Snappy comebacks to stupid questions: the eternal undeath of the credit-card analogy

How to respond when the prime minister says something simplistic and wrong.

One of the most pernicious simplifications in mainstream politics is the "credit card" analogy. You know the one: the British economy is like a maxed-out credit card, and we have a responsibility to pay it off.

It's pernicious because the British economy is nothing like a credit card, maxed-out or not. Britain has control of the very currency in which it owes debt; it can print money to pay bills. On top of that, its effect on the economy which is its revenue source is so large that if it scrimps and saves in order to pay down its debt, there's a very real chance its income will drop by even more.

But the analogy is unkillable, and even if politicians don't cite it directly, they apply its lessons nonetheless—as Cameron did last Thursday:

Labour’s central argument is exactly that. They say that by borrowing more they would miraculously end up borrowing less. Let me just say that again: they think borrowing more money would mean borrowing less. Yes, it really is as incredible as that.

He may not have said the magic words "credit card" (or similar analogies involving "household spending" or "Britain plc"), but the same implication is made: the national debt, and macroeconomics in general, is no more complex than a family budget.

That's not true. But the thing is, even if you apply the same analogy, Cameron's claim is still over-simplistic. Here are just some ways borrowing more money can mean borrowing less:

  • You are unemployed. You have great ability, but few qualifications. You take out a career development loan to pay for post-secondary education. You get a well-paid job as a result.
  • You are unemployed. You have ample qualifications, but no smart clothes. Before the first of a string of job interviews, you borrow enough to buy a suit, ensuring that you win gainful employment and don't have to borrow money to eat.
  • You live in a 1950s prefab. With no real protection against the elements, an uncomfortable proportion of your monthly income goes on heating. You borrow money to pay for insulation, your expenditures drop, and you use the extra to pay off credit-card bills.
  • Annual income six pounds; annual expenditure six pounds sixpence. Result: misery. You borrow some money to put solar panels on the south-facing roof of you Guernsey house, reducing your spending on electricity. Annual income six pounds; annual expenditure five pounds, nineteen shillings and sixpence. Result: happiness.

I could write some detailed sophistry about how each of those analogies apply to Britain. The first is broadly equivalent to "upskilling"; the second to spending money on promoting Britain overseas; the third to fixing our much-vaunted "crumbling infrastructure"; and the fourth to investing in the Green Economy.

But I won't. Because the way to discuss the macroeconomy isn't through trite analogies and dumbed-down explanations; it's through discussions of the macroeconomy. If you want the best discussion of whether Cameron's claims are true, I recommend you turn to Jonathan Portes' exhaustive examination, or Duncan Weldon's blow-by-blow account of the squabble between the PM and OBR. You won't find many comparisons to your own financial situation, but that just means you're getting the good stuff.

Credit cards. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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To beat the Trump hype, we need a return to old-fashioned political virtues

If we want to resist the Trumpification of politics, what we need is restraint, duty and incorruptibility.

After the 1992 US presidential election, Alistair Cooke’s celebrated BBC radio series Letter from America struck a poignant note. Cooke described Bill Clinton’s worn jeans and checked wool shirt, contrasting them with George H W Bush’s buttoned-up Wasp manners and buttoned-down Ivy League shirts. Clinton’s style, Cooke argued, was a rebuke to a tired social and political establishment. His casualness was the new America.

Cooke, then 83, was honest enough to admit unease about this departure from the old, patrician modes and manners. “Along with the passing of George Bush,” he said, “we shall see, I fear, the passing of the blue blazer.” Cooke seemed right at the time. But don’t write off the blue blazer just yet. As ruling elites change, so does the appropriate counterpoint. To topple Bush’s stuffy golf club elites, Clinton picked up his saxophone, took off his tie and felt everyone’s pain. And now? The subtext of these turbulent months (the inevitable second question, prompted by “How do you beat Donald Trump?”) is: “What should ­tomorrow’s leaders, the leaders we crave, look and sound like?”

My conjecture is that, to beat Trump and his type – bling, shiny suits, dodgy deals – we should push towards centre stage an underestimated set of political virtues: restraint, duty and incorruptibility. If it weren’t for the gender associations, I would be tempted to call this quality gentlemanliness. Aside from personal virtue – signally lacking in the Clinton camp – how might decency inform public debate as it comes under attack from maverick showmen trained in the media circus? How can the middle ground regain its confidence?

First, level with the public. Maybe liberalism hasn’t failed so much as its messaging has failed. Instead of smashing the electorate over the head with the idea that everything is just great, make the case that not everything can be for the best in all possible worlds. As populists reach for empty slogans, a new space has opened up. Accept and exploit those asymmetries: more people are ready to hear uncomfortable truths than politicians imagine.

Kingsley Amis once argued that a writer’s voice should stay close to his speaking voice: not the same, but close. Adapting that idea, if politicians stayed closer in public debate to the truths that they articulate in casual conversation – some things are impossible; almost every policy creates a losing as well as a winning side; there really isn’t any money – they would be surprised how many people are ready to hear that not all problems can be evaporated into thin air. Stray too far from awkward truths and elections become about simple lies v tricksy lies.

Second, centrists do more harm than good when they rush to categorise dissenting opinion as not only wrong, but unacceptable. “Any suggestion that liberal values are not humanly universal,” as John Gray wrote in a recent NS essay, “will provoke spasms of righteous indignation.” Instead, we need to be more tolerant in our tolerance.

Third, stop pretending that everything desirable can be shoehorned into the “progressive” agenda. “I really care passionately about persevering with the common-sense middle ground and doing it quite well” is a problematic political sales pitch, but not for the reasons that are usually given. The gravest difficulty may come at the beginning, with the faux passion, rather than with the substance – public service and competence – underneath.

It is revealing that those closest to David Cameron expended so much energy trying to persuade us that he was not an updated version of Harold Macmillan. That is why the gay marriage reforms, though admirable, were accorded too much significance. Ah, Cameron was a natural crusader! But he paid a price for dressing up as a “radical” when greater challenges arrived. It weakened some of his strongest cards – calmness, perspective, proportion – just as politics was coarsening. Aren’t Tories supposed to understand the virtues of yesterday? In other words, as an electoral strategy to beat Trump (or Nigel Farage), I’d put up a Macmillan type over a Clinton type every time.

Fourth, cut ties with “messaging experts”. It’s a fraud. They teach that everything must be asserted with powerful conviction. Yet ideas unworthy of powerful conviction are best left shorn of them. The electorate has endured a communications version of crying wolf. As a result of the messaging game, when something genuinely important crops up, it sounds simply like the same old shtick.

Fifth, ditch the bogus quantification. Few things signal untrustworthiness more reliably than fake precision. Something shifted in me when George Osborne argued that Brexit would leave households £4,300 worse off. What, no decimal point? Voters understand uncertainty better than politicians imagine. Precise quantification used to sound professional. Now it sounds suspicious.

Finally, think about tone. Conventional wisdom holds that the mainstream must fight the Trumpian revolution on its own terms: a simple solution, memorably expressed, a guiding vision for the country or the world. If anyone has a good one to hand, I’m all for it. But what if – after decades of ­sophisticated argument and counterargument, as politics has solved the easy problems while parking the difficult or insoluble ones – we have reached a state of such evolved equilibrium that no such easy answer can exist?

Pretending otherwise is no longer a point of difference. It takes you towards the lowest common denominator. As Trump has shown, that is well-occupied territory. Perhaps wooing the angry mob is not the solution. Instead, the admirable and successful politician of the future will have to win back the support of moderate, sensible but disillusioned voters. 

Ed Smith is a journalist and author, most recently of Luck. He is a former professional cricketer and played for both Middlesex and England.

This article first appeared in the 01 December 2016 issue of the New Statesman, Age of outrage