Hating Hillary

Gloating, unshackled sexism of the ugliest kind has been shamelessly peddled by the US media, which

History, I suspect, will look back on the past six months as an example of America going through one of its collectively deranged episodes - rather like Prohibition from 1920-33, or McCarthyism some 30 years later. This time it is gloating, unshackled sexism of the ugliest kind. It has been shamelessly peddled by the US media, which - sooner rather than later, I fear - will have to account for their sins. The chief victim has been Senator Hillary Clinton, but the ramifications could be hugely harmful for America and the world.

I am no particular fan of Clinton. Nor, I think, would friends and colleagues accuse me of being racist. But it is quite inconceivable that any leading male presidential candidate would be treated with such hatred and scorn as Clinton has been. What other senator and serious White House contender would be likened by National Public Radio's political editor, Ken Rudin, to the demoniac, knife-wielding stalker played by Glenn Close in Fatal Attraction? Or described as "a fucking whore" by Randi Rhodes, one of the foremost personalities of the supposedly liberal Air America? Could anybody have envisaged that a website set up specifically to oppose any other candidate would be called Citizens United Not Timid? (We do not need an acronym for that.)

I will come to the reasons why I fear such unabashed misogyny in the US media could lead, ironically, to dreadful racial unrest. "All men are created equal," Thomas Jefferson famously proclaimed in 1776. That equality, though, was not extended to women, who did not even get the vote until 1920, two years after (some) British women. The US still has less gender equality in politics than Britain, too. Just 16 of America's 100 US senators are women and the ratio in the House (71 out of 435) is much the same. It is nonetheless pointless to argue whether sexism or racism is the greater evil: America has a peculiarly wicked record of racist subjugation, which has resulted in its racism being driven deep underground. It festers there, ready to explode again in some unpredictable way.

To compensate meantime, I suspect, sexism has been allowed to take its place as a form of discrimination that is now openly acceptable. "How do we beat the bitch?" a woman asked Senator John McCain, this year's Republican presidential nominee, at a Republican rally last November. To his shame, McCain did not rebuke the questioner but joined in the laughter. Had his supporter asked "How do we beat the nigger?" and McCain reacted in the same way, however, his presidential hopes would deservedly have gone up in smoke. "Iron my shirt," is considered amusing heckling of Clinton. "Shine my shoes," rightly, would be hideously unacceptable if yelled at Obama.

Evidence to the contrary notwithstanding, American men like to delude themselves that they are the most macho in the world. It is simply unthinkable, therefore, for most of them to face the prospect of having a woman as their leader. The massed ranks of male pundits gleefully pronounced that Clinton had lost the battle with Obama immediately after the North Carolina and Indiana primaries, despite past precedents that strong second-place candidates (like Ronald Reagan in his first, ultimately unsuccessful campaign in 1976; like Ted Kennedy, Gary Hart, Jesse Jackson and Jerry Brown) continue their campaigns until the end of the primary season and, in most cases, all the way to the party convention.

None of these male candidates had a premature political obituary written in the way that Hillary Clinton's has been, or was subjected to such righteous outrage over refusing to quiesce and withdraw obediently from what, in this case, has always been a knife-edge race. Nor was any of them anything like as close to his rivals as Clinton now is to Obama.

The media, of course, are just reflecting America's would-be macho culture. I cannot think of any television network or major newspaper that is not guilty of blatant sexism - the British media, naturally, reflexively follow their American counterparts - but probably the worst offender is the NBC/MSNBC network, which has what one prominent Clinton activist describes as "its nightly horror shows". Tim Russert, the network's chief political sage, was dancing on Clinton's political grave before the votes in North Carolina and Indiana had even been fully counted - let alone those of the six contests to come, the undeclared super-delegates, or the disputed states of Florida and Michigan.

The unashamed sexism of this giant network alone is stupendous. Its superstar commentator Chris Matthews referred to Clinton as a "she-devil". His colleague Tucker Carlson casually observed that Clinton "feels castrating, overbearing and scary . . . When she comes on television, I involuntarily cross my legs." This and similar abuse, I need hardly point out, says far more about the men involved than their target.

Knives out

But never before have the US media taken it upon themselves to proclaim the victor before the primary contests are over or the choice of all the super-delegates is known, and the result was that the media's tidal wave of sexism became self-fulfilling: Americans like to back winners, and polls immediately showed dramatic surges of support for Obama. A few brave souls had foreseen the merciless media campaign: "The press will savage her no matter what," predicted the Washington Post's national political correspondent, Dana Milbank, last December. "They really have their knives out for her, there's no question about it."

Polling organisations such as Gallup told us months ago that Americans will more readily accept a black male president than a female one, and a more recent CNN/Essence magazine/ Opinion Research poll found last month that 76 per cent think America is ready for a black man as president, but only 63 per cent believe the same of a woman.

"The image of charismatic leadership at the top has been and continues to be a man," says Ruth Mandel of Rutgers University. "We don't have an image, we don't have a historical memory of a woman who has achieved that feat."

Studies here have repeatedly shown that women are seen as ambitious and capable, or likeable - but rarely both. "Gender stereotypes trump race stereotypes in every social science test," says Alice Eagley, a psychology professor at Northwestern University. A distinguished academic undertaking a major study of coverage of the 2008 election, Professor Marion Just of Wellesley College - one of the "seven sisters" colleges founded because women were barred from the Ivy Leagues and which, coincidentally, Hillary Clinton herself attended - tells me that what is most striking to her is that the most repeated description of Senator Clinton is "cool and calculating".

This, she says, would never be said of a male candidate - because any politician making a serious bid for the White House has, by definition, to be cool and calculating. Hillary Clinton, a successful senator for New York who was re-elected for a second term by a wide margin in 2006 - and who has been a political activist since she campaigned against the Vietnam War and served as a lawyer on the congressional staff seeking to impeach President Nixon - has been treated throughout the 2008 campaign as a mere appendage of her husband, never as a heavyweight politician whose career trajectory (as an accomplished lawyer and professional advocate for equality among children, for example) is markedly more impressive than those of the typical middle-aged male senator.

Rarely is she depicted as an intellectually formidable politician in her own right (is that what terrifies oafs like Matthews and Carlson?). Rather, she is the junior member of "Billary", the derisive nickname coined by the media for herself and her husband. Obama's opponent is thus not one of the two US senators for New York, but some amorphous creature called "the Clintons", an aphorism that stands for amorality and sleaze. Open season has been declared on Bill Clinton, who is now reviled by the media every bit as much as Nixon ever was.

Here we come to the crunch. Hillary Clinton (along with her husband) is being universally depicted as a loathsome racist and negative campaigner, not so much because of anything she has said or done, but because the overwhelmingly pro-Obama media - consciously or unconsciously - are following the agenda of Senator Barack Obama and his chief strategist, David Axelrod, to tear to pieces the first serious female US presidential candidate in history.

"What's particularly saddening," says Paul Krugman, professor of economics and international affairs at Princeton and a rare dissenting voice from the left as a columnist in the New York Times, "is the way many Obama supporters seem happy with the . . . way pundits and some news organisations treat any action or statement by the Clintons, no matter how innocuous, as proof of evil intent." Despite widespread reporting to the contrary, Krugman believes that most of the "venom" in the campaign "is coming from supporters of Obama".

But Obama himself prepared the ground by making the first gratuitous personal attack of the campaign during the televised Congressional Black Caucus Institute debate in South Carolina on 21 January, although virtually every follower of the media coverage now assumes that it was Clinton who started the negative attacks. Following routine political sniping from her about supposedly admiring comments Obama had made about Ronald Reagan, Obama suddenly turned on Clinton and stared intimidatingly at her. "While I was working in the streets," he scolded her, ". . . you were a corporate lawyer sitting on the board of Wal-Mart." Then, cleverly linking her inextricably in the public consciousness with her husband, he added: "I can't tell who I'm running against sometimes."

One of his female staff then distributed a confidential memo to carefully selected journalists which alleged that a vaguely clumsy comment Hillary Clinton had made about Martin Luther King ("Dr King's dream began to be realised when President Lyndon Johnson passed the Civil Rights Act of 1964") and a reference her husband had made in passing to Nelson Mandela ("I've been blessed in my life to know some of the greatest figures of the last hundred years . . . but if I had to pick one person whom I know would never blink, who would never turn back, who would make great decisions . . . I would pick Hillary") were deliberate racial taunts.

Another female staffer, Candice Tolliver - whose job it is to promote Obama to African Americans - then weighed in publicly, claiming that "a cross-section of voters are alarmed at the tenor of some of these statements" and saying: "Folks are beginning to wonder: Is this an isolated situation, or is there something bigger behind all of this?" That was game, set and match: the Clintons were racists, an impression sealed when Bill Clinton later compared Obama's victory in South Carolina to those of Jesse Jackson in 1984 and 1988 (even though Jackson himself, an Obama supporter, subsequently declared Clinton's remarks to be entirely inoffensive).

The pincer movement, in fact, could have come straight from a textbook on how to wreck a woman's presi dential election campaign: smear her whole persona first, and then link her with her angry, red-faced husband. The public Obama, characteristically, pronounced himself "unhappy" with the vilification carried out so methodically by his staff, but it worked like magic: Hillary Clinton's approval ratings among African Americans plummeted from above 80 per cent to barely 7 per cent in a matter of days, and have hovered there since.

I suspect that, as a result, she will never be able entirely to shake off the "racist" tag. "African-American super-delegates [who are supporting Clinton] are being targeted, harassed and threatened," says one of them, Representative Emanuel Cleaver. "This is the politics of the 1950s." Obama and Axelrod have achieved their objectives: to belittle Hillary Clinton and to manoeuvre the ever-pliant media into depicting every political criticism she makes against Obama as racist in intent.

The danger is that, in their headlong rush to stop the first major female candidate (aka "Hildebeast" and "Hitlery") from becoming president, the punditocracy may have landed the Democrats with perhaps the least qualified presidential nominee ever. But that creeping realisation has probably come too late, and many of the Democratic super-delegates now fear there would be widespread outrage and increased racial tension if they thwart the first biracial presidential hopeful in US history.

But will Obama live up to the hype? That, I fear, may not happen: he is a deeply flawed candidate. Rampant sexism may have triumphed only to make way for racism to rear its gruesome head in America yet again. By election day on 4 November, I suspect, the US media and their would-be-macho commentators may have a lot of soul-searching to do.

In this comment piece on sexist language in the US media in relation to Hillary Clinton Andrew Stephen suggested that Carl Bernstein had publicly declared his disgust for Hillary Clinton's thick ankles. We are informed that Carl Bernstein intended, in his biography of Hillary Clinton, to refer to comments made by others about her when she was at high school. We are happy to accept that Carl Bernstein was not motivated by sexism, and we are sorry for any embarrassment caused.

Andrew Stephen was appointed US Editor of the New Statesman in 2001, having been its Washington correspondent and weekly columnist since 1998. He is a regular contributor to BBC news programs and to The Sunday Times Magazine. He has also written for a variety of US newspapers including The New York Times Op-Ed pages. He came to the US in 1989 to be Washington Bureau Chief of The Observer and in 1992 was made Foreign Correspondent of the Year by the American Overseas Press Club for his coverage.

This article first appeared in the 26 May 2008 issue of the New Statesman, Moral crisis?

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The optimism error

We are told that austerity has triumphed and that the British economy is running full steam ahead. The reality is more alarming.

In Cardiff last Thursday, 7 January, George Osborne warned of a “dangerous cocktail of new threats” to Britain’s prosperity. These include collapsing global stock-market and commodity prices, weak growth in China and Latin America, stagnation in Europe and turbulence in the Middle East. Osborne was right to prepare us for “headwinds”. What he could not admit was that the fragility of the British recovery he now discerns – just two months after his triumphal Autumn Statement – is due, in no small measure, to his own austerity policies.

The unpalatable truth is that austerity in the face of the private-sector collapse of 2008-2009 has weakened our ability to produce output. Britain has been left overfinancialised, overborrowed and underinvested. It is not surprising that it is exceptionally exposed to any global downturn.

Before John Maynard Keynes it was believed, by economists at least, that a competitive market would normally produce full employment. As the facts of experience appeared to indicate otherwise, economists, prompted by Keynes, sharpened up their theory. A market economy would ­always lead to full employment provided wages and prices were flexible. Workers, if facing unemployment, had only to accept wage reductions to “price themselves back into work”.

However, as it seemed unrealistic to suppose that workers would do this – or do it quickly enough – government policy could short-circuit the painful process of adjustment. When a slump threatened or occurred, a government could stimulate spending by cutting interest rates and by incurring budget deficits. This was the main point of the Keynesian revolution.

This policy ran from the 1950s to the 1970s. It was overthrown in the 1980s, when unemployment prevention became confined to interest-rate policy, eventually run by the central bank, not the government. By keeping the rate of inflation constant, the monetary authority could keep unemployment at its “natural rate”. This worked quite well for a time, but then, following the widespread failure of the banking system, the world economy collapsed in 2008.

In a panic, the politicians, from Barack Obama to Gordon Brown, took Keynes out of the cupboard, dusted him down, and “stimulated” the economy like mad. When this produced some useful recovery they got cold feet. “Keynes,” they said, “you’ve done your job. Back in the cupboard you go.” I wrote a book at the time called The Return of the Master. A reviewer pointed out that the Master had returned for six months only.

Why had the politicians’ nerve failed and what were the consequences?

The answer is that in bailing out leading banks and allowing budget deficits to soar, governments had incurred huge debts that threatened their financial credibility. It was claimed that bond yields would rise sharply, adding to the cost of borrowing. This was never plausible in Britain, but bond yield spikes threatened default in Greece and other eurozone countries early in 2010. Long before the stimulus had been allowed to work its magic in restoring economic activity and government revenues, the fiscal engine was put into reverse, and the politics of austerity took over.

Yet austerity did not hasten recovery; it delayed it and rendered it limp when it came. Enter “quantitative easing” (QE). The central bank would flood the banks and
pension funds with cash. This, it was expected, would cause the banks to lower their interest rates, lend more and, by way of a so-called wealth effect, cause companies and high-net-worth individuals to consume and invest more. But it didn’t happen. There was a small initial impact, but it soon petered out. Bank lending, an important index of recovery, in fact went down as the institutions sat on piles of cash and the wealthy speculated in property.

So we reach the present impasse. Events have confirmed that a competitive market economy is subject to severe collapses, and the effects of these linger in the form of elevated unemployment, lower output, lower productivity and increased poverty. At the same time, however, counter-cyclical policy is disabled. Monetary expansion is much less potent than people believed; and using the budget deficit to fight unemployment is ruled out by the bond markets and the ­Financial Times. The levers either don’t work, or we are not allowed to pull them. Where do we go from here?

 

The present situation

The first thing is to establish where we now are. How much recovery has there been in Britain? Economists try to answer this question with reference to the output gap – the difference between what an economy is actually producing and what it can produce. The OECD’s most recent estimate of this gap in the UK stands at a negligible -0.017 per cent. We might conclude from this that the British economy is running full steam ahead and that we have, at last, successfully recovered from the crash. This is the basis of George Osborne’s triumphalism. His critics, including myself, have been proved wrong. His austerity policies have worked. Or so we are told.

But such a conclusion would be premature. Although we are producing as much output as we can, our capacity to produce output has fallen. This can be shown by comparing the current economic situation to where we would expect to be, according to the historic trend.

From this perspective, championed by the Oxford economist Simon Wren-Lewis, the position is far less rosy. Growth in output per person in Britain (roughly “living standards”) averaged 2.25 per cent per year for the half-century before 2008. Recessions in the past have caused deviations downward from this path, but recoveries had delivered above-trend growth, lifting us back up to the previous path. One can say that the “business cycle” oscillates between errors of pessimism and errors of optimism. In other words, the loss of output is temporary.

This time it was different. The recovery from the financial crisis was the weakest on record, and the result of this is a yawning gap between where we are and where we should have been. Output per head is between 10 and 15 per cent below trend.

We are faced with a puzzle. If the output gap is as small as the OECD believes, then the British economy appears to have lost much of its productive potential. It is no longer a case of demand falling short of supply, leaving a surplus of workers and capital equipment. The supply is no longer available: we have lost eight years’ growth of productivity. Between 1971 and 2007 productivity growth averaged 2-3 per cent a year. Since the recession started it has been close to zero. Why is it that the recession turned spare capacity into lost capacity? One answer lies in the ugly word “hysteresis”.

 

Hysteresis

This is an idea borrowed from physics. If an insulated wire is wrapped around an iron bar, and an electric current is then passed along the wire, the iron bar becomes magnetised. Some of this magnetism remains even after the current has been switched off. A shock has a long-lasting effect. This is labelled hysteresis.

An economy experiences hysteresis not when output falls relative to potential output, but when potential output itself falls as a result of a recession. What happens is that the recession itself shrinks productive capacity: the economy’s ability to produce output is impaired.

The intuition behind it is simple enough: if you let a recession last long enough for capital and labour to rust away you will lose growth potential, on account of discouraged workers, lost skills, broken banks and missing investment in future productivity. By not taking steps to offset the negative shock of the recession with the positive shock of a stimulus, the coalition government cost the country 10 per cent or more of potential output.

The phenomenon of hysteresis is not ­necessarily captured by high levels of “headline” unemployment. In fact, low levels of unemployment may reflect low productivity growth, as employers prefer to use cheap workers to investing in machines: unemployed workers may be re-employed in part-time or minimum-wage or zero-hour contract jobs. Much of the new private-sector job creation lauded by the Chancellor is exactly in such low-productivity sectors. The collapse of investment is particularly serious, because investment is the main source of productivity.

The challenge for policy is to liquidate the hysteresis – to restore supply. How is this to be done?

 

Blockage of policy

An economic recession is precipitated by a fall in private spending, be it investment or consumption. It can be countered by monetary and fiscal policy, aiming either to stimulate private spending or to replace it temporarily by public spending. On the monetary front, the bank rate was dropped to near zero; this not being enough, the Bank of England pumped out hundreds of billions of pounds between 2009 and 2012, but too little of the money went into the real economy. As Keynes recognised, it is the spending of money, not the printing of it, which stimulates productive activity, and he warned: “If . . . we are tempted to assert that money is the drink which stimulates the system to activity, we must remind ourselves that there may be several slips ­between the cup and the lip.”

That left fiscal policy. Fiscal policy can fight recession by cutting taxes or increasing public spending. Both involve deliberately budgeting for a deficit. In Britain, any possible tolerance for a deficit larger than the one automatically caused by a recession was destroyed by fearmongering about unsustainable debt. From 2009 onwards, the difference between Labour and ­Conservative was about the speed of deficit reduction. The contribution that deliberate deficit budgeting might make to recovery was never mentioned, except by unreconstructed Keynesians.

So we now have a situation in which the main tools available to government to bring about a robust recovery are out of action. In addition, sole reliance on monetary policy for stimulus creates a highly unbalanced recovery. The money the government pours into the economy either sits idle or simply pumps up house prices, threatening to re-create the asset bubble that produced the crisis in the first place. We already have the highest rate of post-crash increase in house prices of all OECD countries. This suggests that the next crash may not be far off.

 

The public accounts trap

From 2009 onwards the main obstacle to a sensible recovery policy has been the obsession with balancing the national budget. A government can finance its spending in one of three ways: it can raise taxes, borrow from the private sector, or borrow from the Bank of England (that is, “print money”). Each has advantages and disadvantages, but public opinion has decided that the first of these – covering all spending by taxes – is the only “honest” way. In popular discourse, borrowing signifies a “deficit”, and a particular horror attaches to deficits, because they suggest the government is not “paying its way”. “We must get the deficit down” has been the refrain of all the parties.

Printing money to finance public investment has been suggested by both the Labour leader and the shadow chancellor as a way to get round the borrowing constraint. Its advantage is that it wouldn’t directly increase the national debt, because the government would only owe the money to itself. On the other hand, it might destroy confidence in the state’s ability to control its spending, and it would jeopardise the independence of the central bank. So, printing money to pay for public spending should only be a remedy of the last resort.

It is right to be concerned about a rising national debt (now roughly £1.6trn). But the way to reverse it is not to cut down the economy, but to cause it to grow in a sustainable way. In many circumstances, that involves deliberately increasing the deficit. This is a paradox too far for most people to grasp. But it makes perfect sense if the increased deficit causes the economy, and thus the government’s revenues, to grow faster than the deficit. If the economy is in the doldrums, practically all forms of government expenditure should be welcomed, as they utilise idle resources.

In our present situation, with little spare capacity, the government needs to think much more carefully about what it should be borrowing for. Public finance theory makes a clear distinction between current and capital spending. A sound rule is that governments should cover their current or recurrent spending by taxation, but should borrow for capital spending, that is, investment. This is because current spending gives rise to no government-owned assets, whereas capital spending does.

If these assets are productive, they pay for themselves by increasing government earnings, either through user charges or through increased tax revenues. If I pay for all my groceries “on tick” my debt will just go on rising. But if I borrow to invest in, say, my education, my increased earnings will be available to discharge my debt.

Covering current account spending by taxation is at the heart of the balanced budget rule. But as Thomas J Sargent, certainly no Keynesian, wrote in 1981 (Federal Reserve Bank of Minneapolis, Research Department Working Paper W): “The principles of classical economic theory condone deficits on capital account.”

Now is an ideal time for the government to be investing in the economy, because it can borrow at such low interest rates. But surely this means increasing the deficit? Yes, it does, but in the same unobjectionable way as a business borrows money to build a plant in the expectation that the investment will pay off. It is because the distinction between current and capital spending has become fuzzy through years of misuse and obfuscation that we have slipped into the state of thinking that all government spending must be balanced by taxes – in the jargon, that net public-sector borrowing should normally be zero. George Osborne has now promised to “balance the budget” – by 2019-20. But within this fiscal straitjacket the only way he can create room for more public investment is to reduce current spending, which in practice means cutting the welfare state.

 

A British Investment Bank

How can we break this block on capital spending? Several of us have been advocating a publicly owned British Investment Bank. The need for such institutions has long been widely acknowledged in continental Europe and east Asia, partly because they fill a gap in the private investment market, partly because they create an institutional division between investment and current spending. This British Investment Bank, as I envisage it, would be owned by the government, but would be able to borrow a multiple of its subscribed capital to finance investment projects within an approved range. Its remit would include not only energy-saving projects but also others that can contribute to rebalancing the economy – particularly transport infrastructure, social housing and export-oriented small and medium-sized enterprises (SMEs).

Unfortunately, the conventional view in Britain is that a government-backed bank would be bound, for one reason or another, to “pick losers”, and thereby pile up non-performing loans. Like all fundamentalist beliefs, this has little empirical backing. Two relevant comparators – the European Investment Bank and Germany’s KfW (Kreditanstalt für Wiederaufbau) – show that, in well-regulated financial systems, such banks pay for themselves. Neither bank has had to go back to its shareholder(s) to raise fresh money to cover losses. The EU is setting up a European Fund for Strategic Investments, which, with a capitalisation of €21bn, is expected to lever at least €315bn of investment over the first three years.

George Osborne has rejected this route to modernisation. Instead of borrowing to renovate our infrastructure, the Chancellor is trying to get foreign, especially Chinese, companies to do it, even if they are state-owned. Looking at British energy companies and rail franchises, we can see that this is merely the latest in a long history of handing over our national assets to foreign states. Public enterprise is apparently good if it is not British.

Britain already has two small state investment banks – the Green Investment Bank (GIB) and the British Business Bank. But the Treasury is so obsessed with avoiding any increase in the deficit that, up to this point, it has deprived these newly formed institutions of any power to borrow. This has restricted their investment potential. The Green Investment Bank was capitalised with £3.8bn of public funds in 2012; it has so far invested £2bn. Now the government proposes to privatise the GIB, because “it is necessary to move the bank off the public balance sheet if it is to arrange additional funding through borrowing”. The same fate no doubt awaits the British Business Bank, set up to channel money to SMEs.

Apart from exposing its unjustified belief that public investment must be loss-making, the Treasury’s stance is an artefact of its insistence that there should be no net borrowing. It was to avoid this grave effect on public investment that Gordon Brown, as chancellor, was drawn into the large-scale Private Finance Initiative, when there were cheaper financing mechanisms available.

Setting up a British Investment Bank with enough borrowing power to make it an effective investment vehicle is the essential first step towards rebuilding supply. Distancing it from politics by giving it a proper remit would create confidence that its ­projects would be selected on commercial, not political criteria. But this step would not be possible without a different accounting system. The solution would be to make use of comprehensive accounting that appropriately scores increases in net worth of the bank’s assets. The British Investment Bank I envisage would only finance investment in productive assets: although its borrowing would show up in the public accounts, it would be financed by revenue from its own activities. This is fundamentally different from tax-financed debt, and fully in line with the conventional theory of public finance outlined above.

Has the Chancellor the courage to grasp the opportunity?

He can justifiably congratulate himself on having avoided the worst disasters to which Treasury accounting rules and narrow ideology could have led him. But in the non-political recesses of his mind he must understand that the recovery over which he has presided is incomplete, fragile and, above all, unfair.

The first necessary step is to reform the way we do our national accounts, in order to dispel the deficit and debt phobia that blights sensible policy.

Robert Skidelsky is a cross-bench peer and a leading biographer of J M Keynes. His most recent book is “Britain Since 1900: a Success Story?” (Vintage)

This article first appeared in the 14 January 2016 issue of the New Statesman, David Bowie