Workers against Wall Street

President Obama’s “shock and awe” statism is failing. On the eve of the midterm elections, the US ec

Gary, Indiana

We're hurtling through downtown Gary at about 75 miles an hour but Officer Lilley, at the wheel of our car, remains relaxed. He's telling me languid stories about the AK-47s that the local teenagers carry, about the gangs, the drugs, the overtime. Then the city's "shot spotter" pings an alert on to his laptop, which is wedged right next to the handbrake.

He mutters a call for assistance into his radio and swings the police car on to the forecourt of a gas station where about 30 people are running, pointing, strung out, screaming recriminations. There's been a fight, but the fighters are gone, as is the kid who decided to let off his pistol. Nobody is dead. Everybody is shouting into the face of Officer Lilley, a black cop in a black crowd, who simply drawls soothing phrases back at them.

Eventually seven police cars arrive and the cops fan out to disperse the crowd of onlookers, many of whom they seem to know by name. Two years ago there were times when the city could field only five cars in total on a night shift, but federal dollars have paid for 96 new vehicles and allowed Gary Police to re-employ 11 laid-off officers. This short, sharp exercise in armed social work is possible only because of the fiscal stimulus.

Gary is a city where 84 per cent of the population is black and one-third of the people live in poverty. It is one of the most obvious places on earth where an influx of taxpayer dollars might do some good. It has 3,000 abandoned homes and a decaying infrastructure, and its public finances stand two years away from bankruptcy. Yet what is obvious, amid these wrecked streets and impoverished lives, is how little the stimulus has achieved.

Gary's urban texture - grass and ivy over broken concrete - is testimony to what happens when an economic model fails. In its deserted downtown district, the churches, the concert hall, the theatre, the ballet studio, the Gothic apartments from whose windows steel magnates once surveyed the city's pulsating wealth, stand ruined, unsecured against intruders.

Though atypical of America, Gary's broken landscape is spectacularly typical of what has gone wrong in the country at large. Its meagre progress, two years into the Obama administration, signals the president's failure to solve America's most basic problems and to deliver to the very people whose votes put him in the White House.

The problem for America today is that another economic model has failed: one based on globalisation, cheap credit, home ownership and mass consumption. Six million Americans have fallen below the poverty line since December 2007. The median income has fallen by 4.7 per cent. In the same period, more than 2.5 million homes have been repossessed. And that only compounds the long-term problems America hid beneath the financial euphoria of the boom years - but average real wages have stagnated since the 1990s; the number without health insurance has grown by ten million in a decade and stands at 50 million.

The most basic problem is this: in a system based on credit, the credit system is not functioning. It's easy to spot the malfunction in a city like Gary: I saw one home for sale at $7,900 cash, the scrawled street-corner placard adding, by way of explanation, the word "Foreclosure". The only part of the credit system that does function is the destructive part; the "payday loans" store on Gary's main street is the only thing left with working neon signs. Most of the other shops are closed for good.

With a swollen mass of people unable to borrow, save or spend, the great dynamo of the world economy - American consumption - is sputtering. And the stimulus has not yet managed to restart it.

Eighteen months ago, the mayor of Gary, Rudy Clay, told me that all the city needed was $400m. With that, said the dapper veteran of the civil rights movement, Gary would "fly like an eagle and once again make America proud". In the event, the city was given just $266m - most of that earmarked for education - and for spending not on current costs, but on reorganisation.

Of the $24m Clay applied for to knock down derelict homes, $2m was delivered - and most of the buildings are still standing. It took 18 months for the money to pay for new streetlights to filter through the system. And, with $266m, Gary has managed to create the grand total of 327 jobs. That is more than $800,000 per job.

“We were last in line," Clay complains. "We keep pressing the State of Indiana for more money - to fix our roads, for example - but the problem is they spent all the money. They probably thought, 'Well, Gary voted in large numbers for the president, so the president can take care of them.'" A glance at the city's finances reveals a more complex picture. Its financial controls are archaic, its debts to other agencies high; and its tax base is heavily dependent on one source - a property tax that brings in 80 per cent of Gary's revenue.

In 2008 the Republican-controlled state government of Indiana brought in tax-capping measures that will, by 2012, halve the amount of property tax Gary can collect. While richer, whiter counties surrounding Gary have their own local income taxes, Gary does not - for the simple reason that there is very little income to tax. Within this system, redistribution is impossible unless the state and federal governments make it happen.

But that is where Gary's problems run into the culture war that has gripped America.The governor of Indiana is Mitch Daniels, a fiscal conservative who has made his reputation by balancing the state's books, privatising Indiana's major roads system in the process. Daniels - unlike some other Republican governors - agreed to accept the fiscal stimulus money, but on condition that the state retained control. He then decreed that the stimulus could not be used to fix the balance sheets of near-bankrupt city governments like Gary. Only major, one-off projects would receive federal dollars.

So, in the midst of the largest fiscal stimulus since the Second World War, one of America's poorest cities is being forced to cut taxes and cut spending. By 2012 its entire tax take will not be enough to cover the police, fire and ambulance services. Officer Lilley and his colleagues know that all the problems that fuel the crime - drugs, truancy, poor housing, unemployment - will remain unaddressed.

President Obama's stimulus was formulated with high hopes: two-thirds of the $787bn spent would be delivered not through the Bush-era mechanism of tax cuts, but through the overtly Keynesian channel of public spending. Jared Bernstein and Christina Romer, economists on Obama's transition team, predicted in January 2009 that the stimulus money would "create three to four million jobs" by the end of 2010, 90 per cent of them in the private sector. They projected that unemployment would peak at just 8 per cent in 2009.

The Romer/Bernstein forecast, like much of the Obama stimulus plan, was a triumph of optimism. Unemployment reached 10 per cent a year ago and has not been below 9.5 per cent since, even with the stimulus. Private-sector employment has shrunk. The money has been spent, but the jobs and growth did not follow.

The paucity of achievement is all the more remarkable given that, two months after the Romer/Bernstein report was published, the Federal Reserve was forced to launch its own, much bigger monetary stimulus package, known as quantitative easing (QE). By printing money and using it to buy a mixture of bank and government debt, the Fed pumped $1.75trn into the US economy.

Yet the combined results are poor. Growth is slowing. The threat of deflation is so clear that the Federal Reserve will, on the morrow of the midterm elections, be forced to throw several hundred billions more into QE.

In the housing market, there is already a double dip. Even with mortgage interest rates cut to their lowest ever, the sheer volume of un-sold properties - 1.5 million empty and a further five million trapped in a "shadow" market - has begun to push house prices down again. The banking sector has begun to shudder in turn at the prospect of another round of mortgage losses.

It is this tangible failure of economic strategy that is sapping the energy and credibility of the Obama administration. It has provided the American right with a convincing narrative to unite the plebeian conservative and "coastal elite" strands of Republicanism.

Governor Daniels, a mainstream Republican who is being tipped as the man to run against Obama in 2012, calls Obama's policy "shock and awe statism". But the real shock is how little has been achieved. Statewide, the whole of Indiana has managed to spend $4bn of stimulus money to create 10,000 jobs.

“It's not enough," the governor says, "and I would caution you that while I know the $4bn is real, I cannot say the same about the 10,000 jobs. We just don't know. They [the federal government] don't know."

Nationally, he says, "We've had this perverse outcome in which the private sector has continued to shrink and the public sector has gotten bigger. Frankly, it looks more like a way to take care of favoured constituencies than an economic policy."

So, for the mainstream American right, what explains the failure of the Obama stimulus is "crowding out": it is the size of the state that has prevented the private sector from responding to the crisis with fresh hiring and company start-ups. In addition, consistently large majorities polled by the Pew Research Centre believe that state intervention has benefited the banks and large corporations only - leaving the middle class, the poor and small businesses to rot. Finally, there is a growing fear that the size of the budget deficit will drag the United States into penury. Daniels tells me that the country faces a "survival-level threat".

It is in this context that the narrative of the Tea Party movement has emerged. And you have only to travel a hundred kilometres east of Gary, along the patched-up private motorways of Indiana, to hear it in full voice.

The hall is swaying to the tune of "God Bless the USA" - a song for which everyone except the journalists stands up, many clenching fists against chests. The crowd is 99 per cent white and 100 per cent Christian. Of those to whom I speak during the interval, several believe that the president is neither American nor Christian. One is selling a set of playing cards depicting Obama as a "Kenyan-born, lying, arrogant Muslim communist that hates America".

What the Tea Party objects to is the president's policies of state intervention. What it adds to conventional fiscal conservatism is the idea that all state intervention into economic life is immoral, un-Christian and unconstitutional. The plebeian right is convinced that a city like Gary neither deserves stimulus money nor can use it to any good effect.

Jackie Walorski, a Republican who sits in the Indiana legislature and is standing for the US House of Representatives on 2 November, tells me: "We are watching a freight train of spending in this country. Americans don't live that way. We're the land of capitalism; we're not the land of taking people's public tax money and throwing it into a concept that isn't proven, that has not produced jobs."

Does she begrudge the money spent in Gary? Would she have blocked the cash for schools, more police and police vehicles?

“It's not a question of begrudging," says Wal­orski, a 47-year-old former TV journalist. "Just because it's gone to education, police and fire doesn't mean the money has done anything in those areas. That's not what the key is in this country. You can continue to write cheques but recovery comes from private-sector jobs and holding a line on spending."

What is sapping the energy of Democratic Party supporters, even in a place like Gary, is that if you strip Walorski's words of all the rhetoric, economically they ring true. America's governance system, lacking the basic capacity, and in some places the will, to spend the money, looks ill suited to delivering maximum bang for 787 billion bucks.

But the rhetoric itself has material impact, and way beyond the worried Christian faces assembled to hear it. It is a rhetoric that - intentionally or otherwise - identifies the recipients of state spending as the enemies of the American constitution. From Indiana to the Gulf of Mexico, that means the public sector, migrants and the African-American poor.

When Walorski takes the stage at a Tea Party rally in the small rural town of Angola, Indiana as warm-up act for the Fox News commentator Glenn Beck, she points to a giant US flag behind her and whips the audience to its feet with the warning that they have just days "to fight for who we are in America".

She continues: "If we don't fight for freedom, liberty, individual destiny, they are redefining this country out from underneath us. The battle we're facing is to defend this flag on our turf, our soil. When our soldiers came out of the boats in Normandy they literally walked over the bodies of other soldiers to fight for our freedom. The battle we face today, the ideological war that we're fighting, is for standing up for a constitution. The land of the free and the home of the brave is under assault today."

It is worth unpacking this statement. In the literal text, Obama and the Democrat-voting Congress are the "they" Walorski refers to. But America's airwaves are alive with the angry voices of enraged white Christians, channelled towards coherence by the right-wing commentators. No one on the stage in Indiana needs to assert that Obama is "a racist" with “a deep-seated hatred for white people or the white culture" - because Beck already said so on TV, on 28 July 2009.

Back in Gary, for the black community activists trying to hold things together, it feels as if the word "they" has another meaning.

“When you turn on the TV and hear all this anger, all this vitriol," says Ben Clement, who helps run a community theatre group for teenagers, "well, it's culture-based, race-based, and it's frightening. And it shows that there's a disconnect - it's almost like we're living on two separate planets."

Clement, like many Obama-supporting black professionals, rues the complacency of a generation that has drifted out of activism. "Our parents went through the civil rights movement, but for our generation it's been a time of rest, where we didn't think those were going to be issues. Now, when I see Obama vilified, my stomach tightens up, because he is the best of us, the best of what we have to offer. If they feel like that about him - how would they treat me?"

This is the real culture war - an artillery battle of words in which the two sides never meet.

It has blindsided America's political commentators. The polling organisations record no perceptible increase in the numbers of extreme right- and left-wing views. But distrust and fear are tangible once you get where the American media dare not venture - into the honest and considered thoughts of ordinary people.

So, where does the battle go after 2 November? Economists on the Keynesian left of the Democratic Party are now clamouring for a further fiscal stimulus as they frantically try to recover ground in the ideological war they have essentially lost. Judging by the polling on all possible outcomes, the Congressional arithmetic makes another fiscal stimulus impossible. And even if it were possible, it is difficult to see how a second stimulus could overcome the institutional problems that Gary typifies.

Over at the Federal Reserve, the chairman, Ben Bernanke, is inching towards a further round of quantitative easing. In September, he conceded that even if the Fed did opt for a second round of quantitative easing, the impact of this might be softened: though central bankers have no way of knowing how much increased demand they get from QE, they suspect it works best as an anti-panic measure, not as an additional boost. Once "QE2" is begun, the Fed has in effect fired the last bullet in the clip. It may signal the start of a unique period of policy stasis in which all conventional options have been used up.

One route out would be through a trade war and dollar devaluation - a route as popular among the Democratic grass roots as it is among the Tea Party activists.

Back in Indiana, Walorski swaps insults with the Democratic incumbent, Representative Joe Donnelly, whose support for the stimulus, she claims, has "exported jobs to China". Meanwhile, in the union hall of Local 1066, which represents employees of US Steel Corp in Gary, workers are calling for the government to impose tough trade sanctions against Chinese steel imports.

But, for now, the Obama administration is sticking to the economic doctrines that formed the shared belief set of both parties since the 1990s: globalisation and a strong dollar. Even as Bernanke's promise of further QE caused the dollar to slide against other currencies, the treasury secretary, Timothy Geithner, took to the airwaves to promote keeping the dollar strong. "It is very important," he said, "for people to understand that the United States of America and no country around the world can devalue its way to prosperity . . . It is not a viable, feasible strategy and we will not engage in it."

Another route out is the one offered by Governor Daniels: a new, national, one-year fiscal stimulus of between $400bn and $800bn, including suspension of payroll taxes, in return for equivalent cuts in state spending and a bonfire of business regulations. Though fiscally neutral, a tax cut on this scale could put money where neither state spending nor money printing has yet managed to put it - into the pockets of American consumers.

Yet the problem remains: without restarting the credit market, nothing can sustain growth. There needs to be some kind of defibrillating shock. The American patient, with all its problems of obesity and fast food, has to have its heart restarted before the rehab and the statins can get to work.

For two years, America's political cycle and its economic crisis have been parallel stories, the one played out on brash television shouting shows, the other handled by the super-brained east coast policy elite in the privacy of summits and retreats. After the midterm elections, the two cycles will collide. Either the Obama administration will find a new kind of circuit breaker for the economy, or America will face stagnant growth, deflation and the possibility of a further banking crisis.

In Gary, the people know what they want the president to do: to break with Wall Street, ditch the doctrine of free trade, end foreclosures and deliver jobs. There is, despite the political chasm between the union guys and the Tea Party activists, a parallel desire for politicians to break with the lobbying industry and speak for the people. "He [Obama] has to drive the agenda," says Steve Dunn, a steelworker. "If you ever listen to a speech by Franklin Delano Roosevelt, it's basically you against me; it's the working class against Wall Street. And that's the way things are today - but I don't hear that from President Obama."

The irony of American politics, on the eve of the midterms, is that if anybody owns the narrative of "workers against Wall Street", it is the ultra-conservative, free-market right.

Paul Mason is the economics editor of BBC Newsnight. His reports from the US can be seen at bbc.co.uk/paulmason. A revised edition of his book "Meltdown: the End of the Age of Greed" (Verso, £8.99) is out now.

MILES COLE
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The new Brexit economics

George Osborne’s austerity plan – now abandoned by the Tories – was the most costly macroeconomic policy mistake since the 1930s.

George Osborne is no longer chancellor, sacked by the post-Brexit Prime Minister, Theresa May. Philip Hammond, the new Chancellor, has yet to announce detailed plans but he has indicated that the real economy rather than the deficit is his priority. The senior Conservatives Sajid Javid and Stephen Crabb have advocated substantial increases in public-sector infrastructure investment, noting how cheap it is for the government to borrow. The argument that Osborne and the Conservatives had been making since 2010 – that the priority for macroeconomic policy had to be to reduce the government’s budget deficit – seems to have been brushed aside.

Is there a good economic reason why Brexit in particular should require abandoning austerity economics? I would argue that the Tory obsession with the budget deficit has had very little to do with economics for the past four or five years. Instead, it has been a political ruse with two intentions: to help win elections and to reduce the size of the state. That Britain’s macroeconomic policy was dictated by politics rather than economics was a precursor for the Brexit vote. However, austerity had already begun to reach its political sell-by date, and Brexit marks its end.

To understand why austerity today is opposed by nearly all economists, and to grasp the partial nature of any Conservative rethink, it is important to know why it began and how it evolved. By 2010 the biggest recession since the Second World War had led to rapid increases in government budget deficits around the world. It is inevitable that deficits (the difference between government spending and tax receipts) increase in a recession, because taxes fall as incomes fall, but government spending rises further because benefit payments increase with rising unemployment. We experienced record deficits in 2010 simply because the recession was unusually severe.

In 2009 governments had raised spending and cut taxes in an effort to moderate the recession. This was done because the macroeconomic stabilisation tool of choice, nominal short-term interest rates, had become impotent once these rates hit their lower bound near zero. Keynes described the same situation in the 1930s as a liquidity trap, but most economists today use a more straightforward description: the problem of the zero lower bound (ZLB). Cutting rates below this lower bound might not stimulate demand because people could avoid them by holding cash. The textbook response to the problem is to use fiscal policy to stimulate the economy, which involves raising spending and cutting taxes. Most studies suggest that the recession would have been even worse without this expansionary fiscal policy in 2009.

Fiscal stimulus changed to fiscal contraction, more popularly known as austerity, in most of the major economies in 2010, but the reasons for this change varied from country to country. George Osborne used three different arguments to justify substantial spending cuts and tax increases before and after the coalition government was formed. The first was that unconventional monetary policy (quantitative easing, or QE) could replace the role of lower interest rates in stimulating the economy. As QE was completely untested, this was wishful thinking: the Bank of England was bound to act cautiously, because it had no idea what impact QE would have. The second was that a fiscal policy contraction would in fact expand the economy because it would inspire consumer and business confidence. This idea, disputed by most economists at the time, has now lost all credibility.

***

The third reason for trying to cut the deficit was that the financial markets would not buy government debt without it. At first, this rationale seemed to be confirmed by events as the eurozone crisis developed, and so it became the main justification for the policy. However, by 2012 it was becoming clear to many economists that the debt crisis in Ireland, Portugal and Spain was peculiar to the eurozone, and in particular to the failure of the European Central Bank (ECB) to act as a lender of last resort, buying government debt when the market failed to.

In September 2012 the ECB changed its policy and the eurozone crisis beyond Greece came to an end. This was the main reason why renewed problems in Greece last year did not lead to any contagion in the markets. Yet it is not something that the ECB will admit, because it places responsibility for the crisis at its door.

By 2012 two other things had also become clear to economists. First, governments outside the eurozone were having no problems selling their debt, as interest rates on this reached record lows. There was an obvious reason why this should be so: with central banks buying large quantities of government debt as a result of QE, there was absolutely no chance that governments would default. Nor have I ever seen any evidence that there was any likelihood of a UK debt funding crisis in 2010, beyond the irrelevant warnings of those “close to the markets”. Second, the austerity policy had done considerable harm. In macroeconomic terms the recovery from recession had been derailed. With the help of analysis from the Office for Budget Responsibility, I calculated that the GDP lost as a result of austerity implied an average cost for each UK household of at least £4,000.

Following these events, the number of academic economists who supported austerity became very small (they had always been a minority). How much of the UK deficit was cyclical or structural was irrelevant: at the ZLB, fiscal policy should stimulate, and the deficit should be dealt with once the recession was over.

Yet you would not know this from the public debate. Osborne continued to insist that deficit reduction be a priority, and his belief seemed to have become hard-wired into nearly all media discussion. So perverse was this for standard macroeconomics that I christened it “mediamacro”: the reduction of macroeconomics to the logic of household finance. Even parts of the Labour Party seemed to be succumbing to a mediamacro view, until the fiscal credibility rule introduced in March by the shadow chancellor, John McDonnell. (This included an explicit knockout from the deficit target if interest rates hit the ZLB, allowing fiscal policy to focus on recovering from recession.)

It is obvious why a focus on the deficit was politically attractive for Osborne. After 2010 the coalition government adopted the mantra that the deficit had been caused by the previous Labour government’s profligacy, even though it was almost entirely a consequence of the recession. The Tories were “clearing up the mess Labour left”, and so austerity could be blamed on their predecessors. Labour foolishly decided not to challenge this myth, and so it became what could be termed a “politicised truth”. It allowed the media to say that Osborne was more competent at running the economy than his predecessors. Much of the public, hearing only mediamacro, agreed.

An obsession with cutting the deficit was attractive to the Tories, as it helped them to appear competent. It also enabled them to achieve their ideological goal of shrinking the state. I have described this elsewhere as “deficit deceit”: using manufactured fear about the deficit to achieve otherwise unpopular reductions in public spending.

The UK recovery from the 2008/2009 recession was the weakest on record. Although employment showed strong growth from 2013, this may have owed much to an unprecedented decline in real wages and stagnant productivity growth. By the main metrics by which economists judge the success of an economy, the period of the coalition government looked very poor. Many economists tried to point this out during the 2015 election but they were largely ignored. When a survey of macroeconomists showed that most thought austerity had been harmful, the broadcast media found letters from business leaders supporting the Conservative position more newsworthy.

***

In my view, mediamacro and its focus on the deficit played an important role in winning the Conservatives the 2015 general election. I believe Osborne thought so, too, and so he ­decided to try to repeat his success. Although the level of government debt was close to being stabilised, he decided to embark on a further period of fiscal consolidation so that he could achieve a budget surplus.

Osborne’s austerity plans after 2015 were different from what happened in 2010 for a number of reasons. First, while 2010 austerity also occurred in the US and the eurozone, 2015 austerity was largely a UK affair. Second, by 2015 the Bank of England had decided that interest rates could go lower than their current level if need be. We are therefore no longer at the ZLB and, in theory, the impact of fiscal consolidation on demand could be offset by reducing interest rates, as long as no adverse shocks hit the economy. The argument against fiscal consolidation was rather that it increased the vulnerability of the economy if a negative shock occurred. As we have seen, Brexit is just this kind of shock.

In this respect, abandoning Osborne’s surplus target makes sense. However, there were many other strong arguments against going for surplus. The strongest of these was the case for additional public-sector investment at a time when interest rates were extremely low. Osborne loved appearing in the media wearing a hard hat and talked the talk on investment, but in reality his fiscal plans involved a steadily decreasing share of public investment in GDP. Labour’s fiscal rules, like those of the coalition government, have targeted the deficit excluding public investment, precisely so that investment could increase when the circumstances were right. In 2015 the circumstances were as right as they can be. The Organisation for Economic Co-operation and Development, the International Monetary Fund and pretty well every economist agreed.

Brexit only reinforces this argument. Yet Brexit will also almost certainly worsen the deficit. This is why the recent acceptance by the Tories that public-sector investment should rise is significant. They may have ­decided that they have got all they could hope to achieve from deficit deceit, and that now is the time to focus on the real needs of the economy, given the short- and medium-term drag on growth caused by Brexit.

It is also worth noting that although the Conservatives have, in effect, disowned Osborne’s 2015 austerity, they still insist their 2010 policy was correct. This partial change of heart is little comfort to those of us who have been arguing against austerity for the past six years. In 2015 the Conservatives persuaded voters that electing Ed Miliband as prime minister and Ed Balls as chancellor was taking a big risk with the economy. What it would have meant, in fact, is that we would already be getting the public investment the Conservatives are now calling for, and we would have avoided both the uncertainty before the EU referendum and Brexit itself.

Many economists before the 2015 election said the same thing, but they made no impact on mediamacro. The number of economists who supported Osborne’s new fiscal charter was vanishingly small but it seemed to matter not one bit. This suggests that if a leading political party wants to ignore mainstream economics and academic economists in favour of simplistic ideas, it can get away with doing so.

As I wrote in March, the failure of debate made me very concerned about the outcome of the EU referendum. Economists were as united as they ever are that Brexit would involve significant economic costs, and the scale of these costs is probably greater than the average loss due to austerity, simply because they are repeated year after year. Yet our warnings were easily deflected with the slogan “Project Fear”, borrowed from the SNP’s nickname for the No campaign in the 2014 Scottish referendum.

It remains unclear whether economists’ warnings were ignored because they were never heard fully or because they were not trusted, but in either case economics as a profession needs to think seriously about what it can do to make itself more relevant. We do not want economics in the UK to change from being called the dismal science to becoming the “I told you so” science.

Some things will not change following the Brexit vote. Mediamacro will go on obsessing about the deficit, and the Conservatives will go on wanting to cut many parts of government expenditure so that they can cut taxes. But the signs are that deficit deceit, creating an imperative that budget deficits must be cut as a pretext for reducing the size of the state, has come to an end in the UK. It will go down in history as probably the most costly macroeconomic policy mistake since the 1930s, causing a great deal of misery to many people’s lives.

Simon Wren-Lewis is a professor of economic policy at the Blavatnik School of Government, University of Oxford. He blogs at: mainlymacro.blogspot.com

 Simon Wren-Lewis is is Professor of Economic Policy in the Blavatnik School of Government at Oxford University, and a fellow of Merton College. He blogs at mainlymacro.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt