Propaganda

I've avoided the various leader 'debates' on this election campaign, as indeed I have found myself listening to the radio less. I can't really deal with the amount of energy that is wasted making empty promises about a few marginal issues that will not affect the long term economic and existential viability of our country. However I can't avoid the news entirely and was pleased to hear that Ed Milliband finally tackled head-on the view (presented as fact for the last five years) that the last Labour government bankrupted the country through financial profligacy. He apologised for the lack of regulation that helped cause the global financial crisis (rightly) but refused to apologise for borrowing against an (apparently) strong economy. Of course the audience member who had asked the question was incredulous, blurting out his own variation on the received wisdom that he has to balance his household budget from week to week, so a government should do as well. Leaving aside the fact that a national economy is nothing like a household economy for the moment, what Ed and chums should really point out is that is exactly what they did. When a household is doing well and you're both earning a decent salary and you've paid off your student debts and you've got a bit of savings, what do most people do? Borrow four times their annual income to buy a house, based on the received wisdom that as we get older our salaries increase and we will not lose our jobs. Once we have factored in the repayments for this debt into our household budget (i.e. balanced it), we think about borrowing more, maybe to buy a car or a conservatory. None of these things unbalance our household budget, because the repayments are within our means, we can pay our mortgage, our car finance etc and still afford a pint at the end of the week (the measure I believe the audience member used). Of course if the company we worked for suddenly went bankrupt, what would we do then? How would we pay for the mortgage and car? Well, we could probably give the car back, but what about the mortgage? We still need a house to live in. If we were confident we might try and get some sort of bridging loan until we got another job or maybe borrow some money to start a business, so we were able to pay the mortgage. We could try to make some savings, maybe by not feeding or clothing our children; after all, what's the point in them having full bellies or clothes if they don't have a house to live in. I guess if we take no action, we'll be out on the street, where we would have to rely on state benefits (assuming this household is in a country that has state benefits). 

Anyone who is not a total idiot will be able to see the crude analogy I am attempting to draw above, but it is less crude than the analogy with household budgets that the current right wing orthodoxy wants us to understand. Of course a national economy is infinitely more complex than a household budget, but even a household budget is more complex than whether you have enough cash in your pocket for a pint at the end of the week. However, as far governments treating the economy like a household budget go, I would say the last labour government did a pretty good impression: borrow against your income whilst your income is good. Interestingly it was households borrowing not against their income, but against the possible future price of their house that caused the last financial crisis. Is that the kind of household budget we want? Given that the current 'recovery' is based almost entirely on a property bubble, the current government's household budget does feel rather subprime. But that's not the narrative; there is only one way to balance this household budget and that is sell the family silver and clothe the children in rags. 

These analogies are crass to the point of being useless, but then so is most of the rest of the 'debate' in this election.