Gillian Tett, the Provost of King's College, Cambridge, where once John Maynard Keynes was both a fellow and a professor, and which was his academic base throughout his life, has written an article in the Financial Times, where she is a member of the editorial board, suggesting that countries around the world should be “alarmed about their nations' surging debt”.
Tett's article was written in response to a recent OECD publication on "Empowering Public Understanding of Public Finances". This, like much of what the OECD produces on economics, as I noted in a recent Substack article, is highly neoliberal in its outlook and analysis, which is, of course, exactly why Gillian Tett has quoted it, because it feeds straight into her debt paranoia. As she broadly correctly notes when seeking to summarise it:
Governments are being asked to manage long-term fiscal risks in an environment where public trust and people's willingness to tolerate trade-offs are low.
From there, Tett adopts the approach I explained in my article on normal people a week ago. She assumes a right to proclaim what is good for such people as a member of the educated elite. Her logic for doing so appears to be based on that promoted by the Rockefeller Foundation in the early twentieth century, when some of the richest people in the world thought that they had the right to set the economic and social policies that governments should follow, a logic we are still familiar with today because it still remains that of the world's elite from Musk, to Blair, and beyoind.
Tett then appears to assume that her readers in the Financial Times are, like her, a part of that elite, as she sets out to tell the world what they must learn so that they might understand just what it is that they should accept with regard to government spending, taxation, and debt. She does so by agreeing with the OECD, noting that in the report she refers to:
[T]he OECD argues that governments need to take four steps:
- demystify the budget for politicians;
- communicate clearly with the public;
- give citizens a proper voice in fiscal policy; and
- co-opt civic bodies to be fiscal advocates.
What is the goal? It is, based upon what I can only presume, from the construction of her article, to be her apparent attendance at an OECD seminar on this issue, that finance ministers should use social media platforms, such as Instagram, to explain debt and embrace simple metaphors, such as a household budget, to explain fiscal choices. As she notes:
Margaret Thatcher famously deployed this analogy, and it was used again this week on the BBC by Sir Howard Davies, former chief UK financial regulator.
There is, of course, one simple problem with that. It is that the household analogy is wrong (as the linked glossary entry explains). Worse than that, it is profoundly misleading and mischaracterises the nature and function of money altogether as far as a government is concerned, as well as the role of tax in the government funding cycle, and the nature and purpose of government debt, as well as government bonds.
It is as if Tett's great desire, as a member of the financial elite, is to mislead, because that is what she is suggesting be done.
And she suggests the threat should come with menaces attached. As she proclaims:
[T]he sad reality is that humans are highly skilled at selectively ignoring bad news. So the OECD's ideas seem unlikely to work without another ingredient: bond market pressure. After all, voters and politicians in Portugal, for example, only embraced radical debt-cutting measures after a market crisis.
So perhaps investors should now pray that something like a “goldilocks” crunch emerges — a wave of bond market turmoil that is just big enough to show voters why fiscal consolidation is needed, but not so big that it craters the financial system and economy.
She added:
Is it cynical to wish for such a jolt? Yes. But [this may be] be the only way to concentrate minds — ideally before we face a truly devastating debt explosion.
Let me, then, summarise Tett's debt-paranoid approach. First, without showing the slightest sign that she understands what so-called government debt is, or why it has risen, she is saying that governments must:
Keep people in the dark and feed them economic bullshit about a household analogy that is meant to mislead, and does.
Second, she is saying:
The beatings will continue until people agree that the eleite are right.
And third, she is saying:
Things might turn to shit if the elite do not get their way, and just to prove the point, they'll turn them to shit anyway by shrinking the state, just to prove they were right.
Either way, shit is what you'll get.
That's your lot.
Accept it.
Rarely have I seen anything I think so arrogant, brazen, or self-deluded, as well as just wrong, in the pages of the FT. But at least we know that the household analogy is being used quite deliberately as an economic narrative, and I can only presume Tett knows it is a falsehood designed to constrain government, in which case we know exactly where she, and the OECD, stand politically.
To support this post and to explain the household analogy, a new post in the 'View On' series has been published this morning. It includes an extensive reading list on this topic.
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To find out how Rockefellar and Big Oil influenced the world, changing the school curriculum, and introducing pharmaceuticals to the world, I can recommend:
* “The Dark Truth of the Educational System Shaped by John D. Rockefeller” (2023)
* “History Channel Documentary-How Big Oil Conquered the World”
Thank you
Brilliant response , Gillian Tett’s article was full to the brim with arrogance and you nailed her at every turn.
Mathias Cormann a right wing former West Australian Liberal finance minister and neoliberal is the current head of the OECD. (Secretary-General of the Organisation for Economic Co-operation and Development). He sets the tone.
Tett is a big disappointment. Having spoken quite clearly about the 2008 crash in terms of what went wrong, I’d hoped that she be someone who would help to bring a bit of sanity to all this. However, it seems that promotion has made her nail her colours to the mast.
To actually wish for another crash in order to dash the hopes and lives of millions is obscene; to encourage a powerful sector like finance to drive the economy into the ground – again – and isn’t one sort of happening anyway – is pure nihilism. It’s kamikaze style thinking – but this time the pilot bail will out before impact as central banks provide the parachute whilst the ship that is the wider economy will be left to sink with huge fatalities.
Do you know what: Tett’s article is declaration of war against democracy. In the Financial Times, and in broad daylight!! We should call it ‘The Tett Offensive’ because its both disgusting and quite clearly aggression in the pursuit of getting the upperhand for a sector that has many upperhands already. If we can arrest people for meeting at Quaker houses, then she can be arrested too I kid you not, for sedition for start.
Pleonexia anybody? Obviously! Appalling. And right under the nose of sovereign government!
I like ‘The Tett Offensive’
Broken record:
Tett would never ever appear on a e.g. YouTube video with you (or Steve Keen) for the simple reason she knows she would be torn to pieces.
Obviously, one hopes that this is not the case (& she would be humiliated – in much the same way that the gormless editor of The Economist was by Tucker Carlson).
I do not & never will buy the FT or the Economist – trash propaganda designed to keep the faithful on the straight & narrow (direct towards disaster).
Tett & Co are setting up a “tumbril situation” & they are too dumb to recognise it – they are comfy in their own well feathered nets – while the serfs suffer.
Agreed, Tett I understand is anthropologist by training but is now an apologist for the finance sector. She is not an economist at all.
The financial establishment, and the establishment in general, prefer the fascism of Farage and Trump to the prospect of a Socialist Labour or Greens. That’s why the City is in talk with Reform, and Burnham is promising he won’t upset the markets, pretty much signalling he won’t leave himself the fiscal rules to do anything but tinker at the endges. When I speak to people at work they aren’t falling for Farage, but the question of there being no money left and the State being too big is firmly entrenched.
What I would like to hear is an orthodox neoliberal economist explain what the precise “debt” to GDP limit is and why. Is it 80% or 100% or 150%? And why that specific number? What happens in the number is not reduced?
As I recall, when Cameron entered number 10, we had that famous note left by Labour saying there was no money. For 10 years we had a completely ridiculous austerity project which didn’t do anything useful, but was in fact completely self defeating. Then 2020 rolls around and COVID strikes and it turns out that we have loads of money to pay billions to companies and individuals and a few extra billion left over to line the corrupt pockets of politicians as well! Where did all that money come from and why did it not cause immediate catastrophe?
MMT explains what the limit of spending is and why. Neoliberalism never has, and I really don’t understand why they never get questioned on it. Gillian, what happens if we reach 110.5% debt to GDP? What about 110.6? When does the Kraken strike?
I am doing some theoretical analysis in this right now….
There will be more. So far the maths is working, so well it will fall out of view.
PSR’s ‘Tett Offensive’ – great!<p>
BBC Newsnight seems to have a love affair with Tett – she appears frequently, although she comes across as quite a debt-moderate compared with their other love – Matthew Syed who is apocalyptic about the need to slash public debt<p>
BBC’s own editorial guidelines – inadequate as they are – do explicitly warn economic correspondents to explain that the household analogy doesn’t work for a government. But of course Tett isn’t challenged on Newsnight – she is the sage , so cant be.<p>
It is plain as a pikestaff that the dominant narrative – as laid down by the murky powers that be- , is that ‘there is no money’, despite it being demonstrated time and again – including in 2008 and 2020 , that there is money when there needs to be.<p>
The fact that there is no open and clear way of protesting/complaining to BBC/Ofcom that they don’t feature any of the many heterodox economists like Richard , who would challenge Tett and Syed and co . suggests we are in a post-democratic Ministry of Truth era.<p>
It sounds like a conspiracy – but that’s how it feels.
It is a conspiracy
For heaven’s sake! Neoliberal economics is indeed a cult.
I know you are no big fan of M Mazuccato, but her interview a few days ago got a lot of favourable comments on YouTube. I joined those advocating giving your blog and channel a look. She is moving toward community involvement and avoidance of dismissive preaching, which is a step in the right direction. Maybe one day she will shake off the yoke.