Watch a guest school a room full of establishment pundits, leaving Andrew Neil quiet as a mouse

Grace Blakeley on this week
Support us and go ad-free

On 26 October, guest Grace Blakeley schooled a room full of establishment stalwarts on the BBC’s This Week. By the end of Blakeley’s economics lesson, presenter Andrew Neil was quiet as a mouse.

Blakeley, a research fellow at The Progressive Policy Think Tank, cut through Conservative Michael Portillo, who was talking about “living within our means”:

Read on...

Support us and go ad-free

Blakeley said:

I think Michael’s actually hit on a point there which is that austerity doesn’t work. It’s counterproductive. And this is why we’re seeing the fact that the deficit hasn’t been eliminated. It was supposed to be eliminated in 2015… then it was 2018. And we’re still here having the same questions over and over again. And it’s because we’ve taken money out of the productive base of the economy. It would be like a business saying – a bar – ‘I’m going through hard times so I’m selling all my bar stools, I’m going to close an extra day a week and… I’m going to stop selling the more expensive beer. And ultimately… that reduces your revenues and then the business fails even more… And that’s what we’ve seen with austerity to begin with.

The economy currently only works for people who live off wealth

Neil also asked Blakeley:

What would the end of austerity look like under Labour?

She responded by pointing out that Labour’s platform is fundamentally transformative:

Investment spending is different

Blakeley later expands on her point that calculated investment in society brings about economic activity. Neil – who is also chairman of Conservative media outlet The Spectatorasked her:

What in your view should be the fiscal constraint on Labour?

And Blakeley took apart the premise of the question:

A really severe problem we’ve got since Osborne has been that he’s lumped investment spending in with current spending. And investment spending… on any measure generally has a multiplier of larger than one so when you spend a little bit you get that amount or a little bit more in returns down the line. You build a road; businesses accumulate around that road, they pay taxes.

Governments actually calculate ‘fiscal multiplication’ when they spend to invest. And, however it sounds, it’s not complicated. All it means is the money that is returned into the economy for every £1 of investment. So a fiscal multiplier of three would return £3 for every £1 spent.

The thing is, many people in the mainstream media, the Labour right and the Conservative establishment appear to have either studied flawed economics or ignored fiscal multiplication in order to justify austerity and privatisation, which transfer money from ordinary people to the already-rich. So it seems like a fresh idea on shows like This Week.

When Neil pressed her again on what should be the financial constraint on borrowing to invest, Blakeley responded:

You shouldn’t really need one as long as you’re doing that sensibly.

Well, there are obviously limits but those limits are quite big. Look at the amount that China’s borrowed… the entire expansion of the Chinese economy basically since the crash has been driven by its own government investment… that’s shown the amount of space governments can create – by borrowing – to build things that we need.

To be frank, Blakeley absolutely killed it. Neil, Portillo and Alan Johnson all looked out of their depth.

Austerity is a con, let’s end it ASAP.

Get Involved!

– Keep writing to your MP to express any discontent.

Support The Canary so we can keep holding the government to account.

Featured image via screengrab

Support us and go ad-free

We need your help to keep speaking the truth

Every story that you have come to us with; each injustice you have asked us to investigate; every campaign we have fought; each of your unheard voices we amplified; we do this for you. We are making a difference on your behalf.

Our fight is your fight. You’ve supported our collective struggle every time you gave us a like; and every time you shared our work across social media. Now we need you to support us with a monthly donation.

We have published nearly 2,000 articles and over 50 films in 2021. And we want to do this and more in 2022 but we don’t have enough money to go on at this pace. So, if you value our work and want us to continue then please join us and be part of The Canary family.

In return, you get:

* Advert free reading experience
* Quarterly group video call with the Editor-in-Chief
* Behind the scenes monthly e-newsletter
* 20% discount in our shop

Almost all of our spending goes to the people who make The Canary’s content. So your contribution directly supports our writers and enables us to continue to do what we do: speaking truth, powered by you. We have weathered many attempts to shut us down and silence our vital opposition to an increasingly fascist government and right-wing mainstream media.

With your help we can continue:

* Holding political and state power to account
* Advocating for the people the system marginalises
* Being a media outlet that upholds the highest standards
* Campaigning on the issues others won’t
* Putting your lives central to everything we do

We are a drop of truth in an ocean of deceit. But we can’t do this without your support. So please, can you help us continue the fight?

The Canary Support us

Comments are closed