Twitter japes, tragic jokes and David Cameron’s deficit fetishism.

I recently spent a very enjoyable half hour trolling David Cameron on twitter.

I would genuinely be less angry if arch nobber @David_Cameron was an evil genius rather than an ignorant clown. November 11, 2015

Ha! “I cannot accept your description of a drop in funding of £72m or 37% as a ‘slight fall’.” @OxfordshireCC boss corrects @David_Cameron

— Laurence Peacock (@LaurencePeacock) November 11, 2015

The whole episode was thoroughly uplifting and I really would recommend it if you find yourself feeling listless.

But fun though Dave bashing is, there’s a darker comedy to be found in the exchange of letters between the PM and the Leader of Oxfordshire County Council, Ian Hudspeth.

“Dear Ian”, begins Dave “Man of the People” Cameron, displaying that legendary common touch, like a Boris Johnson you’d trust with your daughter. “Yours, David” then explains he is writing to fellow Tory humanoid, “Ian”, about Ian’s 2016/17 Oxfordshire County Council budget. Dave needs Ian’s help, you see. He needs Ian to spend less money because Ian is in the “public sector” and therefore needs to “to play [his] bit to help pay off the deficit the last Labour Government left.”

It’s odd to see this nonsense peddled in private. It must be quite a thrill to come out with it in public. Like playing Bogeys in class. “Did you hear that one, Miles?” the Prime Minister asks of an aide after a particularly big bluff on financial responsibility. “That was a big one and no one even noticed. I think I’ve got an erection…” But in private, why bother? Who is there to give a nudge and wink? Who’s he trying to impress? It’s almost as if he believes it.

The character known as Dave then goes on to suggest a number of ways that Ian could save money. He could sign up for “devolution”, which appears to mean getting a small amount of cash to accept responsibility for a massive problem (aging populations and social care); selling off Council assets, which are presumably being horded greedily away; and sharing emergency service organisation with neighbouring Councils.

In any case, Dave assures Ian, making savings shouldn’t be too difficult, given that Ian’s piggy bank has actually increased in recent years. Yes, there’s been a “slight” fall in funding, but when you really look at the figures (and various reallocated spending pots) you’ll see the Council’s “spending power” has actually gone up by 1.3%.

So why, wonders Dave, is Ian so intent on cutting all those things that leave a warm fuzzy feeling in his synthetic aortic region (elderly day centres, children’s centres, libraries, museums)? It makes Dave sad.

Ian’s reply should be read in full by anyone interested in David Cameron’s understanding of the nation’s finances. But I’ll summarise for comedy effect underneath, like sarcastic subtitles.

Ian, in the nicest possible way, tells Dave to do one. You cannot call a 37% drop in the Central Government Grant a “slight fall”, he points out, correctly. And you could come to the conclusion that Oxfordshire County Council has only saved the apparently negligible figure of £204m since 2010 if you ignore the fact that this is not a total figure but an annual one. To quote Ian, “I cannot emphasise enough that £204m is NOT a cumulative figure.” (I like a fellow who is willing to use CAPITALS at the Prime Minister. I wonder how badly he wanted to stick an exclamation mark at the end of that one.) Since 2010/11, Ian adds, the total savings have actually been £626m, which means Dave is only out by about two thirds.

So too would flogging off Council assets to make up any long term shortfall be “neither legal, nor sustainable.” Another point to Ian, you would have thought. Ian also thinks this is a good moment to mention the Council has already reduced employee numbers by 37.4% and, just in case Dave forgot, “additional functions have been transferred to local authorities since 2009/10”. Ian’s being a bit coy here, as by “additional functions” he means looking after some of the most sick and vulnerable people in our society. But, yeah, additional functions…whatever.

What Ian’s reply demonstrates so worryingly clearly is the Prime Minister’s profound ignorance over a) his own constituency’s local finances and b) the impact that decreased spending has on people’s lives.

All of this is obvious and important but there’s one more oversight the letters make clear - the profound and debilitating hold that deficit fetishism has over the government.

“Deficit fetishism” is a term coined by the economist Joseph Stiglitz for the mindset which views eliminating the gap between government spending and government income in any given year as the primary task of fiscal policy. This is the PM’s view. It’s also Ian’s. “Reductions in public spending,” in order to “remove” the deficit is “something I fully support and will deliver in Oxfordshire,” he says at the start of his letter.

Ian’s problem is that between these opening remarks and his closing promise to “meet the deficit challenge”, he meticulously details why this is not a good idea. In summary: important stuff is expensive. It’s more important that we have the stuff rather than reduce the deficit.
The stuff includes: health care; protecting the neediest and most vulnerable (50% of the Council budget is spent on 2% of the population); provision for the growing number of over-85s (up by 25% by 2020); safeguarding the increasing number of children in care; paying for the education of those (and other children). In other words, Ian seems to be implying that the costs of cutting spending to reduce the deficit far outweigh the benefits of doing so. He ostensibly signs up to deficit reduction then spends five detailed pages outlining why further budget cuts would be unwise, unsafe and unfair.

But Ian has no where to go. One you’ve accepted that reducing the deficit is the most important task, one that must be done no matter what (because sound public finances are the only way to ensure present and future spending) well, then, you’d better just get on with it. Tough luck, Ian. These letters aren’t arguing over ends. They’re arguing over means. If reducing the deficit is paramount, then everything else is “minimising reductions in the services people most value”.

Our problem of course is that the end is bunkum. Deficit fetishism is an economically counterproductive policy based on a factual error. But Ian’s has found to his (and the people of Oxfordshire’s) cost problem that it’s not up for debate. The faulty premise was the price of admission. Ian can’t tell the King he’s mad because the King only talks to people who agree to his madness. Cameron’s ignorance is, in this way, curiously irrelevant. Whether his figures are out by a factor of two, three or four, misses the point. We said goodbye to facts and sense a long time ago. And Ian went down the rabbit hole the moment he signed up to deficit reduction:

“But I don’t want to go among mad people,” Alice remarked.

“Oh, you can’t help that,” said the Cat. “We’re all mad here. I’m mad. You’re mad.”

“How do you know I’m mad?” said Alice.

“You must be,” said the Cat, “or you wouldn’t have come here.”