Arguing against “really simple” economics

I blogged earlier about Labour’s decision to sign up to George Osborne’s “fiscal compact” and whether or not that was a good idea. I’ve just been reminded of a bit from Thursday’s Question Time when a member of the audience talked about being “really simple” with the government’s budget being just like his own. I wonder if this kind of thinking is was prompted John McDonnell’s move yesterday. As you can see in the video, economist Yanis Varoufakis quite succinctly set the audience member right, prompting applause from the rest of the audience. It shows that this kind of “common sense thinking” can be countered quite easily if the will is there. I suppose the question is whether the bloke who asked the question changed his mind after the exchange, or still thinks he is right:

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4 thoughts on “Arguing against “really simple” economics

  1. I was encouraged to see most of the people around the guy with the beers were grinning knowingly, so it suggests the household purse false analogy may not be quite as ubiquitous as it often seems.

  2. It is succinct, but I doubt the guy was any the wiser as to why he is wrong.

    Obviously the household budget analogy is stupid, but how can this be explained simply and clearly? The audience members appreciated it, but for a non-economics minded person, why should income fall with expenditure, as is said? The guy won’t understand that. How can we get this message across in a slogan?

    The Tories played big on the “maxed out our credit card” speak – complete arse but won them an election. What does the left-wing equivalent look like? Challenge for Labour is to identify it, and repeat it ad nauseum.

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