Austerity Rory FAILS to libsplain economics to Zack Polanski
Rory Stewart gets taken apart for his put down of the Greens Zack Polanski:
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Rory Stewart gets taken apart for his put down of the Greens Zack Polanski:
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So Rory looks up a statistic prior to the programme then demands that specific statistic (that anyone could actually Google nowadays in seconds) then pretends because Zack can’t tell him the figure instantly that this indicates economic incompetence. I’m glad I don’t regularly watch this podcast if this is the type of regular behaviour in it towards guests. Let’s have someone on our show then have a wee snigger about them afterwards is also a rather revolting thing to do. Rory is a Tory which makes him a despicable human being right away whether he can tell a good story about his failed career or not and come across as a bit more pleasant and humane than the likes of Badenoch or Starmer, big deal! Who couldn’t? Campbell is a spin doctor ie someone who spins facts on behalf of politicians to make them look better than they deserve. Certainly both have experience of politics but neither have greatly helped the public in either of their roles. This is an exercise in gaslighting the public to believe than nothing can actually change. When in fact that’s not true if the political will is there to make change happen. Zack is on a different level to these people politically and they are too arrogant and blinkered to realise it.
Rory also labelled Gary Stevenson, of Gary’s Economics, a “pseudo economist” despite Gary having two degrees in economics and one specifically (M.Phil in Economics) from Oxford which is Rory’s very own alma mater.
It’s not a mystery, and their excitement is making them look very foolish. Polansky’s just further along the learning curve than they are, albeit his grasp is still pretty shaky.
The real mistake here is that Stewart and Alastair Campbell are both wrong. You do not have to pay all the interest we are paying. This is technical. The BoE pays interest on CBRAs held by the BoE (effectively as a form of post-Crash collateral provided by the Commercial Banks). It does not require to pay interest on all the CBRAs held. It chooses to do so. It could choose not to do so. The European Central Bank (ECB), and Bank of Japan (BoJ) do not pay interest on all the reserves. They operate a system called “tiered reserves”, with a bottom tier paying no interest at all on its reserves. It is a choice of the Treasury and BoE to pay all the interest; and in this the BoE is an outlier, an oddity compared with its peers.
There is a second way this is all wrong. The BoE is choosing to reverse QE, with QT; that is, selling the QE bonds back to the market. Now that interest rates are high, this is a terrible idea. The reason for that is, the capital value of the Bonds has fallen as yields have risen, and the BoE is shipping big capital losses. Again, Britain is an outlier. Even where other major Central Banks are operating QT, they do not sell them back to the market at the price of big capital losses; the ‘mark-to-market’ losses only crystallise under the Treasury indemnity as and when gilts are sold (OBR); these losses will crystallise will crystallise as QT is applied in the BoE.This is not a virtuous circle, but a vicious spiral. Furthermore, both the US Federal Reserve and ECB operate a system of “passive” QT, allowing for the maturity of bonds, or non-reinvestment to work through; and not the active QT sales in the market, pursued by the BoE.
The BoE is an outlier, in a global economy in which Britain influence and significance is shrinking. The structure of operations being used in Britain by treasury and BoE requires a complete overhaul. The world of central banking has changed. Britain hasn’t; and it certainly isn’t a paradigm to be followed.
Rory Stewart first appeared in the P.G. Wodehouse novel ‘Jeeves and the Spook in Trews’ (1926).
Should a responsible government make plans for what happens when the international money system collapses and we’re thrown back on the real economy? Aren’t these a couple of Great Game fantasists? I wonder what happens when the African Union push to get colonisation recognised as a crime against humanity is recognised at the United Nations.
https://www.theguardian.com/world/2025/nov/30/african-leaders-push-for-recognition-of-colonial-crimes-and-reparations
Of course, for the living planet’s sake, we’ll have to take out the USAmerican regime before its next Oil War.
I’m not well-versed in economics (although I’ve been watching the JK Galbraith docuseries The Age of Uncertainty on BBC iPlayer and much seems vaguely familiar), but the video commentary seems oblivious to the kinds of colonialism, neocolonialism and globalism that pits the interests of foreign and domestic workers against each other. Which is why Trump-populism says ‘bring jobs home’. If Britain cannot feed its own human population, it risks starvation if the international money system collapses. And that’s just one near-future potentially catastrophic failure. It will be countries closer to autarky with greater social cohesion which (initially) will ride out storm better. Capitalism is based on promises that can never be paid at global scale. It’s inherently unstable and prone to cascade failure.
Well, that was interesting. There were major challenging and difficult areas of monetary policy, of a technical nature that came out of the podcast. And not a single commenter wanted to engage directly with them.
It is an illustration of why we are in the mess we are in.
I thought the interview was perfectly fair. Zack has to learn to take the rough with the smooth in being questioned. He should also stop talking so quickly, he’s beginning to sound glib and clichéed . You may not like Rory’s own politics, but he’s entitled to his view, and his critique of Zack. The obvious riposte to Rory’s questioning would have been “well, I can’t give you an exact value, but I know its one heck a lot of money, but you know, Rory, I didn’t take on that debt – you did, so did you Alasdair, you and all your political colleagues. The Greens didn’t, and they wouldn’t have. You’re criticising my way of doing business, but what exactly are you defending , the GFC, our economic malaise, our crumbing social infrastructure, Thatcher’s evisceration of our manufacturing capacity, gross inequality, capitulation to corporate America? “” Zack also stumbled a bit on Japanese debt difference, which he should have been aware of. Though in a sense, if you think about it, that actually supports Zack’s own thoughts on debt and government spending. He could have explored that a bit with Rory. If he didn’t speak so quickly, or so reflexly, he might have had a bit more time to make these or similar observations.
The point everybody is missing that it wan’t just Polanski who wasn’t the complete master of a (trivially set up) brief; Stewart and Campbell clearly do not understand the technical monetary issues either. All three were in error; but Stewart and Campbell were far more foolish, because they pretended an authority on the subject Treasury issues, that they simply do not possess.
What this reveals is the bereft nature of our politics; politicians who do not understand what they are doing. If you operate a political two-party cartel under an FPTP system, you attract the wrong people into politics, but the eletorate receive the politics they deserve. Ignorance protects you from nothing.
The comments here have rather made the point, by missing the point.
@John S Warren, the British cultural deference to ‘breeding’ in preference to education, training and professional ethics emerges in the cult of the ‘gentleman amateur’, or perhaps dilettante, technically sometimes a manifestation of the halo effect (where success in one field of endeavour is supposed evidence of general ability).
https://en.wikipedia.org/wiki/Amateur
But studies of mainstream economics suggests all economists are wrong about something fundamental at any given time, there’s always a magic money tree somewhere (though schools disagree on where), and they are obsessed with the minutiae of supposed spending power regardless of the empirical application of their economic model to the real world. When the real world occasionally impinges and systems start breaking down, we suddenly discover elements of the real economy (like ‘essential workers’, ‘public health’ and ‘food’). Incidentally, I view racism as much more of a threat to social cohesion than immigration, to clarify.
I asked a serious question, and it’s one that serious institutions also ask. What is the government’s responsibility for catastrophe planning? I’ve noticed that cyberattacks and geopolitics (presumably including hot war, genocide, economic war, destabilisation etc) are mentioned in recent surveys as top concerns, along with nonbank financial institutions. There are a lot of things the USAmerican Federal Reserve, International Monetary Fund and the Bank of England don’t seem keen on seeming concerned about, though. Heads in the sand, or is doom-mongering self-fulfilling for them? If it was 89 seconds to midnight in January 2025, what’s the next estimate going to be?
Ahem, the point wasn’t missed at all. I stated it right at the top of the thread, and even used the word “foolish” you went on to use. Just sayin.