Clegg completes Thatcherite conversion with Maggie metaphor

At some point in early May, Nick Clegg’s economic philosophy switched from Keynesian to that of a deficit hawk. Today he completed the conversion by reiterating Margaret Thatcher’s flawed household debt metaphor.

During his speech today, Nick Clegg said:

“It’s the same as a family with earnings of £26,000 a year who are spending £32,000 a year. Even though they’re already £40,000 in debt. Imagine if that was you. You’d be crippled by the interest payments. You’d set yourself a budget. And you’d try to spend less. That is what this government is doing.”

The argument was first used by Margaret Thatcher in 1976 when she told Thames TV’s ‘This Week’:

“I think you’re tackling public expenditure from the wrong end, if I might say so. Why don’t you look at it as any housewife has to look at it? She has to look at her expenditure every week or every month, according to what she can afford to spend, and if she overspends one week or month, she’s got to economise the next.

“Now governments really ought to look at it from the viewpoint of ‘What can we afford to spend?’ They’ve already put up taxes, and yet the taxes they collect are not enough for the tremendous amount they’re spending. They’re having to borrow to a greater extent than ever before, and future generations will have to repay.”

But this line has been thoroughly debunked in recent times by The Times’ Anatole Kaletsky and New York Times’ Paul Krugman as well as by Keynes himself. Of course, until his Damascene conversion, Nick Clegg knew this. On Saturday May 1, he told Reuters that:

“My eight-year-old ought to be able to work this out – you shouldn’t start slamming on the brakes when the economy is barely growing. If you do that you create more joblessness, you create heavier costs on the state, the deficit goes up even further and the pain with dealing with it is even greater. So it is completely irrational.”

Lib Dem members tend to share this older view. A YouGov poll today found that only 29% of party members fully agree with the government’s policy of cutting spending to reduce government borrowing. An identical proportion of Lib Dem voters share Clegg’s position.

At some unknown point after the Reuters statement but before he spoke to Mervyn King, Clegg changed his mind. With his conversion complete, the Liberal John Maynard Keynes will be turning in his grave.

UPDATE 21/9:

The theme of this blog post was picked by a couple of commentators today. Matthew Engel in the Financial Times called Clegg’s metaphor, “the usual simplistic nonsense of comparing a governmental deficit with household debt”. Polly Toynbee in the Guardian calls it “that disreputable old populist fallacy”.

http://twitter.com/georgeeaton/status/25038337156 George Eaton

RT @leftfootfwd Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/estebanrooney/status/25038359273 Steve Rooney

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/sianberry/status/25038406780 sianberry

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/sinnaluvva/status/25038463456 Malcolm Evison

RT @leftfootfwd: Clegg completes Thatcherite conversion with Maggie metaphor http://bit.ly/bMscDR
http://twitter.com/sciamachy/status/25038519865 sciamachy

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/class_war/status/25038587545 Nick Hider

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/shamikdas/status/25038663661 Shamik Das

Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt: http://bit.ly/bMscDR reports @wdjstraw on @leftfootfwd
http://twitter.com/maizeyr/status/25038689093 Maizey R.

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/verbalid/status/25038932205 Nick Copland

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/dannycarrington/status/25039080127 Danny Carrington

"Clegg completes Thatcherite conversion with Maggie metaphor | Left Foot Forward"( http://twitthis.com/yioh6c )
http://twitter.com/psbook/status/25039705212 Political Scrapbook

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/rosiecosy/status/25039755869 Rosie

RT @psbook: RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/derekjohnbryant/status/25039790656 Derek Bryant

RT @psbook: RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/billbenbob/status/25039891199 Will Roberts

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/yorkierosie/status/25039913890 yorkierosie

RT @leftfootfwd: Clegg completes Thatcherite conversion with Maggie metaphor http://bit.ly/bMscDR #ldconf
http://twitter.com/gemmatumelty/status/25040014060 gemma tumelty

RT @psbook: RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/dizzyingcrest/status/25040063236 Dizzying Crest

RT @yorkierosie: RT @leftfootfwd: Clegg completes Thatcherite conversion with Maggie metaphor http://bit.ly/bMscDR #ldconf
http://twitter.com/alecspeaking/status/25040088404 Alec Speight

RT @psbook: RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/mindinflux/status/25040099828 Mind In Flux

RT @yorkierosie: RT @leftfootfwd: Clegg completes Thatcherite conversion with Maggie metaphor http://bit.ly/bMscDR #ldconf
Chris

FFS Cleggy is a fucking crypto-conservative – what a c***.
http://twitter.com/othertpa/status/25040475841 Other TaxPayers Alli

RT @leftfootfwd Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/danashley/status/25040501424 Dan Ashley

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/lewiscoyne/status/25040652380 Lewis Coyne

http://www.leftfootforward.org/2010/09/clegg-completes-thatcherite-conversion-with-maggie-metaphor/ Oh bloody dear, #ldconf
http://twitter.com/ranggrol/status/25040772147 Andrew

RT @psbook RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/jruddy99/status/25040797004 John Ruddy

Liberal Keynes is spinning in his grave RT @leftfootfwd: Clegg completes Thatcherite conversion with Maggie metaphor http://bit.ly/bMscDR
http://twitter.com/musicmp/status/25040803660 M McLaughlin

RT @yorkierosie: RT @leftfootfwd: Clegg completes Thatcherite conversion with Maggie metaphor http://bit.ly/bMscDR #ldconf
http://twitter.com/jphf/status/25040815607 JPP

RT @OtherTPA: RT @leftfootfwd Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/woods_george/status/25041265179 George Woods

RT @leftfootfwd Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/louhaigh/status/25041284606 Louise Haigh

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/timbird84/status/25041302557 Tim Holmes

"slamming on the brakes when the economy is barely growing" is "completely irrational" – Nick Clegg, May 2010 http://is.gd/fjJDX
http://twitter.com/adamfishpoet/status/25041713831 Adam Fish

Best bit of this: Nick's admission he now knows less about economics than an 8-yr-old: http://bit.ly/bMscDR (via @yorkierosie & @MindInFlux)
http://twitter.com/andy_s_64/status/25042413742 Andy Sutherland

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/andytannersmith/status/25042419746 Andy Tanner-Smith

RT @wdjstraw: Clegg May 1st 2010: Even my 8-year-old knows making cuts before the economy is growing would be wrong http://bit.ly/bMscDR
http://twitter.com/ladyedinburgh/status/25042663973 Sarah Brown

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/roehamptonchris/status/25042737670 Chris Roberts

@fentonstevens http://www.leftfootforward.org/2010/09/clegg-completes-thatcherite-conversion-with-maggie-metaphor/
http://twitter.com/ianmurraymp/status/25043203853 Ian Murray

Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/brucerisk/status/25043337678 bruce findlay

RT @IanMurrayMP: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/duncanweldon/status/25043793052 Duncan Weldon

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/darrenadam/status/25044477486 Darren Adam

RT @IanMurrayMP: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/simonsalento/status/25044605438 Simon Williams

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/ralphwjbrown/status/25044724298 ralph brown

RT @yorkierosie: RT @leftfootfwd: Clegg completes Thatcherite conversion with Maggie metaphor http://bit.ly/bMscDR #ldconf
http://bestblogs.labourhome.org/2010/09/20/clegg-completes-thatcherite-conversion-with-maggie-metaphor/ Clegg completes Thatcherite conversion with Maggie metaphor « The best Labour blogs

[...] More… [...]
http://twitter.com/jessica_asato/status/25045468918 Jessica Asato

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/beaubilly10/status/25045482999 fljf

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/rupertread/status/25048225942 RupertRead

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/maizeyr/status/25048342757 Maizey R.

@SJ_Consigliere This >
http://www.leftfootforward.org/2010/09/clegg-completes-thatcherite-conversion-with-maggie-metaphor/
http://twitter.com/janewatkinson/status/25050321762 Jane Watkinson

RT @leftfootfwd: Clegg completes Thatcherite conversion with Maggie metaphor http://is.gd/fjJDX
http://twitter.com/boredlondongurl/status/25052527548 Melissa Nicole Harry

RT @leftfootfwd Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/fionaradic/status/25052852903 Fiona Radic

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://www.touchstoneblog.org.uk/2010/09/with-clegg-in-liverpool/ With Clegg in Liverpool | ToUChstone blog: A public policy blog from the TUC

[...] Will Straw has already made this point at Left Foot Forwards. Related posts (automatically generated):Nick Clegg has no way to rebalance [...]
http://melangerie.blogspot.com Philip Walker

On the other hand, the Liberal Gladstone is probably smiling. One of the benefits of being a very old party is the ability to claim a genuine intellectual forebear for almost any policy position!

I rather think that proclaiming retrenchment to be “thoroughly debunked” is putting it a little strongly. Economics is not exactly famed for its clarity, or scientific testability.
http://twitter.com/inbirmingham/status/25054757056 InBirmingham

Clegg completes Thatcherite transition http://tinyurl.com/3x9zunb
Mr. Sensible

Will, just remember what Clegg said to Nick Robbinson in August.
“I changed my mind earlier than that [the Coaltion negotiations] … firstly remember between March and the actual general election … a financial earthquake occurred in on our European doorstep.”

“… to be fair we were all … reacting to very, very fast-moving economic events.”

http://www.leftfootforward.org/2010/07/now-clegg-claims-he-changed-mind-on-deficit-before-the-election/
trevors den

Don’t make me laugh.

Interest payments on debt are £30 billion this year. Next year it will be £43 billion; the year after … you get the message.

Well actually of course you don’t.

Was Keynes advocating debt interest payments which would surpass the education budget and the defence budget combined?
Was Keynes advocating debt interest payments which would amount to half the NHS budget?

And that is just interest payments; what about repaying debt? Yes in your dreams.

In fact whilst Keynes proposed that governments should indeed expand public expenditure to counteract the effects of economic contraction, but when in times when the economy was growing strongly Keynes said the government should reduce demand and, in effect, save up for a rainy day.

Since you are a fan of Keynes you should remember that after the war he negotiated a loan of £55 billion in todays money. It took 60 years to pay off. Our current national debt is heading for £1.4 trillion.

Oh sorry – these are figures and money. Do move on.
http://twitter.com/johnnymcardle/status/25057826525 John James McArdle

RT @leftfootfwd: Clegg completes Thatcherite conversion with Maggie metaphor http://is.gd/fjJDX
http://twitter.com/unisoneastmids/status/25064491506 UNISON East Midlands

Clegg completes Thatcherite conversion with Maggie metaphor http://is.gd/fkdtL
http://twitter.com/cllrkrichards/status/25066283807 Kevin Richards

Clegg shows his real colours when addressing conference @leftfootfwd: Cleggs Thatcherite conversion with Maggie metaphor http://is.gd/fjJDX
http://twitter.com/draxfacts/status/25075060040 Grosvenor Long-Wall

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://order-order.com/ Guido Fawkes

Hold on a second, you need to take a reality check, Clegg and Cable were talking about the necessity of “savage cuts” over a year ago. cable wrote a pamphlet for Reform advocating cuts that go further than those on offer by the Coalition.

Those facts don’t correlate with your “the LibDems have sold out for power” narrative. The truth is different, they were never as left-wing as you fantasised, if they were they would have been in the Labour Party.
http://twitter.com/wdjstraw/status/25097849212 Will Straw

Nick Clegg is absolutely brazen claiming that he has always been consistent on the deficit reduction timetable. http://bit.ly/a4RLKv
http://twitter.com/sms_policywatch/status/25098096100 SMS PolicyWatch

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://twitter.com/smartstuff99/status/25098451611 Andy Smart

@ASwabey He doubts me! http://bit.ly/9R7v6r
http://twitter.com/paul0evans1/status/25098625246 Paul Evans

Clegg's Thatcherite conversion really is very difficult to swallow http://bit.ly/dm46wb
http://twitter.com/stephenemoss/status/25098706006 Stephen Moss

RT @Paul0Evans1: Clegg's Thatcherite conversion really is very difficult to swallow http://bit.ly/dm46wb
http://twitter.com/odbe34/status/25098779068 Owain Gardner

RT @wdjstraw: Nick Clegg is absolutely brazen claiming that he has always been consistent on the deficit reduction timetable. http://bit.ly/a4RLKv
http://aleddilwynfisher.wordpress.com/2010/09/21/dilwyns-daily-digest-tuesday-21st-september-2010/ Dilwyn’s Daily Digest – Tuesday 21st September 2010 « Aled-Dilwyn Fisher

[...] also used a classic Thatcherite metaphor, as highlighted by Will Straw at Left Foot [...]
http://twitter.com/kieronam/status/25099961349 Kieron Merrett

RT @wdjstraw: Nick Clegg is absolutely brazen claiming that he has always been consistent on the deficit reduction timetable. http://bit.ly/a4RLKv
http://twitter.com/fortunejf/status/25100354496 Joe Fortune

RT @wdjstraw: Nick Clegg is absolutely brazen claiming that he has always been consistent on the deficit reduction timetable. http://bit.ly/a4RLKv
Will Straw

Guido,

Surely we judge the Lib Dems on what they campaigned on. Clegg’s “savage cuts” rhetoric ahead of last year’s party conference disappeared as soon as it started while the Lib Dem manifesto only set out £10 billion of new savings / tax rises. Critically, the IFS said that the Lib Dem plans were “no more or less ambitious than the [Labour] Government”. Little wonder when Clegg was so dismissive of the Tory position.

Will
http://www.order-order.com Guido Fawkes

Well you seem to be switching your evidential basis, complaining about rhetoric here now and deriding the importance of rhetoric in the past. Make your mind up.

Fact is you and many on the wonkish left were fantasising about some kind of progressive coalition, it was delusional. Clegg-Cable-Laws and the rest were never going to sign up with deficit deniers.
http://www.shamik.co.uk Shamik Das

Guido, there’s no deficit denying here – take a look.
John Bracewell

The ultimate insult if you are Labour, the ultimate accolade if you are Conservative. But one thing is for sure, all actions by everyone everywhere are judged against what Margaret Thatcher did/said, that does not say a lot for Blair/Brown does it? People are seeing through that pair of wasters more and more as time passes.
Mr. Sensible

‘trevors den’, if as a result of these cuts you cut out demand in the economy, you reduce growth so tax receipts are less, you reduce jobs so tax receipts are less and benefit payments go up, and in both cases you therefore reduce the chances of actually cutting the deficit.

Look at some of our European neighbours; they started embarking on cuts, and as a result Ireland, for example, has had its credit rating cut.

And, Guido, I believe the Lib Dem manifesto advicated no VAT increase, no cuts this year and a 1-year stimulous.

There’s compromise, and then there’s doing an about turn on probably the biggest issue of the election.
http://twitter.com/wdjstraw/status/25136872094 Will Straw

@albiondumsday Fair enough! The full debate is in the comments to these two pieces http://bit.ly/bMscDR and http://bit.ly/cwi0zO
http://twitter.com/jon_w_h/status/25143232682 Jonathan Holt

RT @leftfootfwd: Clegg completes Thatcherite conversion with flawed Maggie metaphor on household debt http://bit.ly/bMscDR
http://modernityblog.wordpress.com/2010/09/21/some-round-up/ Some Round Up? « ModernityBlog

[...] Left Foot Forward on Clegg completes Thatcherite conversion with household debt metaphor. [...]
http://www.leftfootforward.org/2010/09/is-the-coalition-unfairly-targeting-scotland-for-cuts/ Is the coalition unfairly targeting Scotland for cuts? | Left Foot Forward

[...] days after Left Foot Forward highlighted Nick Clegg’s use of Thatcherite language during his conference speech, more evidence has emerged [...]
red trev

It does’nt matter which way you cut it,in the final analysis the lib-dem’s are screwed.When the full nightmare of the cuts sink’s in, their shabby little party shall carry the mark of cain for a generation at least.Its just a question of when the coalition implodes, and how big labour’s landslide will actually be.
http://leftoutside.wordpress.com/2010/09/24/nick-clegg-david-cameron-and-margaret-thatcher-all-think-the-national-debt-is-too-small/ Nick Clegg, David Cameron and Margaret Thatcher all think the National Debt is too small « Left Outside

[...] was no less certain, a government should borrow like a household (thanks to LFF and The [...]
http://www.leftfootforward.org/2010/10/what-a-difference-a-year-makes/ What a difference a year makes | Left Foot Forward

[...] Nick Clegg’s conference speech, George Osborne equated the structural deficit to a “credit card bill” despite the [...]
http://twitter.com/cuchulaindundee/status/121922078197813248 Alan Cowan

Clegg completes Thatcherite conversion with Maggie metaphor | Left Foot Forward http://t.co/X7vEtYcK
http://www.leftfootforward.org/2011/10/everything-you-know-about-the-thatcherite-consensus-is-wrong/ Everything you know about the ‘Thatcherite consensus’ is wrong | Left Foot Forward

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