December 9th, 2013

SKETCH: The Office of Budget Bollocks at the Treasury Committee


A sketch based on pride, prejudice, assumptions, speculation, incomplete information, wild data and carried off with unsubstantiated assertions of professional expertise.

No different from its subject, then, the Office of Budget Responsibility. Its senior management were up before the Treasury select committee to discuss their response to the Autumn Statement.

At the table three economists.

In medieval times they’d have been consumed by burning faggots. Now they are employed by the Treasury to say things John Dee would have thought far-fetched.

For one thing, they have a description, or forecast or projection of the economy 50 years hence.

The gluteal mass on which you sit, reader, knows as much about our 50-year future as the OBR. That is the only absolutely true and useful fact in this sketch.

Some committee members wanted the OBR to talk about the dangers, difficulties and desirability of a fast growth in house prices. Mark Garnier asked the OBR’s Robert Chote if he had a view on what the ratio of household debt to income should be.

Chote: (Pertly). No. (Pause for laughter. It didn’t come.) If you have an increasing housing market. More transactions. More expensive houses, you’ll see a debt-to-income ratio rising as a consequence of that. You won’t necessarily be seeing a big change in the household net asset. Which we haven’t.

Please note the lack of answer in that reply, rendered verbatim.


Robert Chote has a haircut which is (seasonally-adjusted and regionally-weighted) unforgiveable. It’s a thick crew cut with a closer trim at the sides. He has a long, sharp nose which you want to grab and use his head as a brush to remove lint from your cardigan.

Then it was Stephen Nickell’s turn to patronise the committee with his scruffy condescensions. Garnier had mentioned a household balance sheet, and wanted to know if things were getting out of hand in the property market, what with the surge in house prices. Nickell addressed this member (a former fund manager) saying: “A balance sheet has assets and liabilities. You can’t describe a balance sheet by describing liabilities.”

That is like saying to a bespoke tailor: “You can’t put your trousers on before your underpants.”

Garnier’s point is that household debt was soaring to levels we’ve never seen before. In the 80s it went up a modest 10 or 12 per cent and funded that boom. In the decade before the crash it went from 100 to 170 per cent. It walloped away. And the OBR, Garnier suggested, was saying that was absolutely fine.

“We’re not describing it as fine or not fine,” Nickell said with an expert touch of high table weariness, to suggest he was addressing his intellectual inferiors. He went on to deploy 180 words of this and that – perhaps a massive anagram – to disparage the question without engaging with the substance of it.

Is our economy dependent on house prices for growth? And will it come back to demolish us if interest rates soar (what with QE)?

These are very pertinent questions. But economists are the least-best placed people to answer them. Philosophers and anthropologists can tell us more than these dismal ning-nongs.

PS: Stephen Nickell was one of the 364 economists who signed the catastrophic letter to the Times in 1981. That letter said that there is “no basis in economic theory or supporting evidence” for the budget Howe had produced. And the recession promptly turned into the famous boom. Nickell issued an on-the-one-hand-but-on-the-other clarification of his position.

These highly-paid professionals are, essentially, gutless astrologers and need to be – what’s the modern equivalent? – humbled.


87 Comments

  1. 1
    LB says:

    http://www.if.org.uk/archives/2031/ons-reveals-full-uk-pension-liabilities

    The results showed the extraordinary sums that Britain has committed to pay its future retirees. In total, the UK is committed to paying £7.1 trillion in pensions to people who are currently either already retired or still in the workforce.

    That’s growing at over 700 bn a year.

    Taxes, all of them 700 bn.

    Hmm you don’t have to be a mystic like Dee to see which way its going to end.

  2. 4
    tn02 says:

    Love the title!

    • 25
      Jan Uittenbroek says:

      Must be great for him now. He must have thought of such headlines when with the Indi and they would never have printed them.

  3. 5
    Bill me says:

    life is bull.
    when.
    put right heel down firmly.
    next hop on to the left foot and ride around the clock tonite.

  4. 7
    Penfold says:

    “” humbled.”””

    No hung, drawn and furcking quartered and then tossed into a Vat of acid.

  5. 8
    dai sartorially says:

    if stephen nickell was tidied up a bit would he make a passable tramp?

  6. 9
    Phwoooar! says:

    Tulisa can sell me coke any time. She is hot.

  7. 10
    JadedJean says:

    Something for those impressed by prizes and experts to take on board:

    “In his speech at the 1974 Nobel Banquet Friedrich Hayek stated that if he had been consulted whether to establish a Nobel Prize in economics he would “have decidedly advised against it” primarily because “the Nobel Prize confers on an individual an authority which in economics no man ought to possess… This does not matter in the natural sciences. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence. But the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally.”

    On the Economics “Nobel”

    http://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economic_Sciences#Controversies_and_criticisms

    • 76
      The General Public says:

      Spot on.

      If someone adds magnesium to dilute hydrochloric acid, what happens next isn’t informed by their political leanings, it just happens, every single time. T

      That’s why economics isn’t a “science”. It actually sits somewhere between tarot-reading and horseracing tips.

      • 80
        Just Saying. says:

        Interesting that in the USA the emerging thought gaining acceptance is that the USA $ will lose its status as the world’s currency, and provoke a massive economic change in the US that will make 2008 seem like a summer shower.
        America is borrowing $200 million per hour in all 365 days in the year.
        Its debt and hidden foreign debt (put at $5 trillion off the books) is over $20 trillion, which is larger than the whole of all EU debt.
        The way the USA determines unemployment is also under fire with major economic media stating the real figure is just over 14%. One in seven people in the USA are on food stamps.
        Here we have the BBC et al constantly castigate UK performance and benchmark us against the rapidly being villified Obama administration data.
        Hayek was spot on, and a left wing economist is an oxymoron.

  8. 11
    Flashback says:

    A question for the old farts here who lived through the era of the Profumo scandal. Err, what was it like?

  9. 12
    Blowing Whistles says:

    Sketch: “… professional expertise”

    Would that be from the disproportionate number of duplicitous, rhetorical, jargon, actually pig-ignorant of the law creating masses who infest our parliament – from the legal bastard classes – who ‘believe’ Their own rectitudedness in that what they tell others [sheep] is legal?

  10. 13
    Blowing Whistles says:

    Let’s see now – tens of thousands of immigrants coming soon. Within months the crime rates are going to rapidly multiply and soar. So what’s the lawyer classes to do. Increased crime equals – “mega bucks” of fees for the legal types – its bonanza time all over again – and who fucking pays – The British Public pays.

    Now can you see why there is scant attention paid by the legals in parliament and elsewhere to the issue of that our borders must be shut?

    Oh it isn’t politically correct to say that … yeah ‘cos no fucking MP or legal has the backbone to say it.

    • 16
      Carruthers says:

      Yes Sir, we get it. You don’t like lawyers.

      • 18
        Blowing Whistles says:

        I refer to Mark Twain’s – classic quote if I can quote it off the top of my head

        “The mere mention of the word lawyer is enough to deprive any man of all public confidence”.

        I fucking detest the bastards by the way.

        • 23
          Going down says:
                                     __T__I___...__7~
                       ,_           `"|-=||==|==|==|
                       [_`'---...,____|"_||__|__|__|_
                       | `'---...__BLOWING_WHISTLES__]
             haha~^~-~^-^~^'----~^~---~---------~^---'`~^-^~~^-^~^
          
        • 27
          Anonymous says:

          I detest the way they are allowed to operate.

  11. 14
    Mirror says:

    Influential Public Accounts Committee report suggests drug smugglers and wealthy gangsters could be taking advantage of Britian’s slack border regime. Britain’s blundering Border Force is failing to protect the country from criminals and illegal immigrants, a damning report has revealed. MPs on the influential Public Accounts Committee suggested drug smugglers and wealthy gangsters could be taking advantage of the country’s slack border regime. The warning came after MPs found officials were failing to search lorries properly for smuggled goods or migrants. Passengers coming into Britain on private planes and boats were also being neglected, potentially letting millionaire gangsters off the hook. The damning report said the Force missed almost HALF of their own seizure and detection targets. MPs blamed outdated computers and government cuts for leaving the Force without the kit needed or enough staff to cope.

  12. 15
    JadedJean says:

    The right is free-market, Libertarian, i.e precisely what caused the financial crisis through excessive leverage/credit ie predatory lending in the first place. If Europe is moving to the right that can only be because efforts to regulate financial services are in fact failing, and these efforts to regulate are failing because most people are being misled into falsely believing that regulation is right-wing. The psychology of this is really quite clever. Anarchists (deregulators) will have most people fearing regulation by making them associate it with fascism. But fascism was left-wing not right-wing. What the financial services fear is a return of legislation in the USA and Germany from 1933 onwards which was effectively Keynesian. Economics for much of the last forty years has been non Keynesian. See Friedman, Hayek etc and what they vilified and look into who the most prominent economists have been since the end of WWII.

    It is statistically unexpected.

    • 62
      Jaded Bollox says:

      You can obviously read. Unfortunately, your ability to understand is somewhat limited.

      Then, you are a Nazi, so your failings are entirely understandable.

      • 79
        JadedJean says:

        I have been led to believe, by a credible source, that over the years, classical economists were effectively moved aside in academia and elsewhere in favour of Chicago/Austrian School anarchists who worship deregulation and promote egalitarianism + caveat emptor despite overwhelming biological evidence for behavioural diversity (i.e that some/many people are childlike).

        Liberals are very fluent in my view, only because they conveniently ignore the complexities of sociobiological reality.

      • 82
        Jimmee the Red Naughtie - BBC resident Com. says:

        Hey hey hey you are describing me and I dislike that as I am communist.

    • 78
      Sarbanes Oxley says:

      actually I caused the crisis.
      I explained that as long as everyone ticked the right government mandated boxes they didn’t need to worry about risk.
      Regulation and micro management increase risk. They don’t reduce it.
      Just look at your pension performance. You have to fit on one of four government mandated risk classes. The more risk averse you declare yourself the more “safe” government debt is in your portfolio. But as anyone can work out some government debt is not safe, eg Greek sovereign debt. And all government debt falls in value when intrest rates rise. Given where interest rates are now which way do you think they’llgo next?
      You’re not Ed Balls are you?

  13. 19
    Wilberforce Claiborne Humphries says:

    “In medieval times they’d have been consumed by burning faggots…”
    That’s right, bring up faggots, you homophobe!
    You leave us out of this, duckie, or we’ll cause a scene!

  14. 24
    Gordon Brown says:

    I’m horny.

  15. 28
    Cast out for speaking human says:

  16. 29
    Urban Dic says:

    1. Chote

    Chote is a derogatory slang abbreviation of the word choteus meaning that of a man’s penis which is wider in length than it is long. The word chote is a fast growing adjective used in the Australian coastal town of Currumbin to describe a frustrating or stupid person who is behaving inappropriately (namely a male). The word also is a local greeting term to acknowledge friends or acquaintances known over a long period of time and or seen on a regular daily basis.

    derogatory usage -
    Have a look at this choteus trying to be chairman of the Office of Budget Responsibility, he’s got no idea.

  17. 30
    Cast out for speaking human says:

    • 52
      UKIP, the finale solution says:

      More common sense in 10mins than comes out of Westminster in ten yrs.

      A good and decent man, no wonder the liblabcon and their running dogs have tried so hard to destroy him, the last thing they want is good and decent politicians in charge, it would ruin their plans for the UK.

      • 69
        The Real Alternative says:

        +1 Bloom’s honesty obviously terrified the LabLibCon, so they set their attack dogs on him.

  18. 37
    Dave the Shark says:
  19. 43
    Quentin Letts says:

    It was 364 economists in 1981. If you’re going to take the piss of their counting skills at least get the numbers right.

    • 46

      Simon’s figure is quite correct if you take into account SSAP 16 (Standards on Inflation Accounting), Quentin.

    • 86
      Quentin Letts says:

      Oop. Looks like the Ministry of Truth has changed it to the right figure now. And who said the Guido comment thread is just a bunch of nutjob blowhards who no-one takes any notice of?

  20. 49
    albacore says:

    The Office of Budget Responsibility?
    Where is that based – in the Sea of Tranquillity?
    The loons and spoons let loose to run Great Britain now
    Are of about as much use as a moon-struck cow
    Which is bad enough for suffering English folk
    But don’t top being copped for a Mandela joke

    http://www.dailystar.co.uk/news/latest-news/354830/Locked-up-for-EIGHT-hours-for-telling-Nelson-Mandela-joke

    • 51
      John from Hull says:

      Responsibility ? MPs ?? Utter tosh !
      Any self-respecting* politician aspires to be Minister for Administrative Affairs, if you catch my drift.

      (*Heaven knows we don’t respect anyone else.)

  21. 53
    a non says:

    Bit unfair to Astrologers Simon.
    Much more sense in their simple horoscope than in an economic think tank horrorscope.

    • 84
      Pundit Too. says:

      They have formed the largest black sky area in Europe over Cumbria.
      I always believed it was over Westminster.

  22. 54
    Anonymous says:

    I’m sorry but all comments should now end as there’s a memorial service about to start and it would be entirely inappropriate for life to go on as normal.
    At 8am, everyone must start crying, remembering the oppression and stuff.

    • 56
      Charles Dodgson says:

      How doth the little crocodile
      Improve his shining tail,
      And pour the waters of the Nile
      On every golden scale!
      How cheerfully he seems to grin,
      How neatly spreads his claws,
      And welcomes little fishes in
      With gently smiling jaws!

    • 85
      BBC - Bringing Back Communism says:

      Don’t worry we have wall to wall 24 hour coverage of this sad / joyous occassion to totally bore you to tears with, and take the opportunity to twist history and give out disinformation.

  23. 55
    My fervent wish says:

    Please please please please make everyone in the stadium do all that dancing stuff they do for the cameras….and make Gordon Brown and Camermong feel obliged to join in.

  24. 58
    Anonymous says:

    Given their disrespectful and utterly unhelpful responses the person who appointed them should be fired. Hailing that MPs (or the other place) should have the right to recall them to attend a new confirmation hearing. The threat of that would alone make their sponsor think about it more.

    Imagine the HoC or HoL recalling and refusing to endorse their re-appointment. The Chancellor would be in an impossible position and likely have to resign (at least, in pre-coalition conditions, he would have).

  25. 59
    POLITICIANS SKIMMING OFF THE BACKS OF THE TAXPAYER FOR 900 YEARS says:

    Come to South Africa for the biggest photo opp of the century

  26. 63
    HEARDITALLSEENITALLBEFORE says:

    An 11% pay rise tells us all we need to know about the true rate of inflation , can we now assume all state pensioners will receive a similar rise next April.
    Incredibly one of the reasons put forward for this rise was to lessen the NEED for corrupt expenses claims.

    • 65
      POLITICIANS SKIMMING OFF THE BACKS OF THE TAXPAYER FOR 900 YEARS says:

      We can only hope that they all slowly choke to death on large pieces of taxpayer subsidised food

  27. 67
    JACK STRAW says:

    I can’t wait to shake hands with my old mate Robert Mugabe

  28. 68
    Oops says:

    Is Winnie wearing a necklace today?

  29. 71
    The New Messiah says:

    This is what it is all about. All this political bollocks. We have these people plus our MPs and thousands of others in quangos telling us crap like water is dangerous to drink or some other such bollocks.

    We pay them billions to be patronised by this bollocks.

    But there is an alternative. All MPs do is hav debates and vote on those debates in the Commons. Oh yes and then there is the Lords with even more taxpayer money being pissed up the wall. Oh yes and then there is the EU with even more billions being sprayed around and over which the pleb has little or no say.

    So what is the alternative to this medieval system of government that passes for democracy?

    Simples.

    We should have televised debates with both sides of an argument (such as should we be in the EU or should fracking be allowed). Each side has export witnesses which can be cross-examined by political barristers as in a criminal trial. This would make political television far more appealing and unbiased than it is now, especially if the TV presenters are banned from making any comment.

    At the end of the summings up, the jury (i.e. the electorate) is asked to decide in a referendum which policy should be implemented. To make the process cheaper several referendums can be decided at the same time.

    There is no reason why the plebs can not come to just as intelligent a decision as MPs. And the added advantages to this ‘new democracy’ is that we get rid of the party system and all the lobbying, expense fraud, corruption and feathering of pockets.

  30. 74
    Displaced Brummie says:

    But at least astrologers can point to the stars that they gather their predictions from.

  31. 75
    Georgie Osborne's Blue and White Army says:

    The OBR is a certain someone’s finest achievement ( if you can forget about Mark Carney and his family’s expenses).

    One should not knock it.


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Rod Liddle on the loony UN sexism special rapporteur:

“There is more sexism in Britain than in any other country in the world, according to a mad woman who has been sent here by the United Nations.

Rashida Manjoo is a part-time professor of law at Cape Town University in the totally non-sexist country of South Africa (otherwise known as Rape Capital Of The World).

Mrs Magoo has been wandering around with her notebook and is appalled by the sexist “boys’ club” culture here, apparently.

I don’t doubt we still have sexism in the UK. But is it worse than in, say, Saudi Arabia, d’you think, honey-lamb? Or about 175 other countries? Get a grip, you doolally old bat.”



orkneylad says:

What’s he been doing FFS, mining bitcoins?


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