The FT asks: “isn’t [George Osborne] just too immature, too inexperienced, too insubstantial to run one of the world’s largest economies?”
No, he isn’t. I say this not because I have a high opinion of him, but because it’s easy to be Chancellor, at least within the confines of managerialist politics. Here are a few pieces of advice.
1. Say nowt. You step through the door of Number 11 with a reasonable amount of goodwill, and the very office of Chancellor gives you gravitas. The quieter you stay, the easier it will be to retain these advantages. Also, keeping quiet allows others to project their fantasies upon you; Brown allowed Polly Toynbee (and many Labour MPs) to believe he was a Viking warrior for social democracy.
Any interesting statement is, by definition, controversial. The key to being Chancellor is not to attract controversy.
And don’t get involved in party politicking. As Chancellor, you should be above the fray.
2. Kitchen sink the bad news. Every finance director knows this trick. Your first announcements should be about how bad things look, and how there are probably many gremlins you haven’t yet discovered which your incompetent predecessor left you.
It’s hard to give the impression that you’re good at the job. But you can exploit the framing effect, by making your predecessor look bad.
3. Don’t worry much about the numbers. As Chancellor, your job is far easier than that of finance director of a quoted company - the markets are much more forgiving of you. They expect government borrowing to overshoot its targets, and gilt yields won’t rise much, if at all, if they do. By contrast, finance directors who get the numbers wrong get hit hard by the markets.
Of course, you should give the impression of worrying about the numbers - you need a reputation for prudence. But as long as you don’t jeopardize creditworthiness - which is easy - you shouldn’t really worry. Just talk a good game.
4. Don’t be radical. Justice and efficiency requires a massive overhaul of the tax and benefit system. But politics is not about justice and efficiency. It’s about keeping the swinish multitude quiet. Which means not making any radical reforms, as these create noisy losers.
Of course, you’ll want to do something. But the trick here is to pick the right enemies - those you can beat. This means a few public sector functionaries or benefit claimants.
5. Don’t worry about the financial markets. These are largely driven by global factors beyond your control. And they are volatile and so have a high noise-signal ratio. Nigella’s dad had the right idea here, when he called City economists (including me at the time) “teenage scribblers.”
6. Don’t pretend you are responsible for economic growth. For one thing, you’re not. And if you take credit for the sunshine, you‘ll be blamed for the rain.
If you’re really confident of years of decent growth, you might want to break this rule. But it’s risky. Better to say that governments can merely provide the framework for economic growth - and stress that your predecessor did not - but cannot create growth directly.
7. Have average luck. Unless you do something catastrophic or are very unlucky, the economy will pootle along at 2-3% growth a year. Your biggest danger is a “black swan” event that might make you look like someone who can’t cope in a crisis; Alistair Darling was unlucky enough to get one of these - the collapse of Northern Rock - early on.
Of course, you can’t control your luck. But you can leave the job when you choose, which could be key to creating your reputation.
8. Don’t regard the Chancellorship as a stepping stone to being Prime Minister. Only seven of the last 30 Chancellors have gone on to become PM. Instead, regard the Chancellorship as a route into some well-paid directorships or speaking engagements - which is why low taxes on the rich and on companies are a good idea. You’ll spend much more of your working life as ex-Chancellor than you will as Chancellor.
No, he isn’t. I say this not because I have a high opinion of him, but because it’s easy to be Chancellor, at least within the confines of managerialist politics. Here are a few pieces of advice.
1. Say nowt. You step through the door of Number 11 with a reasonable amount of goodwill, and the very office of Chancellor gives you gravitas. The quieter you stay, the easier it will be to retain these advantages. Also, keeping quiet allows others to project their fantasies upon you; Brown allowed Polly Toynbee (and many Labour MPs) to believe he was a Viking warrior for social democracy.
Any interesting statement is, by definition, controversial. The key to being Chancellor is not to attract controversy.
And don’t get involved in party politicking. As Chancellor, you should be above the fray.
2. Kitchen sink the bad news. Every finance director knows this trick. Your first announcements should be about how bad things look, and how there are probably many gremlins you haven’t yet discovered which your incompetent predecessor left you.
It’s hard to give the impression that you’re good at the job. But you can exploit the framing effect, by making your predecessor look bad.
3. Don’t worry much about the numbers. As Chancellor, your job is far easier than that of finance director of a quoted company - the markets are much more forgiving of you. They expect government borrowing to overshoot its targets, and gilt yields won’t rise much, if at all, if they do. By contrast, finance directors who get the numbers wrong get hit hard by the markets.
Of course, you should give the impression of worrying about the numbers - you need a reputation for prudence. But as long as you don’t jeopardize creditworthiness - which is easy - you shouldn’t really worry. Just talk a good game.
4. Don’t be radical. Justice and efficiency requires a massive overhaul of the tax and benefit system. But politics is not about justice and efficiency. It’s about keeping the swinish multitude quiet. Which means not making any radical reforms, as these create noisy losers.
Of course, you’ll want to do something. But the trick here is to pick the right enemies - those you can beat. This means a few public sector functionaries or benefit claimants.
5. Don’t worry about the financial markets. These are largely driven by global factors beyond your control. And they are volatile and so have a high noise-signal ratio. Nigella’s dad had the right idea here, when he called City economists (including me at the time) “teenage scribblers.”
6. Don’t pretend you are responsible for economic growth. For one thing, you’re not. And if you take credit for the sunshine, you‘ll be blamed for the rain.
If you’re really confident of years of decent growth, you might want to break this rule. But it’s risky. Better to say that governments can merely provide the framework for economic growth - and stress that your predecessor did not - but cannot create growth directly.
7. Have average luck. Unless you do something catastrophic or are very unlucky, the economy will pootle along at 2-3% growth a year. Your biggest danger is a “black swan” event that might make you look like someone who can’t cope in a crisis; Alistair Darling was unlucky enough to get one of these - the collapse of Northern Rock - early on.
Of course, you can’t control your luck. But you can leave the job when you choose, which could be key to creating your reputation.
8. Don’t regard the Chancellorship as a stepping stone to being Prime Minister. Only seven of the last 30 Chancellors have gone on to become PM. Instead, regard the Chancellorship as a route into some well-paid directorships or speaking engagements - which is why low taxes on the rich and on companies are a good idea. You’ll spend much more of your working life as ex-Chancellor than you will as Chancellor.
Brilliant summary
Posted by: Serf | September 08, 2008 at 11:29 AM