The Econoclasts Should Labour sack Starmer & will Reeves bankrupt Britain?
Nov 19, 2025
Yanis Varoufakis and Wolfgang Munchau delve into the tumultuous state of British politics, questioning the viability of Keir Starmer's leadership and the implications of Rachel Reeves' budget. They argue against the overreliance on economic experts and debate the pitfalls of midterm leadership changes in the Labour Party. Munchau critiques past political coups, while Varoufakis suggests bold alternatives like a national investment bank. The hosts emphasize the need for political accountability amid a backdrop of economic challenges.
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Danger Of Abdicating Economic Decisions
- Yanis Varoufakis argues delegating fiscal and monetary decisions to independent expert panels abdicates democratic responsibility and produces toxic politics.
- He claims macroeconomic models are calibrated assumptions that falsely assure control over inflation and growth.
Bank Bond Sales Created A Treasury Burden
- Varoufakis says the Bank of England's bond sales created a self-inflicted black hole costing the Treasury roughly £100 billion.
- He argues the Treasury should not automatically bail out central bank losses created by its policy choices.
Limits Of Independent Fiscal And Monetary Bodies
- Wolfgang Munchau accepts central bank independence in narrow remit but warns independence should be legal not constitutional and mustn't be sacrosanct.
- He stresses fiscal councils lack theory and often limit a chancellor to minor tax choices, undermining responsibility.
