Simon points out that John McDonnell’s proposed fiscal rule is much better than Osborne’s. This poses the question: why, then, should Labour be struggling so hard to establish “credibility” with the electorate about its approach to the public finances?

It’s certainly not because Osborne’s policy has been a success. OBR data show that, in the last five years, the government has borrowed £183bn more than the OBR expected (pdf) in 2010. This is strong evidence that austerity has been counter-productive, as any schoolboy Keynesian would have predicted.

Instead, I fear that there are less good reasons why Labour is struggling. One reason is that voters have bought the story that Labour “over-borrowed” in the 00s. I’ve argued that this story is false - its borrowing was a reasonable reaction to the savings glut and investment dearth – but its plausibility has been enhanced by some Labour figures’ self-abasing desire to apologize anyway.

There is, though, something else. The fact that Osborne is wrong is, paradoxically, an advantage for him. The reason for this has been pointed out in a new paper by Peter Schwardmann and Joel van der Weele. They show that people who deceive themselves are better able to deceive others. This corroborates research by Cameron Anderson and Sebastien Brion, which has found that the over-confident are more likely to be hired than more rational candidates, because they send out more “competence cues”, and so their irrational overconfidence is mistaken for actual competence. As Matthew Hutson says, “to be a good salesman, you have to buy your own pitch.”

Osborne’s talk about cutting borrowing fits this pattern: his overconfidence that he can cut borrowing has been mistaken by voters for an ability to actually cut borrowing – an ability he has not, thus far, possessed to the extent that he claimed.

In this, he has been helped by other factors. One, of course, is media bias. As Simon says, fiscal policy is reported not so much by economists – most of whom are opposed to Osborne’s policy – but by political reporters.

This matters in two ways, even leaving aside partisan bias. One, as David Leiser and Ronen Aroch have argued (pdf), is that laypeople’s thinking about economics relies upon a “good begets good” heuristic. They believe that good things have good effects. The desire to cut government borrowing is seen as “good”, so people think it must have good effects – thus ignoring the paradox of thrift.

The other is plain deference. As Adam Smith wrote:

We frequently see the respectful attentions of the world more strongly directed towards the rich and the great, than towards the wise and the virtuous. We see frequently the vices and follies of the powerful much less despised than the poverty and weakness of the innocent…The great mob of mankind are the admirers and worshippers, and, what may seem more extraordinary, most frequently the disinterested admirers and worshippers, of wealth and greatness. (Theory of Moral Sentiments, I.III.29)

Whatever John McDonnell does, therefore, he will struggle to achieve “credibility”. As a wise man asked, “what chance have you got against a tie and a crest?”