Episode Overview

Podcast: LSE: Public lectures and events
Episode Title: Why we're getting poorer
Date: October 13, 2025
Host: Ganga Sridhar (Assistant Professor, LSE)
Guest/Speaker: Cahal Moran (Behavioral Economist and author, Visiting Fellow at LSE)

This episode focuses on Cahal Moran’s new book, “Why We're Getting Poorer,” which explores the lived reality of declining purchasing power and the broader failures of contemporary economic policy. Moran delves into the root causes of stagnating and declining living standards in the UK and beyond, using accessible anecdotes and insights from a range of disciplines.

Key Discussion Points & Insights

Introduction to Cahal Moran and the Book

• Host Ganga Sridhar introduces Cahal Moran’s background, emphasizing his efforts to democratize economics and make its concepts relatable for a broad audience ([00:18]).

  • Moran previously co-authored Econocracy, sparking the Rethinking Economics movement.
  • His new book combines humor, real-life anecdotes, and multidisciplinary sources to humanize economic topics.

• Sridhar highlights the book’s approach: “Not only did I find myself learning as I read the book, I found myself laughing loads because this book is funny and it's grounded...” ([03:46])

The Cost of Living Crisis & Inflation

• Moran explains the context behind the book’s title, referencing Bank of England chief economist Hugh Pill’s statement that “Britons needed to accept that they are poorer” ([05:21]).
• He describes the recent cost-of-living crisis:
  • Inflation soared into double digits, especially acute in the UK due to unique local factors.
  • Even as inflation slowed, the increased prices had a permanent hit on people’s standard of living: “People saw a 20 to 30% hit to their purchasing power... that it was in some sense permanent.” ([06:09])
• The Bank of England’s main tool for inflation targeting — raising interest rates — disproportionately hurts ordinary people, especially those with variable rate mortgages or rent.
  • “...the primary way that we have to deal with the cost-of-living crisis is to increase the cost of living.” ([07:36])
  • “My rent increased by quite a lot during this period, as I'm sure many people's did.” ([08:00])

Critique of Economic Management Tools

• Moran questions the wisdom of using higher interest rates to manage inflation spurred by supply-side problems (energy, microchips, etc.), likening it to “solving the disease of inflation by essentially killing the patient.” ([09:12])
• Argues this policy “benefit[s] the rich over the average person.”

Lessons from the 2008 Financial Crisis

• The failure to predict or respond constructively to economic crisis is not new ([10:16]):
  • Recalls the 2008 financial crisis as pivotal in shaping his perspective.
  • Recovery took six years, with sustained stagnation afterwards.
• Moran critiques the UK’s response:
  • After Labour was voted out, the Conservative-led coalition embraced austerity (“tens of billions in spending cuts”).
  • The idea was to “reduce the deficit,” yet this, he argues, was “misdiagnosis and misdirection.” ([11:44])

The Cost of Austerity

• Moran stresses the crucial underpinning role of government in the economy — cuts to infrastructure and social spending caused lasting harm.

• Illustrates the problem using George Osborne’s metaphor about “fixing the roof while the sun was shining” ([12:57]).

  • “Years later, his cuts led to the collapse of an actual roof in a school in Kent, as well as the roofs of many other schools across the country. Not just schools, hospital wings have collapsed, rendering them unusable.” ([13:29])

• Reports Cambridge’s Bennett Institute found a decline in physical and social infrastructure almost everywhere in England: “schools … GPs, mental health services, hospitals … train stations, bus routes. One fifth of bus routes in the UK have disappeared over this period and fares have only gone up…” ([14:06])

Short-sighted Policy Decisions

• Moran highlights the self-defeating logic of cutting investment in renewables (“the green crap”) ([14:32]):

  • Cuts to energy efficiency retrofits and green subsidies meant households lost out, especially during the energy crisis spurred by Russia-Ukraine war.
  • “The think tank Carbon Brief estimated that the downstream cost of these cuts to the green crap was £150 per family per year.” ([14:57])

• Even government support for household energy bills didn’t offset these missed investments.

  • “We had failed to invest in our economy and this had cost us down the line… It didn’t even work in terms of the government budget.” ([15:13])

The Flawed Worldview of Economic Policy

• Moran critiques the view articulated by Dominic Raab ([15:40]):
  • Quote: “...unless you've got a strong economy creating the revenue, it’s just a childish wish list.”
• Moran notes this view sees the economy as separate from social outcomes, disregarding how social services enable economic participation.
• Uses disability benefit cuts in Denmark as an example:
  • Withdrawing benefits led to women leaving the workforce to care for relatives, reducing tax revenue and failing to save the government money ([16:50]).
  • “...the thing about care … it needs to be done no matter what. You can withdraw the benefits. And if those benefits were being used to pay for a carer, somebody ... has to drop out of work and take care of them anyway... This led to... a notable withdrawal of women from the workforce...” ([16:54])

Notable Quotes & Memorable Moments

• Cahal Moran:

  • “People saw a 20 to 30% hit to their purchasing power … that it was in some sense permanent.” ([06:09])
  • “The primary way we have to deal with the cost-of-living crisis is to increase the cost of living.” ([07:36])
  • “My concern is whether we solve the disease of inflation by essentially killing the patient.” ([09:12])
  • “Just taking [government services] away is not a good thing for the economy.” ([12:30])
  • “Years later, [Osborne’s] cuts led to the collapse of an actual roof in a school in Kent...” ([13:29])
  • “One fifth of bus routes in the UK have disappeared over this period and fares have only gone up in the meantime.” ([14:06])
  • “The think tank Carbon Brief estimated that the downstream cost of these cuts to the green crap was £150 per family per year.” ([14:57])
  • “This policy didn’t save any money, as well as making a whole bunch of people's lives much more difficult in the process.” ([16:54])

• Ganga Sridhar:

  • “Not only did I find myself learning as I read the book, I found myself laughing loads because this book is funny and it's grounded...” ([03:46])
  • “It really takes economics out of the clasp of ... technocratic narrative and ... brings it out to the people.” ([01:36])

Timestamps for Important Segments

• [00:18] — Host introduction, overview of Cahal Moran’s career and values
• [05:15] — Moran begins his talk, book’s title inspiration
• [06:09] — The cost-of-living crisis and inflation’s persistence
• [07:36] — Critique of inflation targeting via interest rates
• [10:16] — Personal impact of the 2008 financial crisis and response
• [12:57] — Metaphor of “fixing the roof” and actual infrastructure failures
• [14:06] — Decline in public infrastructure and services post-austerity
• [14:32] — Fallout from cuts to green energy investments
• [15:40] — Analysis of the economic worldview behind service cuts
• [16:54] — Flawed logic of disability benefit cuts

Takeaway

Cahal Moran’s analysis offers a critical, accessible dissection of why living standards are declining in the UK. He challenges orthodox approaches to economic management—particularly austerity and inflation targeting—arguing they harm ordinary people and entrench inequality. Instead, Moran urges policymakers to recognize the foundational role of government investment in fostering both social and economic prosperity.

The episode blends rigorous critique with wit and humanity, making complex economic issues comprehensible and urgent for a wide audience.