Liz Truss - an unending void of horror and pain

[Little waster]

I'm sensing alcohol was involved here

What, in the mini-budget?

I just naturally assumed Truss and Kwasi had injected crack cocaine straight into their foreheads and then went wherever that took them.

I'm assuming in a couple if days Truss is going to wake up Hangover-style surrounded by the detritus of a wild "The-Queen's-dead!" celebration with a polar bear in her living room and Chris Eubank making cheese toasties in the kitchen for some reason.

[Little waster]

Meanwhile my Youtube algorithm has trending videos on "Hyperinflation in the Weimar Republic and the Rise of Nazism" ... so that's got to be a good sign.

[TopBadger]

The statement from the BoE seems to have stabilized things?

I wonder if the BoE retain it's independence. Seems government policy is entirely at loggerheads with BoE's mandate to control inflation.

[tenchboy]

I'm sensing alcohol was involved here

What, in the mini-budget?

I just naturally assumed Truss and Kwasi had injected crack cocaine straight into their foreheads and then went wherever that took them.

I'm assuming in a couple if days Truss is going to wake up Hangover-style surrounded by the detritus of a wild "The-Queen's-dead!" celebration with a polar bear in her living room and Chris Eubank making cheese toasties in the kitchen for some reason.

The very thought. Chris Eubank would never be in Lix Trusse's kitchen. It's a preparatoire dahling

ETA I'm keeping that typo!

[IvanV]

I feel seriously let down by Private Eye, and not just because it has arrived 6 days late again - along with my 4 days late Economist.

It has just transferred the Johnson Whatsapp Group skit to Truss. I'm so disappointed. I hoped they could come up with something distinctive, like the Philomena Cunk column we had twice.

And it has run a waiting-a-long-time Prince Charles joke on its cover (link to current cover). I suppose it is what everyone expects.

[noggins]

That as well.

The fun bit is your run-of-the-mill right winger can simply dismiss the criticisms of the likes of Scrutable or JOB or the Guardian as just being the carping of disgruntled liberals upset they've spent the last decade (or three decades or seven decades) on the "wrong side of history" talking Britain down.

But they can't dismiss the markets as easily; people whose vast salaries depend on their supposed ability to get these sorts of calls right, people who in other circumstances they'd be arguing have markedly superior insights into the workings of economies and people who ironically have probably benefitted the most from the mini-budget.

You have those people essentially sat there saying to themselves "well that extra 400k a year is all very nice but the economy is still going to be a complete basketcase so I'd suggest we start moving all our funds into bottled water, gold bars and shotgun shells."

My impression is that the Tory party is no longer the natural home of financiers and plutocrats. If it was then Sunak would have won.

The Tory party is the natural home of people over 60 who think Britain has been going to the dogs since the 60s. Most of them don't give a sh.t about the economy because they aren't working anyway. Inflation will though hit their pensions.

Yes. I though it was plutocrats chucking bones to daily mail greeninkers. But its in fact the other way round.

[Gfamily]

Joe Lycett has the right message

hold ur nerve babe.jpg (16.67 KiB) Viewed 1090 times

https://twitter.com/joelycett/status/15 ... 6218346498?

[nekomatic]

I feel seriously let down by Private Eye

I'm so disappointed.

I’d write in and cancel my subscription if I were you.

[Woodchopper]

Estimate here that the recent rise in interest paid on government debt will cost an extra £2.4 billion. On one sale happening today.
https://twitter.com/jeuasommenulle/stat ... Bx4D4dyQSw

Point is just to show how much higher rates will cost.

[Rich Scopie]

IMF tells Truss and Kwartang they haven't got a ****ing clue what they're doing.

https://www.bbc.co.uk/news/business-63056417

[El Pollo Diablo]

Kind of weird how context makes my avatar more sinister as time goes by.

[Gfamily]

IMF tells Truss and Kwartang they haven't got a ****ing clue what they're doing.

https://www.bbc.co.uk/news/business-63056417

Ah, Daniel Hannan has another explanation: the markets are terrified of ... Starmer!

Screenshot_20220928-094134.jpg (54.77 KiB) Viewed 927 times

[TopBadger]

Well he's right because the IMF specifically referenced Starmer concerning (checks notes)... oh, no... actually they didn't.

Oh well, another item gotten wrong by Hannan - what's the count up to these days? Are we past Aleph-0?

[TimW]

Ah, Daniel Hannan has another explanation: the markets are terrified of ... Starmer!

What has happened, then, that suddenly makes Starmer likely to get in? It only makes sense as an attack by Hannan on Liz Truss.

[dyqik]

Kind of weird how context makes my avatar more sinister as time goes by.

And your thread title look more and more generous.

[lpm]

Well, I'm beaten. I've no idea what happens next and how all these economic factors play out.

My only guess is that the BoE will slam up short term interest rates to 6% or 7% over the next three months, crash the housing market and consumer demand, and then wait for a sharp recession. Inflation will burn out because no-one can afford to spend. Then the BoE can axe interest rates again like the 2008 emergency measures, and hope to god the patient's heart starts beating again.

[IvanV]

My only guess is that the BoE will slam up short term interest rates to 6% or 7% over the next three months, crash the housing market and consumer demand, and then wait for a sharp recession. Inflation will burn out because no-one can afford to spend. Then the BoE can axe interest rates again like the 2008 emergency measures, and hope to god the patient's heart starts beating again.

Something like that would be my guess too. People are already comparing it to the 1972 Anthony Barber give-away budget which kicked off a wage price spiral and led to the downfall of the Heath government, the conflicts of the mid-70s, and ultimately Callaghan having to go to the IMF. Though these days we know more about inflation and the BoE would tackle it a bit faster. For an economic historian, Kwarteng doesn't seem to know his economic history too well.

I listened to something a few months ago on the radio with an eminent economist considering future interest rate and tax-and-spending patterns. The economist suggested it wasn't entirely stupid for the government to run a bigger fiscal deficit, in view of the cost of living crunch, with the consequence that the BoE would have to put up interest rates a bit more. Up to a certain point, the difference in outcome was largely distributional and could have been positive distributionally. The very poor don't have mortgages. But Kwarteng's version is well beyond that point, and has unpleasant distributional effects, as the IMF has quickly pointed out.

[nekomatic]

IMF tells Truss and Kwartang they haven't got a ****ing clue what they're doing.

https://www.bbc.co.uk/news/business-63056417

Yeah but Patrick Minford , John Redwood and David Frost think the IMF haven’t got a f***Ing clue, so who are we supposed to believe? (shrug emoji)

[lpm]

To throw something else onto the mix: Covid + NHS + energy rationing.

Per Woodchopper's posts about the growing variant, there's a reasonable chance of a large wave combining with a high flu season. Which combines with the NHS collapse thread per Plodder's reminder. Which combines with the shortage of gas/energy in Europe and the possibility of energy rationing.

Which all adds up to reduced economic production. An ill workforce plus some industries restrained by rationing, in a highly inflationary environment, would lead simultaneously to a deeper recession and higher inflation. Very 1970s. We could be needing the IMF sooner rather than later...

[dyqik]

To throw something else onto the mix: Covid + NHS + energy rationing.

Per Woodchopper's posts about the growing variant, there's a reasonable chance of a large wave combining with a high flu season. Which combines with the NHS collapse thread per Plodder's reminder. Which combines with the shortage of gas/energy in Europe and the possibility of energy rationing.

Which all adds up to reduced economic production. An ill workforce plus some industries restrained by rationing, in a highly inflationary environment, would lead simultaneously to a deeper recession and higher inflation. Very 1970s. We could be needing the IMF sooner rather than later...

There's some stuff around about how 1/5th of those over 50 who aren't available for work are on NHS waiting lists. Presumably another large fraction are ill, but not able to get on waiting lists, or have something where waiting lists aren't relevant, and still more are caring for those, or the children of those, who are ill.

[Little waster]

It should be noted that part of this has come straight-out the Republican Scorched-Earth Playbook.

There's a a strategy (who's name I've temporarily forgotten) of using tax cuts and the "wrong" sort of government spending to deliberately balloon the deficit as an electoral startegy.

This is a win-win for the Repugs and usually catastrophic for the nation.

The idea is the tax cuts will be initially popular and the resulting economic stimulus MIGHT ultimately pay for it all while the Repugs get to "starve the beast", shrinking the state and supposedly reducing the Democrat's voting pool of vested interests while all-the-while making the country more self-reliant, entrepreneurial and rightward-leaning, which in turn will reward them at the ballot box. History suggests that's usually/always Cloud Cuckoo Land and that Laffer is a f.cking tool.

What happens more often is the deficit just soars out of control while the public realm crumbles and the economy stagnates. This ultimately ushers in a Democratic government. However the evil genius of the plan is that the incoming Democrats are then left with a set of unpalatable options as they struggle to balance the books; raise taxes or cut public spending further, despite being elected on a promise to fix the nation's infrastructure. The Republican historic profligacy deliberately constrains the Democrats' future spending. After 4 (or at best 8) years of struggling to fix the Repugs mess (often in the face of a hostile House of Representatives determined to block everything) the Democrats have lost the centrist voters through tax rises, disillusioned the left through spending cuts and pissed off everyone through their apparent impotence, allowing a shameless Republican candidate to get elected on a tax-cutting MAGA platform to start the whole sh.tty cycle again.

I'm surprised its taken the Tories this long to begin aping it TBH.

[TopBadger]

All reasons why the next Labour government need to implement PR... to keep the Tories out of government.

[IvanV]

It should be noted that part of this has come straight-out the Republican Scorched-Earth Playbook.

... This ultimately ushers in a Democratic government. However the evil genius of the plan is that the incoming Democrats are then left with a set of unpalatable options as they struggle to balance the books; raise taxes or cut public spending further, despite being elected on a promise to fix the nation's infrastructure. The Republican historic profligacy deliberately constrains the Democrats' future spending. ...

It is clear that the Tory Party has been following the Republican playbook for some time.

A difference is that in the US the opposition can also deliberately constrain the spending of the government, because US federal governments often can't do very much without cooperation from the other side. It's much easier in the US to stop people spending than stop people not spending. So the Democrats don't usually get to implement their program in the way they would have liked, whereas slashing is harder to stop. Here governments have a better chance to govern and do what they want, which is a good thing when what they are doing is sensible, but less good when what they are doing is evil.

But yes, it does look like a deliberate attempt to leave the place in a mess for Labour to have to clear up, and make themselves unpopular with large tax rises, that the Tories can then promise to reduce. We can only hope that the electorate remember who it was that left everything in such a mess.

I was always disappointed the Blair government refused to do what needed to be done to even things out a bit more, and recognise the funding/staffing difficulties NHS was heading towards. It's going to be much harder and more expensive to fix now. Ultimately the only way people are going to accept and understand that if we want continental quality public services we have to have continental level taxes, is to say so.

The bad news on improving equality is set out in the book I'm currently reading. The Great Leveler by Walter Scheidel is a much more serious, deeply researched and highly rated economic history book than anything Mr Kwarteng wrote. Scheidel is a professor at Stanford. Its central historical thesis is that serious moves towards greater equality have historically been provided only by the 4 Horsemen of Levelling: major interstate war, devastating plague, exceedingly violent revolution, or utter state collapse. He considers the world from the stone age to the 21st century, and finds very little in the way of levelling by other means. The general trend at other times is in the opposite direction. So the prospect for much serious levelling through peaceful politics is not great, in the sense that there is very little historical precedent for it.

[Opti]

I've seen the current situation described as a 'Trussterfuck'. Neat.

[Trinucleus]

IMF tells Truss and Kwartang they haven't got a ****ing clue what they're doing.

https://www.bbc.co.uk/news/business-63056417

Ah, Daniel Hannan has another explanation: the markets are terrified of ... Starmer!
Screenshot_20220928-094134.jpg

Why, are the markets worried Starmer might crash the economy?