The PM must either sacrifice her party, her authority or the economy
To survive, Liz Truss needs to do three things.
Firstly, she must pull the Conservative Party out of its tailspin. Labour poll leads that start in the upper-teens and go a whole lot higher are not sustainable for a Tory leader.
Secondly, Truss must retain her authority as Prime Minister. This is distinct from merely remaining in post. It is possible for a PM to be in office, but not in power, which would be the case if she U-turned on her flagship policies.
Thirdly — and this one is really important — she mustn’t crash the economy again. It’s conceivable that Truss could recover from the events of the last week, but not if they’re repeated. Though the sudden collapse in Sterling has reversed itself, a second nosedive would sink this government for good. ...
Short-term devaluation may lead to long-term benefits
When Kwasi Kwarteng unveiled his mini-budget last Friday, sceptical commentators focused on the medium-term. Would the Chancellor’s offering — a double album of Thatcheresque golden oldies — get the British economy growing again? (I had my doubts.)
But then came the short-term verdict of the financial markets: an instant vote of no-confidence. It was the sort of thumbs-down normally given to the economic policies of a banana republic, not a G7 democracy. Welcome to Britazuela.
There was an especially nasty moment on Wednesday when the Bank of England was forced into an emergency purchase of UK government bonds. Given the day of the week, this triggered memories of 16 September 1992 — a.k.a. Black Wednesday — another occasion when the markets lost confidence in the economic policies of a Tory government. ...
In yesterday's Italian election, even her political allies went backwards
In Conan the Barbarian (1982), a victorious general asks Arnold Schwarzenegger “what is best in life?” — to which Arnie infamously replies: “To crush your enemies, see them driven before you, and to hear the lamentation of their women!”
In other words, winning is not enough — others have to lose.
As Giorgia Meloni savours the taste of victory this morning, there will be those who see her as an all-conquering barbarian — the Right-wing populist who took her Brothers of Italy (FdI) party from just 4% of the vote in 2018 to a commanding first place in yesterday’s Italian general election. ...
Despite the hype, the mini-budget isn't all that radical
If you believe George Monbiot in The Guardian today, then Liz Truss and her Chancellor Kwasi Kwarteng are about to turn Britain into a turbo-capitalist dystopia. Goodbye green and pleasant land, hello Blade Runner nightmare.
His evidence is that the government is stuffed full of free market liberals who used to work for think tanks like the Institute of Economic Affairs and the Adam Smith Institute. And he’s right: many of their alumni are now employed in Downing Street. Furthermore, Monbiot points out that these outfits are opaquely funded, that they coordinate their activities in private meetings, and hold ideological positions that fall outside of the mainstream. ...
In practise, the ideology always leads to welfarism
Taking Liberties by Jamie Whyte is a new discussion paper from the Institute of Economic Affairs, a free market think tank. It is a defence of classical liberalism against ‘post-liberal’ thinkers like Philip Blond and Nick Timothy.
Whyte’s key point is that the post-liberals are wrong to blame liberalism for the contemporary ills of the western world. He acknowledges problems like family breakdown, but pins the blame on government intervention.
He claims that post-liberals make a fundamental error by conflating the classical liberalism of free markets with the progressive politics of the bloated welfare state. Post-liberals argue that the former leads to the latter, because the state has to expand in order to help individuals satisfy their desires. Whyte’s key objection to this linkage is that classical liberalism was never about government intervening to supply what people want, but rather allowing people to make their own decisions so that they can take responsibility for themselves. ...
Shame on those who pour scorn on the mourners
Today’s state funeral brings an end to the official mourning period. It has also brought an end to The Queue — perhaps the most extraordinary of all the tributes paid to Elizabeth II over the last ten days. Though sensitively managed, the queue was not choreographed — and it was anything but uniform. Tens of thousands of people from across the country and around the world streamed through Westminster Hall — each to pay tribute to the Queen in their own way.
But for a minority of bystanders the lying-in-state was more than their shrivelled souls could bear. There was crude mockery of course, with some of the more awkward bows and curtsies singled-out for ridicule. Others resorted to whataboutery — what about the poor? what about climate change? — as if we’re too stupid to think about more than one thing at a time. Various experts popped-up to analyse the ‘true’ motivations of the queuers (perhaps someone should analyse the true motivations of the experts). Most absurd of all, were the concern-trollers who tried to portray the queue as a minor humanitarian disaster — the sort of thing that a more rational nation might have avoided. ...
There are more alternatives than they think
British anti-monarchists are having a moment. Hashtags like #NotMyKing are trending on social media and fatuous tweets like this one are getting more attention than they deserve.
They’ve been helped by our increasingly idiotic police, who seem to think that protecting the public from other people’s opinions is more important than clearing up crime. Every time that a republican protester is arrested, the anti-monarchist campaign gets stronger. If your whole schtick is portraying the status quo as reactionary, then seeing some placard-waver bundled away by the coppers is propaganda gold.
Markets may be over-reacting to changes in gas prices
Do the stunning gains made by the Ukrainian armed forces over the last few days mean that peace is nearer than we’ve dared hope? Or will a desperate Vladimir Putin escalate the conflict? At this stage it’s still anyone’s guess, but some of those guesses have consequences — for instance, on the cost of heating our homes.
You may surprised to learn that the movement in gas prices in recent weeks has been sharply downwards. Just take a look at the following chart tweeted out by the German financial journalist, Holger Zschaepitz:
The extreme spike in gas prices we’ve seen since the invasion of Ukraine appears to be subsiding. Zschaepitz declares that the “Kremlin strategy of weaponizing energy [is] falling flat”. European demand for gas is already down significantly on previous years. Alternative sources of supply are making themselves felt. As for Putin imposing further restrictions on the supply of Russian gas, current export levels are so low that he’s hasn’t got that much more room for manoeuvre. We’ll see this week how the markets react to the rapidly changing war situation, but Putin may have come close to doing his worst — at least in terms of gas prices. ...