Some of these takes make too much of the left wing - right wing divide. British voters aren;t like that. The man on the street is very very often way to the left of the far left of the Labour Party on things like banker bonuses and corporate taxes, and way to the right of the extremes of the Conservative Party on law and order, defence, asylum, issues relating to wokery etc.
I'm not sure there is much more to this story that Truss being a duff whose basic competence was not able to be trusted. She is a very, very odd character who was very plainly grotesquely overpromoted and who only got the job because she told the Party membership (which is about 160,000 wealthy, elderly rural type-people) what they wanted to hear about tax cuts.
The only person worth reading about how the British state operates, if that's the word, is Dominic Cummings. In particular his observation that the government does not control the government. Singapore on Thames is impossible, even if it were to be the headline policy of a government with a massive mandate because the deep state does not exist to do what it is told by ministers. There are umpteen officials who wield more power than any politician, arguably minus the Prime Minister. Truss' planned policies were quite mundane, really. She didn't try to halve tax, or abolish any meaningful taxes, or bring a flat income tax rate in, or anything even remotely akin. And still everything melted down.
We have big problems in the UK, but not any worse than comparator nations in Europe. The biggest missed opportunity has been that the deep state, with a couple of exceptions, has seen Brexit as a threat to doing things the same old way, rather than as Cummings did/does as a necessary but not sufficient step towards total re-wiring as a means of doing everything much, much better. Personally I hope specifically for the Conservative Party to cease to exist. I would prefer this fate for Labour as well but that's less necessary.
No one mentions austerity -- prudent cuts in inefficient, outdated, unwarranted, or corrupt government expenditures -- as a necessary element to improvement UK public finance.
The British are ****ed. The Tories aren't conservative, and haven't been since Thatcher was PM. Right now, the very best that Sunak can likely do for the country is call for early elections and let Labour make an even bigger mess of things. What is needed is pain- lots and lots and lots of pain. The voters need to be incentivized to start voting for a different path forward- a path that doesn't include the unelected government apparatus of today.
If you cut taxes without cutting spending, you're not really cutting taxes.
Several factors allowed governments to get away with that the last few decades, but the party is over. Someone who doesn't recognize the party is over is a bad leader.
It’s worth noting that there has been no restoration of power to the people in the UK, the reverse. None of the political Parties are ‘populist’ whatever that means exactly and the so-called Conservative Party isn’t Conservative. All the Parties tried to thwart Brexit. Truss wasn’t some people’s choice, she was chosen by the Conservative Party membership - about 170 000 - only because she wasn’t any of the others on offer. The Parliamentary Party... the Tory MPs... decide which names go forward to the membership. They wanted Sunak. They eliminated the other popular choice early on, and that left Truss as least worse option. She failed, the cabal forced her out leaving Hobson’s choice Sunak as the only one with sufficient support from MPs so the membership need not be consulted. The MPs got what THEY wanted - the people don’t matter. The problem in the UK as elsewhere in Europe, is nearly half of the work-able population get paid to do jobs that create no wealth - Government, NGOs, etc - or do not work at all. Increasingly the economy is being socialised, funded by the State with tax plunder from the wealth creators and money printing. The net beneficiaries of this keep voting in whoever promises to keep the money flowing.
> Yet many of our conservative voices now pander to voters by advocating big-government big-tax nationalism, protectionism, subsidies, and crony capitalism, albeit directed in different directions than the left.
Cochrane is throwing a lot into this sentence. A lot of generalizations that don't seem true or salient. I follow politics pretty closely, and I don't hear "conservative voices" advocating for most of this stuff. Also, the salience of these things matters a huge amount.
Example: I'd gladly give a little on "protectionism" which every engages in some but generally sticks with free trade in order to get real action on subsidization of higher education and big companies and deregulation (which are the operational elements of crony capitalism that matter).
This is all simply downstream from bad policy. Supply-side reform and smaller government can work. Tax cuts and large energy subsidies during an inflation outbreak probably cannot. But policy has become sufficiently dumbed down that we lack the ability to select the right policy mix at the right time. This is a problem across the political spectrum.
Read Konstantin Kisin's latest Substack post. It had nothing to do with Truss cutting taxes or opening immigration, but instead the bond blowup from the huge energy subsidies she created.
Truss lost for the same reason / same enemy that made Trump "lose" - lifetime jobs of Deep State well-educated bureaucrats.
The UK, and the USA, and the European Union, need to have 10 year term limits on government bureaucrats.
Just as the biggest benefit of democracy is the peaceful transfer of power -- to somebody new, different, that is what all too-big gov't departments and ministries need.
And what helped China after Mao thru Deng, Jing, Hu, and Xi ... but maybe now reverting to a third-world-ish "President for Life". Not so different than dictator Putin.
Deep state bureaucrats don't believe they are so much like little dictators - but it would be more clear if more of them left gov't and found real jobs.
"Do the growth-boosting supply-side reforms in housing, energy and infrastructure first, and the tax cuts later. Even then, do not fund permanent tax cuts through additional borrowing. Cut spending by the same amount as you cut taxes, even if you believe that your tax cuts will eventually be self-funding. Request external, independent auditing and evaluations of every spending pledge and every fiscal change. Don’t make open-ended, untargeted spending commitments. Target support on those who need it most, and present an exit plan from the policy in advance."
Some of these takes make too much of the left wing - right wing divide. British voters aren;t like that. The man on the street is very very often way to the left of the far left of the Labour Party on things like banker bonuses and corporate taxes, and way to the right of the extremes of the Conservative Party on law and order, defence, asylum, issues relating to wokery etc.
I'm not sure there is much more to this story that Truss being a duff whose basic competence was not able to be trusted. She is a very, very odd character who was very plainly grotesquely overpromoted and who only got the job because she told the Party membership (which is about 160,000 wealthy, elderly rural type-people) what they wanted to hear about tax cuts.
The only person worth reading about how the British state operates, if that's the word, is Dominic Cummings. In particular his observation that the government does not control the government. Singapore on Thames is impossible, even if it were to be the headline policy of a government with a massive mandate because the deep state does not exist to do what it is told by ministers. There are umpteen officials who wield more power than any politician, arguably minus the Prime Minister. Truss' planned policies were quite mundane, really. She didn't try to halve tax, or abolish any meaningful taxes, or bring a flat income tax rate in, or anything even remotely akin. And still everything melted down.
We have big problems in the UK, but not any worse than comparator nations in Europe. The biggest missed opportunity has been that the deep state, with a couple of exceptions, has seen Brexit as a threat to doing things the same old way, rather than as Cummings did/does as a necessary but not sufficient step towards total re-wiring as a means of doing everything much, much better. Personally I hope specifically for the Conservative Party to cease to exist. I would prefer this fate for Labour as well but that's less necessary.
No one mentions austerity -- prudent cuts in inefficient, outdated, unwarranted, or corrupt government expenditures -- as a necessary element to improvement UK public finance.
The British are ****ed. The Tories aren't conservative, and haven't been since Thatcher was PM. Right now, the very best that Sunak can likely do for the country is call for early elections and let Labour make an even bigger mess of things. What is needed is pain- lots and lots and lots of pain. The voters need to be incentivized to start voting for a different path forward- a path that doesn't include the unelected government apparatus of today.
If you cut taxes without cutting spending, you're not really cutting taxes.
Several factors allowed governments to get away with that the last few decades, but the party is over. Someone who doesn't recognize the party is over is a bad leader.
It’s worth noting that there has been no restoration of power to the people in the UK, the reverse. None of the political Parties are ‘populist’ whatever that means exactly and the so-called Conservative Party isn’t Conservative. All the Parties tried to thwart Brexit. Truss wasn’t some people’s choice, she was chosen by the Conservative Party membership - about 170 000 - only because she wasn’t any of the others on offer. The Parliamentary Party... the Tory MPs... decide which names go forward to the membership. They wanted Sunak. They eliminated the other popular choice early on, and that left Truss as least worse option. She failed, the cabal forced her out leaving Hobson’s choice Sunak as the only one with sufficient support from MPs so the membership need not be consulted. The MPs got what THEY wanted - the people don’t matter. The problem in the UK as elsewhere in Europe, is nearly half of the work-able population get paid to do jobs that create no wealth - Government, NGOs, etc - or do not work at all. Increasingly the economy is being socialised, funded by the State with tax plunder from the wealth creators and money printing. The net beneficiaries of this keep voting in whoever promises to keep the money flowing.
> Yet many of our conservative voices now pander to voters by advocating big-government big-tax nationalism, protectionism, subsidies, and crony capitalism, albeit directed in different directions than the left.
Cochrane is throwing a lot into this sentence. A lot of generalizations that don't seem true or salient. I follow politics pretty closely, and I don't hear "conservative voices" advocating for most of this stuff. Also, the salience of these things matters a huge amount.
Example: I'd gladly give a little on "protectionism" which every engages in some but generally sticks with free trade in order to get real action on subsidization of higher education and big companies and deregulation (which are the operational elements of crony capitalism that matter).
This is all simply downstream from bad policy. Supply-side reform and smaller government can work. Tax cuts and large energy subsidies during an inflation outbreak probably cannot. But policy has become sufficiently dumbed down that we lack the ability to select the right policy mix at the right time. This is a problem across the political spectrum.
Read Konstantin Kisin's latest Substack post. It had nothing to do with Truss cutting taxes or opening immigration, but instead the bond blowup from the huge energy subsidies she created.
Truss lost for the same reason / same enemy that made Trump "lose" - lifetime jobs of Deep State well-educated bureaucrats.
The UK, and the USA, and the European Union, need to have 10 year term limits on government bureaucrats.
Just as the biggest benefit of democracy is the peaceful transfer of power -- to somebody new, different, that is what all too-big gov't departments and ministries need.
And what helped China after Mao thru Deng, Jing, Hu, and Xi ... but maybe now reverting to a third-world-ish "President for Life". Not so different than dictator Putin.
Deep state bureaucrats don't believe they are so much like little dictators - but it would be more clear if more of them left gov't and found real jobs.
Here is a soul-searching take by Kristian Niemietz (Institute of Economic Affairs, UK):
https://iea.org.uk/has-real-trussonomics-never-been-tried-a-postmortem-of-the-truss-kwarteng-project/
The punchline:
"Do the growth-boosting supply-side reforms in housing, energy and infrastructure first, and the tax cuts later. Even then, do not fund permanent tax cuts through additional borrowing. Cut spending by the same amount as you cut taxes, even if you believe that your tax cuts will eventually be self-funding. Request external, independent auditing and evaluations of every spending pledge and every fiscal change. Don’t make open-ended, untargeted spending commitments. Target support on those who need it most, and present an exit plan from the policy in advance."
So how long will it take to call out the new PM, Sunak? Or is one not permitted to speak against the WEF swill?