At the very start of the lunatic Truss regime, I gave credit for one small thing: the sacking of Tom Scholar which, be it a good or a bad idea (I have no view) was at least done unceremoniously on Day 1. That's the Machiavelli way to go.
What followed - the soi-disant 'fiscal event' - was so close to terminal disaster (via an instantaneous meltdown amongst pension funds), I don't think we've properly registered it yet. This was also done swiftly and without reference to anyone: but that's not even remotely justified by the Machiavelli principle, and proves we are dealing with maniacs, willing to hazard the edifice of the UK pension system, and with it the economy, without a thought.
Fortunately - and this is where the door starts rapidly to turn on its hinge - the grown-ups stepped straight in and caught the witlessly, culpably dropped Ming vase before it hit the ground.
Let's step back a bit. Why did the Tory faithful vote for Truss? Because in those mad eyes, sub-Thatcherite apparent-certainty, and Johnsonian willingness to be jokily undiplomatic towards Macron and Sturgeon, they thought they'd found their girl - and that if someone was willing to mouth demented policies in public ("I will reform the ECHR"), it must be OK to want them and have them. All that's needed is balls - and at last, we've got someone with balls!
Well, no. Batshit is batshit, and cuts no ice in the real world.
Here's where it gets interesting. The adults are quietly closing in on her from all directions, steering her gently but firmly by the elbow - and she's not wriggling and struggling and crying "shan't!". First, the Bank. Then Biden. Then Macron. Then someone in the Party who could see the damaging optics of the 45% thing. Then whoever it is that calls the shots in the North Seas Energy Cooperation partnership. Then the National Grid. They've all evidently got her measure and, unlike with May - who likewise got frequently taken aside and told to change her ways - somehow it all sinks in real quick, and she goes along straight away, without obviously having been thoroughly humiliated. A preliminary assessment, for sure: but I think we're talking hyperactive bright teenage attention-seeker, keen to make a noise but also keen for grown-up approbation. I just want to be Head Girl, that's all. Of course dear, just so long as you don't do anything silly. (Anyway, there isn't anyone else who wants it as badly as you do.)
There's more of this to come - for certain - in the next few weeks along, so many potentially lethal holes did she dig in such a short space of time. When she's finally run out of personal steam, and the Tory anarchist-ultras have started to lose heart (and lose access: the door-keepers will ensure that), I wonder who ends up being the puppet-master at No.10? Every PM needs a Willy ...
ND
36 comments:
"I wonder who ends up being the puppet-master at No.10?"
I can confidently predict it'll be someone who believes in keeping wages low, house prices high, and mass immigration.
Good summary.
Q: Who let the adults back into the room or were they there all the time when Boris was around?
Q: If Boris was supported (albeit silently) by the adults, what was the plan? Was it just to escape the EU's financial regime?
Since the anointment of Truss is an extinction level event, will the adults allow one more near-miss to allow an orderly or disorderly transfer to the real candidate for PM?
Looking forward to those in the Conservative Party who can see the writing on the wall and want to do something about it, renaming themselves Extinction Rebellion.
'demented policies in public ("I will reform the ECHR")'
Demented in the sense that we needn't reform it we should just leave. It's obviously a mad notion to have an ECHR since "human rights" don't exist. Nobody has ever had rights simply by virtue of being human.
Man is a social animal so his rights and duties come from the society of which he is part. The expression favoured by Martin Luther King was far nearer the mark - Civil Rights.
And those have to be guarded and nurtured inside our society, not fannyed around with by a bunch of Continental legal bureaucrats.
The adults in the room theme shows that it doesn't make much difference who is PM, there are major limits to what any of them can do.
I don't think we've heard the last of bond market meltdowns. I saw an estimate recently of the insanely big value of gilts that must be sold in the next 12 months to fund the Truss tax cuts and energy bailout. BoE programme to buy gilts ends in a week's time. The only way the borrowing can happen is with a really big rise in interest rates. Even Liz Truss will balk at blowing up the housing market and DB pensions at the same time.
Then we have various people threatening to wage nuclear war (the Poles, Zelensky, the Russians) and a steady build of of the Russian army ready to strike when the ground hardens, later this year. How will HMG cope when that crisis flares up some more? One gets the impression that the US govt will be quite happy to throw UK/EU under a bus to further their aim of regime change, followed by breaking Russia into smaller states.
Hmm. Seems like a hanckering after the common-or-garden rule by “experts”, academics and the civil service to me.
Were these alleged adults in the room the same ones which let pension funds become overly-dependent on a single asset class (U.K. government gilts) becoming, in the process, et another Top Big to Fail entity (or entities)?
The same ones which failed to have in place a programme for replacement of nuclear power capacity as it approached its (easily foreseeable) end of economic life?
Failed to foresee the need for continuing hydrocarbon production domestically while renewables were built out?
Lacked any semblance of political understanding for how cutting off a governments — any governments — ability to make a policy response in the face of unstoppable illegal immigration would generate hard-to-manage blowback against all migration?
If so, then I for one think we can all do with quite a bit less of their tender ministrations.I’m not sure it’s true to say that voters expect their government to not make any mistakes, although they probably demand any mistakes are acknowledged and rectified quickly. But I’m pretty certain they expect their governments to govern, as in be conviction politicians at times, rejecting that most pernicious of liberal consensus goodthinking, “conventional wisdom”.
Note it was a subset of DB pensions that were hedged using LDI that were at risk. As it transpired, only about £3.6bn of support was required from the BoE. Handy doom and gloom story to keep Truss in line however...
Ex Lib Dem, ex Remainer, ex Republican...
She's definitely a Marxist. The Groucho flavour.
"These are my principles, and if you don't like them, well, I have others."
DJK - when Russia counter-attacks I expect more sanctions. Obviously my dream is that Truss will have a revelation, announce that we'll blackball Ukrainian entry into NATO, and can you build four nukes for us please like you're building for Turkey? 20 billion is an absolute snip.
https://en.wikipedia.org/wiki/Akkuyu_Nuclear_Power_Plant
Alas our economy is so shaky that the US could kill it stone dead, which they can't do to Russia's.
Oh, and Happy Birthday Vlad !
It seems that ND is celebrating the fact that whoever is nominally in power, it's really unelected, unknown shadowy forces, that are really pulling the strings.
IOW you will get the govenment that you're given and not the one you vote for.
We can see how well that's working out for the majority of Britons.
"The adults are quietly closing in on her from all directions, steering her gently but firmly by the elbow - and she's not wriggling and struggling and crying "shan't!". First, the Bank. Then Biden. Then Macron. "
No, the perma-State is closing in. It just goes to show we have no democracy in the UK. If you stray off the approved path you'll dragged into a dark alley and come out loving Big Brother. There is no way of knowing if the Truss/Kwarteng low tax and growth plan would have worked, because the PTB don't want to risk that happening. Better to chop them off at the knees now, and make sure a suitably WEF approved alternative is installed instead.
It seems that ND is celebrating
It's a very big jump from "duly elected governments with properly considered manifestos should have the constitutional ability to get their programmes through" (to which, amen)
to
an airhead with no visible powers of rational judgement and the flimsiest of mandates, should be allowed to do on a whim whatever someone suggests to him/her at a Spectator party
- unless we wish to incorporate The Powers of a Dictator into the prize you win for swaying a few tens of thousands of party members. We sort-of do, anyway, in our system: but there have to be limits
Anything with a hint of cutting back Big State about it will be blown up into a crisis.
Tax cuts are anathema to The Blob.
Not that unfunded spending of a far greater magnitude was ever a problem when it came to lockdown (Sunak was a golden boy) or energy caps.
As it happens, the Laffer curve shows that tax cuts generate more revenue than the losses owing to the cuts.
Truss does not have time to mess around if she wants to save the Tories from oblivion in 2024. She and Kwarteng failed to announce the cuts in State which were to accompany the tax cuts.
All this really means is that the Grown Ups will never ever allow us to have a Thatcher again.
Conservatism is well and truly dead.
This 'the adults have entered the room' shtick is just code for 'Someone I dislike has been done over, and I approve' basically. Where were the adults over the last 15 years telling the eco-mentalists that you can't have a renewable power grid powered by intermittent sources (wind and solar) unless you also have a replacement lined up for natural gas, which can supply power at the flick of a switch, 24/7? Adults were noticeable by their absence then. Also said adults might have pointed out to the UK PM earlier this year that we are very dependent on natural gas and getting into a proxy war with a massive global gas supplier might just be a bit dangerous for the country, and its inhabitants. Where were the adults in the room pointing out that printing hundreds of billions to pay people to stay in their homes and do nothing to avoid a bad case of the flu (at worse) might just possibly have some consequences, both financial, economic and social? No adults to be seen then, if you so much as attempted to point out the folly of it all you got accused of wanting to kill granny and treated like some sort of moral defective.
So colour me sceptic that there are any 'adults' left in political life, just people with their own vested interests that are playing out now with the attempted defenestration of Truss.
https://www.youtube.com/watch?v=gj_1mrSoVZ8&ab_channel=Supertanskiii
Or there's this angle. Watch to the end to see its pertinence to this discussion.
Well said Sobers.
Biden an adult? Macron? For God's sake Nick give the hallucinogenic mushrooms a rest.
"Where were the adults ... telling the eco-mentalists that you can't have a renewable power grid powered by intermittent sources unless you also have a replacement lined up for natural gas, which can supply power at the flick of a switch, 24/7?"
Has been endlessly told to successive governments, not least from this blog; but (sadly, IMHO) there has been all-party consensus on pressing ahead for many years now - that's democracy for you!
[There has also been a degree of wolf-crying: there were "authoritative academic studies" published by the usual suspects "proving" that you can't sustain more than 25% of wind power in the capacity mix, long since disproved. Always risky invoking academic a priori reasoning in matters of practical engineering: Watt's steam engine was 'impossible' by the academic physics of the time]
The adults in this case have been the Grid, simply getting on with the job within their statutory powers and duties, reminding people about the cost from time to time. They'll be doing the same this winter, despite herself's clearly stated and ludicrously liberto-doctrinaire policy "there will be no rationing". Certainly not, PM - just a 'planned programme of load shedding', plus some unplanned demand destruction.
I'd be a bit more amenable to the suggestion that Truss is somehow a uniquely British example of poor leadership or cognitive capture by some vaguely-defined group of apparently infallible grow-ups.
While the UK's situation is pretty rubbish, it's way, way better than Germany's. Germany's "Traffic Light" coalition is just about the worst government of any I can think of right now. And that includes the US. The coalition in Germany coming hot on the sensible-shoed heels of that well known Adult In Room™ Angela Merkel. Who herself was largely in hoc to that epitome of the Professional Managerial Class' go-to poster child of "competence", the EU Commission. Whose energy and environment Directives (and general attitude to industry) make Liz Truss look like a model of coherent, rational and thoughtfully considered policy definition and implementation. Germany is scarcely bettered than France. I could go on, but hopefully everyone gets the gist here.
It is precisely because sufficient numbers of the electorate, not to mention Conservative Party members, are fed up to the back teeth with this kind of self-regarding self-satisfied clique of intelligentsia cavorting around making humdingers of mistakes in all manner of policy areas that they were prepared to go for Truss as opposed to more-of-the-same Sunak. If Truss sticks to this strategy of trying something off-the-wall, yes, perhaps, occasionally blundering into a mess (which will be forgiven if it is spotted and rowed back promptly) but giving us any -- anything at all -- apart from the tried-and-failed mush we've had since Blair then I wouldn't write off her quite yet and quite so glibly.
Clive - I wouldn't write off her quite yet and quite so glibly
I'm not. I suspect she'll rapidly come to a modus vivendi which sees her stay the course to the next GE - to the despair of the left. What resemblance this will bear to her "campaign rhetoric" remains to be seen. Just look at the scale of the "non handouts"!
Your remarks about Germany are of course very well taken (and, as regards energy policy, echoed around these parts for years) - different dynamics, but what a shower
there's an interesting question as to when the Truss Praetorians break ranks. They've invested so much in her, and look what's happening - already! ... Guido is on a knife edge, and clearly finds this a most uncomfortable position. But Steve Baker's recent 'turn of phrase' is fascinating. What a difference a ministerial limo makes, eh?
"Guido is on a knife edge, and clearly finds this a most uncomfortable position"
His position is "less taxes for offshore holding companies!"
He's entertaining, but that's as far as he goes.
"It is precisely because sufficient numbers of the electorate, not to mention Conservative Party members, are fed up to the back teeth with this kind of self-regarding self-satisfied clique of intelligentsia cavorting around making humdingers of mistakes in all manner of policy areas that they were prepared to go for Truss as opposed to more-of-the-same Sunak. If Truss sticks to this strategy of trying something off-the-wall, yes, perhaps, occasionally blundering into a mess (which will be forgiven if it is spotted and rowed back promptly) but giving us any -- anything at all -- apart from the tried-and-failed mush we've had since Blair then I wouldn't write off her quite yet and quite so glibly."
Absolutely spot on. I've got to the point I'd vote for anyone who wasn't a globalist/Davos/WEF acolyte now, and that includes Jeremy Corbyn. And that's coming from a lifelong Tory voter.
"Biden an adult? Macron? For God's sake Nick give the hallucinogenic mushrooms a rest."
Our host must be trying to up interest in his blog, because anyone who puts Biden in same sentence as 'adults in the room' can only be looking to drive traffic up on their site. Biden doesn't know who is dead and who is alive, or if he's sh*t his pants today, so only a troll would put him in the 'adult' category.
"Has been endlessly told to successive governments, not least from this blog; but (sadly, IMHO) there has been all-party consensus on pressing ahead for many years now - that's democracy for you!"
So there aren't really any 'adults' that step in when the 'children' make a wrong move then. Just those with vested interests who step in when someone threatens them. How can you describe the likes of Biden Macron et al as 'adults' when they are fully signed up members of the renewables/war on Russia/covid madness policy mix?
I think Biden, although an experienced politician, is now, for obvious reasons, not much more than a figurehead. The question is how good are the people behind him ? Who is setting policy ?
No doubt Obama would like to, but can he ?
Don
The Bank of England could not find its backside on a sunny day. Don’t call them grown ups. Their grasp of economics and inflation is at playschool level.
Kind regards
Charles
Isn't warmonger Truss connected in some way with the World Economic Forum?
If so, to the question who is pulling her strings? Isn't the answer: the warped WEF?
Biden today
"Let me start off with two words.... Made in America "
https://twitter.com/GhostOfJoeBiden/status/1578460064741875712
Talking of house prices and mass immigration
C4 Despatches tonight, on how rent allowances in benefits aren't keeping up with rent rises - in many areas there are no places to rent that benefits will cover.
But do C4 point out the 1.1 million UK visas Boris handed out, and what that'll do to rents?
Don't be silly, it's just that the Evil Tories won't pay.
The Tories are evil ok, but for letting in a million people a year...
"the same ones which let pension funds become overly-dependent on a single asset class"
It's my understanding that "let" is the wrong verb: they bloody well insisted that the pension schemes stock up on gilts, especially index-linked gilts.
I've seen the move attributed to G Brown. Sounds plausible.
"It's my understanding that "let" is the wrong verb: they bloody well insisted that the pension schemes stock up on gilts, especially index-linked gilts."
The State didn't insist the pension funds then borrow bucket loads of money using said gilts as collateral though did they? That little escapade was entirely down to the financial geniuses in the City (presumably they are all 'adults in the room' too according to our host).
'I say Tarquin, lets borrow shed loads of money because interest rates are rock bottom, and use as collateral an asset that is directly inversely linked to interest rates, so if rates do go up (and as they are on the floor they can't go down any more) our asset drops in value and we have to stump a fortune in cash. Which we won't have, because we'll have spent it all on junk bonds'
With adults like this in the room, who needs children?
@Sobers: seeking to avoid confessing to your error by chattering about something else is the sort of transparent tosh that even schoolboys can see through.
And what the buggery have junk bonds got to do with the issue?
"seeking to avoid confessing to your error by chattering about something else is the sort of transparent tosh that even schoolboys can see through."
When I said 'dependent on a single asset class' what I meant was that the BoE allowed the pension funds to make huge bets on eternal low interest rates. All these LDIs that they signed up to were predicated on gilt yields remaining low (and thus prices high) forever. As soon as those yields started going north (and values south) their investment strategy turned to dog sh*t. What sort of financial regulator allows an entire pension industry to take the same bet, at a time when interest rates were bound to rise eventually, especially given the amount of money that had been printed?
"And what the buggery have junk bonds got to do with the issue?"
Thats the other side of the LDI. The money you borrow against the gilts is invested in higher yielding bonds, in other words, junk, because you need to juice your pension returns due to near zero interest rates.
The FT explains it all quite well:
https://www.ft.com/content/6ca2ff89-e59b-4529-8448-4c09b27af480
Ah pensions! When I was arranging a mortgage twenty years ago the nice young lady asked me if she could interest me in a pension? "Not at all, thank you. I treat people for their pensions"...meaning I had patients in terrible distress about their pensions every week. I think Gordon Brown decided to tax them into oblivion. And Equitable Life anyone? Pensions are a mug's game.
The more renewables, the more fossil fuel back up is needed. Seems never to be mentioned.
Re how Lizzy got the job - from my old experience of Con Associations it was a fix. 'Advice' flowed down to local chairs and meetings in nice sitting rooms chewed over the options. The brown guy, very bright and competent but stabbed Boris (who wouldn't), is too rich, taxed Oop North to fund daarn sarrf. He might have frightened the rest of the team - being a lot better. None of that would have mattered but for guidance from above - he's not the ERG's creature - Lizzy is. The right wing loons wanted Lizzy and they got her. Now she is being suitably groomed and steered, she will do as she is told.
Then she chose or was lumbered with Mr Kwartang. A gent who's actual banking experience seems very hard to determine. From the evidence so far his experience is not much - he got the keys to the car but crashed it on the first trip out. Naughty step for him.
All a bit sad, we are back where we were leading up to the Brexit referendum - lost. But in an even worse financial pickle - all the world and all the world's markets can see we are broke and the Tories and the ERG have even less clue than back in 2015-6. We have no more idea how to get some growth. Brexit offered the Singapore-on-Thames option but that frightened the NIMBYs - so we have got fancy investment zones - but Lizzy and the ERG don't like them either. The other alternative is the Miss Marple version of Britain. Run by rich elderly colonels and prune-faced old maids supported by 14 year olds working down coal mines and an obedient servant class. Much more to the ERG's liking.
Post a Comment