T.The ghosts of Britain’s economic crisis of the past rise ghostly. It evokes memories of the ill-conceived and ill-fated “dash to growth” under Conservative Prime Minister Reginald Maudling in 1962-64. 1972-74 Anthony Barber and old friend Nigel Lawson in 1988-89.
Yes, they were Prime Minister Tories too. they usually are. From 1997 he was teased and widely misunderstood when Gordon Brown, who served as Labor Prime Minister until 2007, reportedly promised “no more booms and busts”. What he actually claimed to have said was, “No more tory booms and busts.”
All of these growth efforts had in common that they were well-intentioned and took time to be seen as failures. But Liz Truss and Kwasi Kwartengu’s dash to growth is something else. This first pistol was fired by two of his most arrogant politicians. Stop when it’s barely starting.
Kwarteng and I cross paths only occasionally.Our encounter was fairly civilized, but a few years ago as a judge for a book on financial history, I participated in the unanimous verdict that the prize of the year should be a very fine book by Liaquat I tasted the arrogance when the major central bankers of the 1920s and 1930s lord of finance.
Kwarteng grew a beard on me and asked me why I didn’t win the award. his money bookWell, there were many answers, but one was that the books were bad. Now I have been told by his contemporaries at Eton that Qualtengu was considered absolutely brilliant, but undoubtedly arrogant.
Arrogance is the classic Aristotelian fatal flaw. Flaws are seldom shown publicly these days more than after the apparent disaster of reception for him. “Accounting event” on September 23headline FT Last Monday exclaimed, “Kwarten promises further tax cuts as Tories fear Stirling Mount.” Kwarteng has reportedly vowed to double down on tax cuts despite investor fears, “preparing Conservative MPs and market traders for further turmoil”.
And then came the turbulence. Bank of England must intervene While trying to quell a dramatic collapse in confidence in the government’s “growth policy” to borrow money for tax cuts from the rich, poor children were found carrying empty lunchboxes to school.
As recent IMF, OECD, and respectable think-tank studies have shown, this is a naked redistribution of income from the poor and the rest of society to the rich, which is positive for economic growth. There is absolutely no evidence that it affects
The Truss-Kwarteng farce is bad news for Pound. When the pound fell to parity with the dollar in January 1985, Margaret Thatcher called her friend Ronald Reagan and the United States supported the pound. I don’t think Joe Biden and Truss’ relationship is on such a foundation yet if they ever need help again.
The need to maintain or restore financial stability is one of the primary roles of central banks, along with attempts to control inflation. The paradox last week was that banks were declaring their intention to raise interest rates to combat inflation, i.e. contractionary monetary policy, while a well-publicized intervention allowed liquidity to enter the financial system. Injecting, that is, easing monetary policy. to restore financial stability.
Trying to buck the tide of sensible economic public opinion and the financial market views that influence what they believe, Truss and Quarten Complain about “Treasury legitimacy””. But as Ed Balls points out, he was the key figure in granting central banks monetary policy independence 25 years ago, and there is nothing wrong with the Treasury’s legitimacy. It allows higher/lower spending. tax increase/decrease; more or less fair. More or less intervention in response to a major shock – more or less determined by the government of the day.
We’ve seen the financial markets through Truss and Quarten. Let’s face it: their desire to boost the productivity of the UK economy has been hit hard by their own Brexit and a 4% to 5.5% cut in annual GDP (estimated by the National Institute of Economic and Social Research). I was stepped in. .
On this issue, while congratulating Kiel Sturmer on the success of the Labor Conference, I would like to emphasize that despite his latest slogan: Brexit could workBrexit is a disaster and Labor leaders should say so. It’s an open goal.
https://www.theguardian.com/business/2022/oct/02/liz-truss-and-kwasi-kwartengs-foolish-dash-for-growth-is-a-non-starter Liz Truss and Kwasi Kwarteng’s silly dash for growth is not a starter.William Keegan