Like Turkeys voting for Christmas.
I haven't commented on politics for a while even though there is so much to talk about. Sorry, but I can’t resist this.
One name at the moment conjures up all sorts of comments and chaos: Liz Truss.
I had thought of commenting on her during her campaign to be elected leader of the Tories, but I really didn't expect her to win. For the short of memory, her campaign promises centred around free market policies that went out with the ark, (well; with Maggie Thatcher anyway). According to Liz, giving the rich more money by cutting taxes and removing regulations would lead to increased investment which would lead to more jobs, and thus the UK economy would grow exponentially. From this obviously larger base, the government would easily recoup the money it lost by decreasing taxes in the first place and the UK would become some sort of Shangri La, where everyone got paid exceptionally good wages with which they would then start yet more business with and the whole wonderous process would go around all over again.
This didn’t work for Maggie, and even though Liz obviously thinks she is some sort of clone of that woman, this policy is very quickly crashing for her too, even before it is implemented. Milton Friedman and Maggie had a lot to answer for at the time, and their influence, it seems, lives on.
So, what is wrong with policies like these? Well, we have lived through something similar ever since the banking crash of 2007/8. Quantitative easing, the system by which central banks created more cash which they then released into financial systems throughout the world didn’t manage to create much growth either. The rich in many countries simply pocketed the cash, yet I cannot see the sudden spurt of entrepreneurship that this was supposed to have promoted, or the linked job creation and the trickle down of economic benefits that the theory postulated. Instead, government borrowing increased to account for all the extra money supply, so we will all be taxed for years to pay for this. The rich got the cash and the rest of us will be picking up the tab for years yet got little out of this policy.
But what do the super-rich do with all that money? Think of what the average or low-income person spends money on, and things like food, fuel, clothes, health and housing will feature strongly. These are after all the basic necessities of life. A little extra income, as well as expanding spending on the above, allows things like entertainment, transport and holidays to be added to the mix. There is some kind of limit on how much any person can spend on such items though. Even if you scale up super-rich spending to allow for 5-star hotels when on holiday for two months of the year, and Beluga caviar at every meal the same issue shows up. Surplus cash is not a big issue for anyone who’s income is anywhere near the national average or below, while if you had an income of say £100,000 p.a. (and an income like that wouldn’t even qualify you as super-rich!), you should easily have money to spare.
Assuming you have some money to spare, what would you do with it? Few sensible people would have left their spare cash in any sort of savings account in the last decade or more. The interest rates are pathetically low. The government itself gives some options such as ISA’s. These are tax free and allow for savings of £20,000 per year, and you can use them to buy shares and bonds. I don’t know about all my readers, but I cannot save more than a tiny fraction of that amount. If you look at the statistics, the amounts moving to offshore savings banks has increased dramatically since quantitative easing too. That money is definitely not going towards helping the UK economy. House prices have also increased exponentially since QE, and I don’t mean just the price of luxury houses. House prices at the lower end of the market have increased dramatically too. Unfortunately, this is not driven by people buying their homes. I read an extract about a report from the Joseph Rowntree Foundation saying that “Over the past 20 years, its report found that for every four homes built in England the equivalent of three of these have gone into the private rented sector.” I find that figure quite shocking.
Of course, the lack of availability of social housing dates back to the time when Maggie sold it all off. Liz Truss must be in awe of that sort of impact. The upshot of a lack of social housing now is high rents, high house prices, and in many cases low quality housing. The social divide between rich and poor widens as a result, as increasingly few young people even get a chance to get themselves on the property ladder.
This is by Edwina Curry.
Asked during an interview with the GB News channel whether Ms Truss could survive, Ms Currie said: “Oh, no, of course she can't survive. Oh my goodness. I'm going to put this on record. I think she is charmless, graceless, brainless and useless."
Johnny Mercer says the PM promised during her leadership campaign that the veterans’ affair(s) brief would not be downgraded under her government.
But the Plymouth Moor MP says that as soon as Ms Truss took office, she fired him and folded his post into the defence minister’s role.
‘I remember Liz kind of laughing while she did it.
‘She was giggling and looking at the floor and I was just thinking “I am a mug for believing these guys”, and it sucked the air out of me.