Thanks for the comment Simon! On your UK suggestions, I think the west needs to (re)learn the lessons of a mixed economy, where the public sector provides public goods, like education, health, transportation and utilities at high quality and low prices. Take out the producer capture of public sector unions and the egregious 'agency' costs of lex Greensill like middle men.
The issue is that, post Blair and Brown, the notional colour of the rosette has made no difference to policy, it has been a consistent muddle of centre left European social democrat, US inspired Crony Capitalism, Globalism and dirigiste wannabe central planning. Osborne thought Green was an Industrial Policy, as did May and now Starmer thinks making bombs is.
The idea that the government can create 'high quality jobs' is a vanity project that gets abandoned (when it doesn't work) and the politicians resort to 'being on the world stage'.
Best thing they could do is revisit Kwasi's Singapore on Thames plan and get rid of the Treasury and BoE instead this time!
There is the kernel of an election manifesto for one of the parties in your opening paragraph Mark. Yet as you say, the low risk option is for one party to stick close to what the other is doing and compete on personality and competence. This degenerates into simply being less incompetent.
As a result we have uninspiring leaders without a vision. Like or loath what Trump is doing, he sees the stagnation in Europe, feels the drift of parts of the US towards it and is fighting the tide. Europe needs to wake up and present an alternative vision, rather than hunker down and wait in hope for the US midterms.
Go for it Simon! China has built a successful economy by copying what works and, to follow Charlie Munger, also by looking at what doesn't work elsewhere and making sure you don't do that. Learning by other's mistakes. Charlie calls it inversion.
The labour laws they are proposing have already been shown not to work in NZ, the landlord regulation idea has been demonstrated as bad in Ireland and so on.
And yet they plough on, venerating the ability to deliver on bad ideas as competency (see almost everything Michael Gove did post the education bit).
During this weeks market turmoil (I missed Monday and Tuesday due to time off to cycle around Richmond Park instead) I noticed much focus on the reaction to Trump’s tariff, the 90 hiatus ex China and the strangely similar messaging from Jamie Dimon and the Bank of England about hedge fund deleveraging rather than systemic risk as US 10 yr yields moved towards 4.5% and the long end of the UK yield curve spiking to such an extent, the BoE were forced to announce only short dated gilt issuance from April 14th
But no mention anywhere about the $7trillion US refinancing due this year courtesy of Janet Yellen as Fed chair presiding over QE at the zero band from 2014, and as Treasury Secretary from 2022 issuing nothing but short dated paper, most of which in combination matures this year
One comment I saw cited the quote from Altabani from the 1969 Italian Job…”if they planned this traffic jam, they planned away way out” Given the Trump administration has known about this for years, and knows the main foreign holders of USTs (The EU and UK) are hostile to Trump, surely they gamed a solution to this refinancing dilemma?
So I notice Starmer’s rhetoric is still EU supportive but maybe recognises the end game to the current turmoil is an ascendant China, Russia and an increasingly aloof, inward looking USA
There have been a number of silly comparisons between Trump's tariffs and Liz Truss' policies, John. Truss decided to pile debt upon debt in an attempt to kickstart growth and investors refused to finance what they considered to be an ideological rather than carefully crafted plan. The equivalent was Biden/Harris piling up debt with the Inflation Reduction Act, which the deeper US bond market absorbed while higher rates stored up problems for later.
Recognising this, Team Trump came with a plan to pare back government spending. The rising rates in the bond market appear to be the unwind of tactical trading positions. This was triggered by the initial rally in bond markets and lower rates, in response to the tariff announcements.
Lower borrowing rates is one of the three economic priorities of the administration, along with lower oil prices and a weaker dollar. All three were being delivered but were temporarily undone by leveraged financial traders using short Treasuries to finance trades. Trump paused tariffs to prevent an unwieldy unwind of those positions. The priorities of the administration and the policies have not changed.
Thanks for the comment Simon! On your UK suggestions, I think the west needs to (re)learn the lessons of a mixed economy, where the public sector provides public goods, like education, health, transportation and utilities at high quality and low prices. Take out the producer capture of public sector unions and the egregious 'agency' costs of lex Greensill like middle men.
The issue is that, post Blair and Brown, the notional colour of the rosette has made no difference to policy, it has been a consistent muddle of centre left European social democrat, US inspired Crony Capitalism, Globalism and dirigiste wannabe central planning. Osborne thought Green was an Industrial Policy, as did May and now Starmer thinks making bombs is.
The idea that the government can create 'high quality jobs' is a vanity project that gets abandoned (when it doesn't work) and the politicians resort to 'being on the world stage'.
Best thing they could do is revisit Kwasi's Singapore on Thames plan and get rid of the Treasury and BoE instead this time!
There is the kernel of an election manifesto for one of the parties in your opening paragraph Mark. Yet as you say, the low risk option is for one party to stick close to what the other is doing and compete on personality and competence. This degenerates into simply being less incompetent.
As a result we have uninspiring leaders without a vision. Like or loath what Trump is doing, he sees the stagnation in Europe, feels the drift of parts of the US towards it and is fighting the tide. Europe needs to wake up and present an alternative vision, rather than hunker down and wait in hope for the US midterms.
Go for it Simon! China has built a successful economy by copying what works and, to follow Charlie Munger, also by looking at what doesn't work elsewhere and making sure you don't do that. Learning by other's mistakes. Charlie calls it inversion.
The labour laws they are proposing have already been shown not to work in NZ, the landlord regulation idea has been demonstrated as bad in Ireland and so on.
And yet they plough on, venerating the ability to deliver on bad ideas as competency (see almost everything Michael Gove did post the education bit).
During this weeks market turmoil (I missed Monday and Tuesday due to time off to cycle around Richmond Park instead) I noticed much focus on the reaction to Trump’s tariff, the 90 hiatus ex China and the strangely similar messaging from Jamie Dimon and the Bank of England about hedge fund deleveraging rather than systemic risk as US 10 yr yields moved towards 4.5% and the long end of the UK yield curve spiking to such an extent, the BoE were forced to announce only short dated gilt issuance from April 14th
But no mention anywhere about the $7trillion US refinancing due this year courtesy of Janet Yellen as Fed chair presiding over QE at the zero band from 2014, and as Treasury Secretary from 2022 issuing nothing but short dated paper, most of which in combination matures this year
One comment I saw cited the quote from Altabani from the 1969 Italian Job…”if they planned this traffic jam, they planned away way out” Given the Trump administration has known about this for years, and knows the main foreign holders of USTs (The EU and UK) are hostile to Trump, surely they gamed a solution to this refinancing dilemma?
So I notice Starmer’s rhetoric is still EU supportive but maybe recognises the end game to the current turmoil is an ascendant China, Russia and an increasingly aloof, inward looking USA
https://open.substack.com/pub/thepeacemonger/p/starmer-is-curiously-aligned-with?utm_campaign=post&utm_medium=web
Ian Proud, a former British diplomat in Russia, makes a good argument
The question thus is whether the Bank of England has done a deal with the Fed ?
There have been a number of silly comparisons between Trump's tariffs and Liz Truss' policies, John. Truss decided to pile debt upon debt in an attempt to kickstart growth and investors refused to finance what they considered to be an ideological rather than carefully crafted plan. The equivalent was Biden/Harris piling up debt with the Inflation Reduction Act, which the deeper US bond market absorbed while higher rates stored up problems for later.
Recognising this, Team Trump came with a plan to pare back government spending. The rising rates in the bond market appear to be the unwind of tactical trading positions. This was triggered by the initial rally in bond markets and lower rates, in response to the tariff announcements.
Lower borrowing rates is one of the three economic priorities of the administration, along with lower oil prices and a weaker dollar. All three were being delivered but were temporarily undone by leveraged financial traders using short Treasuries to finance trades. Trump paused tariffs to prevent an unwieldy unwind of those positions. The priorities of the administration and the policies have not changed.