How is the situation resolved? I think (and of course I may be wrong), that the real economic crime of the last couple of decades was not government spending per se, but rather the enthusiasm of central banks to pursue zero or near-zero interest rates and, at the same time, distort long-term bond yields by sucking up the paper. This allowed triviality and corruption to flower in many ways, crucially including corporate behaviour. Managing a business well is hard and dangerous; congratulating yourself for making your employees undergo DEI and/or SGE indoctrination is easy. To that extent, management was granted the privilege of entertaining themselves with displacement activity, rather than the tough work of management.
If we have seen the back of ZIRP/quasi-ZIRP, then this displacement activity will no longer be survivable - markets will simply replace the trivial/corrupt/decadent management cohort we have bred. It's been done before.
And if so, then the answer to how we fight back from our present condition is easy and old-fashioned: we re-discover the magic of compounded small gains. In other words, prey for grey normal days, and vote for anyone who promises to do . . . very little extraordinary.
I do hope you are correct Michael. I worry about the entrenched interests in our civil service, healthcare and education services that elections do not touch. Governments have worked around this with special advisers. This has led to an abdication of responsibility by those we elect to make decisions.
More businesses pursuing profit as priority would be welcome but this does not make houses more affordable, unclog the bureaucracy of the NHS or re-educate the relativists in education. It does not ease road congestion or invest in modern trainlines. It will not invest in nuclear power or remove pollution from our rivers. Government must take the lead addressing all these issues.
In principle this is just competent government. But to get there from here would be extraordinary if it evolved. Rather I expect an external shock to lead to a crisis that removes an older generation of politicians and heralds a new breed determined for change.
What might that be? A naval blockade of Taiwan. A blockade of the Gulf of Mexico (Russian warships are back in Cuba), the fall of Ukraine, total war in the Middle East. I don't know.
Maybe it'll be something as trivial as Sadiq Khan's next policy of appeasement. Compulsory Arabic lessons? Probably not. Banning dogs from public parks. Now there is something that will unite the classes of Britain.
First, I don't really believe in any of the crises you suggest, with the possible exception of dogs being banned in parks. The change when it comes, or rather as it comes, is likely to be endogenous, and very much under the radar until it is obvious. How then?
My first belief is that the key thing that Starmer has done, arguably the only thing, is to subject his party (and himself) to Sue Gray. Now whether Starmer picked Sue Gray, as opposed to Sue Gray picking Starmer, is unknown. But surely the point is that she is The Blob incarnate. That implies: i) her interests are aligned principally with the civil service's interests; ii) she knows how the machinery works, and where the bodies are buried; and iii) consequently, she can make or break ministers (and prime ministers) as she wishes.
Two things follow from this. First, we are about to enter the extreme phase of the dialectic - the triumph of the Blob. (She's already told Starmer to put both fiscal and monetary policy beyond the reach of Parliament or the Party.) But second: the central determining role of the Blob in Britain's future is therefore obvious and undeniable. Responsibility can no longer be palmed off to the Tories, or to Brussels. For the first time in my lifetime, the Blob is utterly exposed.
So if we take it that Sue Gray wants above all the survival of the Blob, it's going to have to up its game sharpish. This is particularly true since Starmer himself seems a mere placeholder; someone we've got to put up with because the crucial job is to punish the Tories for their bait & switch. Maybe there's a small number of people who actually want Starmer, but I suspect there's a far larger number who just have to get rid of the Tories. He will enter No 10 with a huge majority and not much popular backing. Sue Gray will have noticed this, you can bet.
That probably means that she'll be obliterating the conflicted cronies in Ofwat; she'll be making terrifying visits to NHS bigwigs; and I'm pretty certain she'll be clearing the way for modular reactors in record time.
And in the meantime, the market's realization that real interest rates are here to stay will work its magic in removing the incompetent time-wasters who under ZIRP mistook DEI for management. In the beginning and in the end, the markets are also politics. Sue Gray will have noticed this too, you can bet.
The ship will turn. You won't notice it at first, because Capt Starmer will be smarming the passengers. Meanwhile, up in the bridge. . .
I’ve never had a letter published in the FT, but I did manage to get a letter published in the Independent in 2011 (known as the Indescribable by Private Eye) pointing out to Labour MEP Richard Corbett who said the best way to deal with the rise of UKIP in the EP was to defund them My main point was that this was monumentally stupid because a) UKIP had broken no rules and b) UKIP was supported by far more Labour voters than Tories A decade on and Corbett continued to occupy his bubble of delusion
Mark Blyth spoke extensively about why austerity is a bad idea
What is interesting about his approach is that he like you acknowledged the bit of Keynesian theory the modern establishment likes to avoid and the ‘spend on anything as long as the government is spending’ is a recipe for collapse
The recent UK local elections and EU elections and subsequent calls of a snap General Election in the UK and France, looks a lot like panic to me In the UK a case can be made that the most seismic event was not the rise of independents in the local elections or even George Galloway winning Rochdale It was the fact that an independent candidate came clear second to Galloway with 6,000 votes in a parliamentary by election in a seat Labour regard as their own and typical of an area where the likes of Richard Corbett has no idea what is happening because the vote is taken for granted
It’s certainly the case the voters bought into Johnson’s aspirational manifesto of 2019 handing the Tories a majority they haven’t seen since Thatcher But yet again their aspirations are trampled over and whatever was promised was abandoned and the Sunak/Hunt combination took over and with no mandate increased government spending on God only knows what
With debt to GDP at 102%, a governing class ridden with scandal and nothing to show for it, Sunak will rightly be annihilated on July 4th But Starmer will form the next government as an unpopular leader for whom no one outside of St Pancras holds any enthusiasm for
It’s a similar story on Germany and France as AfD surge in the polls in the former and Marine Le Pen’s party looks set to form the next government in the latter Again it’s a reaction to an overbearing EU Commission that the CEO of Ericsson criticised for its obsession with regulation
We on this side of the EU debate used the monicker EUSSR to describe its direction Seems we may be able to look back at that prophetic observation as Niall Ferguson provided a critique of Western (mainly US) policymaking
I love a bit of Niall Ferguson, John. There's a man not afraid to make a prediction and be spectacularly right and spectacularly wrong on occasion.
I read in Birmingham that Muslims are voting Green because it is the only party that opposes Israel. Not sure how it'll oppose them without an army. I am sure they'll make some stirring speeches in international chambers of irrelevance.
Another feature is the rise of independents supporting Palestine. When people's economic interests aren't looked after they vote on other issues. None may be elected this time. But when you allow ghettos to form, then certain constituencies will fill up with people who have issues beyond Britain front of mind.
And there will be George Galloway cropping up to milk the masses.
How is the situation resolved? I think (and of course I may be wrong), that the real economic crime of the last couple of decades was not government spending per se, but rather the enthusiasm of central banks to pursue zero or near-zero interest rates and, at the same time, distort long-term bond yields by sucking up the paper. This allowed triviality and corruption to flower in many ways, crucially including corporate behaviour. Managing a business well is hard and dangerous; congratulating yourself for making your employees undergo DEI and/or SGE indoctrination is easy. To that extent, management was granted the privilege of entertaining themselves with displacement activity, rather than the tough work of management.
If we have seen the back of ZIRP/quasi-ZIRP, then this displacement activity will no longer be survivable - markets will simply replace the trivial/corrupt/decadent management cohort we have bred. It's been done before.
And if so, then the answer to how we fight back from our present condition is easy and old-fashioned: we re-discover the magic of compounded small gains. In other words, prey for grey normal days, and vote for anyone who promises to do . . . very little extraordinary.
I do hope you are correct Michael. I worry about the entrenched interests in our civil service, healthcare and education services that elections do not touch. Governments have worked around this with special advisers. This has led to an abdication of responsibility by those we elect to make decisions.
More businesses pursuing profit as priority would be welcome but this does not make houses more affordable, unclog the bureaucracy of the NHS or re-educate the relativists in education. It does not ease road congestion or invest in modern trainlines. It will not invest in nuclear power or remove pollution from our rivers. Government must take the lead addressing all these issues.
In principle this is just competent government. But to get there from here would be extraordinary if it evolved. Rather I expect an external shock to lead to a crisis that removes an older generation of politicians and heralds a new breed determined for change.
What might that be? A naval blockade of Taiwan. A blockade of the Gulf of Mexico (Russian warships are back in Cuba), the fall of Ukraine, total war in the Middle East. I don't know.
Maybe it'll be something as trivial as Sadiq Khan's next policy of appeasement. Compulsory Arabic lessons? Probably not. Banning dogs from public parks. Now there is something that will unite the classes of Britain.
Let me try and approach an answer.
First, I don't really believe in any of the crises you suggest, with the possible exception of dogs being banned in parks. The change when it comes, or rather as it comes, is likely to be endogenous, and very much under the radar until it is obvious. How then?
My first belief is that the key thing that Starmer has done, arguably the only thing, is to subject his party (and himself) to Sue Gray. Now whether Starmer picked Sue Gray, as opposed to Sue Gray picking Starmer, is unknown. But surely the point is that she is The Blob incarnate. That implies: i) her interests are aligned principally with the civil service's interests; ii) she knows how the machinery works, and where the bodies are buried; and iii) consequently, she can make or break ministers (and prime ministers) as she wishes.
Two things follow from this. First, we are about to enter the extreme phase of the dialectic - the triumph of the Blob. (She's already told Starmer to put both fiscal and monetary policy beyond the reach of Parliament or the Party.) But second: the central determining role of the Blob in Britain's future is therefore obvious and undeniable. Responsibility can no longer be palmed off to the Tories, or to Brussels. For the first time in my lifetime, the Blob is utterly exposed.
So if we take it that Sue Gray wants above all the survival of the Blob, it's going to have to up its game sharpish. This is particularly true since Starmer himself seems a mere placeholder; someone we've got to put up with because the crucial job is to punish the Tories for their bait & switch. Maybe there's a small number of people who actually want Starmer, but I suspect there's a far larger number who just have to get rid of the Tories. He will enter No 10 with a huge majority and not much popular backing. Sue Gray will have noticed this, you can bet.
That probably means that she'll be obliterating the conflicted cronies in Ofwat; she'll be making terrifying visits to NHS bigwigs; and I'm pretty certain she'll be clearing the way for modular reactors in record time.
And in the meantime, the market's realization that real interest rates are here to stay will work its magic in removing the incompetent time-wasters who under ZIRP mistook DEI for management. In the beginning and in the end, the markets are also politics. Sue Gray will have noticed this too, you can bet.
The ship will turn. You won't notice it at first, because Capt Starmer will be smarming the passengers. Meanwhile, up in the bridge. . .
I’ve never had a letter published in the FT, but I did manage to get a letter published in the Independent in 2011 (known as the Indescribable by Private Eye) pointing out to Labour MEP Richard Corbett who said the best way to deal with the rise of UKIP in the EP was to defund them My main point was that this was monumentally stupid because a) UKIP had broken no rules and b) UKIP was supported by far more Labour voters than Tories A decade on and Corbett continued to occupy his bubble of delusion
Mark Blyth spoke extensively about why austerity is a bad idea
https://youtu.be/in5M65566iw?si=VmHXteNItZsgWiQk
What is interesting about his approach is that he like you acknowledged the bit of Keynesian theory the modern establishment likes to avoid and the ‘spend on anything as long as the government is spending’ is a recipe for collapse
The recent UK local elections and EU elections and subsequent calls of a snap General Election in the UK and France, looks a lot like panic to me In the UK a case can be made that the most seismic event was not the rise of independents in the local elections or even George Galloway winning Rochdale It was the fact that an independent candidate came clear second to Galloway with 6,000 votes in a parliamentary by election in a seat Labour regard as their own and typical of an area where the likes of Richard Corbett has no idea what is happening because the vote is taken for granted
It’s certainly the case the voters bought into Johnson’s aspirational manifesto of 2019 handing the Tories a majority they haven’t seen since Thatcher But yet again their aspirations are trampled over and whatever was promised was abandoned and the Sunak/Hunt combination took over and with no mandate increased government spending on God only knows what
With debt to GDP at 102%, a governing class ridden with scandal and nothing to show for it, Sunak will rightly be annihilated on July 4th But Starmer will form the next government as an unpopular leader for whom no one outside of St Pancras holds any enthusiasm for
It’s a similar story on Germany and France as AfD surge in the polls in the former and Marine Le Pen’s party looks set to form the next government in the latter Again it’s a reaction to an overbearing EU Commission that the CEO of Ericsson criticised for its obsession with regulation
https://fortune.com/europe/2024/04/30/ceo-sweden-biggest-companies-ericsson-regulation-europe-competitiveness-telecom-no-industry/
We on this side of the EU debate used the monicker EUSSR to describe its direction Seems we may be able to look back at that prophetic observation as Niall Ferguson provided a critique of Western (mainly US) policymaking
https://www.thefp.com/p/were-all-soviets-now
The voters have likely had enough
I love a bit of Niall Ferguson, John. There's a man not afraid to make a prediction and be spectacularly right and spectacularly wrong on occasion.
I read in Birmingham that Muslims are voting Green because it is the only party that opposes Israel. Not sure how it'll oppose them without an army. I am sure they'll make some stirring speeches in international chambers of irrelevance.
Another feature is the rise of independents supporting Palestine. When people's economic interests aren't looked after they vote on other issues. None may be elected this time. But when you allow ghettos to form, then certain constituencies will fill up with people who have issues beyond Britain front of mind.
And there will be George Galloway cropping up to milk the masses.