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News does not age well these days.
Just one week ago, I had meant to begin this article with the sentence, "The young, unelected Truss administration started its tenure with a bang. Substantial tax cuts reminiscent of Thatcher and Reagan."
Silly me.
Faster than I could mumble, "U-turn," Truss, this human weather vane (see my previous article on her ), performed a John-Kerry-style flip-flop.
Before she had even landed this pirouette, she threw her somewhat brave Chancellor of the Exchequer (Minister of Finance to US readers) Kwasi Kwarteng, under the bus.
"I listened," she said. "It was all his fault" was the subtext.
What had happened? A tumultuous "Conservative" party conference (they really love their infighting) and headlines such as "the markets thought it was the wrong step."
The Guardian even screeched about "class war by the Tories" and tax cuts for the rich.
In any case, the British Pound certainly did take a dive. But so did the Euro a short while later. Now that Truss has performed her U-turn, the Pound rebounded, and the Blackrocks of this world like her again. For now.
Somehow, lost in all the tired trope-spewing about "tax cuts for the rich," it was completely lost that Truss and Kwarteng had managed to bake in even the demand for more migration - I will get to that later in this article.
Peculiar, this seems to be attached to every seemingly unrelated political bill these days, where even a White House Document requesting "emergency supplemental funding for critical security and economic assistance to Ukraine" on p. 35 (of a 70-page document) contains some clauses related to the resettlement of Afghan nationals.
I call this the migration sandwich of modern politics. Hidden between many layers of boring technocrat-ese lettuce and kale, you can be sure to always find a juicy slice of migration spam (yes, it is one of my Monty Python references ).
Back to Truss's famed "radical" tax cut and her subsequent U-turn:
I regret the one-sided criticism and "I told you so" heaped on Kwasi Kwarteng. A son of immigrants from Ghana, Kwarteng has written many highly readable books, amongst them "War and Gold: A Five-Hundred-Year History of Empires, Adventures, and Debt" which I very much recommend. He certainly has a strong free market and a somewhat libertarian bend to him (predictably, Labour MP Rupa Huq called him "only superficially black" – it is that kind of racist treatment that conservatives of color can expect if they do not conform to leftist orthodoxy, as Thomas Sowell and many others like him can attest). It is, however, not the tax-cutting plans that he and Truss should get criticized for.
What "the markets" were/are rightfully worried about is how the tax cuts would play out in terms of inflation. Not well - given that the tax cuts were not underwritten by commensurate spending cuts. Furthermore, in order to stimulate growth and curb inflation, such "daring" tax cuts should have been flanked by an even more daring Paul Volcker moment during the Reagan administration, i.e., a massive rate hike. So far, the Bank of England is at a timid 2.25% interest rate. We are far from a Paul Volcker moment where the interest rate was raised from 11.2% to 20% in June 1981. After years of modern super-low interest rate orthodoxy and money printing, the Bank of England does not seem to have the appetite to engage in a Paul Volcker moment.
o be fair, whilst a Volcker moment may be necessary, like the modern US, the current UK is a society very much built on consumer credit - everything from housing to washing machines, furniture, and electronics is/was bought on credit; all premised on zero to low interest.
If the interest rate were to be raised to Volcker levels, a lot of dominos would begin to fall. Still, in order to rein in inflation, I suspect the Bank of England will slowly creep towards higher levels in search of that sweet spot, where inflation is curbed without sparking mass loan defaults. I doubt that this sweet spot exists. There might be no way around these dominos collapsing, the showdown moment for an entire society living well beyond its means.
To illustrate what I am saying, just look at the government debt. The picture is rather bleak: As per a Parliamentary report, "…in 2020/21 borrowing financed around 29%, or around £1 in every £3.50…". Furthermore, the same report highlights that "…since 1970/71, the government has had a surplus (spent less than it received in revenues) in only six years. The last budget surplus was in 2000/01 (please see the following link ).
The ridicule of Truss's and Kwarteng's "outrageous" assertion that the tax cuts "will pay for themselves" is historically ignorant. Let us remember that this worked out in the case of Ronald Reagan – lower tax cuts meant higher tax revenues ( To be fair, there are leftist economists and think tanks that argue against this - feel free to Google the discussion in your own time. It should, however, not be surprising that once tax rates are lowered below a certain level, it might be easier to simply pay rather than to get engaged in elaborate compliance/accounting work. If you are interested, Google the Laffer curve).
Moving on to migration - Truss and Kwarteng remain creatures of the system. Whatever political decisions are made these days, they always seem to involve more migration. Thus, Truss has announced that she would relax visa rules in order to address widespread labor shortages. This "review could also endorse a loosening of the requirement to speak English," - according to a Reuters piece.
With this, she is in good company with the "conservatives" who have governed the UK since 2010. Labour deliberately ramped up migration in the late 1990s in order to "rub the Rights noses in a bit of diversity" (thus Andrew Neither, former advisor to Blair, quoted in a Telegraph article from 2009 ). Labour's goal back then was to make the UK more multicultural as they saw that as a good in and of itself.
In contrast, the "Conservatives" since Cameron seemed to believe that a certain amount of migration is inevitable for the flourishing of any economy - you know, getting the best and brightest from all over the world, yada yada yada.
Yet, in spite of this multicultural booster shot into Britannia's delicate arm – it seems curious that some train connections are still slower than they were during Victorian times. And whatever happened to the Concorde? Shouldn't we all be travelling hypersonic by now if Labour's and "Conservative" belief in that migration-innovation-kryptonite was true?
Consequently, whilst talking ever tougher on migration, migration under the "Conservatives" only knew one direction - up (Link )! Remarkably, even in right-leaning sources, you will only find references to net migration rather than total migration. For instance - if during one year 600,000 people moved into the UK but 400,000 moved out, it shows a net migration of 'only' 200,000 - as if that was not even more transformative to the UK as a society (or what about having a conversation why a rather high number of Brits continues to go abroad?).
The contextualization and (hand-wringing) explication gets rather droll when academic institutions such as the Oxford University Migration Observatory get involved and tell us, "The UK has experienced broadly similar levels of migration compared to other high-income countries, on average over the past few decades" ( Link ).
Oh well, that's all good then; thanks for enlightening us, yokels - if everyone else does it, that makes it fine. (Would that not, perhaps, merit a hyperlink to how everyone else is doing with that, like - "Hey Sweden, how's that hand grenade violence working out for you…or that rape rate…never mind that liberal websites tell us, "Why Sweden's high number of reported rapes might be a positive sign": Link ?)
Societal considerations vis-a-vis migration set aside - it is well worth digging into this argument that migration is necessary for the functioning of every economy, rocket fuel for our aging societies. At a crude numbers level - are there really no Brits available to do highly qualified and menial work to keep our country going? The great British weekly magazine, the Spectator, has delved into this, and its findings are remarkable ( Link ).
The Spectator showed seemingly paradoxical numbers (Link): whilst unemployment stood at a 40-year low, a record 1.27 unfilled vacancies were posted. At the same time, 5.3 million Brits were on "out-of-work benefits." That is one out of nine Brits! Drilling down deeper into this number showed that 1.7 out-of-work benefits, i.e., being too ill to engage in ANY work. The article surmised that years of "Conservative" reforms to raise the workforce participation rate had been reversed. The article further concluded that more investigation was needed to explain these numbers.
Whilst we can speculate whether the lockdowns had anything to do with this - it shows the intellectually lazy trend of migration of all Western countries: Rather than fixing systems (e.g. of false incentives) or investigating reasons for negative trends, migration is hailed as the panacea to cure it all, regardless of the downsides that it creates on so many levels.
Let us consider at a crude numbers level what increased migration means to this blessed island: The population of the UK rose from its 1950 level of 50 million to 67.5 million in 2022 ( Link ). We hear "capitalism" blamed if young people cannot climb up the property ladder and afford houses in London that, in the 1950s, a bus driver could have bought. We hear about the National Health Service (NHS) being in constant crisis due to underfunding, winter, and summer heat, global warming, Covid. And, of course, the mainstream calls for more migration to save the NHS - never mind that for the British public, this has been a net negative with all the expensive diseases that migrants bring with them, e.g., due to widespread cousin marriage (Cousin marriage: Link; TB: Link, HIV: Link)
We hear about motorways and public transport being clogged up due to underfunding. Same about sewers and water utilities. Knife and gun crime spiking? Probably systemic racism. Please, no difficult conversations – that would be hate speech or at least thought crime.
Could we, for a moment, entertain the question that simply by adding 9 million people since Blair, almost 25 years ago, might explain most of the challenges described above? A country that already has twice the population density of Germany and four times that of France seemingly being predestined to be the center of global migration – because, um, "that is what has always made Britain great."
It is frustrating when a society is collectively stuck in what we IT geeks call an "infinite loop" bug- the only thing they can accept is more migration. Only more migration can cure the downsides of migration.
(Un)Fortunately, reality has a way of inserting itself into such wishful thinking-based circular arguments. A comical example of this is the Member of Parliament (MP), Claudia Webbe, for the Eastern Midlands city of Leicester, where there is no clear majority population anymore.
The other week, young Muslim and Hindu men battled it out in Leicester - scenes like a young Muslim scaling a Hindu temple and throwing down the flag affixed to the top of it. Young Muslim and Hindu men are travelling in from all over the British Midlands to fill the ranks of their "brothers" - police barely managing to keep both groups apart. Still, the aforementioned, hapless Claudia Web tweeted (defiantly? delusionaly?): "Leicester is a shining example of how people from different cultures can live together side by side. Our diversity is what makes Leicester special. We are the city where the minorities make up the majority. And we are richer for this vibrant exchange of cultures." (Link to the original tweet).
What can you even say about such superpowers of self-deceit? It is like "Comical Ali" / "Bagdad Bob" - the former information Minister of Iraq who bravely kept shouting "victory is near" - as American tanks were rolling in behind him. Unlike him, the likes of Claudia Webbe actually believe their own propaganda. Bagdad Bob did not - and bolted out the back entrance at the end of the final press conference.
The window for Truss (or whatever fake conservatives might succeed her) to turn the ship around is closing rapidly. The British "Conservatives" still have two years on the clock with a mandate that Boris Johnson won for them in 2019. The other big party in the UK, Labour, is currently ahead by 25-30% according to the latest polls. How much worse could it get, you may ask – compared to a socialist green party masking as "Conservatives"? A lot.
We are talking about all-out socialists masking as "moderate" social democrats. So, take the current "Conservatives" and add even more statism, green energy, and open borders. Yes, the country would be even worse off. As things are, the choice is between pretty quickly descending into chaos and a Blitzkrieg-like descent into chaos. What about a third party? There would be Nigel Farage's Reform UK (formerly Brexit Party, formerly UKIP) – but he has not been particularly successful (or willing) to build anything substantial apart from his own brand. Also, the "first to pass the post" system makes the emergence of a third party very difficult.
The last chance for Truss is to have an adult conversation with the electorate. It has not been tried for a while. It might just be a dose of reality that society needs or maybe even wants. This would look a bit like this:
Alas, that was not the speech we got from Liz Truss at the end of the "Conservative Party Conference" on 5 October 2022. Instead, it was full of the "oh wouldn't it be nice" musings of modern (progressive) politics without addressing any verboten topics. Instead, she gave us a slice of self-indulgent "It was often really tough being a woman."
It is now abundantly clear that this woman is no Maggy Thatcher. Such a person does not seem to exist in the British "Conservative Party." The old proverb tells us, "Come the hour, come the (wo)man." It remains to be seen how much worse the hour needs to get.
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