What Do You Think Today?

[peter]

Liz Truss begins her fight back today with a series of interviews both in the press and on television. She will be 'grilled' by Laura Kuenssberg on this morning's BBC political slot (if Kuenssberg can get beyond her desire to keep the revolving door open and actually ask some penetrating questions) which will be her first real appearance in front of the public since her disruptive budget of last Friday gone.

Except that we can't call it a budget. Huge in scope, something akin to doing a pirouette with a container ship in the Bearing Straight, it has to be called a 'fiscal event' because if it were called a budget then by convention Kwasi Kwartang would have had to accept the OBR's offer to provide a preliminary assessment prior to his introduction of the thing to parliament. Note this, because Kwarteng actually lied to parliament - he told them that there was not time for the preparation of such a report when the OBR had said that they could do so. But in addition, had it been designated as a budget, and had it failed to win the support of the House when it was voted on (which it would have to have been), then this would have been an end of game situation. Therr would have had to have been a dissolution of parliament and a general election. But let this rest.

As I say, Truss will begin to try in earnest to salvage her reputation today, and the thrust of her argument will be that she was not prepared to accept the idea that Britain is in a state of 'managed decline' - that our best days are irrecoverably behind us and that the best we can do is slip off into the sunset of history as a has-been on the stage of world greatness.

On the contrary, she will argue, we have so much to offer if we will but shed this negative view of ourselves and start thinking in terms of growing into a future that is now open to us in the post-brexit era. To this end we must change the policies we have been following (policies that she has readily gone along with for the past decade it should be noted) and start driving toward growth and prosperity via the creation of a dynamic economy based on high quality, high earning jobs in which business is incentivised to thrive. Which she describes as only being possible to achieve by making the so called 'difficult decisions', by which she actually means giving shit-loads of cash to your donors and mates in big business (and most of the other already super-wealthy by default at the same time), and squeezing down on the poorest in society by freezing or indeed cutting their benefits. Oh, and you might need to throw in a bit of austerity as well - say five years of pulling back public services, infrastructure repair and improvement, trimming back on the civil service and health sector etc (not the military though - we might be needing that in the near future if things keep going the way that they are).

All of which will no doubt go down a treat. Laura Kuenssberg will be as soft as a mink stole around the neck of Truss (she will have to be if she wants a) to ever have another interview with her and b) ever get through the doors of Downing Street and into the heart of politics herself). James O'Brien made a really good point the other day when Truss had done her regional interviews (in which she performed really badly - lots of blank silences and fumbling for answers); that these guys are under no pressure not to ask difficult questions - they know that they ain't gonna be seeing a PM again until possibly the next election, if then, so they are pretty much unfettered in terms of what they can ask. National journalists however have to pussy foot around the hard topics, because otherwise they just get frozen out of the picture by the Downing Street press office.

But this aside, a nasy little fly in the ointment has appeared on the front of the Sunday Times in the form of a story that within hours of delivering his bombshell budget which rocked the markets and caused the pound to plummet, Kwasi Kwarteng went to a champagne cocktail event hosted by the very hedge fund traders who stood to gain fortunes by shorting the market on the pound, and scooping up the rewards when it fell. Organised by a leading fund manager and Conservative Party donor, and in the presence of just about everybody of note in the currency speculation game, Kwarteng was toasted for his successful delivery and encouraged to continue on his path and to dole out more of the same.

I bet he was! If ever a story was needed to undermine the other narrative that Liz Truss will be pushing, that all of these hard decisions are a necessary evil in order to make the country great again, then this is it. A bunch of fat cat money speculators toasting the chump who has just handed them a mint on a plate. Like a group of kids in a playground egging on the fat unpopular one to perform acts of even greater stupidity for their amusement, who, in the glory of his being the centre of attention, thinks that they actually like him...... At last Kwarteng, interloper into Eton (on a - wait for it - scholarship: not exactly 'one of us'), you've made it. They all love you - 'course they do!

The same article tells how Kwarteng has become labelled as a 'useful idiot' within the top circles of hedge fund management, and the term is by accounts in pretty widespread use - and that from a Tory MP who advises business leaders. So safe to say that for all of Liz Truss's talk about changing the way we see our future on the global stage, when the curtain is pulled back it's all about the mullah. If you want to actually find out what things are really about just do as the old adage tells you - follow the money. It will never lead you wrong, it will never be time wasted. Truth is that Truss probably understands that this country is screwed just as well as the next person: she can't really be that thick, that deluded, as to not be able to see that which is before her eyes.....she was a remainer for Christ's sake! As it says in a little block on the front of the Observer this morning, "Libertarian Folly. Austerity is back on an epic scale. Whisper it. This is where Brexit has inexorably led."

[peter]

It looks as though Liz Truss and Kwasi Kwarteng might be forced to U-turn on the policy of scrapping the top rate of tax as a result of a growing rebellion within the Tory ranks at its implementation.

The BBC news website reports that it is to be delayed until at least the mini-statement in November in which Kwarteng will set out his plans to get borrowing under control and to return to the fiscal responsibility that the Tories are apparently famed for. It goes on to say that the policy may have to be scrapped altogether, or kicked indefinitely into the long grass.

All of which will be highly embarrassing for the PM who yesterday in interview with Laura Kuenssberg was adamant that the policy would go ahead. One point of note however, was her firmly placing the blame for the obviously contentious policy (at a time of ruinous economic hardship for many) on the shoulders of Kwarteng himself - a distancing that might be more significant than it first appears. George Osborne said yesterday that Truss must be prepared to sacrifice Kwarteng in the interests of self preservation, and that the chancellor was on pretty thin ice already. If he was not able to rally support within the party with a rousing speech at conference today, then he was toast, said Osborne.

Michael Gove has been up to his old tricks of stirring up dissent. On Kuenssberg yesterday, he refused to say that he would back the tax-cutting policies of the mini-budget and said he could not support the abolishment of the top rate. One cannot but wonder if he sees an opening for himself were Truss to fall, and (with Cummings working behind him in the background) might be giving a little push here, a nudge there, just to see what might come out. The Daily Express is certainly onto him today, accusing him of bringing down one Prime Minister and asking if he wants to do the same for another?

But irrespective of what Gove has or has not been up to, Truss is in a difficult position. She needs to get the backbench MPs back on-side and convince them that she is not going to lead them into defeat at the next election. She has got her work to do. The clear debacle of her mini-budget is hanging over her and the reputation of the Tory Party for stability and economic competence is in tatters. She will not soon be forgiven for this and she has some serious ground to make up if she is going to win her party around to her way of thinking.

But the week ahead should be interesting. There has never been a conference held against a backdrop such as this and we can expect some fireworks before it is all over.

Let's light the blue touch-paper and retire.......

[peter]

There were always questions as to whether Liz Truss would have the force of personality to hold together the fractious beast that is the Tory cabinet (let alone the parliamentary party of MPs of all stripes) - and suggestions that she would be pulled this way and that, herded here and shoved there, as she struggled to contain the opposing forces of the various powerful factions within her Party.

So it has proved - and she's only been in power for twenty nine days. Forced by party dissatisfaction to make a U-turn on her policy of abandoning the top rate tax of 45 pence in the pound on earnings of over 150K, she next had to pull forward her planned financial statement in which she was going to have (via her chancellor) to explain how she was going to get the horrendous levels of borrowing (at which everyone and his mother were looking at aghast) back into the realms of fiscal normality. The Tory's hard won reputation for fiscal reliability and economic competence more generally, lay in tatters following her much questioned budget, and the market turmoil seemed to give heft to the fears that Truss was out of her depth.

Against this backdrop the Tory Party conference was always going to be a difficult trick to pull off.

The latest row (as if the first two above weren't enough) to threaten to undermine the Truss administration yet further is that ot benefits. To raise them in line with inflation (around ten percent currently) or in line with wages (around five or six percent)?

While Boris Johnson had guaranteed that the former would be the case, it seems that Truss is less than inclined to keep this promise. She has guaranteed to maintain pensions in line with inflation on the basis that "this was a manifesto promise", but when it came to benefits (more specifically universal credit) she seemed to hesitate, saying in interview that "nothing has been decided yet". She dug her heels in on this point leading interviewers to assume that it was not her intention to keep the Johnson promise.

This has split the party and cabinet down the middle. Penny Mordaunt, Leader of the House, has, in breach of the normal rules of cabinet etiquette, come out in favour of increasing in line with inflation. Home Secretary Suela Braverman has accused there of being a "coup" to attempt to unseat Truss (she's probably refering to the Micheal Gove and Grant Schapps led backbench criticism of the general performance of the Truss Government to date) while trade secretary Kemi Badenoch has in her turn, rounded on Braverman saying that her comments are divisive and unhelpful. I think Braverman has leadership intentions of her own still remaining, and in drawing attention to Truss's problems she is indirectly undermining the PM, effectively saying, "Look - she can't hold it together."

Meanwhile the authors of the debacle, Truss and Kwarteng are themselves beginning to show signs of splitting asunder. Truss was absolutely clear in her interview with Laura Kuenssberg that it was Kwarteng's policy to abandon the top tax rate, not hers, but that she would be sticking with it, 24 hours lare she U-turned, saying it was only tangential to her main thrust of helping people through the energy crisis. Kwarteng for his part, said in interview that he and Truss had discussed the policy and had agreed on it. Nadine Dorries, now a backbencher having been thrown out of her job as culture secretary by Truss, put in her pennyworth (as if anything that Nadine Dorries could say could ever improve matters). She observed that Truss had "thrown her chancellor under a bus" and that the PM had no mandate for the policies that she was suggesting. If she intended to carry them forward, said Dorries, she should put them to the people for ratification in the form of an immediate general election. True possibly, but not what a leader wants to hear from a backbench MP the day before she has to stand before conference and make a keynote speech.

So against a backdrop of total chaos and infighting, with her party discipline and cabinet unity publicly collapsing around her, with levels of confidence in her leadership draining away like water after a cloudburst, she must stand before her party today and make them believe not only in her extreme libertarian vision of how we get out of our current economic mess, but that she is the one who has the power and the charisma, the cojones and the hutzpah to pull it off. It would be a tall order for even Boris Johnson with his ability to rise to the occasion with florid and colorful rhetoric - for Truss with her famous lack of oratorical skills it will be an impossibility. Her best shot is to keep it brief (which she seems to have worked out herself - her speech is rumoured to be about half an hour long, considerably shorter than most leader speeches at conference) and business like. If she tries to pull out any of her ersatz anger stuff (think her "that is a disgrace!" line in respect to UK cheese production) then the results are going to be toe-curling.

But pull it off she must. If she is going to survive, and the desire of the Tory Party not to have another leadership challenge will at least be one thing helping her to do so, then she has to restore some sense of order to the proceedings, has to get a grip back upon party discipline and cabinet unity. Failure to do this and she's toast. She was never wanted as leader by the parliamentary party and her economic ideas are outliers within the party far from universally accepted. Not for her the teflon coating of Johnson that seemed to allow him to slip past any situation that would have brought a normal mortal down; on the contrary Truss's unexceptionalism bleeds from every pore. But despite this, today she must find something, some magic inside herself that she can make her own. She's not Margret Thatcher - no photo ops with tank helmets and billowing scarfs can help her today - and she's not Boris Johnson, tasked with one thing only, to get the country out of the EU. She's Liz Truss and today she must find a persona to stamp upon herself, some mark of her own that makes her unmistakable, unforgettable, impossible to ignore. If she fails to do this then the 'soundings' that rumours have it have been circulating (of means whereby she could be removed and another pre-chosen leader to step in without the need for a leadership contest) may develop into an all out cacophony.

[peter]

What are the routes via which an ordinary individual - not one with the advantages of an Eton and Oxbridge education, or the fluke of being born into royalty or the aristocracy - can rise up into the elite of the country, to become part as it were, of the 'establishment' with all of the benefits that this brings.

I suppose it's all down to success. Success in a chosen profession - I mean going right to the very top in say Law or medicine. Gaining celebrity will do it, assuming one can stay there. Going to the top of the Church will do it - a seat in the Lords if you are a bishop being guaranteed. And of course politics.

If you have that particular brand of self-belief, that confidence that you know what is best both for yourself and other people, then the latter is a good way of getting to the top of our society. At the very least, as a backbench MP you are going to enjoy the kudos of recognition within your local community. You won't get stinking rich (unless you have a pretty shaky moral compass and a lot of luck avoiding scrutiny), but you'll do okay and your life will be pretty assured as far as it goes.

But it isn't going to get you into the elite. That hallowed place where you are amongst the movers and shakers from this day hence, where you (and if you do it exceptionally well, the generations of your family that follow you) are essentially protected from the ups and downs of which ordinary mortals are prey to, where the actions of successive governments will be to ensure that you and yours are shielded from harm as part of the 'status-quo' that must be protected and maintained.

No, for this you must rise right up to the top. You will need to be up at the level of cabinet, and while there to perform in such a way as to get yourself at least up into the Lords, or failing that, through the revolving door into the business world in a position where true wealth can be accrued.

Now I've been wondering of late what it is that drives people into politics. It would be lovely to believe that all of our politicians go into the business full of high ideals of 'serving the nation', and I'm sure there are some that do. But I'm betting that they are a minority. There may be an admixture of this kind of thinking in perhaps lots of potential entrants to the game, but it will, I'm betting, be secondary to the desire for the kudos and route to real power and wealth - of the lasting kind - that politics offers, in the majority of the entrants.

Which is why we must always not be prepared to take our politicians at their word. We must not be prepared to give them the benefit of the doubt. They are a shiftless bunch of grasping self-interested bastards. Their own benefit will always trump that of the people they are meant to be serving and nothing that they say or do can be taken at face value. In short, they are human beings and must be seen as such. Remember this and apply it to whatever they say or do.

[Avatar]

Yep, you can't trust politicians. You'd think people would have figured that out by now.

Pity we haven't been able to come up with better solutions...

See your government is now wavering on bringing the budget / OBR thing forward again, going back to their original date now.

What chance that Truss will be shortest serving PM ever?

--A

[Forestal]

I wish we still had the maxiumum term for politicians. Add an age requirement too.

Maximum of 3 terms as an MP, minimum age of 40.

Would kill off career politicians and ensure that those who came into government had some experience outside the halls of West Minster.

[peter]

Going for growth? The brass nerve of them!

Having pulled us away from our biggest trading partner, reduced exports by a fifth and made imports so much harder. Having pushed interest rates up via the Bank of England having to attempt to rein in the inflation that they have caused, overseeing a business environment where tens of thousands of businesses are on the verge of bankruptcy, facing energy costs of around three times of that which pertained a year ago, where huge numbers of people are worried about the security of their jobs, their borrowings, even their housing, and they're talking about growth? How dare they!

Today Truss stood up in front of the Tory Party conference and sold them the same baloney that she peddled during her election campaign - her brand of extreme neo-liberalism that we saw the market consequences off, the moment it was unleashed n an unfettered manner on the country. It failed when it was tried before and it will fail again. People whose mortgages currently sit at around fifteen hundred pounds a year are looking at stumping up eight thousand in a years time. The consequence of this will be a crash in property values akin to that of the housing bubble bursting in the early nineties. People will not have to be worrying about whether they can pay their household energy costs at this point because they won't have any houses to pay them in. Half of them will be stuck in negative equity traps that will shape their futures for decades to come.

And this fucking bunch of clowns are talking about growth. The Institute of Economic Affairs, the Adam Smith institute and the other neo-liberal think-tanks that have coached Truss and Kwarteng on their economic positions (in reality lobby groups whose identities were secret, but who now effectively run the country) didn't think this one out very well did they?

Except that the first casualty of their policies will be the provision of public services, and when they are able to turn to the country and say, "Sorry - there's no money for funding the welfare state ....best thing to do is to sell it off to private providers, then, boom!, their job is done. Because the last thing you want in a public ripe for manipulation is for them to be educated, and healthy, and secure in their homes and lives. Where's the benefit to that if you want a gullible populace, ripe for the idea that it's selfishness and greed that should be the top priorities in our lives, that there is no room for compassion or selflessness. Stable, happy people don't buy this kind of bullshit, and the guys behind these so-called think-tanks know it.

As George Monbiot said in his YouTube post earlier today, this neo-liberalism has so pervaded our society that we no longer recognise it for the arrant nonsense, the extreme fringe nature of the thing, that was clearly understood when it was first mooted back in the nineteen thirties. Thatcher and Regan (with the help of big and dubious money donors) got it into the mainstream and now Truss is doing a rinse-and-repeat job on it.

And nothing good will come except for a tiny few at the top. For the rest of us it will be onto the scrapheap if we can't pay for the ticket. As Neil Kinnock once said in a speech responding to Thatcherism all those years ago, if this is what you want then fine - vote for it.

But don't get sick, or don't get old. Don't get unemployed or don't get disabled. Don't get poor or homeless or any other of the things where the state might have to step in to give you a leg up. Because if you come to the point where you have to do so, to turn to the place from where your stability and certainty used to come, you might suddenly find that it isn't there any more.

[peter]

Why do governments do that? Why do they say one thing in public when it is common knowledge that they are saying the complete opposite in private?

In a piece on the front page of today's Times entitled "Plea for European help against blackouts", the following is said.

The Government has said repeatedly that Britain's energy supply will be secure this winter. Officials have said in private, however, that there could be shortages for millions of households under a "reasonable" worst-case scenario.

This seems to me to be an increasingly frequent phenomenon that is indicative of how our administrations see us. It appears that we are to be ever more viewed like children who cannot be trusted to be able to cope with the truth. What is it exactly that they fear? That their own failing will be thrown under the spotlight if they are honest with us? How much worse would it be if these blackouts occur without people having been properly prepared and given time to order themselves to be able to cope under such (hopefully brief in duration) circumstances.

Or is it that we are considered to have the mentality of minors; that if the brutal truth is put to us we will go into meltdown (prior to the freeze-down )? Do they fear that we will panic and fall apart at the seams if confronted with reality, such that we must be told, "there, there," in maternal tones, "nothing to worry about here." But surely this cannot be correct because why would it be such common knowledge that they were saying different things in private?

Or perhaps it's just part of a "break it to them gently" approach. But if so it's profoundly silly. It makes them look duplicitous when there is no need. We are adults. We can stand the truth. Far better, I'd think, to be straight with us and outline the probabilities of there being problems. And far better to take the European approach of asking us, in preparation for such difficulties, to attempt to reduce our energy consumption by talking the necessary mitigating steps to enable this in advance (like having the necessary warm clothing and heating appliances geared to heat just one room etc).

But I can't believe that this public/private dichotomy of the facts is not deliberate. Whatever its purpose, the manipulation of information dissemination in our state is way too advanced for such a basic thing to happen mistakenly or as a result of simple journalistic competence. Now that would be stretching belief just too far.

--------------------0----------------

Are we really now under an administration of climate deniers?

Certainly the war in Ukraine has thrown our reliance upon outside energy supplies into stark relief, but the response of the new Truss regime seems to be singularly beyond the point where this can be the only reason for the positions they are taking.

Forgive me for not having all the details to hand, but am I not correct in thinking that they have already made clear that they will not be adhering to our net-zero commitments as they have been agreed by previous administrations? Or if perhaps they haven't gone this far, then at least it would be fair to say that their stated intentions of opening/ramping up gas drilling in the North Sea and the establishment of fracking on the mainland do not seem to indicate that climate change is one of their top priorities.

And yesterday in her speech, Truss was at pains to include green protesters such as Extinction Rebellion in amongst her ''anti-growth coalition", making particular capital out of the quickly attended to protest by Greenpeace activists, after which point it was noted, she seemed to gain confidence.

There is a very definite increase in climate change denial opinion within the right wing YouTube channels like GB News and Talk Radio, and this is even filtering through into the mainstream media where certainly the Telegraph is less sympathetic to the science of climate change and the predictions made thereby than it used to be. I'm wondering if under the surface now, we do not have an administration that is essentially composed of climate change sceptics? Time will tell I guess, but there are worrying signs that the Truss administration might be paying lip-service to the climate change agenda without being truly on-board with it.

-----------------0--------------

Truss's plans to renege on the Johnson pledge to increase benefits in line with inflation seem to be hitting the buffers all round at the moment. Latest to join the coalition of dissenting voices is cabinet minister Jacob Rees-Mogg who apparently told Truss that it "will never happen.

Rees-Mogg joins an already notable list of names that have expressed concern about the policy, including Leader of the House Penny Mordaunt, ex ministers Micheal Gove and Grant Schapps, and of course Nadine Dorries. All in all it doesn't look good from the point of view of Liz Truss stamping her authority on her cabinet, but perhaps that's no bad thing. By necessity there will be cabinet and Government officials who are not as right-wing libertarian orientated as Truss and Kwarteng, and for more reasonable voices to have the clout to be heard could perhaps take the sting out of what could otherwise be a very neo-conservative administration.

Here's hoping.

[Iolanthe]

I can't say that I understand all this money stuff Peter, but what I do understand is that I am being given financial help from the government as a pensioner that I really don't need. Having spent the 20 or so years with children at home living from month to month with only my pittance earned from piano teaching to pay for holidays, new windows etc. we are now in a much better position. Mortgage paid, and legacies received as elderly relatives died. Hubby gets a good civil service pension (on which he is taxed). There seems to be no way that the better off can help the worse off other than donating to food banks, which we do each week when we go shopping. The help given should have been much more targeted to those that actually need the help. I was horrified when they announced the abolition of the 45p tax level, not that we've any chance of coming under that bracket. Glad they cancelled that. I'm finding the news quite disturbing at the moment. We have children stabbing other children to death. Whatever kind of world will my grandchildren find themselves in in a few years time.

[peter]

I think, Iolanthe, that the telling of what is being done now will be in the country that we find ourselves living in, in five or so years time.

I made the observation to my wife yesterday that the Truss 'faction' (for that is what it is, and one of many) of the parliamentary Conservative Party seems to want us to become a sort of hybrid between Singapore and the US.

The fallout from the current economic crisis will inevitably be that public services will have to be cut. Of this there is little doubt. When the Government can go to the people and say, "There is no money for public services" (not so baldly - but in essence), they will use it as a green light for the farming out of services to the private sector, who they (the Government) will tell us, can provide the money that the exchequer cannot.

This will come straight from the playbook of the Truss/Kwarteng/Institute for Fiscal Studies faction, - the extreme form of neo-liberalism that has now taken leadership of the Tory Party (cf with the hard-right [Suela Braverman], the brexiteer [Rees-Mogg, Steve Baker], the one-nation Tories [Tom Tugendhat], which make up the party as a whole) and will suit their project down to the ground.

In this model, public services are run by private sector interests. Things like the probation service, the fire service, the education service are payed for by the state from tax revenues, the NHS is privatised and run on the US model under which if you cannot pay you die - end off, and big business laughs all the way to the bank. It's a free-market paradise allowing big business to drive it's arms elbows-deep into the treasure chest of exchequer money.

I'm afraid it's a frightening prospect and not something that we in this country have been used to at all.

The post-war consensus that in order to prevent the rise of extreme political ideologies, people must be provided via the state system, with the basic securities of life - health-care, education, support in the case of unemployment, housing - the understanding that people who were in possession of these things could not be bamboozled into belief in extreme forms of thinking, these things have been lost.

With the rise of neo-liberalism in the Thatcher/Regan era (which in truth we have never shaken off since) this minority belief that "greed is good", that it's okay to order your life, your state around self-interest, has held sway, and the Truss administration is just the culmination of this process. It denies the (to me) fundamental truth that we are more than this; that such things as compassion and selflessness do also form a large part of what we are. That we cannot ever truly thrive if our neighbors suffer as we enjoy the fruits of life.

Alas in the world toward which we are headed, there will be no place for such sentiment. We will have to learn (and many of us have already) to be prepared to turn a blind eye to the sufferings of others. We have enjoyed in the post-war period, an era of unusual sentiment in terms of its basis on compassion - for that is what the welfare state is. It is not the way the world is ordered for many nations, nor indeed for ourselves for most of our history. But alas, it is coming to an end, and woe to the generations that are to come.

There will indeed be sunlit uplands to be enjoyed - but only a small number of us (and declining by the day) will ever get to reach them.

[peter]

Following on from Iolanthe's post above, I'll try if I can, to give a brief and cogent explanation of what has happened in the past couple of weeks since Truss's mini-budget.

The precipitate and extreme turn about of the fiscal event, based as it was upon unfettered borrowing, spooked the markets who were increasingly concerned about how and if the government would be able to finance such borrowing against a backdrop of high and rising interest rates.

This was reflected in a sharp, even unprecedented, rise in the costs of gilts, which are effectively the money that Government has to pay in order to borrow money. The rising price is effectively the markets way of saying, "We think that the risk of lending you money is growing exponentially, so you will have to be prepared to pay more in order to borrow it."

Now this in turn brought a particular section of the market, that which is concerned with payment of the final salery pension schemes, into near insolvency. Why this should have been the case is not entirely clear to me, but I believe it is because the hedge funds that control these final salary pension schemes use leverage on the price of gilts as a means of protecting themselves against future fluctuations in the value of their funds, and thereby ensure their ability to meet their long-term commitments in terms of payment of the said pensions.

This was not a situation that the Bank of England could tolerate - the possibility of insolvency of the funds upon which the pension payments of tens of thousands (hundreds even) of people were dependant, and so they acted to correct this by immediately guaranteeing to buy all thirty year bonds (those that the Government pay out on in incremental payments over this long period) for a period of thirteen days, and at a cost of five billion pounds a day. This, they hoped would stabilise the markets and bring about a fall in the cost of gilts, which to the point of writing it appears to have done.

But the problem is that this 65 billion pounds has to be found by the Bank, and not having this kind of money lying around for the taking, it took the only alternative left to it and 'printed' the money up from (as it were) nothing. This creation of money by fiat, known as quantative easing, is all very good - but it is highly inflationary, adding additional inflationary pressure to an economy already beset by the same as a result of a multitude of other factors (think the global energy crisis, the war in Ukraine, brexit..... the list goes on).

Now the Bank has been at pains to get inflation under control and to bring about a fall back to the 2 percent levels around which it has been hovering for the past couple of decades. Levels of ten plus percent are not sustainable for an economy in which companies and indeed domestic households are indebted up to the eyeballs (in the belief that borrowing was going to be cheap as chips forever) - but here they are, doing exactly the opposite of what they want to be doing, and creating more inflationary pressure themselves by virtue of creating tons of non-existant cash out of thin air. (The reason that this is inflationary is that the overall goods etc of the country in toto remains the same, but the amount of money in circulation that this is balanced against is suddenly much higher. Thus the purchasing power of money against a set quantity of those goods is, in balance, suddenly smaller.)

Now, in order to continue their attempts to rein in inflation (despite their having taken this highly inflationary step themselves), they are forced to use the only tool at their disposal to do so, and that is to raise interest rates on borrowing and saving. By doing so, they encourage saving and discourage borrowing. The theory is that if people/companies save as opposed to borrow, then purchasing decreases across the economy as a whole and in consequence prices of everything fall (supply and demand and all that sort of stuff).

But this increase in interest rates on existing borrowing has nasty, even catastrophic effects on those businesses and households already up to their necks in debt. At base interest rates of two percent, they can cope with their borrowings - at six percent they find themselves in trouble. As an example that I've given before, someone with a twelve hundred pounds a month mortgage today could be faced, if they are not able to avail themselves of a new deal very rapidly - and near a thousand such deals have been pulled by the mortgage companies in the last week - facing a bill of eight thousand pounds. Totally unrealistic and impossible for them to meet. Thus, the effect of this kind of interest rate could well be to collapse the housing market in the near future and drive thousands of households and businesses into insolvency.

But seen from a Government point of view, this disastrous situation might actually be preferable to that of having hundreds of thousands suddenly finding that they have no pension incomes. It is reported in today's FT that the Royal Mail pension scheme had to go cap in hand for an advance in order to meet its pension obligations this week, such was its closeness to total collapse. That scheme alone pays 124,000 pensions out monthly.

Set against this, a spread out occurrence of bankruptcies and house repossessions will be far easier to deal with. Reportage of these failures will be spread out and local, rather than lumped into one great national howl of outrage, and splashed all over the media. It's cynical and calculating - but when was government ever not.

But there you have it. That's my understanding of what has happened. I apologize for any things that I have got wrong and hope perhaps Forestal (whose understanding of this stuff seems to be better than mine) will correct this account where it falls down.

But this not withstanding, I hope it helps.

[peter]

Crabs. Now there's a thing that you don't hear much about these days. Perhaps with the onset of male 'grooming' (is that what it's called) the little blighters are facing a dearth of opportunity to 'plough new fields' (as it were). But in the absence of anything approaching a decent news story this morning, I have decided to give you two tales relating to my encounters (vicarious, I assure you) with the beasts, over the course of my six decades.

A friend of mine told me of an acquaintance of his who had woken up following an 'assignation' (shall we say, in an attempt to maintain some delicacy in a story that it must be admitted, does not lend itself easily to such refinement) to find that he was 'not alone'.

He tripped off to his doctor (you could see one in those days), an elderly chap in his seventies who should probably have been put out to grass a decade or so previously.

"I think I've got crabs," he said, perhaps not as loudly as he could have, being somewhat embarrassed you will understand.

The doctor looked puzzled. "I beg your pardon?" he queried.

"Crabs," said my friend's acquaintance, a little more loudly this time.

The doctor leaned forward, still looking unsure. "Cramp?" he asked

Finally the fellow's patience broke, "CRABS man - CRABS!" he bellowed across the table.

Finally getting it, the doctor mumbled, "Oh I see, I see", not a little embarrassed himself, and proceeded to dispense the necessary anti-parasitic needed to rectify the situation.

-----------0-----------

The wife of a well known doctor, a somewhat stuffy lady, came into the practice (the vet's - not the doctor's) one day and was complaining about the quality of the people that we were attracting to our west coast seaside town.

"It's shocking," she tut-tutted, "Absolutely shocking, the rabble we get here. Do you know, my husband had a waiter from a local hotel in his surgery this other day - he had crabs in his eyebrows!"


Have a good weekend folks!

[peter]

Actually - I say in the absence of any decent news story today (see above), but there is perhaps one item that is worthy of comment, and that is President Biden's rather unsettling habit of 'going off-script' when he is talking extemporaneously to people in his vicinity while the press ot other observers are present to report what he is saying.

His latest foray into loose talk appears to be commenting that the world is closer to nuclear Armageddon than it has been at any point since the Cuban missile crisis of the sixties.

He is of course refering to President Putin's veiled threats to use tactical nuclear weapons in the Ukrainian theatre if he feels that 'Russian' territory is being in any way threatened.

President Macron of France has said that he feels Biden's remarks to be "unwise", and I think I see where he is coming from. In situations such as this words matter - and especially so if they are coming from the mouth of the most powerful man in the world, the man who has his finger on the button that could decide in an instant, whether we all wake up to see a tomorrow or not.

In truth, I don't even know what a tactical nuclear weapon is - is it a nuclear warhead type of weapon or just a missile that is powered by nuclear fuel in order to get to its destination - but I'm damn sure that if Emmanuel Macron thinks that it should not be brought up in unscripted comment by the US President, where from the deep offices of the Kremlin his words could be easily misinterpreted, then he is probably right.

This is one of the problems of electing geriatric individuals to positions of power as the heads of states; they are simply not as careful with their language as younger individuals in the same positions. You saw it with Prince Phillip on numerous occasions, of which his 'slitty-eyed' comment was only one. All very well when it is only a constitutional representative of a monarchy with little or no power: very different when the careless comments are issuing from the mouth of a player in an already highly volatile and dangerous situation, which at any point could escalate into a new realm of horror altogether.

If Biden cannot be relied upon to exercise discretion in his comments - at all times, whether he thinks he is being overheard or not - then the circle of advisors and officials around him should put him under wraps - keep him, as it were, out of any situation where his loose talk could throw fuel onto the fires of delicate and developing crises.

[Damelon]

In truth, I don't even know what a tactical nuclear weapon is - is it a nuclear warhead type of weapon or just a missile that is powered by nuclear fuel in order to get to its destination.

FYI, it’s a nuclear warhead with a fraction of the power of the Hiroshima bomb for use against a target like a supply depot or maybe like that factory in Mariupol where those Ukrainians were besieged.

[aliantha]

peter, I think Biden knew *exactly* what he was saying when he made the Armageddon comment. I don't think it was a slip of the tongue at all. And his staff has said that Biden simply restated the administration's view of the situation.

At the start of his administration, his advisers actually did try to keep Biden under wraps to some degree. But there has been less of that lately, as we approach our midterm elections (November 8th).

I'm sure the comment plays differently in Europe than it does here, an ocean away, though.

[peter]

Thanks Damelon: that explains the difference (not alas, that it is terribly comforting!)

Hey, Ali!

Yes, I have no doubt that our media puts its own spin on things, closer as we are perhaps, to the source of the problem. Macron's comments were reported as being pretty unequivocal though.

On the home front, Liz Truss and her government are in many ways fighting for survival as they enter the coming weeks and get back into the House for the next session of Parliament (and following a bruising conference).

They are caving in on all fronts (reports in the Times have it that the benefits 'cut' will be dropped this week, though in fairness the pressure on this will come from inside government itself), but are coming out fighting with stark warnings to the party that if they don't stop infighting and undermining the Truss administration they risk letting in a "monstrous coalition" of Labour and the SNP into Downing Street.

Elsewhere, the rural elements of the parliamentary MPs are joining forces with the 'anti-growth coalition' (think such normally mundane operations such as the RSPB and the Angling and Wildlife Trusts) to shout out in favour of the countryside and against the Government's "environmental vandalism" as pertains some of their growth policies.

This is all completely unprecedented given the short period that the Government has actually been in office (in terms of this manifestation at least), and when you think that in the last election the Conservative Party were returned with an eighty plus seat majority in the House it actually beggars belief that we are looking at as near a close certainty as possible of a Labour Government following the next one. This kind of turnaround does not occur in British politics......or at least it didn't used to.

It doesn't of course do, to be to certain in predicting the Tory demise - there are two years for them to turn things around in, and given the speed at which politics seems to be moving at present, anything could happen in this amount of time - but looking at the polls, even at best they make grim reading for Truss et al. The Labour lead runs anything from nineteen points up to thirty three, depending on where you look, and one commentator I saw yesterday said it had the same feeling as when the Major Government went into tailspin in the (what) late nineties. At that point, he said, the feeling was of there being a Labour Government in waiting, and that Blair would become PM was seen as really being a done deal. This, he said, feels like that.

On other fronts, the blame game seems to be getting into full swing with no small portion being heaped upon the shoulders of Michael Gove. Painted today (with a full headline all of his own in the Mail on Sunday no less) as a "sadist" with a penchant for stabbing people in the back (and that coming out of Downing Street by accounts) he is blamed for heading up a behind the scenes rebellion against Truss and all she is trying to achieve.

But let's face it, Truss doesn't really need much help from Gove to trash her reputation at the moment. In a matter of days rather than weeks, she's managed to tank the economy, trash the Tories reputation for economic competence, drive the party down in the polls and send its various factions into a screaming rout in opposite directions from each other...... but it's always good to have a bogeyman to focus attention on though isn't it. Gove for his part, will hardly be innocent of the charges either. Ex Tory MP Anne Widicombe was saying on GB News the other day that Gove was an inveterate plotter. He simply couldn't help himself on that front, she said; it was in his nature. And one suspects that the man himself will not be too displeased to be painted as the architect of the rebellion against Truss. Always the opportunist, Gove will see the writing on the wall for this particular period of Conservative office, and will be positioning himself for a tilt at the leadership when Truss falls. A period in opposition following a slaughter of Truss at the polls, and the party should be nicely softened up for him to emerge (Johnson like) as the 'savior', ready to take up the mantle of leadership and reunite the fractured party. This for sure, will be his particular thinking.

In another, truly bizarre, twist on the blame spread, the Telegraph today has it that, "Ministers blame the Bank (of England, that will be) for soaring mortgage costs."

According to the minister's opinion, it was not the government's precipitous and ill-advised mini-budget that has thrown the mortgage market into disarray - it was the Bank of England's failure to use interest rates earlier to control inflation that has caused the turmoil.

Let's get this clear. According to said minister's, the Bank of England should have put up interest rates before - and if they had done so, they wouldn't have had to be doing it now? But wouldn't that have simply caused the same problems - that of people not being able to afford their mortgage costs - earlier rather than now? And wasn't it the Government's unlimited borrowing intentions that spooked the markets, which required the Bank to step in and save the pensions market, which in turn brought about the need to impose the drastic interest hike?

But in typical fashion, the Government has decided that if you say it loud enough, and often enough, then people will come to believe it to be true - and when the people believe that it it's true, then by extension it is true. So let's just practice this; all together - "It's the Bank of England's fault! It's the Bank of England's fault!"

So yes, the process of obfuscation and misdirection begins. The muddying of the waters, the spraying out of the fog of disinformation and half-truth into the facts, the stirring around of the timelines and salting with a bit of conspiracy here and there. After all - Truss is not exactly a newcomer to all of this. She did sit in a Government led by arch-disseminator Boris Johnson for a couple of years, and one would have expected her to at least have learned something during this time.

Quick scan of the rest of the morning's stories.....

No - nothing to get excited about, unless you want to hear the tale of when Star Trek icon William Shatner soiled himself on stage mid-act (many jokes there involving plays on his name, but I'll run with the Star's "captain's log" one....)

No Peter! Too nasty! Too nasty! Let it go!

(And here's another nasty one, as if that last weren't enough. Do you realize that if anything happens to Liz Truss Therese Coffey will be our PM. Like William Shatner, it doesn't bear thinking about!)

[I'm Murrin]

Man, the interest rate thing really bothers me. I'm no economist, so I might be missing something, but elements of it seem pretty clear.

The idea is, raising interest rates encourages people to save rather than spend, and in turn the markets will lower their prices to encourage the spending back, and this little bit of feedback will lower inflation. It all makes sense on a certain level.

But the inflation we're dealing with now is concentrated in two things: food and energy. So tell me, will people stop eating food and using energy because their money is better off in a savings account? Raising interest might lower inflation in some parts of the economy, but it's going to do fuck all to stop people buying food and using power, because those things have inelastic demand - people need them regardless of price. So all the interest hike in this case really does is increase the cost of borrowing and debt, putting people who have mortgages under even greater economic pressure.

I'm lucky in that I can still afford to pay my bills even on the minimum wage I'm getting now, and I have a fixed rate deal for two more years so I have room to breathe, but even I am seriously planning out how to use up my savings and extra income to fully pay off my mortgage before that deal runs out.

The simple fact is, one of the big problems with our economy right now is wages. Wages haven't grown, and in fact have dropped in real terms, since the 2008 financial crisis. The UK has some of the lowest wages in Europe. The energy price crisis is exceptional, but it's really just accelarating something that would have happened inevitably as inflation continued over time (since our systems are built on keeping it at 2% so that there is always growth). We always were going to hit a point where people couldn't afford to pay their bills, because they refuse to ever increase wages but want to constantly increase their profits. The whole crisis was inevitable, and lowering taxes on the rich and increasing interest on savings - which people in precarious positions don't have anyway - was never going to do anything but make the situation worse.

It's incredibly frustrating to see this and have to wonder: are they so stupid or ideologically blinded that they don't see it themselves, or do they see it just as clearly but choose to let the poor suffer for their benefit?

It it at least heartening that so many of the industries that are capable of doing so are organising strike action to insist that something changes. If only I could think that they'd succeed and their successes could spill over into other sectors that don't have union support.

[peter]

I believe that it is the latter Murrin - that they are simply prepared to allow those at the bottom of our society to shoulder the pain. I agree in all points with your post and absolutely that the clever money at the moment is in reducing ones borrowing, credit card and mortgage, to the minimum levels one can possibly afford. I remember when I was younger the wisdom always was that you should get the biggest mortgage you could at the earliest possible time, because, it was said, that it would always get easier to pay (in relative terms) as time progressed. In essence (in those days) your payment of say, fifty pounds per month, would stay the same, as over the years your wages grew away from it by natural wage inflation as time progresses. This clearly no longer applies. The key thing (in my opinion) is going to be to put everything on hold - holidays, home improvements, new cars and computers etc (basically any large scale spending that can be avoided) for a couple of years in order to consolidate. The longer you can fix your mortgage for, to get as close to your final closure point, the better. That way at least, you have a stab at clearing it with a last final push at the end. Many people will not prepare themselves for what is coming and will loose everything. My heart bleeds for them.

-------------0-------------

Couldn't help but to have a wry smile when reading that Liz Truss had considered giving Michael Gove an ambassadorial role in the Middle East on the basis of keep your enemies close.....but not too close. I'm thinking that Gove would not consider this type of appointment with much relish at all. It is reported that Truss herself gave authorisation to the Downing Street comments about the ex Chancellor for the Duchy of Lancaster taking a "sadistic delight" in stirring up trouble and having a "darkness inside him" that "corrupts his soul".

The nature of these comments has been received with universal approval by her cabinet team - Nadhim Zahawi has openly questioned them - and it is said that Truss will adopt a more emollient approach over the forthcoming days as Westminster once again gets into its swing.

It would make sense for her to do so. No Prime Minister can hope to last long if they alienate large swaths of their backbench MPs, the individuals upon who's support they depend in order to get legislation through the House. The first thing to be done will be to shelve the real-term benefits cuts and return to the increase in line with inflation as promised by her predecessor. It is reported that she intends to visit the Commons tea rooms in order to meet MPs in their habitat and take soundings of their mood. (Better I'd have thought to visit the House of Commons bars; the MPs will be more loquacious when lubricated, not to mention that she will probably find far more of them there than enjoying tea with their little fingers raised.) Her Chancellor, Kwasi Kwarteng, also intends to get in deeper with the rabble, saying that he will meet all 356 Tory backbench MPs in person in order to explain his thinking before he sets out his plans to balance the books in the next fiscal statement.

And let's face it, the Truss/Kwarteng Laurel and Hardy act have some ground to make up. As noted before, they do not represent a majority position within the parliamentary party and if they can't pull the MPs in behind them pretty rapidly, things could get rough. They've got a tricky week coming up with the Boris Johnson inquiry beginning to consider whether the former PM deliberately misled the House and also some legislation pertaining to the Northern Ireland Protocol under consideration in the Lords. Westminster is the beating heart of our political system and it is only when MPs are gathered there in their numbers that the whispering and backroom dealing that makes or breaks governments can truly function. If Truss doesn't get her troops rallied pretty quickly, she's liable to find that that whispering is setting up to break her's.

But one thing I'd like briefly to mention that I saw a YouTube video on yesterday, and that is a common misconception that the neo-liberal type of government that Truss is said to favour (in the mold of the Thatcher one before her) is all about market freedom and small state.

On the contrary, said the makers of the vid. If you look at the expenditure of the Thatcher government you actually find that the state was in no true sense diminished under her watch, unless you are considering the welfare aspects of it in isolation. The administration was adept at hiding where it was spending money - typically just relabelling spending from this type to that, in order to give the illusion that it was cutting back in the areas that it had said it would - but was in truth no better at shrinking state involvement than any administration before it.

Certainly, we were told, the Thatcher regime was perfectly happy to exercise huge spending and increase in areas where it involved stamping down on freedoms, individual and collective in the form of trade unions, and it occurs to me that in this respect it appears that the Truss administration will be little different. Already our new Home Secretary has told us (in interview in the Telegraph I believe) that "protesters are an unruly mob that need to be restrained". No specific type of protester or any qualifying reference, just protesters in general. Unruly mob that needs to be restrained.

No expense will be spared and no shrinking of the state will occur in areas where it concerns the curtailment of people's liberties in respect of criticism of the government, or of restraining the ability of genuine asylum seekers to find legal routes to come to this country. There will be no touting of the freedom of people to collectivise in unions in order to protect their interests against employers freed to use any and every means to minimise wages and conditions in the pursuit of profit. No expense will be spared, no shrinking of state involvement will be seen here. As with Thatcher before her, the shrinking of the state will all and only occur in the parts that pertain to the welfare of people, the guarantee of support in time of hardship that was taken as read by the post-war consensus of a state safety net owed to all - all - individuals who make up our varied society.

So let us watch this as it unfolds in our new era of Thatcherism. Take stock of exactly where the state is being shrunk - and where it is being aggressively enlarged. Take stock of where the public services that we have come to rely upon are severed away from state control, and hived off into the hands of private interests, and where conversely, the state tightens its grip and extends its reach into ever deeper and smaller crevices of our lives. If we do this, we might be surprised about exactly how much and where the fabled state shrinking of neo-liberalism does and does not occur.

[peter]

Life can be beastly cruel at times.

I just put together a post on the continuing turmoil of the Truss administration (more trouble in the gilt market, more backtracking and U-turning, more dissent from backbenchers etc)..... and then lost the lot.

Internet connection went down as I attempted to post and that was that.

No great loss - it was pretty dull stuff that you can read in any paper out there today - and I'm not sorry to see the back of it.

So perhaps instead I should tell you about the time that an alsatian dog caught hold of me by the balls - but no, you lot are far too refined a bunch to take any pleasure from that particular tale.

So instead I'll just make my apologies and leave. I'm sure something will pop into my head to post about before long (I know I had a funny story to tell in mind yesterday, but I can't remember for the life of me what it was) at which point I'll be back.

In the meantime, have a great day!

[peter]

I might as well just say Gove has responded to the affront dished out to him by Downing Street (that he is a backstabbing sadist who basically cannot help being a c*nt) by saying that he will not be silenced when it comes to speaking out about what is in the country's best interest. Of course if that happens to align with his own best interest at the same time, then so much the better.

Truss for her part is so surrounded by enemies - half her cabinet, four-fifths of the parliamentary party MPs, fifteen million members of the National Trust, the RSPB, the Countryside Alliance - that she must hardly know which way to turn. It's like one of those old space-invaders games where the attacks come in faster and faster and you finish up flying back and forth trying to stop them from getting through and blasting you to shit. Sooner or later either she has to get this thing under control or she is toast.

As for Kwarteng - his sorry ass isn't worth a plugged nickel at the moment. The BofE is still trying to prop up the bond market by increasing the daily limit on its thirty year gilt purchasing ability. But as the scheme ends this week and it (the Bank) isn't actually purchasing that many bonds, despite its ability to do so, the markets are way off being put into an easier frame of mind, and this is reflected in a still raising cost of government borrowing as gilt prices continue to climb. If the chancellor doesn't get this under control soon - very soon - he will have to go. One commentator said that you could do the sums on a packet of fags and see that the figures don't stack up. A sixty billion black hole, no possibility of making that much saving from public spending cuts (political suicide) and nowhere else to raise the money. Ergo, shit-creek....no paddle. A total cluster fuck with no option but to take the long walk. It's him or Truss, and the Tories cannot afford another leadership debacle right now. So they are basically fucked as well. It's turdtles all the way down (if you'll pardon the scatological pun). They built a castle of crap on top of a mound of shit and now they're waking up and smelling the resultant stench - and coffee it ain't.

(And Kier Stamer and his bunch of professional shit-flies are hovering around the pile waiting to gorge themselves on the tory carcass when it eventually falls dead to the floor, the bloated maggots that they are.)