David Craig, on September 30th, 2022Friday blog
It’s not the purpose of this blog to cover stories that have already been exhaustively covered in the mainstream media. But the ghastly incompetence of Kwasi ‘Khazi’ Kwarteng or ‘Kami-Kwasi’ as he is now affectionately known, is just so appalling that it’s probably worth mentioning a couple of the inevitable results.
Firstly, let me admit that in spite of having done an economics course as part of my MBA, I don’t understand why the budget (which was not a budget just as Putin’s ‘Special Military Operation’ was not an invasion) has caused panic in the financial markets, has risked wrecking pension companies, has led to the Bank of England buying up government bonds, where the Bank of England gets the money to buy these bonds, why buying these bonds has supposedly ‘stabilised the market’, why interest rates are about to rise and all that stuff. But two things are clear to me:
- Kwasi’s special fiscal operation (which is not a budget) will provide the grounds for industrial action which will come close to a general strike
- The Tories have given Labour all the arguments Labour need to win the next general election without even having to get out of bed
The coming general strike?
The two greatest stupidities of Kami-Kwasi’s efforts were removing the cap on bankers’ bonuses and giving tax breaks to the highest earners.
When the bankers’ bonus cap was first imposed, most banks got round the problem by giving their senior employees massive pay rises. So there was absolutely no need for Kami-Kwasi to abolish this cap. The bankers were already wallowing in our money.
Then we have the tax cuts for the highest earners:
Seeing energy prices more than double, inflation rising faster than their wages and mortgage costs rocketing, 90%+ of the working population are going to demand that their wages rise to meet the increasing cost of living. And they’re going to justify this by pointing to how the rich are getting richer due to the Tory tax breaks while they are getting poorer. General strike anybody?
Mrs Starmer already choosing the curtains for Downing Street?
If I was Mrs Starmer (which thankfully I’m not), I’d already be choosing the curtains for my move to Number 10 Downing Street. Kami-Kwasi has given Labour all the slogans they need to slaughter the Tories at the next general election:
- The Tories are the party of the bankers and the rich
- The rich are getting richer while you’re getting poorer
- The Tories only care about their rich City friends
- The Tories are ‘the nasty party’
It’s all about the optics
The Kami-Kwasi/Truss budget (which is not a budget) may be a work of economic genius. After all, both Kami-Kwasi and Truss are highly-qualified. But politics/optics are also important. And the budget (which is not a budget) will be seen as an attack on most working families while enriching a favoured few (Tory donors?) at the top of the pile.
There’s no point being an economic genius if you’re a political imbecile. Perhaps one of the Rolls-Royce brains among the Downing Street advisers should have mentioned this to Kami-Kwasi before he launched the Tories’ suicide attack on the British population?
Category: 
So a small cut in taxes from the highest levels the country has ever seen since WW2 to almost the highest levels is whipped up in a media frenzy.
The markets sense the Bank of England are desperate to crash the pound because they have been using this to soften rate rises. However they are also die hard remoaners who are desperate for a crash to prove how right they are. As such the signalling to the market was the door is open do your worst. The bank fundamentally failed once again to maintain orderly markets and allowed speculators to prosper.
The rest is politics and if Truss wants to put tanks on the lawn and go all Thatcherite then let the electorate decide in two years. Rather like Biden taking the fall for the neocon faction disorderly exit from Afghan as punishment for ending the forever war. It was still the right decision.
Lowering taxes is a good thing from current levels and the right thing to do regardless of what the liberal globalists all want. Most workers will appreciate the thousand quid pay rise just given to them but with the hysterics from the media not sure they all realise it yet.
Lowering taxes must always be a good thing, but when it is linked with increased spending from borrowing it is bad government and the vultures are taking advantage as they always have done. Will the pound be devalued to get us out of this mess?
It is cold turkey time and there is no easy way out of the financial mess our so called elites of the past 50 or so year have created.I personally lay the blame with the USA and in particular their decoupling of the dollar from gold.We of course followed them like lapdog because of the so called “special arrangement”,which has always been in the interests of the US and not us.The USA hegemony of the post war has been a disaster for the world.They have overseen the ruination of their own and most other currencies and we are now at the end game,hence the proxy war,to divert our attention from what is really going on.Going back to Kwasi and Co,his political acumen was totally missing because there was nothing wrong with his growth ideas if carefully explained along with serious cuts in government spending.However any cuts in Govt spending would have had the same reaction from the usual suspects.So,they will just have to carry on and bite the bullet.SOMEONE,has got to return to the principals of sound money,the reward of savings with sensible interest rates and a return to manufacturing stuff that people will buy.A really good ploy for the Cons would be just to carry on with the present mess and let the Labour Party inherit a situation they could only make worse.Not good for the country or the majority though,but it is cold turkey time,it has taken a 2hile to come,but many are going to suffer from the withdrawal of that toxic drug,cheap money.
I’m not saying it’s the best thing they could have done, but neither do I believe it’s the disaster you think it is. The pound along with every other currency has been tanking against the dollar since September 2021, the idea that the “fiscal event” last Friday has crashed the £ is laughable. The media has reacted hysterically – no change there then and the entIre furore is politically motivated not economic. The euro dropped below parity last week but there’s been not a murmur from the MSM. My guess is this is all about brexit and the remoaners or it may be about the great reset and how dare we go off in a different direction. Either way it’s a storm in a teacup and I hope Truss and Kwarteng stick to their guns.
I disagree about the general strike too, 90% were already striking or preparing to strike thanks to the increased cost of living. The “budget” and capping of energy prices has actually given them back some money back so might help in negotiations.
The one thing I agree with you about is the bankers bonuses – what a totally pointless exercise that was! Having said that the tax revenue from those bonuses is not insignificant and perhaps the inland revenue can claw back more from bonuses than they can from salaries?
Meanwhile I heard about this on Talk TV this morning. Chris Skidmore, Net zero zealot of this parish is running a public consultation on net zero. Blimey! It runs until 27th October
Start your response here.
https://www.gov.uk/government/consultations/review-of-net-zero-call-for-evidence
I needed to create a gov.uk account, not the same login if you file in your tax returns online but that just may have been because I wanted email updates on that page.
Meanwhile Chris Skidmore, net zero zealot of this parish, is running a public consultation on net zero. Blimey! A chance to have our say …
Don’t know if I’m allowed to post links, already tried to post this once but it disappeared
More info here
https://www.gov.uk/government/news/chris-skidmore-launches-net-zero-review
Can enter your response here
https://www.gov.uk/government/consultations/review-of-net-zero-call-for-evidence
Meanwhile Chris Skidmore is running a government public consultation on net zero. Blimey! A chance to have our say.
Link posting doesn’t seem to work (this is my 3rd attempt to post) so just google “Chris Skidmore net zero” for more info.
And google “Review of Net Zero: call for evidence” to get to the actual consultation page. I had to create a gov.uk account (not the same account as you use to fill in your tax return online) but that may just have been because I wanted email updates on that page.