Russia has always been a colonial power in denial. While conquering and ruling multitudes, it insisted that—in contrast with violent Western conquests—the indigenous peoples themselves sought Russian protection and that Russian rule was benign. This gap between rhetoric and reality is evident in the country’s current designation as a “Russian Federation”.
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Update: Liz Truss has just resigned as PM. Lord (David) Frost is one of the sanest observers of the UK political scene. He’s in favour of the pro-growth, lower-tax agenda that Liz Truss has made much of. He writes more in sorrow than anger that the time has come for Ms Truss to stand aside. His article includes the nugget of insight around how, in the very early 80s, Sir John Hoskyns, advisor to Margaret Thatcher in her Policy Unit, had set out in a memo a series of “stepping stones” for reform and change. To make changes on energy, tax, inflation, house planning, etc, requires a lot of patient preparatory work, to ensure that reforms don’t alienate the public on a large scale, or rattle the markets. This is akin to a pilot on a ship or plane having a passage plan before leaving port or taking off. A serious government needs to have a worked-out idea of where it is going, and how it is going to do it, and have contingency plans. For example: when contemplating the need to take on Arthur Scargill’s National Union of Mineworkers, following the damaging strikes of the early 70s, Mrs T. put Nigel Lawson in charge of energy (before he became Chancellor in 1983) and he built up coal stocks so that the UK had a buffer of coal during the likely strike. This is like a general marshalling his forces intelligently before going into battle. My impression is that Truss lacked people around her who knew how to guide her in such a way. And this speaks to what in my view is a deeper problem with much politics today in the West: the lack of strategic thinking and understanding of statecraft. Politicians sometimes study subjects such as “international affairs” or “politics” in liberal arts degrees and masters’ degrees in university. There is the Kennedy School of Government in the US , to give one case. But I wonder how much actual practical knowledge of how to get things done is learned. (If any readers have been to these places, let me know.) In fact, they may simply spend time wallowing in forms of ideology; they’d be better off reading Robert Greene’s 48 Laws of Power, even if it appears to be a treatise on cynicism. Perhaps the nature of those in public life has changed. Whatever else one might say of them, the old landed gentry and business class of people who tended to be Tories had an understanding of the processes of government and making change, although a lot of them were also capable of mass incompetence. On the Labour side, the experiences of unions and working in industry gave a certain realism and understanding of how tough life could be. I worry that too few in public life have this sort of “ballast” in their lives. And we end up with people who don’t really know what they are doing. Perhaps a more intractable problem is that so many people now assume that government, on the scale we now have it, is the “normal” state of affairs, and that anything taking us to a smaller State is terrifying. And it requires tremendous rhetorical skill, management capability and insight to show how a route to a saner state of affairs is possible, even exciting and enticing. This is doubly hard to do after a pandemic, and after when a large chunk of the professional middle classes had spent two years on furlough, watching TV and baking bread at home. And the sadder fact is that a lot of such people, although they will never admit it unless after several drinks, rather enjoyed the experience. October 20th, 2022 | 24 comments - (Comments are closed)
 “….it is more useful to see Liz Truss’s rise and fall as symptomatic of an identity crisis among free-market policy-makers across the West, as they wake up to a world in which can exist neither as competent technocratic administrators nor as a radical liberalising movement. This new world is one in which both Thatcherism and the Blairite Third Way are dead. What those commentators suffering from Brexit Derangement Syndrome appear to have missed is that the country is reeling from what many hoped was a transitory crisis, but now seems to be a permanent paradigm shift: one in which high inflation is endemic and the welfare capitalist model that has been propped up by cheap credit for the past 20 years is vanquished.” – Sherelle Jacobs. Daily Telegraph (£) I wonder if people will talk of these times in the way they once discussed the tumultuous Corn Law/free trade debates that led, eventually, to the formation of the Liberal Party (Whigs and Robert Peel supporters joining) and the Tories, led by Lord Derby and later Disraeli, languishing in opposition for 20-plus years. Stephen Davies of the Institute of Economic Affairs (and a Manchester man who relishes the traditions of classical liberalism and economics in that city), argues that big realignments are going on. I think, contrary to his view, that economics is as important as “culture wars” stuff to what is causing politics to shift. The public has just had a big lesson in why economics matters. It matters a lot. October 18th, 2022 | 24 comments - (Comments are closed)
“The Tory vision of the country is, or should be, one where people are busy – working, thinking, travelling, prospering, bettering their lives. It involves building things and going places. It involves houses and factories, roads and cars, ports and airports, as well as parks, countryside and gardens.” – David Frost, a former member of the Boris Johnson administration, who resigned in part over things like tax hikes. I get the impression that his views are falling on deaf ears among many Conservative MPs, for whom building things, travelling, entrepreneurship, or of how life should be about a sense of adventure, are all terrible things to be banned or viewed with suspicion. Maybe we will get a political realignment at some point, where the Tories revert to their 19th Century default of being the party that largely resisted, or was snooty about, industry and an upwardly mobile class, with a different party championing such things. It may not happen, but I get the sense that there is a lot of change in the political culture at the moment. If you are a young, ambitious person, what on earth does much of the UK political order have to offer if you detest politics and want to just get on with life? The answer, for many, will be to leave. October 17th, 2022 | 9 comments - (Comments are closed)
“The revived fortunes of fossil fuels, especially coal, may explain some of the weakened resolve for decarbonization. Global bank lending to fossil fuel companies is up 15 per cent, to over $300 billion, in the first nine months of this year, from the same period in 2021, according to data compiled by Bloomberg. This is Wall Street just doing its job: making money. Banks earned more than $1 billion in revenue from fossil lending during the first three quarters, in line with 2021. Why quit business with a booming sector over a distant climate goal?” – Alistair Marsh, Bloomberg. ($) The US news service has been pushing the whole “Green transition” agenda in recent years in its coverage, at the behest of founder Michael Bloomberg, so there is something darkly amusing watching the organisation concede that decarbonisation has been a big loser for investors in recent months. If you are JP Morgan, BlackRock, Bank of America Merrill Lynch or a small investment house in Massachusetts, you have to explain to clients why you hugely lagged the stock market because of your “Green” decisions. As the late Richard Feynman once said apropos the Space Shuttle, nature cannot be fooled. That applies to economics as well. October 16th, 2022 | 37 comments - (Comments are closed)
“You couldn’t force lockdowns without laptops, Zoom, Amazon deliveries, cloud computing, Slack, QR codes or Netflix. Without them, lockdowns would have lasted two, maybe three weeks tops before the utter destruction of the economy forced everyone back to the workplace. Instead, we took the Faucian bargain of technology-enabled yearlong lockdowns because it was doable. Silicon Valley’s tools became shackles.” – Andy Kessler, WSJ ($). Tech is great, and these channels would be useful in any sense, but it is certainly true that for a segment of the population (such as those with media influence and in government), they made lockdowns far more “doable”. For a fan of tech such as me, that is an uncomfortable thought. “Faucian bargain” – very droll. October 11th, 2022 | 19 comments - (Comments are closed)
For the past two weeks, a stock narrative has been that UK Chancellor of the Exchequer Kwasi Kwarteng’s “mini-budget” was reckless and rattled the markets, and he should have been more cautious, set out the debt and borrowing side first, not talked about reversing Rishi Sunak’s tax hikes to corporate tax, NICs, etc, and got fully on board with the idea that what the UK needs are the highest taxes since Clement Attlee. This, apparently, is what the clever people in the Square Mile wanted, happily cheered on by much of the media, and the damper ends of the Tory Party. But given a few days to think about this, what strikes me as what a lot of hysteria there has been, and how heavy taxes remain. This story in the Telegraph today shows how “fiscal drag” caused by static tax thresholds means millions of UK taxpayers will, in real terms, be worse off because their tax bills are going up, not down. So the idea that we are going to move to some sort of Reaganite low-tax country was always a bit overdone. It suggests that fashionable opinion has so totally imbibed forms of socialism that anything a bit different sends people crazy. (The performance of the International Monetary Fund, an organisation that should be shut down, is a case in point.) It suggest that those Tory MPs threatening to unpick even the smaller tax hikes need to ask themselves why they are Tory MPs at all. October 6th, 2022 | 10 comments - (Comments are closed)
“The point is that Britain was in an economic mess before Ms. Truss took office, and there is no alternative universe in which policies that have failed for 12 years suddenly would start working on the cusp of a global downturn. The choice is the gamble of a major policy overhaul, or the certainty of steeper decline. So yes, U.S. Republicans, do take note of Ms. Truss’s travails in Britain. The Tories squandered their reputation for competent, free-market economic management. They now find that it’s hard to win back at precisely the moment they and the country need it most.” The Wall Street Journal (I seem to be quoting it a lot these days), giving its transatlantic take on the past 12 years of Conservative fecklessness and some occasional sensible moves. Its verdict on the Bank of England is particularly damning:
On the bright side, at least we hopefully won’t hear much more about Modern Monetary Theory. Addendum: I have ordered Edward Chancellor’s book, The Price of Time, and will review it when I get my copy. It is getting good reviews. We shall see! Sterling is recovering a bit against the dollar. I wonder if some hedge fund types that have shorted the pound have been squeezed out. Update: In response to bad polls and the fact that many Tory MPs are more or less social democrats with a blue label, the Chancellor has reversed his removal of the 45% top tax rate. So, combined with national insurance and other taxes, top earners face a marginal rate around 60 per cent, which is high even by European standards. Needless to say, this is unlikely to help the party retain power unless there is a dramatic improvement in the economy. And even if there is, the “it’s time for a change” will be hard to resist. Labour can get rid of its nuttier members and get into power. September 30th, 2022 | 21 comments - (Comments are closed)
“The unemployment rate was 3.5% in July, the same as in February 2020, but the U.S. has three million fewer workers. Where did everyone go? This in an economy with 11.2 million job openings. It’s mostly men 25 to 54 who haven’t come back to work. Now a McKinsey study suggests that 40% of workers are thinking of quitting their jobs. Does anyone want to work anymore?” – Andy Kessler, Wall Street Journal ($). September 27th, 2022 | 16 comments - (Comments are closed)
Mr. Biden forgives half-a-trillion dollars in student debt without the assent of Congress. White House aides collude with tech platforms to silence dissenting voices on Covid. His regulators stretch the law beyond previous understanding to impose more control over the private economy. And that’s before they get the votes to break the Senate filibuster, add new U.S. states, override 50 state voting laws, and pack the Supreme Court. Mr. Biden has become his foe’s polarizing mirror image. It is exactly what he promised as a candidate he wouldn’t do. Wall Street Journal ($), from which I have quoted quite a lot lately. September 5th, 2022 | 13 comments - (Comments are closed)
“Setting aside the stunning sexist double standard being applied to the current prime minister of Finland Sanna Marin, forgive me if I don’t think it’s news, or relevant, or important, or even noteworthy that she’s got moves. Look, I don’t believe politicians are any more noble or courageous or quasi divine than the rest of us. What’s more, if I were running a Western European democracy I’d imagine my stress level would be considerably higher than it is now. She’s got the right to burn off some steam, live life, and relax every once in a while. And unlike Dick Cheney’s hobby, no one went to the hospital.” – G. Patrick Lynch, at the Econlog blog. Elon Musk, the cheeky chap, has also weighed in on the issue. September 1st, 2022 | 55 comments - (Comments are closed)
“It was bound to happen. After skating through the summer without rolling blackouts, Californians on Wednesday were told to raise their thermostats to 78 degrees and avoid charging electric vehicles during peak hours as a heat wave grips the state. Good thing new gas-powered cars won’t be banned until 2035.” – Wall Street Journal ($). In my view, the idea of making people rely on electric vehicles (EVs) and then curbing how much power they have, is a design feature, not a bug. Those of a Big Government cast of mind (most politicians) might rather like the idea of fitting “kill switches” into EVs so that a bureaucrat can disable them. By making cars costly and annoying, it also forces people to use public transport. At its root, hatred of the car is hatred of individualism and freedom. It is hatred of autonomy, even the joys of owning and driving a vehicle. All that “car culture” stuff is just so vulgar. Lord (David) Frost, the former UK Cabinet Minister and all-round-good egg, wrote a recent article about how, as a teenager, he bought a Rush album containing the song Red Barchetta, which posits a dystopian future when motor cars are banned. He wrote:
September 1st, 2022 | 28 comments - (Comments are closed)
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