Brexit and the waning days of the United Kingdom

[The Larch]

Delusion level: Off the charts.

[Sheilbh]

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Delusion level: Off the charts.

Not sure she'd pass the Turing test with stuff like this 4,000 word essay on how she was right.

[Admiral Yi]

When in doubt, play culture wars card.

[Sheilbh]

Piece is, it seems, 80-90% "I was right" - with the rest "being mistakes were made" (comms - "I'm not the slickest communicator" , didn't understand the pension funds were in a dangerous position).

Of course you could argue that a more circumspect PM would have taken the time to look at market sentiment - especially in relation to the pension funds which were the real driver of the market reaction.

Lots of moaning about Treasury orthodoxy (fair), but also tough to say the left wing economic establishment was against you when you also cite the positive reactions of the CBI and Institute of Directors.

[Zanza]

What is the "economic establishment"? Is it like the "deep state", just the free market variant?

[Tamas]

She is insane, plain and simple.

[Josquius]

Can't remember where I read it but apparently there are a sizable number of tories saying truss is mad but right whilst sunak is competent but wrong.
The wishful thinking is simply loopy.

[Admiral Yi]

What is the "economic establishment"? Is it like the "deep state", just the free market variant?

It's what Peronistas bitch about every time they default.

[Sheilbh]

Can't remember where I read it but apparently there are a sizable number of tories saying truss is mad but right whilst sunak is competent but wrong.
The wishful thinking is simply loopy.

I don't think it's sizeable - especially because from what I've read all the sourcing for that is "sources close to Truss". So a slightly different variety of wishful thinking.

But I think it sort of goes to OvB's article.

If you think the UK economy has a lot of problems then I think the right wing version of what you do looks a lot like what Truss talked about (rather than what she did): lots of supply side reforms which were mentioned in their budget (but not part of it because they're non-financial), particularly planning reform (which she complains the Treasury said was politically unviable - sadly they're probably right) plus tax cuts. As a plan to try and reinvigorate the economy that hangs together, of course the problem is that she's absolutely fucked it for the foreseeable. So if you're on the right, I can see mad but right.

While Sunak is very much more on the managing decline side of things.

What is the "economic establishment"? Is it like the "deep state", just the free market variant?

Mainly the Treasury - but also the OBR and a little bit the BofE. Of course she was actually brought down by the markets but that's a more humbling admission.

It doesn't hang together. She basically says she was right and it was the right policy, economic orthodoxy and Treasury orthodoxy was wrong - she also wasn't informed of how fragile the markets (especially pension fund hedging was) by the Treasury and, knowing what she knows now about that, she would have proceeded differently.

And there is a kernel of truth to that - from what I've read from all the market commentary guys like Joe Wiesenthal or economists like Tooze the real cause of the panic was pension fund hedging but that's more complicated/difficult to explain. To go from that fact to therefore "I was right" though is quite the leap

[mongers]

Delusion level: Off the charts.

Yeah, so her downfall was nothing to do with her own lack of intelligence or utter incompetence (the no/yes un/confidence vote) ?

[PJL]

I'm starting to wonder whether raising interest rates to an previous unacceptable high was a one trick pony by Thatcher. It was okay in the early 80s because there weren't enough home owners to be affected by the change but even ten years later it was seen as unthinkable or at least very damaging due to how many home owners on mortgages who voted Tory there were.

[Sheilbh]

I'm starting to wonder whether raising interest rates to an previous unacceptable high was a one trick pony by Thatcher. It was okay in the early 80s because there weren't enough home owners to be affected by the change but even ten years later it was seen as unthinkable or at least very damaging due to how many home owners on mortgages who voted Tory there were.

Not sure - Thatcher's move coincided with the Volcker shock so there was a wider context. Interest rates peaked under Thatcher in the early 80s - but from the 70s through to the mid 90s interest rates were pretty regularly over 10%. Even mid-90s to financial crash it bounced around 5% and it wasn't unusual to be higher than 5%.

This is where I buy the financialisation argument around housing. I think there is a supply shortage - but something happened in the late 90s/early 2000s that really shifted housing prices and (inevitably) people's exposure to debt:

[Syt]

[Richard Hakluyt]

Time-series data for the UK population 1971-2021 :

https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/timeseries/ukpop/pop

It took from 1972 to 1989 for the population to increase from 57m to 58m. From there there is a speeding up till by 2005 onwards we were adding 1m every two years.

I would hypothesise that UK housebuilding was centred around replacement of old buildings for many years, though there was a peak in the 1950s which greatly improved the general situation. When our population started to increase the housebuilding sector contined with "business as usual" instead of increasing construction by, say, an additional 250k units per year.

For the richer part of the population there is no problem here, rental income rises as do capital values. The question is why do the poor 80% connive and support their own poverty by voting Tory and supporting nimbyism?

[HVC]

For the richer part of the population there is no problem here, rental income rises as do capital values. The question is why do the poor 80% connive and support their own poverty by voting Tory and supporting nimbyism?