It’s not the 80s anymore
Ben Sixsmith on The Critic.co.uk
23 November, 2022
You might have noticed a meme floating around the media about how Britons could become “no better off than people living in Poland”. “If the UK continues with the same level of growth it has seen for the last decade,” writes Sam Ashworth-Hayes, “Poland will be richer than Britain in about 12 years’ time”:
It sounds like an absurd idea that in 2040 we might see complaints in the Polish press about a flood of British plumbers undercutting wages, or Brytyjski Skleps lining the rougher areas of Warsaw, but it isn’t beyond the realms of possibility.
This talking point has also appeared in the Telegraph, the Express and the Financial Times. It often comes with a sense of vague alarm and bewilderment. Poland? The post-communist place? Don’t they live entirely off vodka and potatoes? Don’t they have horses clippety-cloppeting down the streets selling women’s underwear pinched off a truck in Germany? Poland?
A lot can change in nine years, in Britain and in Poland
Having lived in Poland for nine years, I can say that I am not at all surprised by these projections. To be clear, that is all they are — projections. A lot can change in nine years, in Britain and in Poland.
Still, I think a lot of British people would be surprised by how much better things can be in the land of Lech Wałęsa and John Paul II. Equally, a lot of Polish people would be surprised by how much worse things can be in Britain — given that a lot of Poles of my acquaintance appear to think that getting rich in the U.K. is as easy as walking outside with a wheelbarrow and catching the banknotes that rain down from the sky.
Britain has had minimal economic growth for years. Poland has long been enjoying some of the highest economic growth in Europe. It even emerged from the pandemic better off than other European nations with, as Paweł Bukowski and Wojtek Paczos wrote for the LSE, “a relatively lax approach to economic lockdown and a bit of sheer luck”.
Institutions often seem to work better as well. I can generally visit a GP on the day I call. Britons often have to wait for more than a week. Maternal mortality is higher in the UK — and infant mortality is about the same, despite Britain being much richer overall. Actually, Polish life expectancy as whole is just a touch shorter than British life expectancy, despite the nation having a lot more smokers.
Polish kids have ranked higher on the PISA education rankings than British kids — ranking, indeed, the third highest in Europe in science and maths, and the fourth in reading comprehension. Poland is a more peaceful place than Britain, with murder and rape generally being rarer (granted, statistics in the latter case are famously difficult to trust). Terrorism, for reasons I leave to the reader, has been almost non-existent in Polish society.
Some Polish achievements are more difficult to quantify. In Britain, the 20th century was marked by a curious habit of ripping down beautiful buildings and constructing ugly ones. Poland, meanwhile, has been beautifully renovating and reconstructing many of its urban spaces, pursuing a philosophy of “preservation meets modernisation”. Warsaw and Kraków are famous enough, but travellers could also visit lovely towns and cities like Wrocław, Toruń and Gdańsk — or my own, Tarnowskie Góry.
It would be fantastically condescending, and dishonest, to suggest that everything is sunshine and lollipops in Polish life. Any Pole could tell you eloquently and knowledgeably about their struggles. You think an inflation rate of 11.1 per cent is bad? How about 17.9? Wages tend to be lower in Poland than in Western Europe, leading to high emigration. Seeing a GP is simple enough, but getting an operation is a right pain in the ass. Poles are bitterly divided on socio-cultural issues like abortion and the role of the Church.
Many people don’t see that decline is not always a fact of life
Nor is Britain failing in all respects. If that were the case we would not have so many Poles who want to live there. My intention is not just to big up Poland — fond as I am of doing that — or to thumb my nose at my homeland. It is to shake Britain by its national shoulders.
It is tempting to imagine that our economic, institutional and cultural conditions are as they are because, well, that’s just how things are. This is not always an instinct that should be resisted. The first premise of conservative philosophy is that individual and collective lives have limits. We can’t click our fingers and be rich, safe and cheerful. Many people, though, have an excess of gloomy acquiescence. They don’t see that decline is not always a fact of life — as natural as the changing colours of the leaves — but a process that is at least somewhat within our leaders’ control. That countries with less solid and deep political, cultural and economic foundations can equal and surpass British outcomes is proof enough of that.
It is understandable that Britons want to be richer than Poles, just as they want to be richer than Germans, Swedes, Norwegians and the French. Shock at the possibility of being overtaken by a bunch of Slavs, of all people, shows how much Britons have ignored not just their own decline but the accomplishments of others. Let’s do our best, going forwards, to succeed together.
INDIA IPPON DESU
Saturday, November 26, 2022
Monday, November 21, 2022
Sunday, November 20, 2022
Sunday, November 13, 2022
The Devils Hour : Amazon Prime Series
The Devil’s Hour review – proof that Peter Capaldi is the world’s most terrifying actor
That face! The grief it conveys! The ex-Doctor’s turn in this new supernatural crime drama is chilling – and joins a stunning performance from Jessica Raine as a harrowed mother
By Lucy Mangan in The Guardian
Fri 28 Oct 2022 15.00 BST
Last modified on Mon 31 Oct 2022 06.00 GMT
I do not damn with faint praise when I say that the back of Peter Capaldi’s head is the most frightening thing in the opening episode of The Devil’s Hour, Amazon Prime Video’s new spooky six-part drama by Tom Moran. I mean only to place on record the underacknowledged truth that Capaldi is the most frightening actor working today. The only reason a generation of children were not permanently traumatised by his years as Doctor Who is because they do not yet know enough of life. If you do, you see that all of it lives in Capaldi’s face and that most of it is suffering, grief and pain.
We see little of that haunted visage at first, though it is clear his character is the pivot around which the whole thing will swing. Our main concern is with Lucy (Jessica Raine), an overstretched social worker also dealing with an aged mother who has dementia, the end of her marriage to Mike (Phil Dunster) and an unreachable, heartbreaking puzzle of a child, Isaac (Benjamin Chivers). He is emotionless, suggestible, vulnerable and given to seeing and hearing from figures invisible to others. Lucy wakes up every night at 3.33am exactly, wrenched from awful visions as she sleeps. Are they ordinary nightmares caused by current stresses and strains, or the results of buried trauma – as other momentary hallucinations and apparent flashbacks suggest? Or are they, as Capaldi’s face implies, something worse?
Meanwhile, DI Ravi Dhillon (Nikesh Patel) – a suave young man except when he is vomiting over bloody crime scenes – is investigating a bloody murder. The perpetrator is linked to the disappearance of a young boy years ago and, by the end of the first episode, to Lucy too.
Just about every horror trope you could ask for is here, piling up like poisoned candy in a child’s Halloween bucket. There is the Omen-meets-Sixth Sense character of Isaac. There are flickering figures half-glimpsed and gone. Images of bloodstained soft toys and nightgown hems and a shotgun under a chin. There are shadows everywhere.
And then there’s Capaldi, handcuffed to a table in a darkened interview room, talking gnomically to Lucy about everything that has unfolded for them, to which we are not yet entirely privy. “What’s the worst thing you’ve ever experienced?” he asks her – an unsettling enough question anyway, that he is asking with That Face, which should cause all the skin to fly off her body. “All of this!” replies Lucy “You!”
“I’m sorry, Lucy,” he replies sorrowfully. “You’ve suffered far worse than me. You just don’t know it yet.” Dum dum DAAAAAH!
It’s great fun. Its many, many pieces – which if they gel will make it a great show in all sorts of other ways – are currently held together by Raine’s absolutely storming performance. She is fantastic as the mother consumed by love and worry, the courageous professional – there is a well-wrought domestic violence storyline that ratchets up the tension – and the possible victim who is afraid she might be losing her grip on sanity (although whether she’s a victim of a past, present or future evil we cannot be sure). The supernatural element is less important so far than the acute psychological horror her performance evokes. It’s brilliantly done. If the rest of the series matches up to her, we are in for a truly terrifying treat
By Lucy Mangan in The Guardian
Fri 28 Oct 2022 15.00 BST
Last modified on Mon 31 Oct 2022 06.00 GMT
I do not damn with faint praise when I say that the back of Peter Capaldi’s head is the most frightening thing in the opening episode of The Devil’s Hour, Amazon Prime Video’s new spooky six-part drama by Tom Moran. I mean only to place on record the underacknowledged truth that Capaldi is the most frightening actor working today. The only reason a generation of children were not permanently traumatised by his years as Doctor Who is because they do not yet know enough of life. If you do, you see that all of it lives in Capaldi’s face and that most of it is suffering, grief and pain.
We see little of that haunted visage at first, though it is clear his character is the pivot around which the whole thing will swing. Our main concern is with Lucy (Jessica Raine), an overstretched social worker also dealing with an aged mother who has dementia, the end of her marriage to Mike (Phil Dunster) and an unreachable, heartbreaking puzzle of a child, Isaac (Benjamin Chivers). He is emotionless, suggestible, vulnerable and given to seeing and hearing from figures invisible to others. Lucy wakes up every night at 3.33am exactly, wrenched from awful visions as she sleeps. Are they ordinary nightmares caused by current stresses and strains, or the results of buried trauma – as other momentary hallucinations and apparent flashbacks suggest? Or are they, as Capaldi’s face implies, something worse?
Meanwhile, DI Ravi Dhillon (Nikesh Patel) – a suave young man except when he is vomiting over bloody crime scenes – is investigating a bloody murder. The perpetrator is linked to the disappearance of a young boy years ago and, by the end of the first episode, to Lucy too.
Just about every horror trope you could ask for is here, piling up like poisoned candy in a child’s Halloween bucket. There is the Omen-meets-Sixth Sense character of Isaac. There are flickering figures half-glimpsed and gone. Images of bloodstained soft toys and nightgown hems and a shotgun under a chin. There are shadows everywhere.
And then there’s Capaldi, handcuffed to a table in a darkened interview room, talking gnomically to Lucy about everything that has unfolded for them, to which we are not yet entirely privy. “What’s the worst thing you’ve ever experienced?” he asks her – an unsettling enough question anyway, that he is asking with That Face, which should cause all the skin to fly off her body. “All of this!” replies Lucy “You!”
“I’m sorry, Lucy,” he replies sorrowfully. “You’ve suffered far worse than me. You just don’t know it yet.” Dum dum DAAAAAH!
It’s great fun. Its many, many pieces – which if they gel will make it a great show in all sorts of other ways – are currently held together by Raine’s absolutely storming performance. She is fantastic as the mother consumed by love and worry, the courageous professional – there is a well-wrought domestic violence storyline that ratchets up the tension – and the possible victim who is afraid she might be losing her grip on sanity (although whether she’s a victim of a past, present or future evil we cannot be sure). The supernatural element is less important so far than the acute psychological horror her performance evokes. It’s brilliantly done. If the rest of the series matches up to her, we are in for a truly terrifying treat
Monday, November 07, 2022
Objectivism : The proper alternative thought
You must attach clear specific meaning to words i.e be able to identify their referents in reality ..... All philosophical con games count on your using words as vague approximations. You must not take catchphrase - or any abstract statement - as if it were approximate. Take it literally. Dont translate it, dont glamorize it, dont make the mistake of thinking, as many people do "Oh nobody could possibly mean this ! and then proceed to endow it with some whitewashed meaning of your own.Take it straight for what it does say and mean.
Instead of dismissing the catch phrase, accept it as true, for a few brief moments. Tell yourself, in effect "If I were to accept it as true , what would follow ?" This is the bet way of unmasking any philosophical fraud...... To take ideas seriously means that you intend to live by, to practice, any idea you accept as true. Philosophy provides man with a comprehensive view of life. Inorder to evaluate it properly ask yourself what a given theory of accepted , would do to a human life , starting with your own. (Rand, 1982 . P.16)
Instead of dismissing the catch phrase, accept it as true, for a few brief moments. Tell yourself, in effect "If I were to accept it as true , what would follow ?" This is the bet way of unmasking any philosophical fraud...... To take ideas seriously means that you intend to live by, to practice, any idea you accept as true. Philosophy provides man with a comprehensive view of life. Inorder to evaluate it properly ask yourself what a given theory of accepted , would do to a human life , starting with your own. (Rand, 1982 . P.16)
New York Job Transparency Law
By Jennifer Liu in CNBC
Starting Tuesday, businesses hiring workers in NYC are required to list the minimum and maximum salary range for a job on any printed or online posting.
Advocates say it's long overdue that companies become more transparent with their pay practices. Workers hope it will give them more leverage to discuss and negotiate their pay. And the law's main aim is to help close the wage gap.
But as numbers started rolling out this week, New Yorkers began calling out some companies for posting extremely broad ranges: $50,000 to $145,000 for a reporter opening, $125,800 to $211,300 for a senior technical writer, $106,000 to $241,000 for a general counsel position.
In one case, Citigroup listed several jobs with a range of $0 to $2 million, Gothamist reports.
A Citigroup representative told Gothamist it has since updated its ranges, and that the shockingly wide range was an error caused by a computer glitch.
Still, a revised entry for a post for a client services officer listed the salary range between $61,710 and $155,290 as of Wednesday, before it was taken down. A Citi respresentative tells CNBC Make It the company "is proactively reviewing all job postings to ensure the correct salary range is listed" and has "temporarily unposted select job postings and will repost when the salary range is confirmed."
The posting gaffe highlights the numerous ways companies can still find ways around complying with the new salary transparency law, whether intended or not.
Employers test what it means to list a 'good faith' range
The law specifically states businesses hiring in New York City must post a "good faith salary range" for every job, promotion or transfer opportunity.
A "good faith" range is one the employer "honestly believes at the time they are listing the job advertisement that they are willing to pay the successful applicant(s)," says the New York City Commission on Human Rights, which enforces the law.
Businesses may need to offer a wide range if they're open to people of varying levels of experience and to be competitive in a tight hiring market, says Domenique Camacho Moran, a New York-based attorney with Farrell Fritz.
A common strategy for business is to find a target budget for an open role and give a range 20% below and above that point, adds Tony Guadagni, senior principal of research at consulting firm Gartner.
But a $100,000-plus range could be an error or a display that "what an organization is willing to pay for a job could be quite variable," Guadagni says.
"It's hard to imagine that the two agencies that investigate possible violations of the new law — the City's Commission on Human Rights and the Law Enforcement Bureau — would consider a posting that included a minimum salary of $30,000 and a maximum salary of $300,000 a good faith representation of the salary range," he adds. But it's up to investigators to show a salary range isn't in good faith — not on companies to prove it is.
A $90,000 salary range, like the one Citi listed on the amended post that was later taken down, is still "extremely broad" and "does raise the question whether this is a good faith effort," says Beverly Neufeld, president of PowHer New York and a proponent of new law.
Similarly wide ranges could reflect poorly on the business's respect for workers, Neufeld says: "It says a lot about companies when they do use potential loopholes. The spirit of the law is to create transparency, and any company having large salary ranges like that doesn't create any transparency."
Avoiding job posts altogether
Per the law, employers must post the minimum and maximum salary on offer for a particular role when it's listed on an internal job board, as well as external sites like LinkedIn, Glassdoor, Indeed and other job search platforms. It also applies to any written description of an open job that's printed on a flyer, distributed at a job fair or submitted to newspaper classifieds.
In response, some businesses may stop advertising jobs outright and instead rely on other means of recruiting and hiring.
Some companies may opt to take down job postings and encourage applicants to submit their resume to a general email address, The Wall Street Journal reports. Others might tap employee search firms to find candidates on their behalf, rather than advertise an opening and have to post the pay range themselves.
Employers could also avoid compliance if they hire remote workers but say the job can't be done from NYC. That happened in Colorado, where a similar law went into effect in January 2021. The state's labor department sent warning to hundreds of employers to comply with the law and, as of July, had fined three businesses for violation.
Camacho Moran rejects the idea that businesses are deliberately trying to skirt around compliance, as doing so and getting caught could result in lawsuits that'll cost an employer time and money.
In NYC, if a company isn't complying with the new law, job seekers and workers can file complaints or leave an anonymous tip with the city's Commission on Human Rights. Businesses will have 30 days to fix the violation, otherwise they could face civil penalties of up to $250,000.
Despite the law's uneven application so far, Neufeld is optimistic businesses will continue to firm up their pay ranges with the help of public account and legal enforcement.
The aftermath of the law could prove beneficial for employers and employees alike. Job seekers are overwhelmingly in favor of salary transparency, and more than half say they wouldn't apply to a job or company if the pay isn't listed, according to Monster.com data. Listing pay could end up being a good recruiting tool.
"It'll take some time for people to comply," Neufeld says, but "in time, companies are going to come around to see this as a benefit, not as a punishment."
Starting Tuesday, businesses hiring workers in NYC are required to list the minimum and maximum salary range for a job on any printed or online posting.
Advocates say it's long overdue that companies become more transparent with their pay practices. Workers hope it will give them more leverage to discuss and negotiate their pay. And the law's main aim is to help close the wage gap.
But as numbers started rolling out this week, New Yorkers began calling out some companies for posting extremely broad ranges: $50,000 to $145,000 for a reporter opening, $125,800 to $211,300 for a senior technical writer, $106,000 to $241,000 for a general counsel position.
In one case, Citigroup listed several jobs with a range of $0 to $2 million, Gothamist reports.
A Citigroup representative told Gothamist it has since updated its ranges, and that the shockingly wide range was an error caused by a computer glitch.
Still, a revised entry for a post for a client services officer listed the salary range between $61,710 and $155,290 as of Wednesday, before it was taken down. A Citi respresentative tells CNBC Make It the company "is proactively reviewing all job postings to ensure the correct salary range is listed" and has "temporarily unposted select job postings and will repost when the salary range is confirmed."
The posting gaffe highlights the numerous ways companies can still find ways around complying with the new salary transparency law, whether intended or not.
Employers test what it means to list a 'good faith' range
The law specifically states businesses hiring in New York City must post a "good faith salary range" for every job, promotion or transfer opportunity.
A "good faith" range is one the employer "honestly believes at the time they are listing the job advertisement that they are willing to pay the successful applicant(s)," says the New York City Commission on Human Rights, which enforces the law.
Businesses may need to offer a wide range if they're open to people of varying levels of experience and to be competitive in a tight hiring market, says Domenique Camacho Moran, a New York-based attorney with Farrell Fritz.
A common strategy for business is to find a target budget for an open role and give a range 20% below and above that point, adds Tony Guadagni, senior principal of research at consulting firm Gartner.
But a $100,000-plus range could be an error or a display that "what an organization is willing to pay for a job could be quite variable," Guadagni says.
"It's hard to imagine that the two agencies that investigate possible violations of the new law — the City's Commission on Human Rights and the Law Enforcement Bureau — would consider a posting that included a minimum salary of $30,000 and a maximum salary of $300,000 a good faith representation of the salary range," he adds. But it's up to investigators to show a salary range isn't in good faith — not on companies to prove it is.
A $90,000 salary range, like the one Citi listed on the amended post that was later taken down, is still "extremely broad" and "does raise the question whether this is a good faith effort," says Beverly Neufeld, president of PowHer New York and a proponent of new law.
Similarly wide ranges could reflect poorly on the business's respect for workers, Neufeld says: "It says a lot about companies when they do use potential loopholes. The spirit of the law is to create transparency, and any company having large salary ranges like that doesn't create any transparency."
Avoiding job posts altogether
Per the law, employers must post the minimum and maximum salary on offer for a particular role when it's listed on an internal job board, as well as external sites like LinkedIn, Glassdoor, Indeed and other job search platforms. It also applies to any written description of an open job that's printed on a flyer, distributed at a job fair or submitted to newspaper classifieds.
In response, some businesses may stop advertising jobs outright and instead rely on other means of recruiting and hiring.
Some companies may opt to take down job postings and encourage applicants to submit their resume to a general email address, The Wall Street Journal reports. Others might tap employee search firms to find candidates on their behalf, rather than advertise an opening and have to post the pay range themselves.
Employers could also avoid compliance if they hire remote workers but say the job can't be done from NYC. That happened in Colorado, where a similar law went into effect in January 2021. The state's labor department sent warning to hundreds of employers to comply with the law and, as of July, had fined three businesses for violation.
Camacho Moran rejects the idea that businesses are deliberately trying to skirt around compliance, as doing so and getting caught could result in lawsuits that'll cost an employer time and money.
In NYC, if a company isn't complying with the new law, job seekers and workers can file complaints or leave an anonymous tip with the city's Commission on Human Rights. Businesses will have 30 days to fix the violation, otherwise they could face civil penalties of up to $250,000.
Despite the law's uneven application so far, Neufeld is optimistic businesses will continue to firm up their pay ranges with the help of public account and legal enforcement.
The aftermath of the law could prove beneficial for employers and employees alike. Job seekers are overwhelmingly in favor of salary transparency, and more than half say they wouldn't apply to a job or company if the pay isn't listed, according to Monster.com data. Listing pay could end up being a good recruiting tool.
"It'll take some time for people to comply," Neufeld says, but "in time, companies are going to come around to see this as a benefit, not as a punishment."
Thursday, November 03, 2022
Tuesday, November 01, 2022
The Liz Truss Tragedy
The Liz Truss Tragedy
The former British prime minister’s downfall holds important lessons for growth-minded policymakers in the United States, Europe, and elsewhere. While her diagnosis of the country’s economic problem was spot on, she fatally mismanaged both the politics and the messaging of her policy response.
STANFORD – Liz Truss’s stint as British prime minister is over, but she was right that the United Kingdom needs growth. Her downfall is tragic, because growth is the only path out of the country’s economic dilemma.
The UK is surprisingly poor. Its GDP per capita is just $43,000, compared to $60,000 in the United States. The average British home is one-third the size of the average US home. Worse, the country’s economy is not growing. Its GDP per capita is lower than it was in 2007. Productivity – the underlying source of economic growth – has been flat for over a decade.
The UK desperately needs supply-side reforms. Surging inflation tells us that demand-side stimulus is a spent force.
If anything, Truss’s proposed reforms were too mild. A 40% top marginal income tax rate (down from 45%) would not make the UK a low-tax free-market Shangri-La, especially considering that it would also still have a 20% value-added tax (VAT), national insurance taxes, property taxes, corporate taxes, and more. Recall that US President Ronald Reagan and Speaker of the House Tip O’Neill (a Democrat) cut the top federal marginal rate from 70% to 28%.
Truss also proposed free-market “investment zones.” But if one accepts that pro-investment tax and planning conditions are good in blighted areas, why not the whole country?
The UK is at a post-Brexit crossroads. Will it become a free-trade, entrepreneurial, financial hub – a “Singapore on Thames”? Or does Brexit mean protecting and subsidizing inefficient businesses and places even more than the European Union allows?
Unfortunately, we now know the answer. Truss’s critics have no counterproposal that has any chance of reigniting growth. The stage is set for further high-tax, high-subsidy, over-regulated decline.
As sound as Truss’s plans were in economic-policy terms, her government’s handling of the messaging and the politics was spectacularly inept. That is an important lesson for those of us who want to see more growth-oriented policies in the US, Canada, and Europe.
One obvious mistake was Truss’s announcement of a £60 billion ($68 billion) blowout to hold down gas prices. That is not a good way to launch a pro-growth revolution.
She then moved on to “tax cuts,” predictably raising the ire of the high-tax intelligentsia. In announcing the policy, neither Truss nor her chancellor of the Exchequer, Kwasi Kwarteng, explained the point of lowering tax rates. For example, Kwarteng sold tax cuts as “putting money back into people’s pockets.” But such Keynesian stimulus is the last thing the country needs amid historic inflation. Kwarteng should have explained that lower tax rates improve the incentives to work, save, invest, start a business, or, in the case of corporate taxes, move a business to the UK or keep it there. (Ideally, one cuts tax rates but broadens the base, maintaining revenues until spending falls.)
If you can’t explain that clearly and consistently, you either don’t understand or believe your own message, or you think voters are too dumb to comprehend it. Either way, your revolution will fail. In the face of predictable, implacable hostility from the entrenched left-wing media and economic commentariat, a free-market revolution needs great communicators.
By starting with taxes and subsidies, Truss and Kwarteng guaranteed that nobody would pay attention to the most important parts of the plan: the essential pro-growth regulatory reforms that they had described in the 2012 book Britannia Unchained. Britain’s housing restrictions, as in the US, lead to absurdly high prices, which stymies many businesses and the workers they might hire. The situation is especially harmful to less-advantaged people who cannot afford to live near high-productivity jobs. Truss had also planned to bring back North Sea oil production and lift the UK’s ban on fracking. These are sensible responses to a global energy crisis.
The lesson is that growth-minded policymakers should start with microeconomic reforms. Everyone can see that over-regulation and restrictions on housing and energy production are hobbling supply. Even climate-change activists are noticing that it is too difficult to get permits for windmills and transmission lines. Everyone can see that schools are awful and getting worse. Workers as well as business owners and managers can see that labor regulations are straitjacketing their workplaces. People can see in everyday experience how social-program disincentives lead some people not to work at all.
Patiently explaining these problems to voters can also make for good politics. We all long for simple mind-the-store competence in our governments. Fixing dysfunction is a visible achievement that works right away, with no short-run cost.
Truss’s handling of the politics was even worse than her marketing. Margaret Thatcher and Reagan faced the same withering scorn from the chattering classes, and they had to endure years of hardship before their reforms took root. But they held firm.
Truss’s critics seized on UK bond-market hiccups, though these were tiny compared to those of the 1980s. They also were largely attributable to the Bank of England raising rates, and to a pension risk regulation fiasco. [Previous posts ending here.] Nonetheless, Truss quickly gave in. By starting with an energy blowout to placate the left, she already encouraged her opponents to go in for the kill. When a shark is on your trail, you don’t offer it a foot and then assume that you’ll both get along. When an iron lady was needed, Truss proved to be made of straw.
The US, too, is a high-tax, over-regulated, over-subsidized, high-debt, slow-growth economy. For us, too, supply-side reforms are the only way out. Yet many of our conservative voices now pander to voters by advocating big-government big-tax nationalism, protectionism, subsidies, and crony capitalism, albeit directed in different directions than the left.
For those of us who still understand that the only real solution lies in economic freedom and small, competent government, Truss’s downfall offers important lessons. We must heed them so that we don’t blow our chance if we get one.
John H. Cochrane is a senior fellow of the Hoover Institution and an adjunct scholar at the CATO Institute.
Jon Hartley is a PhD student in economics at Stanford University and a research fellow at the Foundation for Research on Equal Opportunity.
The former British prime minister’s downfall holds important lessons for growth-minded policymakers in the United States, Europe, and elsewhere. While her diagnosis of the country’s economic problem was spot on, she fatally mismanaged both the politics and the messaging of her policy response.
STANFORD – Liz Truss’s stint as British prime minister is over, but she was right that the United Kingdom needs growth. Her downfall is tragic, because growth is the only path out of the country’s economic dilemma.
The UK is surprisingly poor. Its GDP per capita is just $43,000, compared to $60,000 in the United States. The average British home is one-third the size of the average US home. Worse, the country’s economy is not growing. Its GDP per capita is lower than it was in 2007. Productivity – the underlying source of economic growth – has been flat for over a decade.
The UK desperately needs supply-side reforms. Surging inflation tells us that demand-side stimulus is a spent force.
If anything, Truss’s proposed reforms were too mild. A 40% top marginal income tax rate (down from 45%) would not make the UK a low-tax free-market Shangri-La, especially considering that it would also still have a 20% value-added tax (VAT), national insurance taxes, property taxes, corporate taxes, and more. Recall that US President Ronald Reagan and Speaker of the House Tip O’Neill (a Democrat) cut the top federal marginal rate from 70% to 28%.
Truss also proposed free-market “investment zones.” But if one accepts that pro-investment tax and planning conditions are good in blighted areas, why not the whole country?
The UK is at a post-Brexit crossroads. Will it become a free-trade, entrepreneurial, financial hub – a “Singapore on Thames”? Or does Brexit mean protecting and subsidizing inefficient businesses and places even more than the European Union allows?
Unfortunately, we now know the answer. Truss’s critics have no counterproposal that has any chance of reigniting growth. The stage is set for further high-tax, high-subsidy, over-regulated decline.
As sound as Truss’s plans were in economic-policy terms, her government’s handling of the messaging and the politics was spectacularly inept. That is an important lesson for those of us who want to see more growth-oriented policies in the US, Canada, and Europe.
One obvious mistake was Truss’s announcement of a £60 billion ($68 billion) blowout to hold down gas prices. That is not a good way to launch a pro-growth revolution.
She then moved on to “tax cuts,” predictably raising the ire of the high-tax intelligentsia. In announcing the policy, neither Truss nor her chancellor of the Exchequer, Kwasi Kwarteng, explained the point of lowering tax rates. For example, Kwarteng sold tax cuts as “putting money back into people’s pockets.” But such Keynesian stimulus is the last thing the country needs amid historic inflation. Kwarteng should have explained that lower tax rates improve the incentives to work, save, invest, start a business, or, in the case of corporate taxes, move a business to the UK or keep it there. (Ideally, one cuts tax rates but broadens the base, maintaining revenues until spending falls.)
If you can’t explain that clearly and consistently, you either don’t understand or believe your own message, or you think voters are too dumb to comprehend it. Either way, your revolution will fail. In the face of predictable, implacable hostility from the entrenched left-wing media and economic commentariat, a free-market revolution needs great communicators.
By starting with taxes and subsidies, Truss and Kwarteng guaranteed that nobody would pay attention to the most important parts of the plan: the essential pro-growth regulatory reforms that they had described in the 2012 book Britannia Unchained. Britain’s housing restrictions, as in the US, lead to absurdly high prices, which stymies many businesses and the workers they might hire. The situation is especially harmful to less-advantaged people who cannot afford to live near high-productivity jobs. Truss had also planned to bring back North Sea oil production and lift the UK’s ban on fracking. These are sensible responses to a global energy crisis.
The lesson is that growth-minded policymakers should start with microeconomic reforms. Everyone can see that over-regulation and restrictions on housing and energy production are hobbling supply. Even climate-change activists are noticing that it is too difficult to get permits for windmills and transmission lines. Everyone can see that schools are awful and getting worse. Workers as well as business owners and managers can see that labor regulations are straitjacketing their workplaces. People can see in everyday experience how social-program disincentives lead some people not to work at all.
Patiently explaining these problems to voters can also make for good politics. We all long for simple mind-the-store competence in our governments. Fixing dysfunction is a visible achievement that works right away, with no short-run cost.
Truss’s handling of the politics was even worse than her marketing. Margaret Thatcher and Reagan faced the same withering scorn from the chattering classes, and they had to endure years of hardship before their reforms took root. But they held firm.
Truss’s critics seized on UK bond-market hiccups, though these were tiny compared to those of the 1980s. They also were largely attributable to the Bank of England raising rates, and to a pension risk regulation fiasco. [Previous posts ending here.] Nonetheless, Truss quickly gave in. By starting with an energy blowout to placate the left, she already encouraged her opponents to go in for the kill. When a shark is on your trail, you don’t offer it a foot and then assume that you’ll both get along. When an iron lady was needed, Truss proved to be made of straw.
The US, too, is a high-tax, over-regulated, over-subsidized, high-debt, slow-growth economy. For us, too, supply-side reforms are the only way out. Yet many of our conservative voices now pander to voters by advocating big-government big-tax nationalism, protectionism, subsidies, and crony capitalism, albeit directed in different directions than the left.
For those of us who still understand that the only real solution lies in economic freedom and small, competent government, Truss’s downfall offers important lessons. We must heed them so that we don’t blow our chance if we get one.
John H. Cochrane is a senior fellow of the Hoover Institution and an adjunct scholar at the CATO Institute.
Jon Hartley is a PhD student in economics at Stanford University and a research fellow at the Foundation for Research on Equal Opportunity.
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