Month: October 2022

Twisted narrative

Turmoil is an opportunity for the ambitious man, for the dishonest and the foolish man. They convince listeners of an instant false narrative, as we have seen in the swirling waters following the mini-budget.

Even amongst Conservative MPs a tale has gone round that the failure of Liz Truss’s mini-budget disproved the principle of low taxes, or of the ideal of economic growth and that somehow it proved we must have high taxes and high spending. It is an instant false narrative, and shocking that it should come from those who call themselves Conservatives.

We were all there though: we saw what happened and in reaction to what. The market reaction to lower taxes was a good one – shares rose. The shock was in the bond markets and the currency markets, when it appeared that spending was not to be curbed at the same time, and when ‘experts’ were side-lined. This is the very opposite of the narrative pressed by advocates of high taxes.

This needs saying, because the advocates of tax-and-spend were out on the airwaves immediately, pushing their line in the face of all demonstrable facts.  To the average voter it is an attractive idea, bypassing the complexity of truth:  Truss supported low taxes and cut taxes – there was an immediate market crash and hike in interest rates; therefore the one led from the other. It is no more accurate than to say that I was ill after a blow-out meal that included beef and cabbage, preceded by mussels which had gone off – so beef and cabbage are dangerous, ignoring the moules frites. Indeed, concentrating on the beef will encourage the consumption of curdled mussels, which would be deadly.

The beneficiary of this dishonest narrative will be the Labour Party: the very party whole pledges make Liz Truss’s misstep seem the path of virtue – unfunded spending even beyond their crippling taxes, and money printed with abandon.

The specific point about the mini-budget was that it contained new spending without announcing cuts, which made the government spending unaffordable. The price demanded by the market to lend shot up, Moody’s became moody, fears began that the Treasury would print money, collapsing the value of the pound, Weimar-style – and if Truss did not, Starmer would have no conscience about printing fake money. Is it any wonder the market went into meltdown?  Nothing about it was about low taxes as such.  The reducing in tax levels was the one thing the market liked.

(The bank of England has been blamed too: some economists have accused the Bank of misconduct in the matter, when the ramped up interest rates and this was enough on its own to spook the market – a high cost of borrowing collapses the profit margin in new ventures and so deters investment. I will leave economists to chide the Bank. It looks bizarre to increase interest rates as the economy teeters on recession.  Inflation at present is not caused by an overheating economy- we are far from over heating – but by the cost of raw materials and components resulting from the Lockdown and by the cost of energy during the Ukrainian War.

Talk of the markets governing policy looks uncomfortably like the overthrow of democracy by a trapezocracy – but if the Government will get itself into unsustainable debt, then it is dependent on the banks, and if (as for the last half a century it has been, the state becomes so vast as to create an inescapable gravitational well around itself that the entire economy is swirling around the rim of the maelstrom, then we are all dependent on those markets, and democracy can go hang. It is not just liberty which depends on shrinking the state, but the very being of democracy.)

This matters, because the “accepted version of events” will shape the political debate for years to come, and those who get in first get to shape it. The proponents of high-tax-high-spending-strict-control have got their version round the world before the truth has got its boots on. This is a danger, and a lesson to those who should have been making the argument for liberty and prudence.

See also

Books

Inability in politicians

Ability in a politician, his, or her, worthiness to fulfil the position, is hard to judge and more apparent when the burdens of office have borne upon them. Speech is easy: action is hard. Only the latter is a reliable test, by which time it may be too late.

An appropriate motto for many a former Prime Minister would be capax imperii, nisi imperasset.

In a dictatorship or oligarchy, power is gained through force or guile or corrupt dealing, and these may be the appropriate qualities for governing. In a democracy, power is gained through creating popularity, in a form of playacting (which is by very definition hypocrisy), and this is of no relevance in actually ruling. The voter then who is serious about his choice has a counterintuitive balancing act, to choose between two or three candidates who, by the very nature of the system which selected them, are probably unsuitable.

Hobbes makes the crucial distinction which the popular electoral system fails to make:

WORTHINESSE, is a thing different from the worth, or value of a man; and also from his merit, or desert; and consisteth in a particular power, or ability for that, whereof he is said to be worthy: which particular ability, is usually named FITNESSE, or Aptitude.

For he is Worthiest to be a Commander, to be a Judge, or to have any other charge, that is best fitted, with the qualities required to the well discharging of it; and Worthiest of Riches, that has the qualities most requisite for the well using of them: any of which qualities being absent, one may neverthelesse be a Worthy man, and valuable for some thing else. Again, a man may be Worthy of Riches, Office, and Employment, that neverthelesse, can plead no right to have it before another; and therefore cannot be said to merit or deserve it. For Merit, praesupposeth a right, and that the thing deserved is due by promise: Of which I shall say more hereafter, when I shall speak of Contracts.

The political system of popular acclamation encourages the rewarding of popularity, not ability, and then destroys that popularity with the demonstration of inability. It is a calamitous application of the Peter Principle.

Looking at myself, I am well aware of my own inabilities in some areas, and though I am lauded in some endeavours, I would be hopeless if entrusted with others. For a politician it can be no different. Ability must have so many aspects, it is surely impossible that one man should have them all. This makes Cabinet government vital (although only Grenville has been credited with putting together a ‘Ministry of All the Talents’). David Cameron to his great credit placed senior ministers in long-term positions, to learn and master the job. (Unspoken, it also tames the civil servants, who may otherwise ignore the politicians as another will be along in a few minutes.)

One might say, in the poplar context:

The Value, or WORTH of a man, is as of all other things, his Price; that is to say, so much as would be given for the use of his Power: and therefore is not absolute; but a thing dependant on the need and judgement of another. An able conductor of Souldiers, is of great Price in time of War present, or imminent; but in Peace not so. A learned and uncorrupt Judge, is much Worth in time of Peace; but not so much in War. And as in other things, so in men, not the seller, but the buyer determines the Price. For let a man (as most men do,) rate themselves as the highest Value they can; yet their true Value is no more than it is esteemed by others.

The manifestation of the Value we set on one another, is that which is commonly called Honouring, and Dishonouring. To Value a man at a high rate, is to Honour him; at a low rate, is to Dishonour him. But high, and low, in this case, is to be understood by comparison to the rate that each man setteth on himselfe.

Debate as I may, it is out of my hands. It is no wonder that the voters are disquieted, disenfranchised in the choice of the King’s First Minister (as even the King himself is disenfranchised in the choice of his own minister). Were the system more clearly that of a Cabinet government, the Prime Minister in Bagehot’s terms ‘first amongst equals’ then maybe all this hurley-burley would look less like an élite coup. One wonders how the Australians cope, when this sort of thing happens all the time.

One must only hope that the Members of Parliament who are making the decisions, flawed as they are, can consider the right measure of ‘worthinesse’ to the actual task to be entrusted, and that they know their colleagues’ qualities, which we on the other side of the screen never can. One may hope too that their chosen leader will have the humility to trust colleagues, flawed though they are to carry the burden no mortal man can carry alone.

See also

Books

What happened; what happens

He seems a sensible chap, and a committed tax-cutter. He was given the worst job in government and chose to stick with it, and now has the most thankless. Jeremy Hunt has prayers riding on his shoulders.

Ours is an age of instant myths. It is commonly understood that the financial markets fell when tax cuts were announced, but that is untrue: the stock market rose. Then however the bond markets factored in that no spending cuts were announced, that the OBR had been muzzled, and interest rates were high, leaving government finance unaffordable – that was the crash.

A constant theme of Conservative campaigning is that the nation must live within its means – which is a euphemism: they mean the government must leave within its means. (‘The nation’ is us, poor mugs, our earnings hollowed out by taxes from before and behind, and we know we have to live within our means or the family starves.) Yet as soon as a PM gets into office, the gold before their eyes sends sober pronouncement out of the window and cash is scattered like a drunk man with a stolen wallet. This last fortnight has been a shock back to reality in Downing Street.

Not in the country though: here unreality is boosted. The myth of the tax-cut crash has been born, and careful management is needed to convince voters that their pockets need not be fleeced. At the moment the topsy-turvy understanding has spread that low taxes make you poorer.

The market rose though, for a while. Tax cuts are indeed a necessity for growth, and growth is necessary to get out of the mess caused by the lockdown and deepened by the Ukrainian War.

Deep cuts are needed. Government spending cannot be on an upward ratchet. Liz Truss would not admit it:  she thought growth would replace the loss from the tax cuts; and it will eventually, but the high interest rates and higher debt will swallow it first. The collective minds of the bond markets were right: government borrowing is unaffordable and so the debt must come down – not just the deficit month by month but the capital amount of debt. That needs such deep cuts that the deficit is eliminated.

A first discipline should be accepted: capital sales go to capital repayment. When Channel 4 is sold, those proceeds cannot just disappear into the Treasury to be splurged on a pet project, and when redundant public land is sold, likewise, to repay national debt, and reduce the beggaring interest payments.

Every government promises to ‘cut waste’ and efforts are petty, possibly because of the way budgets are worded. More granular examination is required. There is political capital in spending on ‘health’ and on ‘defence’, but how much actual goes on healthcare or soldiery?  When over a billion pounds is sent to a few local authorities to do research on ‘health inequalities’, that is accounted as health spending, but it does no good, beyond justifying a budget.

It is not enough to set a budget and throw money without looking at every item. It is better for billions to be cut from a nominal health budget or a nominal defence budget if the cuts are to waste and the actual, effective spending remains. Let MPs then earn their keep by cross-questioning all this spending and deleting the nonsense, the unnecessary and the postponable.

Liz Truss would not admit it, but Jeremy Hunt has done.  The word “cuts” is toxic in political debate according to television journalists. It should not be. If spending has gone too high, it can come down, and should do. The growth agenda must continue.

See also

Illogical crisis

I have been stunned. The right decisions were made, doing what the public demanded, and it is suddenly the worst, most unpopular thing ever. Deeper issues are behind this.

The fortnight has calmed down a bit, the markets are up, but the mocking continues. What did Liz Truss do wrong? That would take some unpicking.

Plenty are out to get her, and this time not just Keir Kneeler – picking a government only of those who supporter her bid for leadership and casting out able, experienced ministers would always cause rebellion from her own side – throwing out a whole establishment has been the end of many a ruler, as the shades of half a dozen mediaeval kings could tell, and the dynamics of the House of Commons are like a mediaeval court.

Then there are the establishment experts, who really needed to be cleared out, but the market was spooked, and that was a deathly blow.

The markets have been recovering. The pound is up a bit – Europe is still crashing, as you expect, but British viewers will not see that – we only look at our own. This is no time for faltering – Liz must hurry to achieve a transformation before the looming General Election.

One would have thought, logically, that all would realise that taxes are far too high, stifling the growth that has been trying to reassert itself since we were released from lockdown. The spending however, the excess spending, on a relentless ratchet – too many are sucking at the teats of the Treasury to let go easily, and they know, like any baby, that the more they suck, the more milk is produced. Spending must come down, dramatically; the budget deficit must be slashed, ideally to zero. Let those who live of the taxpayers’ largesse start complaining about their cost of living crisis, but let those of us who work for a living to create value have the money we have earned.

Then again, as taxes are reduced, the money is swallowed up in inflation and mortgage interest.  The average household will not make a distinction between money lost to tax and money lost to price rises and interest payments – it is all money taken out of their pocket. Then there is a contradiction: instruct the Bank of England to stop hiking mortgage rates, and the market gets spooked again, but leave them unsupervised and th rates shoot up.  I always thought that interest rates were increased to tackle inflation because this stops high spending  and so the demand in supply-and-demand, but now there is not enough spending, and the inflation is caused by energy prices and high taxes. Is the Bank so one-dimensional? Possibly.

Cut taxes, and re-educate the Bank of England if you can, but cut taxes or we really will crash

It is almost as if there were a conspiracy. Conspiracies are usually nonsense, but here you wonder: the high-tax low-growth economy is unsustainable, but plenty have come to expect and to rely on it. If the teats run dry, they have a great deal to lose – they might have to get proper jobs for a start. There is too much self-interest in all this.

It appears that Liz Trus was right: it is not just a question of adjusting rates and spending, but of breaking the ratchet, the system of baked-in decline and recasting the government machine into something more (what’s the word?  Ah yes -) Conservative.

Also, taxes are not all that matter – the 2019 manifesto is still there waiting to be honoured.  It is a good manifesto apart for a couple of really bad points on social and housing policy – so get that done and let the nation see it is being done.  There is little time, so speed up.  Cast out the Blair-age laws against freedom; sack the wokery and outlaw their practices from the state, making Starmer a clear danger as he threatens the opposite. Drive back the boats and cancel the abused right of asylum. Aye, and cut taxes again and again.

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Books

Beauty was reclaimed

Given up to ugly, concrete as the inevitable future of modernity, suddenly beauty was reclaimed in 1984. There is a genuine concept of beauty, which Roger Scruton explained and which the King gave back to us when Prince of Wales.

Today, building is a mixed bag, but there is a real understanding of beauty, and new buildings often uplift the soul: that was impossible before 1984.

In judging people we are taught to look beyond the outward appearance: as Samuel was told ‘Look not on his countenance, or on the height of his stature; because I have refused him: for the Lord seeth not as man seeth; for man looketh on the outward appearance, but the Lord looketh on the heart.‘, but that is of fellow men and women: architecture has only its appearance, which is the outpouring of human mind and skill.

The natural instinct is to see a connection between beauty and moral goodness, as Hobbes observed:

The Latine Tongue has two words, whose significations approach to those of Good and Evill; but are not precisely the same; And those are Pulchrum and Turpe. Whereof the former signifies that, which by some apparent signes promiseth Good; and the later, that, which promiseth evill. But in our Tongue we have not so generall names to expresse them by. But for Pulchrum, we say in some things, Fayre; in other Beautifull, or Handsome, or Gallant, or Honourable, or Comely, or Amiable; and for Turpe, Foule, Deformed, Ugly, Base, Nauseous, and the like, as the subject shall require; All which words, in their proper places signifie nothing els, but the Mine, or Countenance, that promiseth Good and evill. So that of Good there be three kinds; Good in the Promise, that is Pulchrum; Good in Effect, as the end desired, which is called Jucundum, Delightfull; and Good as the Means, which is called Utile, Profitable; and as many of evill: For evill, in Promise, is that they call Turpe; evill in Effect, and End, is Molestum, Unpleasant, Troublesome; and evill in the Means, Inutile, Unprofitable, Hurtfull.

That does not tell us how to define beauty. Others have examined that in detail: chiefest in our time being Roger Scruton. For all his vast width of scholarship, the problem of beauty was a particular fascination, all in a time when the fashion amongst those who though of themselves as thinking men dismissed it. Beauty though is real, and the idea that received opinion may deny it can only be understood in the context that today outspoken opinion denies other plain obvious and scientific facts.

Modernity had its preachers, or you might say its false prophets, whose disciples filled the dominant schools or architecture, excluding all heretics, with Mies van der Rohe almost deified. Concrete was their miracle: with concrete, shapes could be devised defying all that went before, which was fit only for demolition before the new revelation.

One man understood beauty, in  nature and in building, and was in a position to do something about it, for he was a Prince of the Realm, and controlled vast estates that needed a form for their own development: he was Charles Prince of Wales. When he spoke in 1984, his words raised two storms: one from the architectural establishment, outraged that their religion had been challenged by a heretic, and against it a rebellion from architects who begged to break the modernism monopoly and to create beauty, stemming the tide of hideousness. The Prince was mocked as being old-fashioned and out of touch – in reality he was ahead of the game, and very much in touch with what the nation yearned for, which we thought was unachievable.

Had it been one speech, the debate would have rumbled and then stopped, because words are less solid than unyielding concrete.

However a prince can establish his own, rival foundations, and he did. As Luther was defended by a prince, so were the reformers of architecture, and the change soon became visible. Ultimately, an architect only works when he has a paying client, and developers knew that a beautiful building is worth more than a slum.

Form, proportion and symmetry in brick, arches, gables and decorative corbels all started appearing, and began to dominate the better parts of towns – not all of course – the backend, practical area just wanted cheap and functional buildings, but even they shed the bare concrete brutalism. We may take the new, post-modern and neo-Gothic styles for granted, that new buildings are meant to be pretty, but it is only since the late 1980s: before then, harsh, grey concrete was all that we could expect – the architecture of decline.

It is the King whom we have to thank for this revolution.

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Books