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The Premiership of Mary Elizabeth Truss.Sept 2022 - Oct 2022

Snufkin said:
iu
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Truss was so channeling this image in her conference speech, all that inane grinning, what the heck was she on?

When vying for the leadership she wouldn't call Macron a friend but now there is a flight to Prague and free beer and buns to be had she is all over him. Not often I feel sorry for Macron, that must take some French equivalent of stiff upper lip?
 
Seanm said:
This is good on why, when it comes to Bank of England orthodoxy and Truss’s reckless shenanigans, they’re *both* worse. “Uncoordinated class war” is exactly what it is.

https://www.theguardian.com/commentisfree/2022/oct/06/economic-chaos-class-war-british-liz-truss
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Strange article, stoking up class war might be good for clicks but will not help us avoid the descent towards fascism.

Seems there’s a consensus view on the left that historic low interest rates have been, and still are, a good thing for equality.

However, in reality, it depends on who is lending and who is borrowing.

“The theory of usury had been designed for an age in which the lender was rich and the borrower poor. Now the borrower was often a merchant who raised a loan in order to speculate on the exchanges or to corner the wool crop, and the lender an economic innocent, who sought a secure investment for his savings.”

This is the historian R. H. Tawney describing the changing attitudes to usury in sixteenth-century England (quoted in Chancellor’s 2022 book, “the Price of Time”).

As a contemporary example, Wall Street gambles other people’s money, and when the shit hits the fan as it invariably does, the bailout money comes from the public.
 
mandryka said:
I expect the state to water down the energy requirements which are being proposed, maybe by putting a ceiling on the cost of making the home meet the requirement. It's a big problem -- a huge stock of old housing which is very inefficient, and which is very hard to make efficient. The obvious thing to do is "nuance" the definition of efficiency, and to take a reality check on what can be achieved.

It has, by the way, been proposed to make energy inefficient houses harder to mortgage (not BTL mortgages, just any mortgage) by requiring that the mortgage companies hit % targets of efficient properties in their portfolio. It has even been proposed to make it illegal to sell energy inefficient homes.

For the moment, everything is in the air.
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That would take the entire stock of Tudor, Georgian, Victorian, Edwardian, and much of the residual 20th century housing stock out of the market. It would certainly be an interesting experiment in anarchy incitement.

nobeone said:
Truss was so channeling this image in her conference speech, all that inane grinning, what the heck was she on?

When vying for the leadership she wouldn't call Macron a friend but now there is a flight to Prague and free beer and buns to be had she is all over him. Not often I feel sorry for Macron, that must take some French equivalent of stiff upper lip?
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The French equivalent of stiff upper lip has been the subject worldwide acknowledgement since at least the Marquis de Sade, and undoubtedly well-before.
 
Heckyman said:
Strange article, stoking up class war might be good for clicks but will not help us avoid the descent towards fascism.

Seems there’s a consensus view on the left that historic low interest rates have been, and still are, a good thing for equality.

However, in reality, it depends on who is lending and who is borrowing.

“The theory of usury had been designed for an age in which the lender was rich and the borrower poor. Now the borrower was often a merchant who raised a loan in order to speculate on the exchanges or to corner the wool crop, and the lender an economic innocent, who sought a secure investment for his savings.”

This is the historian R. H. Tawney describing the changing attitudes to usury in sixteenth-century England (quoted in Chancellor’s 2022 book, “the Price of Time”).

As a contemporary example, Wall Street gambles other people’s money, and when the shit hits the fan as it invariably does, the bailout money comes from the public.
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I like any post that quotes RH Tawney, but I'm a bit confused by your argument. In her article, Daniela Gabor is identifying the existence of class war by the right. This is not stoking up class war, it is acknowledging that war is already being waged. As Warren Buffet said in 2006, as reported in a New York Times article about the unfairness of George W Bush's tax code (NYT):

“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
 
nobeone said:
Truss was so channeling this image in her conference speech, all that inane grinning, what the heck was she on?

When vying for the leadership she wouldn't call Macron a friend but now there is a flight to Prague and free beer and buns to be had she is all over him. Not often I feel sorry for Macron, that must take some French equivalent of stiff upper lip?
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Don’t feel bad for him. At last there’s a head of government even shorter than him in the photo ops.
 
laughingboy said:
I like any post that quotes RH Tawney, but I'm a bit confused by your argument. In her article, Daniela Gabor is identifying the existence of class war by the right. This is not stoking up class war, it is acknowledging that war is already being waged.
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Sure, Truss et al certainly are waging class war.

The bit I find strange is the implication that the Bank of England now raising rates and trying to reverse QE gets lumped in with the same narrative. If Central banks’ have contributed to class war, it has been due to the opposite action: prolonged low rates, which have stoked asset bubbles and increased inequality.

Of course, raising rates now hurts people who need mortgages and businesses, but the BofE has no good options left. The damage was done much earlier.
 
Heckyman said:
Sure, Truss et al certainly are waging class war.

The bit I find strange is the implication that the Bank of England now raising rates and trying to reverse QE gets lumped in with the same narrative. If Central banks’ have contributed to class war, it has been due to the opposite action: prolonged low rates, which have stoked asset bubbles and increased inequality.
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It's a question of how things are done in practice, I think. Gabor calls the BoE's actions "panic quantitative tightening": to suggest that this is bad - for the financial disruption it causes, and for the sudden increase in the cost of government and personal debt during a cost of living crisis that it will not ameliorate - isn't to say that QE and prolonged low rates are intrinsically good.
 
Truss makes Mogg look like Greta Thunberg.

"No 10 has blocked a public information campaign encouraging people to save energy. Jacob Rees-Mogg signed off plans for campaign with potential £15m budget in recent days. No 10 rejected it today amid claims Truss is ideologically opposed" https://twitter.com/Steven_Swinford/status/1578135758040403971

Saving energy in the face of a coming energy crisis is woke. :rolleyes:
 
mandryka said:
1. Why did the BoE seek to increase mortgage rates in August 2022?

2. I’m less confident that a burst housing bubble will be easy to deal with, precisely because the older housing stock is prohibitively expensive to make energy efficient and corporate investors will shy off for that reason. Of course there may be green subsidies for landlords (but can they afford it?), and the energy requirements may be watered down (by this government - but what about future governments?)


Apart from that, I agree with you, Sean - an excellent clear bit of journalism.
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1. BoE increased the Bank Rate, in a bid to control inflation, and mortgage rates follow.
2. Their whole thing is reducing regulation, and giving public money to clients, so if they get their way it would be reasonable to expect both a watering down of energy requirements and a substantial bung to corporate landlords to help them deal with what regulations remain.
 
Heckyman said:
Sure, Truss et al certainly are waging class war.

The bit I find strange is the implication that the Bank of England now raising rates and trying to reverse QE gets lumped in with the same narrative. If Central banks’ have contributed to class war, it has been due to the opposite action: prolonged low rates, which have stoked asset bubbles and increased inequality.
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Her argument starts with the BoE plan from August which was to Quantitative Tighten and raise interest rates. Both of these take money out of the economy (which usually leads to unemployment), and the BoE explained its hopes: inflation will drop, via reduced money in the economy. Gabor says that the BoE's intent was to push up rates on gilts and long-term interest rates like mortgages (I'll take her word for that because I'm not entirely sure of the mechanisms there). I've also read that the BoE wanted rates higher so that it could lower them again when the next crash happens. It wanted its usual levers back, in other words.

So, at a time of high inflation, the BoE acted to try to bring down inflation, which sounds benign. But higher interest rates and mortgage rates hurt the indebted, and help lenders. And that's the accusation, I think. The BoE is making ordinary people pay as it strives towards structural goals that support financial services firms/rentiers. It is not clear that the BoE is hammering the ordinary people on purpose; maybe it just wants its tools back: a reasonable rate of inflation and interest rates well above zero. But it doesn't seem to care who pays.
 
Seanm said:
It's a question of how things are done in practice, I think. Gabor calls the BoE's actions "panic quantitative tightening": to suggest that this is bad - for the financial disruption it causes, and for the sudden increase in the cost of government and personal debt during a cost of living crisis that it will not ameliorate - isn't to say that QE and prolonged low rates are intrinsically good.
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I’m a bit lost when she says about the BofE August meeting: “This was panic QT, and the Bank was the only large central bank in the world to adopt it.” — but the Federal reserve had already started their QT. Perhaps she counts that as normal QT as opposed to panic QT?

laughingboy said:
But higher interest rates and mortgage rates hurt the indebted, and help lenders. And that's the accusation, I think. The BoE is making ordinary people pay as it strives towards structural goals that support financial services firms/rentiers
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Thanks for the explanation!
 
Heckyman said:
I’m a bit lost when she says about the BofE August meeting: “This was panic QT, and the Bank was the only large central bank in the world to adopt it.” — but the Federal reserve had already started their QT. Perhaps she counts that as normal QT as opposed to panic QT?
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As I said, I'm not totally sure of this, but I think she is suggesting that, via QT, the BoE was trying to dump so many bonds into the markets at once that the bond markets would react with hesitancy. The expression of this hesitancy? The market demands higher bond rates.
 
It’s just typical tw*tter nonsense. Who is this Simon ( ha ha ) Swinford?

...Steven Swinford.
 
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