Bye Bye Sunak..

[Nefarious]

most of the inflation is driven by external factors so the government is hardly responsible for the bulk of the effect.

I mostly agree with the your strict economic analysis of the Truss situation, but I take strong issue with this.

Sure, the war in Ukraine and oil/gas pricing pushed it over the edge, but inflation was not only caused by the government, but was done so quite deliberately.
Until 2007/8 quantitative easing was a dirty word amongst economists - the sort of thing you'd expect of banana republics, most definitely *not* a legitimate macroeconomic strategy. Somehow the circumstances of the credit crunch created a semi-legitimate argument for it's short term use, and governments across the world, not least the UK, realised its incredible potential for redistributing income from poor to rich via the back door (i.e. in ways that the average vote doesn't properly understand) - so it stuck around.

Fast forward to 2020/21 and we had to spend a massive fortune that we didn't have on various Covid-related expenses. Completely necessary (well, apart from the billions syphoned off for Boris's mates), but it was a debt that had to be paid. With public expenditure already squeezed til its pips squeaked, and taxation at levels previously deemed unacceptable for a Tory government, there was only one option - inflate the debt away. Oh, sure lip service would be paid to bring it down - the odd 1/4% interest rise here or there - but the plan all along was to bring down national debt in real terms, whilst also conveniently lining the pockets of the property-owning wealthy at the expense of those who couldn't afford to buy dried pasta.

It 2021, the Bank of England were warning of the inflationary dangers of continuing with QE and the Lords were pushing hard for it to be stopped, but Boris and his cabal of thieving cunts just tapped their collective noses and carried on.

Hell, that idiot Truss pretty much blurted out as much in a public interview immediately post her unceremonious dethronement, when she boasted of her positive impact on the debt pile!

[Beany]

I'd love to see the source for that poll/prediction - that's not a jibe either, that has to be a proper potty outfit to think that would be the result.

Nobody serious is polling labour above 50%, and the average is closer to 40%

[Simon]

Noone believes those numbers. The Tories _always_ do better than the polls in GEs.

[ZedLeg]

It’a based on this

IMG_1218.jpeg (76.75 KiB) Viewed 718 times

[Beany]

The actual source as opposed to a JPG: Stats for Lefties. Using a model that isn't widely used by the major outlets (Electoral Calculus's strong transition model).

https://statsforlefties.wordpress.com/seatmodel/


Electoral Calculus have a bit about it against the 2019 results.

https://www.electoralcalculus.co.uk/tra ... rrors.html

Although it looks like they themselves have moved into a different model

This model used to be the main prediction model for Electoral Calculus, but it has been superseded by modern regression techniques. This page is retained for historical interest only.

https://www.electoralcalculus.co.uk/blo ... model.html

I'm not enough of a statistician to be able to fully interpret that, but I'm willing to bet there are confounding factors that are making that monster labour win to be quite exaggerated.

[GG.]

most of the inflation is driven by external factors so the government is hardly responsible for the bulk of the effect.

I mostly agree with the your strict economic analysis of the Truss situation, but I take strong issue with this.

Sure, the war in Ukraine and oil/gas pricing pushed it over the edge, but inflation was not only caused by the government, but was done so quite deliberately.
Until 2007/8 quantitative easing was a dirty word amongst economists - the sort of thing you'd expect of banana republics, most definitely *not* a legitimate macroeconomic strategy. Somehow the circumstances of the credit crunch created a semi-legitimate argument for it's short term use, and governments across the world, not least the UK, realised its incredible potential for redistributing income from poor to rich via the back door (i.e. in ways that the average vote doesn't properly understand) - so it stuck around.

Fast forward to 2020/21 and we had to spend a massive fortune that we didn't have on various Covid-related expenses. Completely necessary (well, apart from the billions syphoned off for Boris's mates), but it was a debt that had to be paid. With public expenditure already squeezed til its pips squeaked, and taxation at levels previously deemed unacceptable for a Tory government, there was only one option - inflate the debt away. Oh, sure lip service would be paid to bring it down - the odd 1/4% interest rise here or there - but the plan all along was to bring down national debt in real terms, whilst also conveniently lining the pockets of the property-owning wealthy at the expense of those who couldn't afford to buy dried pasta.

It 2021, the Bank of England were warning of the inflationary dangers of continuing with QE and the Lords were pushing hard for it to be stopped, but Boris and his cabal of thieving cunts just tapped their collective noses and carried on.

Hell, that idiot Truss pretty much blurted out as much in a public interview immediately post her unceremonious dethronement, when she boasted of her positive impact on the debt pile!

Completely agree QE is a significant factor and was overused. I'm not clear how it equates to the Tories noses being in the trough though as QE is run by the MPC, i.e. BofE so the government cannot engineer that continues. Is your argument that the Tories and the BofE were in cahoots with Boris saying we need to issue x of government bonds to fund the Covid bailout and the Bank is going to buy them? I can certainly imagine those conversations being had. At the end of the day though the QE programme (and though process behind it) significantly predated that and they had tipped into QT (quantative tightening) pre-Covid I believe only for C19 to blow that out of the water.

ETA: QT actually only used more recently I think to tackle the inflation spike - so too little too late.

[ZedLeg]

The actual source as opposed to a JPG: Stats for Lefties. Using a model that isn't widely used by the major outlets (Electoral Calculus's strong transition model).

https://statsforlefties.wordpress.com/seatmodel/


Electoral Calculus have a bit about it against the 2019 results.

https://www.electoralcalculus.co.uk/tra ... rrors.html

Although it looks like they themselves have moved into a different model

This model used to be the main prediction model for Electoral Calculus, but it has been superseded by modern regression techniques. This page is retained for historical interest only.

https://www.electoralcalculus.co.uk/blo ... model.html

I'm not enough of a statistician to be able to fully interpret that, but I'm willing to bet there are confounding factors that are making that monster labour win to be quite exaggerated.

I don’t doubt it, I just saw the tweet earlier so I thought I’d share.

[Jobbo]

Recently released poll suggesting the Tories will fall to 53 seats... Labour with 550 and Reform with zero.

Clearly no-one wants the Tories to win but with FPTP meaning this results in effectively a one party system is a pretty worrying outcome with only 8% of the respresentation being right of centre (when the public vote would be c.40% for right leaning parties).

Arguably this is a much stronger argument for PR than ensuring the Lib Dems get a few more seats in a parliament with two evenly weighted main parties... My concern with PR was always that it would result in fragmentation and paralysis but clearly it would likely be better than FPTP in this scenario.

The Tories were never in favour of PR when in power. What has changed?

[GG.]

One party getting 84.6% of all seats in parliament (on that, probably pessimistic for the tories, projection) is probably a tipping point in most peoples minds... particularly on a vote share of under 40%.

A more amusing question is that Labour adopted PR as a policy at their national conference - so if they're now against it - what changed??

[Simon]

The party in power are always in favour of FPTP. The end.

[Jobbo]

Indeed. Can’t start whining it’s not fair when it’s been to your benefit in previous elections.

[Nefarious]

Completely agree QE is a significant factor and was overused. I'm not clear how it equates to the Tories noses being in the trough though as QE is run by the MPC, i.e. BofE so the government cannot engineer that continues. Is your argument that the Tories and the BofE were in cahoots with Boris saying we need to issue x of government bonds to fund the Covid bailout and the Bank is going to buy them? I can certainly imagine those conversations being had. At the end of the day though the QE programme (and though process behind it) significantly predated that and they had tipped into QT (quantative tightening) pre-Covid I believe only for C19 to blow that out of the water.

ETA: QT actually only used more recently I think to tackle the inflation spike - so too little too late.

This wasn't a specific point about the Tories having their noses in the trough, it was taking issue with the assertion that inflation was primarily driven by external factors. The current row of hungry snouts aren't solely responsible for this one; in the UK, it was several iterations of thieving cunts ago, and they were by no means the only government to do it. Were Boris's lot more culpable for perpetuating the policy, for their own gain, at times when the economy didn't need emergency stimuli? Or for perpetuating it in the face of stern warnings to the contrary? You could make a strong case, but TBH, there are quite a lot of people who deserve to get in the sack on this one.

As for hiding behind BoE "independence" to dodge culpability, just no. The BoE is independent in the sense that its day to day decisions are in effect automated by its stated goals, but policy direction and setting those goals is government responsibility (as it should be in a democracy). It is independent in the same sense that the civil service is nominally independent of the sitting government, but it is all very much part of the same Westminster machine. The external members of the MPC, and ultimately, the governor himself, are appointed by the treasury.
Back in 2010 when QE proper was first introduced, the process was absolutely hand in glove - the Tresuary even made the stipulation that it would trouser the "excess cash" generated in exchange for underwritting BoE's losses when it has to buy back in at higher rates (incidentally, a policy akin to taking out a Wonga loan that in next government has to pay back - the figures are something like £120bn incoming between 2010-22 compared to £190bn predicted payback over the next 10 years).

In fact, it could be argued that the Truss sheer magnitude of the Liz/Kwati clusterfuck was far less to do with bond markets getting spooked by a lack of transparent budgeting, and far more about power games between an arrogant incoming government that thought it would run the BoE like a puppet on a string, and the BoE digging its heals in - L/K's "plan" necessarily involved selling £60bn in new debt *exactly* at the same moment the "automated" bit of the BoE's function had slated to sell off a fuckton of bonds. It doesn't work like that, Liz, you don't get to control the BoE like a minion - you get to set policy, maybe influence its implementation through appointments, but you don't get to interfere with the nuts and bolts of that implementation.

[GG.]

At a fundamental level though, even QE was needed as a result of external factors - i.e. the GFC.

The interface behind the scenes between Treasury and MPC is an interesting one and I haven't seen written about much (probably because of the limited transparency - really the meetings between the Treasure and MPC should be minuted and disclosed to the public). This is an interesting blog post https://www.taxresearch.org.uk/Blog/202 ... ying-that/

So it was actually the BofE's QT (which, is obviously a novel concept in itself as QE only tried since 2008) which rocked the market as much as the borrowing Truss announced (which was half the size of the QT). Ironically it could have been that the markets would have reacted the same way because of the BofE's independent action on QT!! I would be interested to know exactly when bond yields moved. Interestingly you think that the BofE's action was deliberately to cut off the proposed budget - is there any evidence to support that, or just pure conjecture?

So Truss/Kwarteng could actually be doubly unfairly maligned. They didn't change the Bank Rate and the BofE's action again was either too much too soon or too little too late (as seemingly always) or deliberate political intervention (which I think is unlikely).

[dinny_g]

Our Politicians really are rubbish these days - back in they day, they were careful, discrete and indiscretions would take months and enquiries to come to the light of day.

Nowadays - it's like they just don't care...

https://www.theguardian.com/politics/ar ... -the-rules

- Sunak aide places £100 bet on a July election... 3 days before his boss announces a July Election

[Jobbo]

So Truss/Kwarteng could actually be doubly unfairly maligned.

That is quite the logistical leap

[GG.]

I think ultimately they were very naive. I remember my mother calling me the day of the budget and saying this will be good for me - my response was simply "let's see if it happens".

The biggest damage done was that in screwing it up so badly they've put anyone off trying to be sensible and reduce the tax burden in the future. I was listening to Andrew Marr on a New Statesman podcast last night (yes, I do listen to outside of my bubble!) and his view was that although Labour were not disclosing the extra taxes they would put up, it is OK because "I expect to be taxed more to fund public services" despite taxes being at an all time high and the NHS being funded equivalently as other countries for much worse outcomes. There was much on my part.

[Sundayjumper]

Sunak aide places £100 bet on a July election... 3 days before his boss announces a July Election

Meh. £100 ? If they were really acting on inside info they’d be betting their house on it.

[Sundayjumper]

…the NHS being funded equivalently as other countries for much worse outcomes. There was much on my part.

The other day my boss likened the NHS to a fat diabetic kid that can’t even get through the doorway due to years of gorging on endless treats, and instead of slimming it down so that it can get itself to the fridge unaided, we’re delivering pies directly to its mouth and expecting that to fix it.

[ZedLeg]

Where do you start slimming down, apart from the red faced, huffing idea of sacking all the managers.

[GG.]

You don't - you adapt to a co-pay insurance system and stop trusts buying in toilet rolls for £66.72 a roll. I'm afraid we've got a 1950s soviet style healthcare system and it needs to change structurally not just more or less money in. It is not fair on anyone to have a system that is failing and delivering cancer treatment 20 years behind its peers.

This will actually lead to more not less equality in provision as currently it is SO poor in many areas anyone that can has private healthcare.