Ex-Prime Minister Liz Truss has taken it on the chin. Mocked by the U.K. tabloid, the Daily Star newspaper, as unable to outlast lettuce, she proved to be the U.K.’s shortest-serving P.M. The scorn crossed the pond to the New York Times featured columnist Maureen Dowd. She dumped on Truss because “She didn’t understand that you couldn’t simply borrow money from the future.” This a strange observation from someone living in a nation with $31 trillion in debt. I’ve always found Dowd more snark than depth, and she continues to prove me right.
Nevertheless, Dowd is symbolic of the elite class here and abroad, claiming awareness of how debt and interest work but having no clue. I fear they’re going to find what their hubris has wrought.
While so many are having a great time over Liz’s political demise, we need to heed the message it delivers. While Truss’s fiscal plan is radical to some, it mostly follows the route taken by Margaret Thatcher and Ronald Reagan. Reducing stifling taxes and regulations to increase goods and services to offset too much money chasing not enough goods worked for those successful leaders.
Truss opened the nation to fracking and new leases for offshore exploration to increase domestic oil and gas. She also reduced regulations. The most expensive part was that her proposed subsidies offset the U.K.’s sky-high energy costs. The E.U. will pay a similar fortune to subsidize energy to avoid a crisis. The plan also included some tax cuts. What government could survive its people freezing through the winter? In response, markets reacted harshly to the nation’s bonds and currency. The turmoil forced the Bank of England to intervene.
With only limited political support and an astonishing lack of grit and skill, Truss crumbled.Continue reading