I see Liz Truss is set to relaunch her bid for leadership

HousePlantQueen

I am still trying to work out who the left leaning establishment are, these well known liberals the oBR and BofE? Really? Not my idea of left, or is this right wing Tory speak for anyone who doesn't agree with them? Laughable really.

My first thought were for her teenage daughters ; ^not again, Mum, we have just got over the last time.....we'll have to change schools ......you are sooooo embarassing^

I think it was those Marxist Pension Fund managers and Communist share traders.

The trouble with Truss's 'economics' is that it is entirely mistaken.

It is well evidenced that cutting taxes for the wealthy doesn't have much effect on the domestic economy because they don't spend their increased wealth into the economy. They mostly use it to increase their wealth through playing the financial markets.

The domestic economy is important to growth because that is where the consumer base for buying company products lies. There were no tax cuts for the less well off, though the evidence is that it is they who spend their extra money in the domestic economy. Companies aren't going to invest in developing new products or bringing more products to the domestic market if they don't have any confidence that consumers have enough excess money with which to buy their products.

Nor, in the present state of the UK, are they going to invest in products for export because we have deliberately shrunk our export market by placing barriers to trade with our nearest large market and we haven't replaced it with significant trade deals with other countries. Not to mention the expense inherent in trading further afield.

As for research and development, once again, evidence shows that the wealthy are reluctant to invest in this because the returns are risky. Economist Mariana Mazzucato has studied the drivers of R & D and found that, historically, it is state investment that mainly drives R & D and innovation; which is subsequently exploited by private enterprise. The very thing that is anathema to tory ideology.

Of course, supply side economics depends on cutting worker regulation and keeping wages low. Minimal state involvement is key as it is held that regulation interferes with the free working of The Market...

All in all, this may be 'traditional tory economics' (at least since the Thatcher era) but it is not good economics and it calls for a restructuring of society towards minimal state intervention, minimal worker (and consumer) protection which I don't think that much of the electorate would really enjoy living with.

Even Thatcher would not have done what Truss did, given the economic situation.

This is not in my view Tory economics, they are more nuanced than has been suggested.

The 'nonsense, Baggs isn't the tradition. It is the idea that one leader can transfer seamlessly into the place of another because it's about fulfilling the manifesto on which the party was elected, not about who is the leader

True. Put like that I see what you mean. The four previous points didn't say that so clearly. And my point remains: how we get a PM normally is traditional and can't be dismissed as nonsense, which is what I thought was your argument.

That you don't like the traditions is fine. Rubbishing them less so because long held traditions, however ridiculous to some modern views, when rubbished do not tend to result in improvements in my opinion. Slow and steady is a better approach to change.

You keep talking about evidence, maiz, but you never tell us where this evidence is.

Logically iy must be wealthier people who invest in stuff because they are the only ones with spare money.

Having only studied economics to GCSE level, but having a lay person's/common sense knowledge, surely there will be little growth in an economy where a lot of the electorate are pulling their belts in to pay for increased energy costs, and associated food costs. Although I know not everyone is driven to use a foodbank, I would think that those who are clients of the one I volunteer for, people who have to make do with what is given to them to feed their family, have to pick a second hand coat off the rack of donated ones...well, perhaps they won't be rushing out and spending money and contributing to economic growth.

Baggs

You keep talking about evidence, maiz, but you never tell us where this evidence is.

Logically iy must be wealthier people who invest in stuff because they are the only ones with spare money.

Logically iy must be wealthier people who invest in stuff because they are the only ones with spare money.

The problem is, Baggs that they, on the whole, don't invest in 'stuff' that has any effect on the growth of the economy. As I said. Speculating in the financial markets or investing in shares does nothing for growth.

I think you're thinking of the 'trickle down' economic theory. It just doesn't work because they have a low what is termed 'marginal propensity to consume' in the domestic economy.

Poorer people, given extra money have a much higher MPC They benefit the domestic economy much more.

www.tutor2u.net/economics/topics/marginal-propensity-to-consume

Add to that the 'multiplier effect' where every pound spent into the domestic economy generates an x amount of economic activity.

www.economicsonline.co.uk/managing_the_economy/the_multiplier_effect.html/

It was the free market that sacked Truss,

The same free market she claims to believe in as the ultimate arbitrer of political economy.

Truss is and always was deluded and it is utterly amazing , that even allowing for the idiosyncranies of the Tory Party, that she has any supporters at all.

Does the Tory Party not support home ownership?

Has Truss apologised to all the home owners whose monthly mortgages have soared to unaffordable levels because of her disastrous "mini budget"?

From what I have seen Truss has not had the common decency to apologise for any of the damage she inflicted on the UK economy and on people's lives.

She is an insufferable bighead with delusions that far exceed her very limited adequacy. What an embarrassment she must be to her daughters. Ghastly woman who has never been able to see beyond her blinkered quest for glory.

Exactly this Varian, it was the free market, the investors, the pension funds, the speculators who didn't like what she did, so it is all a load of nonsense if she is the arch free marketeers she claims to be. I know that backbenchers have more freedom to speak than their cabinet colleagues who are restricted by the cabinet omerta, but surely the whips need to have a word with her and Johnson who are both strutting about as if they are of importance. Truss is only of importance and relevance to the people of South West Norfolk and Johnson to Uxbridge and South Ruislip, no more.

I'm learning here, so bear with me.
Do the rich not get richer by re investing their wealth, often in shares? So their money makes money, yes? How can it be at the expense of everyone else if they then expand their businesses and employ poorer people, (though they should of course pay them properly)?

Poorer people, given extra money have a much higher MPC They benefit the domestic economy much more.

I understand this.

I cringed when I heard Liz Truss describe Nicola Sturgeon as "an attention seeker"

Nicola Sturgeon is a serious and accomplished politician with a record of achievement for her party having gained office and having been re-elected as First Minister of Scotland.

Liz Truss is a delusional attention seeker who was not fit to be leader of any party, let alone any country, but by appealing to the lowest common denominator in the membership of the Conservatives, got power for just long enough to inflict untold damage on our economy, on the lives of millions of British citizens and on the standing of the UK in the world.

When Truss was forced out of office she has heard to say "well at least I've been PM"

Some of you who have read my previous posts may know that I am not a supporter of the SNP, but I respect Nicola Sturgeon as a serious and successful politician. Liz Truss is nothing but an attention seeker.

Does the Tory Party not support home ownership?

It would appear not since apparently they keep stymying attempts to build enough affordable houses.

What an embarrassment she must be to her daughters.
I do think it is unfair to bring personal family relations, especially children, into these discussions.
It isn't our business to wonder what LT's daughters think.
Just my take on it.

Joseanne

^What an embarrassment she must be to her daughters.^
I do think it is unfair to bring personal family relations, especially children, into these discussions.
It isn't our business to wonder what LT's daughters think.
Just my take on it.

Quite.

And it is this kind of thing that puts people off N&P threads. We don't need to know GN-ers hatred of this or that politician. It totally reduces the tone.

Are we no expected to express a view on a politician?

not

Joseanne

^What an embarrassment she must be to her daughters.^
I do think it is unfair to bring personal family relations, especially children, into these discussions.
It isn't our business to wonder what LT's daughters think.
Just my take on it.

she started it, miss

Sorry, what's with the miss?

Joseanne

Sorry, what's with the miss?

was an attempt at humour, my bad

👍 OK!

MaizieD I don’t know if these days it’s true that the State initially funds R&D and drives innovation which is subsequently exploited by private enterprise . This doesn’t tally with start up funding for high tech products with profit as the main motivation. Investors from all over the world go to trade fairs where a prototype is displayed and investment is secured on an idea. The State is not involved.

Forgot to say it feels a bit like Trussonomics !

Joseanne

I'm learning here, so bear with me.
Do the rich not get richer by re investing their wealth, often in shares? So their money makes money, yes? How can it be at the expense of everyone else if they then expand their businesses and employ poorer people, (though they should of course pay them properly)?

The 'rich' who are investing in shares aren't the business owners. Well, I suppose they are, technically speaking, but unless they are buying shares in a start-up, the money they pay for their shares goes to the previous owner of the shares. Not a penny goes anywhere near the company. They buy shares either in the hope that the share price will rise and they can resell them at a profit, or that the company will pay a good annual dividend on their shares and so increase the shareholder's wealth.

Business owners are another kettle of fish altogether.

Agreed, businesses employ people. .They employ people to produce the product or service that they intend to sell directly or indirectly to the public. This ought to be a symbiotic relationship. Without the business people would have no jobs and without the people the business owner would have nothing to sell.

at the expense of everyone else..

You have to consider who is buying the products/services. In most cases it is either us, the consumers, or companies that need the product in order for them to produce their own products to sell to the consumer (let's not get any more complicated than tha😆 ) e.g the company that sells a cabinet maker his/her tools. So, the consumer ultimately pays for them, too as cost of equipment and materials is factored into the selling price.

Now, say we are buying from a large PLC rather than an SME.

Part of what we have paid will comprise the company's profit. So a percentage of that will be paid to our wealthy shareholders as dividend. Which then, apart from being taxed, disappears out of the domestic economy be cause the wealthy have, as we've already seen, a low MPC. It goes off into the financial markets, or is 'invested' in property, and leaves a shortfall in the domestic economy. Which, over time, reduces the amount of money left for the rest of the population to share in.