(Drivebycuriosity) - Today is a sad day for the UK - and for the global economy. Liz Truss resigned as Prime Minister after just 6 weeks in office. Truss wanted to reform the British economy and kick start new growth. Gone.
Truss announced the biggest tax cuts since 1972, including duties on high incomes, reduced financial regulations & immigration restrictions and wanted to allow fracking for shale gas across the U.K. High
taxes reduce the initiative to work, to invest and to safe money; regulations are spreading sand into the gears of the economy and are
slowing it further down. Truss`declared: “What I am about is growing the economy,” she said. “And growing the economy benefits everyone.” She`s right, when you grow the pie then there is more for everyone.
Truss´s agenda created the hope that Great Britain could be an island in a world over over-regulation, cancerous bureaucracy and creeping socialism.
Unfortunately - but not surprisingly - he agenda was not understood by the majority ( marginalrevolution). Her program was too revolutionary, too revolutionary for many commentators and her incompetent cabinet, which overruled Truss and cancelled her program. Truss`resignation was unavoidable.
The populist politicians responded to vox populy (tax the Rich!) and to the already highly volatile financial markets. As a reaction to Truss`growth program UK`s interest rates jumped and the Pound Sterling tanked. As usual the financial markets are ruled by short sighted gamblers (managers of hedge funds, pension funds and other big portfolios). Those don`t care about economics and ignore the long horizon, they take short run bets and follow one stampede to another (remember the melt down from 2008?).
Truss fall is a proof that we live in an Ayn Rand world . Truth is highly smart and she understands economics! Her critics do not. But the brilliant are hated by the
mediocre majority (Atlas Shrugged & The Fountainhead). The British will have to pay for the populist u-turn.
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