Best Of

I really don’t know whether the respondents to that polling are stupid or that the questions are simply stupid. Probably more the latter. Polling like this reveals more about personal preferences rather than their understanding (or lack of understanding) of Government finances. Arguably the most honest answer for those questions is “don’t know” or more appropriately “it depends.”

But it is not to say that some of those things can’t be done. As we know the pandemic-era spending effectively ended / reduced homelessness for a period and paid wages of those unable to work due to closed businesses. Government made those decisions because the failure to do so would have led to, arguably, worse outcomes. But there are implications of spending other people’s money in that way - and much of that constrains the policies that the current Government can or cannot enact.

I guess the worse thing about the Government actions during Covid or the last energy crisis or even the triple lock is it has proved that there sort of is a “magic money tree” - and shrill campaigning (or cynical pandering to client electorates) can really put the pressure on. But like all magic it is just a trick, someone pays eventually.

Politics is about priorities and you could prioritise defence spending over the ending homelessness, the old over the young, etc. But you can’t do all of it, and I guess I wish our politicians (and media) could be honest about the trade offs.

Commentary on here seem pretty quiet about the economic impact of the war in Iran.

PB, too, has been successfully hijacked by Farage’s ability to set the media agenda.

It's pretty simple.
If the war isn't over soon, it's pretty likely the world economy will see an oil and gas shock without real precedent. It could make the 70s look like a blip.

And the UK economy will be screwed for another decade (at least).

If it's over by next week, then we might be fine.

Or not.

Trump casually threatens to use nuclear weapons to end the war "in two seconds" while sitting right next to the Prime Minister of Japan—the only country to ever suffer an atomic bombing. The host calls him a complete sociopath.
https://x.com/FurkanGozukara/status/2034797512712753489

Unusual take - the atomic bombs on Japan saved hundreds of thousands of lives.

Had it been necessary for the US to invade, then there would have been hundreds of thousands of US casualties, and many more Japanese casualities. In addition, there might have been millions dead from starvation, given the blockade of the islands and the failure of the rice crop that year.

That said...

Japan and the US were already in negotiations, and the declaration of war by the Soviet Union had tipped the senior Japanese leadership into a desperate funk. The official US Strategic Bombing Survey in 1946 concluded that the war would have ended on substantially the same terms, even without the atomic bomb. But then again, one might add, they would say that.

The clue is in the fact that they didn't surrender after the first.

They surrendered after the Americans allowed the Emperor to stay as nominal head of state. That concession only came after the second bomb.

The Emperor voted to end the war *before* the Americans announced that they might or might not keep the Emperor.

You are correct, and I am wrong - the Brynes Note was the 11th, and the vote was the 10th.

For some reason, I thought they were the other way around.

Various people pushing "it wasn't the bomb, it was The Russians/The Emperor staying/The Japanese Just gave up" narratives have got into a lot of the secondary histories.

The reason for the attempted coup was that the Emperor announced that he was prepared to sacrifice the Imperial System in the surrender. As in, not just himself abdicating (unthinkable) but setting fire to the version of Shinto pushed by the nationalists. To them, this was tantamount to declaring the Japanese Race dead.

That and the fact that he was AOK with war crimes trials for the all the Head Sheds (including himself).

So at least 50% or more of voters want to keep the triple lock and subsidise energy bills during the Iran War. Most voters from all parties want to keep the triple lock, though less than half of Reform voters want to subsidise energy bills. They are divided on increasing defence spending and not yet ready to believe a UBI is possible but not majority opposed and Green voters back it as do half of Labour voters.

Most voters aren't that bothered about students though, more refusing to forgive student loans or bail out universities than not with Green voters again the main exception. Furlough is also not going to be believed as realistic either again

It doesn't matter what voters want, and this is where Starmer and Reeves are about to come up against reality

Incidentally, when the Japanese were running out of everything at the end of WWII. Including cities… they tried “negotiating a surrender”.

Thing like asking the Russians for an alliance (this was just before the Russian attack) - the offer was that in return for protecting Japan at that point (and helping to keep her empire), Japan would join with Russia in an attack on the US etc in a new war, 10 years later.

Some diplomats tried to come up with deals like - Japan isn’t occupied, military left alone, all conquests remain in Japanese hands. Yes, in August 1945, they thought they could keep the conquests. Well, the diplomats said that they had to get the deal parts the military.

All this was being read in Washington, via ULTRA. A chunk of the reason for not stopping the Manhattan Project “train” was the clear evidence that the Japanese government hadn’t worked out that they had lost the war.

It is an economic nightmare and the public have not woken up to just how serious this is

The magic money tree is over and todays bond markets shows that it is not possible to borrow anymore

Starmer and Reeves face a nightmare scenario and, unfair as it is, will get the flack

Labour would be crazy to change leaders at present

On the Triple lock - this points out the problem.

We need the OBR to put an appropriate delay between retail and wage inflation so that there is a suitable gain in the OBR’s budget model if you destroy the lock. At the moment it doesn’t exist so there is no benefit in destroying it

There was an interesting podcast from someone (IFS?) about this a few months back.

The problem with the triple lock is primarily that it's calculated annually without any smoothing. If inflation hits 10% one year, and wages also grow at 10% the same year, the triple lock goes up 10%. If inflation goes up 10% one year and wages 10% the following year, then the triple lock goes up 21%. despite inflation and wages having only gone up 10%.

The effect is also really difficult to model into the future, as not only do you have to predict the broad trends of the future (difficult), but you also have to know how closely wage spikes will lag inflation (virtually impossible). If you get a full blown wage-price spiral going, the triple lock doesn't outpace either by much, whereas a short sharp shock in inflation, followed by a matching spike in wage growth 12 months later rockets the triple lock upwards.

As a result, most of the government modeling of the triple lock assumes that wage growth and inflation move together within the same financial year, which makes the triple lock seem fairly inexpensive. (The more I discover about treasury modeling, the more I realise we're governed by imbeciles.)

This in turn means that if the chancellor cans the triple lock, on paper it doesn't save much money, so they can't do what all recent chancellors are won't to do as soon as any "extra" cash arrives, and immediately rush off and spend loads more (or if one is very lucky, even cut taxes a little), as the OBR won't credit them with any extra "headroom*" for binning the triple lock.

Meanwhile, out in the real world, with all it's current volatility, the state pension keeps rocketing upwards. But that's different, because the modeling keeps saying that won't happen in the future....!

* "Headroom" - the tiny difference between the obscene amount the chancellor is borrowing, and the obscene amount of borrowing at which it is judged the bond market will completely take fright.