Why Trussonomics Has Already Failed

Why, some out there on the right have wondered, have the markets reacted with such contempt for the mini budget put forward by Chancellor Kwasi Kwarteng on behalf of Liz Truss, who has somehow been elevated to the rank of Prime Minister? The economics, after all, had the impeccable pedigree of the finest think tanks in SW1 behind it. What was not to like?

And that is where all those credulous right wingers went wrong: those advising Ms Truss, bodies like the so-called Taxpayers’ Alliance, and the IEA, are not “think tanks”. They are Astroturf lobby groups, whose modus operandi includes getting their copy in the papers as a means of raising their public profile. But the way they do that should ring alarm bells.

Sleight of hand, logic leaps and downright dishonesty, combined with economic illiteracy, are all deployed by these groups. They are never discovered by the right-wing press that laps up their propaganda, but the markets can see through the façade in no time. Let’s see some examples.

The TPA published a “report” in 2009 called Taxpayer Funded Lobbying, claiming that the then Brown Government was paying firms to lobby itself. However, there was no proof of what the payments were for, and the firms concerned did things other than lobbying. On being called out for the logic leap, the TPA tried to lie their way out of it. They failed.

No matter, back came the TPA with the claim that speed cameras, far from reducing accidents and casualties, actually made matters worse. This was sleight of hand, covered up by a regression analysis and Chow Test. However, their claim only works if all speed cameras were introduced on the same date - 1991. Most did not appear until after the turn of the millennium.

And then we come to the HS2 project, where both the TPA and IEA indulged in economic illiteracy in order to dupe the press. The TPA went first, claiming that HS2 would need Crossrail 2 to be built in order to disperse the crowds of punters using its trains when they arrived at Euston. Therefore, they claimed, the cost of Crossrail 2 should be added to the HS2 cost/benefit analysis.

The IEA followed the Crossrail 2 cost addition line, but doubled the projected cost from £10 billion to £20 billion to make the numbers that bit scarier. But neither of these groups carried over the projected benefits of Crossrail 2, hence the economic illiteracy. Projects dependent on one another is not the problem - it is the deception that is. The IEA is now four-square behind what is being called Trussonomics, and this is why everything is unravelling.

Logic leaps, sleight of hand, deceptive use of statistical analysis tools, selective use of figures to dishonestly load a cost/benefit analysis, and then being prepared to spin and lie about any or all of it, does not impress the markets. On the other hand, trying to justify screwing over the poor in order to bung the rich a bit more dosh by saying it’s “fair” doesn’t impress the public.

Getting your propaganda in the papers, bagging a berth on the Daily Politics, Question Time, the Kuenssberg show, the Peston Show, or the Sky News equivalent is one thing. The real world is quite another. Shame on the broadcasters for platforming these spivs and chancers, and God help the rest of us now that we are being softened up for swingeing spending cuts.

Our Prime Minister is not dealing in reality. Be afraid. Be very afraid.

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