Down the khazi with Kwasi?

Back in 1972, the UK's Conservative Government was in trouble, amid economic stagnation and worker unrest, and with a general election due in less than two years. I was living there at the time, a recent graduate employed at the Foreign Office in Whitehall.  Chancellor of the Exchequer Tony Barber tabled a highly irresponsible budget designed purely to put the Tories in a position to win the next election. 

The Tory media were predictably laudatory. One of the tabloids, possibly the Daily Mail, ran a front page with a cartoon of a jet with Barber's face, with the headline "Take off with Tony". The rest of the page described the budget in large print as "the roaring, soaring giveaway that knocks all others flat".  It produced a short-lived "Barber boom", but soon set the UK onto a boom-and-bust trajectory that persisted for better than a decade. And despite it all, Labour came to power in 1974. 

The UK media are comparing today's mini-budget tabled by rookie Chancellor Kwasi Kwarteng to Barber's disastrous experiment, and not without reason. PM "Thick Lizzie" Truss had already announced a wildly expensive plan to protect consumers and industries against rising fuel prices, eschewing the logical option of a windfall tax on energy company profits and opting instead to ramp up borrowing. Kwarteng's package of tax cuts and other measures, almost exclusively to the benefit of the most well-off, will further boost the UK's borrowing requirements, all while adding to inflationary pressures. 

Small wonder, then, that Sterling has tumbled below US$1.10 and Gilt yields have soared. No less an eminence than Larry Summers has opined that "Britain will be remembered for having pursued the worst macroeconomic policies of any major country in a long time".  Even the reliably pro-Tory Daily Mail is aghast, reminding its readership of the disaster that followed Barber's budget, though not reminding those readers that at the time, it thought Barber's budget was a damned fine thing.  

Truss has a solid majority, so the chances of  the Tories being ejected from office early are slim. Based on her first three weeks in office, she looks capable of doing a whole lot of damage.