Censor the Financial Times

On the excesses of the 'free press'

Whether or not Lizzie now Goes is unimportant, the coup has been carried out successfully. There is no escaping the ‘Pragmatic Plan’ to raise taxes and cut spending in to an economic depression.

The last couple of weeks have shown the domination of the financial markets, and press, over elected government. Torsten Bell et al decided that £50bn in tax cuts were economic lunacy, that the markets ‘wouldn’t have it’. £500bn on Lockdown barely moved the dial on the cost of borrowing, but any retrenchment from the productive sections of the economy was a crime that could not go unpunished. Tax cuts that could easily justify themselves in revenue gain, like IR35 or the VAT cut for would have to go too.

It is comforting to believe that the financial markets are composed of ‘business-like’ 40 something men in dark suits scrutinising government plans and calculating their efficacy carefully. The truth is that the main job of a trader on, say, a Foreign Exchange desk, is to figure out what other people are thinking, and hedge their bets accordingly. They get this information through a mixture of the financial press (FT, Bloomberg and WSJ primarily, each market will have their own specific trade sections) and speaking to other traders. There is very little diversity of information here; Twitter is irrelevant. Group consensus is inevitably formed by a very small number of people.

The economic case for abandoning liberal economics became unanswerable for Truss because this small group of people decided that the ‘fiscal black hole’ was suddenly important; it’s quite clear that this was based on moral/political judgements. There was very little focus on the ludicrous commitment to match energy increases indefinitely, likely costing in the hundreds of billions, instead there was relentless fixation on tiny fiddles like the 45p tax rate (£2bn ish) that did not constitute a ‘good look’.

This was not clear-sighted analysis of the budget, it was an outburst of indignation. The ‘Pragmatic Centre’ is anything but; it’s the post-war political moral consensus hiding behind a venir of technocratic competence.