Author: philmullan

Why a wealth tax is a terrible idea

philmullan Debt, Economic policy, Politics, state, Welfarism

The wealth tax cure-all is having its day. Long time a favourite of the ‘progressive’ left to ameliorate the evils of capitalism, it has gained extra exposure from Gary Stevenson, the City trader turned bestselling author, YouTuber and leftist poster-boy. This self-acclaimed “very, very good economist” puts taxing the rich at the centre of his crusade for a fairer society. More recently, with the Labour government’s fiscal plans in tatters, their former leader Neil Kinnock floated the expediency of a 2 per cent tax on assets valued above £10 million. Subsequently at Prime Minister’s Questions the current leader Keir Starmer refused to rule out a new tax on wealth. 

Little better illustrates today’s political and cultural barriers to economic growth than these voguish proposals for a wealth tax. The suggestion of taxing the super-rich to address the government’s fiscal hole is another lily-livered evasion of the tough decisions required. It expresses the cultural and political elites’ prerogative that there is always some other group who can pay for social needs and for their own privileges.

Governments need to stop assuming there is always someone to pay for their spineless overspending. 

Read the full article here.

Labour has no answers to Britain’s economic slump

philmullan Cultural renaissance, Economic growth, Economic policy, Politics, Zombie economy

The government’s long-awaited industrial strategy is a weak rehash of familiar, failed ideas.

After Labour’s first year of chaos and U-turns, the prime minister Keir Starmer managed to keep a straight face when claiming this 10-year industrial strategy provided ‘stability’ and ‘certainty’ for business. Though if any business leaders thought the document offered ‘certainty’ even about taxation levels just four months’ hence in the autumn Budget, they would have been disappointed.

This stereotypical industrial policy announcement prompts three questions. Why did it take them so long to draw up something so standard? Second, why is there such a gap between the widely-perceived scale of our economic problems and this hackneyed set of policies? And, third, more perplexing, why is there still so much support across the political spectrum for the idea of an ‘industrial strategy’, when all these blueprints for change have been so ineffective in shaking Britain out of its economic stupor? 

For answers to these questions, read the full article here.

Rachel the Deluded

philmullan Debt, Economic policy, Investment, Politics, State intervention

Playing on the title of an Australian TV series, some critics of chancellor Rachel Reeves have taken to calling her ‘Rachel from Accounts’. That’s unfair to people who work in accounts departments. Most of them can interpret a balance sheet – a skill that seems to be beyond the capabilities of Britain’s chancellor.

Presenting today’s spending review, Reeves once again told the public that she can make everything add up, in defiance of common sense. ‘Rachel the Deluded’ is a more apt nickname

She insisted that the government can stick to its public-spending commitments, while not raising taxes on ‘working people’. And it can do all this while fulfilling her self-imposed fiscal rules.

In her fantastical spending-review statement, she claimed that Brits are starting to ‘see the results’ from her having ‘fixed the foundations’ and delivered ‘economic stability’.

Worse still, the spending review shows that the chancellor is continuing to ignore mounting public debt. Indeed, this clueless government has doubled down on the fantasy that the UK can borrow its way to growth, even though the national debt is already the equivalent of annual economic output.

Read the full article here.

Could this be the death of the dollar?

philmullan Changing world order, Debt, Geopolitics, Trade

The single most important prop sustaining the US economy today is the global power of the dollar. America’s current relative prosperity (which until recently was dubbed ‘US exceptionalism’) rests far more on the role of its currency than on its tech companies, abundant resources or famed entrepreneurial spirit. Because the dollar is accepted as world money, when the American state and its corporations spend or borrow abroad, foreigners have been willing buyers. This has enabled a seemingly endless flow of cheap money to support the economy at home.

Today, however, this special benefit is looking increasingly vulnerable. And the greatest threat to the dollar’s status doesn’t come from Russia or China or even Europe, but from the US government’s own actions.

Read the full article here.

Scrap the fiscal rules, abolish the OBR

philmullan Democracy, Economic growth, Economic policy, Politics, State intervention , ,

The parlous state of the British economy and its public finances shows us what happens when you defer to the ‘experts’. Rachel Reeves is a middle manager posing as chancellor. She exemplifies the managerial politician. She doesn’t make political decisions about what the country and its people need, so much as follow rules and procedures authored by experts – by those who supposedly know best.

Read the full article here.