Within a decade we will see who has decapitated whom [The Wiggin Sessions]( October 20, 2022 [WEBSITE]( | [UNSUBSCRIBE]( We Hardly Knew Her âGet fired, no one will call you a quitter.â â CA Vikram Virma [Addison Wiggin] Addison
Wiggin Dear Reader, Poor Liz Truss… we hardly knew ya. Mrs. Truss came to power in the Conservative Party in England by comparing herself to Margaret Thatcher. Apparently, she’s no Iron Lady. Before quitting her job today as prime minister, the British tabloid The Daily Star began a livestream of a head of lettuce and a picture of Truss on a table to determine who would wither first: the fresh produce or Truss’s time as prime minister. She only lasted in the posh seat at 1 0 D o w ni ng Str e e t for 44 days. The shortest tenure of any prime minister in history. We did a little math and discovered Thatcher had been prime minister for 4,223 days – the longest of any prime minister while the late Queen Elizabeth still shuffled her way about Buckingham Palace. “Congrats to lettuce,” tweeted Dmitry Medvedev, the deputy chairman of Russia’s Security Council. [Click here to learn more]( British PM Liz Truss resigns after 6 weeks in office. (Source: People Magazine) What went wrong for Truss? It’s really fairly simple. A lot of talk with little logic. She promised tax cuts to make way for a low-tax, high growth, post-Brexit economy. Sounds good to us… except, she and her finance minister Kwasi Kwarteng tried to finance $48 Billion dollars in tax cuts by borrowing the money. If you’ve been watching the global financial markets you know bond traders didn’t like the deal at all. They sold off British gilts (the equivalent of US Treasuries) and the pound headed quickly towards parity with the ever-upward U.S. dollar. The wilting head of lettuce also had a plan for the government to pay energy companies directly to provide energy to consumers this winter to compensate for what is expected to be a shortfall because of the Russian invasion of Ukraine and subsequent economic sanctions. Dutifully, as the leader of the UK Tories, she also promised to continue to limit the power of labor unions… and the Labour Party. Back in the 1970s, Maggie Thatcher was also famous for forcing tax cuts… tackling unions… in an attempt to restore a vibrant economy. Thatcher’s go-to economic advisor was – drum-roll please – Frederick Hayek, who you’ll recall was a leading thinker in what has come to be known as the Austrian school of economics. The Austrians believe that low taxes lead to high growth economies, simply put. They do not take kindly to debt financing or government intervention in the economy. “Anyone expecting a swift return to Thatcherite policies should take a closer look at Truss’s politics,” writes Craig Barry in The Conversation. If Truss’ policies had not been openly trashed by the markets she would have presided over a significant expansion of state intervention into the economy. Her plan to pay companies to supply energy to households and businesses would have cost £130 billion over the next two years – the single biggest spending announcement in UK history. Barry continues: Back then, Thatcher wanted to dismantle the collectivist, Keynesian state of relatively high taxes and government spending, and replace it by embedding neoliberal ideas encompassing lower spending and market primacy in UK economic policy. But now Truss takes the reins of a state already neo-liberalised, and is discovering that state power will increasingly be needed to deal with the crises she has inherited. We don’t necessarily agree with Barry’s final conclusion. In fact, Truss’ short-lived affair only reveals how mutilated political messages can get behind all these -isms… and how poorly governments really are at managing anything in the economy. Thatcher’s own ministers said she would never have agreed to massive expansion of government spending on debt… especially during a period of high inflation and global uncertainty. Rishi Sunak, who may be elected by the Conservative party to replace Truss, said something we may have written in our daily missives. “Sunak warned that the [unfunded tax cuts] would push up inflation…” reports the Guardian “...increase mortgage rates and damage the economy.” Sunak also pledged tax cuts, while trying to get the UK government’s top job, but only after their bout with inflation had resulted in a TKO. Sunak’s money quote: “Not only do I think the Truss plan is the wrong thing for the economy, I also believe that it’s immoral because there is nothing noble or good about racking up bills on the country’s credit card that we pass on to our children and grandchildren.” So it goes, [Addison Wiggin] Addison Wiggin
Founder, The Wiggin Sessions P.S. It’s worth pointing out, Thatcher was PM during the “Reagan Revolution” in the United States. The two were friends and on the same page in many ways economically. Our own George Gilder articulated many of their ideas as speech writer for Reagan in the early years… during the same period when Volcker was battling what has come to be known by Federal Reserve historians as “The Great Inflation.” One thing Reagan got wrong, as we’ve noted on occasion: he proved, as Dick Cheney oft repeated, that “deficits don’t matter” politically. Reagan established a precedent of increasing the deficit and by extension exploding the national debt. When Reagan took office the national debt was $995 billion… by the time he left office it was over $2.9 trillion. No president that followed bothered to look back. The national debt at the time of this writing is $31.155 trillion… and ticking up so fast, you can’t round out the numbers to the nearest billion without committing a journalistic error. Sponsored by Legacy Research Expert who called the bottom of the 2020 and 2022 crashes releases new forecast: âThe Never-ending Bull Market Is Overâ [Click here to learn more]( [Click here for the name and ticker of his favorite stock.](. Ed note: Got something to say? Send your feedback to The Wiggin Sessions [here.](mailto:WigginSessions@5minforecast.com) LISTEN ON [The Wiggin Sessions]( The Wiggin Sessions is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Consilience, LLC. delivering daily email issues and advertisements. To end your The Wiggin Sessions e-mail subscription and associated external offers sent from The Wiggin Sessions, feel free to [click here.]( Please read our [Privacy Statement.]( For any further comments or concerns please email us at support@5minforecast.com. If you are having trouble receiving your The Wiggin Sessions subscription, you can ensure its arrival in your mailbox by [whitelisting The Wiggin Sessions.]( © 2022 Consilience, LLC. 808 Saint Paul Street, Baltimore MD 21202. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We expressly forbid our writers from having a financial interest in any security they personally recommend to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.