As I type, the Conservative party in the UK has announced that it will conduct a vote of no confidence in the Prime Minister, Boris Johnson.
In case you don’t know, this is a purely internal party thing. 15% of the parliamentary party have written to the chairman of a committee (the 1922) expressing a lack of confidence.
They’ll have a ballot, and if a majority want him out, then he’s gone.
Before everyone gets excited, he’ll probably not be kicked out. These votes tend to be the clear signal that the leadership is going to change soon, and there will be months of scheming and dealing behind closed doors. The media love it, political types love it, and most of the UK ignores it.
Bottomline, the next Prime Minister, will probably be Conservative, and will probably not be elected by anyone other than the Conservative party.
Democracy in action.
Inevitably, my Twitter feed now conflates the challenge to the leadership with its favourite causes célèbres. Brexit. Covid-19. Ukraine. NHS. The cost of living crisis. Partygate.
I daresay it will all work itself out.
Life has been dominated by the pandemic and the reactions to it for two and a half years now. In many ways, the world effectively shut down. Industry stopped. The damage to the economy was…ummm…well…
As far as I can work out, world governments created hugely expensive schemes to support the economy. And they worked. How else can we have airlines? Hotels? They had no customers. How did they do it? Simple. Quantitive Easing.
What? You don’t understand? Let me try again.
Government money comes from taxes. Taxes are paid from business profits, or tax on money paid to employees. As the world was shut, tax revenue enet down. And, at the same time, governments created schemes to give huge sums to businesses and voters (and close personal friends, of course). A magic trick. Surely? Yes, it is. What those clever politicians did, was print money. They needed money, so they made it up. (Don’t try this at home.) Not just governments, some entrepreneurs tried the same trick - but they called them NFTs. That’s a story for another day.
Those of a certain age may feel a creeping discomfort. Printing money is bad isn’t it? Well, yes. Traditional thinking is that printing money leads to inflation, and even to its nasty step-brother, stagflation. Why? Well, supply and demand. Money is valuable, because it’s scarce. However, if we make more and more of it, then, well, it’s not so scarce and not so valuable. So, if you want my carrot, then you need to give me more bits of money.
However - if we all agree that inflation is bad, and that we only printed money as a temporary thing, because, you know, Covid, then there’s no need for inflation. Everything will be fine. Keep your carrot price steady.
Gas prices? No, that’s a Ukraine thing. You have to pay more for gas. No! Don’t use energy prices as a reason to increase the cost of your carrot!
Whoops. There you go carrot-man. Now you’ve done it.
As inflation spikes, central banks raise interest rates, as this dampens inflation.
Thing is, it takes a while. So - while the central bankers study their spreadsheets, people find that everything costs more, but their salaries aren’t keeping up. So they strike, or threaten to, and this is enough to get companies to pay them some more. This - fuels inflation. So the central banks raise interest rates…
Got it yet?
The Covid narrative was “keep calm, we got this.”
What’s the post-covid narrative?
Where are we marching? What’s the US saying? Or the UK? Or the EU?
Must be old-age, but I get the distinct impression that nobody has a clue.