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Rational behind Kwasi Kwateng’s budget

199 replies

UserOneSquillion · 28/09/2022 15:43

Genuine question, what is the rationale? On paper he is a extremely intelligent man with a background in economics. Was he following Truss’s orders? Is he trying to keep big business in the UK? If so wouldn’t it be better to lower business tax rather than income tax? Absolutely no one seems happy with this.

OP posts:

Am I being unreasonable?

127 votes. Final results.

POLL
You are being unreasonable
13%
You are NOT being unreasonable
87%
Primprom · 28/09/2022 15:48

Russell Kane explains it in this

potniatheron · 28/09/2022 15:55

Literally just discussing this at work (I work in the City). So far suggestions from my colleagues on the rationale have been...

  1. He's trying to do supply-side reforms, but totally fogot that you can't have an expansionary monetary policy with such a large deficit;
  2. The income tax cut was a deal Liz Truss made with Tory backbenchers in exchnage for their votes and that's why she suddenly was catapulted to frontrunner out of nowhere;
  3. Kwasi got really, really stoned, but as a joke someone slipped some shrooms into his joint and about half an hour later he signed off on the budget.


personally my moneys on some mix of 2 and 3.
MephistophelesApprentice · 28/09/2022 16:02

You can't smoke shrooms, it's a horrible experience that doesn't achieve anything.

What's happened is that Kwateng is a paid consultant for a hedge fund that bet against the UK economy and has now made his mates lots of money.

Bootsandcat · 28/09/2022 16:04

Good question. If only politicians are required to provide rationale to their policies….

Primprom · 28/09/2022 16:06

What's happened is that Kwateng is a paid consultant for a hedge fund that bet against the UK economy and has now made his mates lots of money.

Pleaseeeeee can some investigative journalist find out and publish this? Though nothing happened to Mogg after his brexit win.

sparklecement · 28/09/2022 16:10

I'm just place marking so I can't catch up on this later.

Wheretheskyisblue · 28/09/2022 16:14

Primprom · 28/09/2022 16:06

What's happened is that Kwateng is a paid consultant for a hedge fund that bet against the UK economy and has now made his mates lots of money.

Pleaseeeeee can some investigative journalist find out and publish this? Though nothing happened to Mogg after his brexit win.

See www.opendemocracy.net/en/kwasi-kwarteng-crispin-odey-government-bonds-profit/

ChampagneCommunist · 28/09/2022 16:15

You can see who has donated to his campaign/office here: www.theyworkforyou.com/regmem/?p=24770

Ilikewinter · 28/09/2022 16:18

There is no rational, hes an absolute fecking shower of shite - im sooooo angry.

Primprom · 28/09/2022 16:18

@Wheretheskyisblue thank you. Wow... Why isn't this in the newspapers? Such an illusion we live in, isn't it..

VickyEadieofThigh · 28/09/2022 16:22

Tories can do anything they like to make themselves and their mega-rich donors even bigger piles of cash - even if it entirely plunges the country into a recession the like of which we cojuld never imagine, with terrifying consequences.

Next election: Almost ALL the press - "Vote Tory!" Significant numbers of people who have been hammered by this goverment: "I'm voting TORY!" Labour: "tranwomen are women!"

Huiyt · 28/09/2022 16:23

Think he got his old A level economics book out and didn’t read the chapter properly!

MephistophelesApprentice · 28/09/2022 16:29

The papers are all owned by the rich, many by Tory donors, and the rest of the media is cowed by threats to remove access to politicians. This would of course hurt their bottom line.

That and it will all be subtle and 'unproveable'. Hand shakes on the golf course. Quiet conversations at a dinner party. No direct bribes of course. But a friend of Kwateng's will get a little help, and another will help him out in a way that's obviously completely unrelated. Capitalism ruins democracy.

PersonaNonGarter · 28/09/2022 16:35

He’s doing supply side reform.

He made the mistake of not doing regulations before monetary policy.

So supply side improvements to eg Housing or Small business reform THEN do the money. It’s pretty bad timing and the politics are terrible.

But I agree with him that we need a sea change in current economic orthodoxy which is just resulting in asset price inflation without wages rising.

MarshaBradyo · 28/09/2022 16:37

PersonaNonGarter · 28/09/2022 16:35

He’s doing supply side reform.

He made the mistake of not doing regulations before monetary policy.

So supply side improvements to eg Housing or Small business reform THEN do the money. It’s pretty bad timing and the politics are terrible.

But I agree with him that we need a sea change in current economic orthodoxy which is just resulting in asset price inflation without wages rising.

How could he get the timing so wrong do you think?

It seems fundamental to get it in the right order

PersonaNonGarter · 28/09/2022 16:39

The timing is genuinely weird. I think the rationale for that is that there is very little time before the election for the reforms to kick in, so they are doing the money (which they will get through) before the stuff that will be more sticky in committees.

Mumoblue · 28/09/2022 16:43

They don’t think they’ll get voted in again so they’re doing one last smash and grab.

Softplayhooray · 28/09/2022 16:45

I can't think that on paper he's the right guy. Also I heard that he was once a junior research analyst at JP Morgan but got fired (allegedly etc) for not being very good. No idea if it's true. Anyway, he's useless. The rationale is clearly just incompetence.

MrsBennetsPoorNerves · 28/09/2022 16:46

He doesn't have a background in economics. I don't know why people keep claiming that he does?

His degree was in classics and history. His PhD was in history.

He is no more an economist than I am.

TwoLeftSocksWithHoles · 28/09/2022 16:50

I had assumed it was just where the dart landed.

Userg1234 · 28/09/2022 17:01

As a tory, someone who understands in the main economics, the way money works etc....I don't have a clue.

Truss promised to cut taxes, but you don't do it when inflation rises (more money chasing finite goods etc leads to prove rises)
Why cut for the high earners....a thing called the multiplyer effect....you earn £100 for example, save 10% so spend 90.
that 90 is then saved and spent, £9 saved £81 spent so already your £100 has become £171 spent which grows the economy. Except in times of inflatioǹ.
And borrowing for us,business, governments had been cheap.....until interest rates go up across the world to counter inflation

basically these 2 fuckwits have handed power to Labour

MarshaBradyo · 28/09/2022 17:03

PersonaNonGarter · 28/09/2022 16:39

The timing is genuinely weird. I think the rationale for that is that there is very little time before the election for the reforms to kick in, so they are doing the money (which they will get through) before the stuff that will be more sticky in committees.

Oh right could be. Usually I can understand a reason maybe that’s it.

Icanstillrecallourlastsummer · 28/09/2022 17:04

Ideology often trumps common sense.

Floomobal · 28/09/2022 17:08

basically these 2 fuckwits have handed power to Labour

And thank fuck for that. I have never voted Labour in my life, but it will be the first time at the next GE

BlackForestCake · 28/09/2022 17:19

If you sold your house and put all the money on a horse, you’d be quids in if the horse won, wouldn’t you?

That's what the Chancellor has done. He's bet everything on the tax cuts leading to huge economic growth, but they most probably won't.

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