Mar
2025
I’m So Bored With the USA: Low
DIY Investor
21 March 2025
“Oh, but I’m
Always crashing in the same car”
This is a tale of two disastrous governments; whilst both are diametrically opposite they have much in-common
One did what they promised and doesn’t hide from what they are, the other doesn’t know what it is, therefore they had no idea what they were promising.
The two governments to which I refer are those of President Trump and PM Starmer.
Starmer’s government has, from day one, been dogged by negativity, mainly driven by “the £22bn black-hole” left by the previous Tory government. This accepted, their problems are of their own making, terrible negative communications, ill-judged policies, and doing all they can not to be a Labour government when that was what people voted for.
Instead, they have become more conservative than the Conservatives, with self-imposed budget constraints, and over zealous immigration policies. To this we can now add benefits.
Their defence that this isn’t about “tax and spend” is obfuscation, as is the need to redirect revenue to fund defence spending. The simple truth is that they are hiding, and, as I wrote in “Personlity Crisis” they no longer know what they represent, preferring the haves to the have nots.
A real labour government would tackle inequality not exacerbate it. We are a chronically unequal country. Since 1980, wealth and income as a share of GDP have been shifting from employees to owners, from wages to capital.
‘A real labour government would tackle inequality not exacerbate it’
It is the rentiers who should be paying, instead Labour are targeting disabled people – who, the Resolution Foundation reports, live in households with 44% less income than the median. “To be disabled at working age is almost always to be poor, living in a poor district. (In Wokingham only 4% of working-age people claim a health-related benefit; in Blackpool, the figure is 19%.)”
In “Countries, 2 for a Dollar in Trumpton”, I posed the question, “what is the point of having a Labour party?
Clearly Labour is no longer Labour. As Diane Abbott, the party’s longest-serving MP said cutting benefits for disabled people is “not a Labour thing to do”. She continued, saying: “When people say that being on benefits, or disability benefits even, is a lifestyle choice, do they know the sort of housing those people live in? Do they know what a struggle is it to live on that money? And do they know how humiliating it can be? Nobody would choose that lifestyle.
“I think being on welfare is very depressing, it’s very humiliating, it sort of brings you down. But I have no sympathy with the idea that the way to get people out of welfare is to cut the money they have to live on. I have no sympathy with the idea that it’s a lifestyle choice.
“There is nothing moral about cutting benefits for what may be up to one million people. This is not about morality. This is about the Treasury’s wish to balance the books on the back of the most vulnerable and poor people in this society.”
‘I think being on welfare is very depressing, it’s very humiliating, it sort of brings you down’
Andy Burnham, the Labour mayor of Greater Manchester, has also warned against tightening the eligibility criteria for benefit payments or reducing the amounts, saying this would “trap too many people in poverty”.
In spite of their comments, Liz Kendall, the welfare secretary, argued that the cuts, which will slash £5bn from the benefits bill by the end of the decade, are needed to “fix the broken benefits system” and balance the nation’s books, are expected to cut
Labour MPs have voiced deep concerns over the cuts, under which only the most severely disabled people will need to score four points in at least one activity to qualify for the daily living allowance via personal independence payments (Pips), the key disability benefit that is not linked to work.
Debbie Abrahams, Labour chair of the Commons work and pensions committee, warned against “balancing the books on the backs of sick and disabled people”.
Sarah Hughes, chief executive of mental health charity Mind, said: “Mental health problems are not a choice – but it is a political choice to make it harder for people to access the support they need to live with dignity and independence. These reforms will only serve to deepen the nation’s mental health crisis.”
‘it is a political choice to make it harder for people to access the support they need to live with dignity and independence’
The PM clearly has no idea, last week he promised: “No return to austerity. We are not going down that route”? If we add this to no new tax and no borrowing, it doesn’t compute, something has to give.
With Trump’s US abandoning Europe we need to rearm. As with Germany and “the debt brake” fiscal rules need to be reset. For us that means raising tax revenues not cutting spending; we still tax and spend less than our neighbours.
Within this government needs to understand the role of the independent Office for Budget Responsibility (OBR); they agree the Chancellor forecasts
Debate over the welfare changes will rage for a time yet. Charlie Bean, the former Bank of England deputy governor, told the chancellor: “We’ve got ourselves into a, frankly, pretty ridiculous position, where we’re doing fiscal fine-tuning to control the OBR forecast five years ahead.
“The OBR forecast embodies all sorts of adjustments, judgments – it’s pretty flaky. People who do the forecasts understand the uncertainty.”
He told an event of the Resolution Foundation thinktank: “I think we want to get away from this idea that we continually have to be neurotically changing taxes and spending to try to control this OBR forecast so that it’s hitting our target.”
Referring once again to “Personality Crisis”, Labour has osmosed from being the “party of workers” to the “party of work”.
As the party of workers, Labour represented not just “wage labour”, it represented the workers, represented their dignity, security and place in society. They defended them from those that sought to exploit them and enabled redress. Added to this, were the broader ideals of equality, family life and community identity.
Today, as the party of work, their basis is economic productivity. A person is only as good as their output, those who cannot work due to disability, ill health or old age are a burden. As a result, benefit cuts are a fiscal discipline and balancing the books by penalising sick and disabled people is economic.
‘Labour is now Conservative, pandering to the business elites, justifying spending cuts as moral imperatives’
Labour is now Conservative, pandering to the business elites, justifying spending cuts as moral imperatives. While the party might and reassures traditional supporters that the party still values “hard work”, rewards are skewed to business rather than workers.
As a result, the party appears to now exclude those who traditionally relied on it. If the leadership thinks they are broadening their electoral appeal they are much mistaken. All this achieves is alienating the party’s traditional voters; Labour won >80% of constituencies in Britain’s poorest half. The Tories may have lost ground in more middle‑class areas, especially after Brexit, but that shift hasn’t been fully captured by either Labour or the LibDems.
Labour’s embrace of “work” rather than “workers” is a tacit admission of the aspirations of its leadership. They thrive on middle-class respectability, and assuming that their traditional working-class voters will fall in line. They are missing the elephant in the room, Farage, who will pander to what were once labour voters.
The influence of the elephant could become apparent in the forthcoming Runcorn and Helsby by-election. This is Labours 49th safest seat in the UK (out of the 411 it won last year), they received 53% and had a 35-point lead over the nearest challenger.
But, as we covered in “Countries, 2 for a Dollar in Trumpton”, Reform are currently polling first. A win for them would cause turmoil for both Labour and the Conservatives, convincing each that the principal threat is indeed from Mr Farage, but dividing both parties over how to respond – and triggering leadership speculation.
Another guide will be the forthcoming local elections.
Earlier this month Electoral Calculus published some MRP polling for the local elections which suggest the Conservatives are on course to lose hundreds of seats.
The findings are somewhat misleading. In 2021 local elections, the Tories won 65% of all seats, about 30% higher than normal. Whilst the Tories are defending a high-water mark, for Labour the opposite is true, despite that the poll predicts them loosing seats.
The big winner, Reform; from 0 to 697!
From our own misguided, misfiring leader, we turn to the US and their own fool.
Americans are increasingly concerned about Donald Trump’s effort to overhaul the US economy via tariffs.
Trump writing on Truth Social, said: “Have no fear, we will WIN everything!!!”, claiming that tariffs were already “pouring money” into the country.
The electorate differ; when given a list of issues including inflation, healthcare and immigration, 72% were concerned about tariffs, according to Harris Poll.
The Trump ideology was based on tariffs bringing jobs back to the US leading to higher wages. The commerce secretary, Howard Lutnick, conceded last week that a recession was possible, but suggested this would be “worth it”.
For their part the electorate seem disbelieving, with 66% saying the US economy will take years to recover from Trump’s tariffs.
Another standout is the internal division within the US electorate. Unsurprisingly, Democrats and Independents are 80%+ bearish, whereas with Republicans it is around 55-65%. The same is true on the levying on tariffs
‘Americans are increasingly concerned about Donald Trump’s effort to overhaul the US economy via tariffs’
Where they do agree is on the cost of living; 91% of, 88% of independents (88%) and 82% of Republicans, being concerned about the economy and inflation. Similar majorities said that they are concerned about being able to afford their living expenses.
Turning from Trumpton wrecking the economy, there is the equally chaotic foreign policy.
Israel, having had the chance to resupply and rest their forces, have now re-engaged and bombing the hell out of what is left of Gaza. Perhaps the plan is to leave Trump less site clearance when the Rivera is created.
After failing to create peace there, all eyes are focussed on the master negotiator efforts in Ukraine.
Trumps plan was for Russia to agree to the same 30-day ceasefire on land, sea and air which Ukraine has already signed up to.
‘Perhaps the plan is to leave Trump less site clearance when the Rivera is created’
Russia’s response centred on “the complete cessation of foreign military aid and the provision of intelligence information to Kyiv”.
This would means halting all military support, from the US and from all Ukraine’s foreign backers, including Britain, France and all those putting together plans for a post-conflict “reassurance force” intended to provide a long-term security guarantee to Kyiv.
It is hard to envisage Ukraine accepting this, especially after all the sacrifices required in the three-years fighting off Russia, incurring tens of thousands of casualties and successfully preventing a full takeover of the country – albeit for loss of around a fifth of its territory.
As Matthew Savill, an analyst with the Royal United Services Institute thinktank, said; the Kremlin position as “incompatible” with the European-led security plan.
In a joint press conference, the leaders of France and Germany reiterated their continuing support for Ukraine. “We will continue to support the Ukrainian army in its war of resistance,” the French president, Emmanuel Macron, said.
‘All Trump is achieving is bring in Russia from the cold, legitimising Russian aggression and war crimes’
The Kremlin also intends to continue excluding Ukraine from any talks, saying: “The leaders confirmed their intention to continue efforts to achieve a Ukrainian settlement in a bilateral mode”.
Retired US general Ben Hodges, who was Commanding General of United States Army Europe, said: said: “This is anything but a peace plan. It is a surrender. It’s a pressure from the United States for Ukraine to surrender to Russia.
He continued, saying: “I think that this idea that somehow Russia would live up to any agreement, is nonsense.”
All Trump is achieving is bring in Russia from the cold, legitimising Russian aggression and war crimes, If there is a positive, it is that talks continue, although all this will likely achieve is for Russia to further detach the US from Europe.
As the song said, “What’s Going on?”
“Everybody thinks we’re wrong
Oh, but who are they to judge us”
‘This is a sorry tale.
Both the US and UK have simply awful governments. The veneer really has come off all participants; Messrs Trump, Vance, Musk, Starmer, Reeves, et al, all equally hopeless.
Musk, of the “it wasn’t a Nazi salute, ok”, fame is really having a bad time.
Tesla’s share price has halved over the past three months, with the FT reporting today that hedge fund short sellers have made $16.2bn betting against it.
Last year the entrepreneur and professor Scott Galloway observed of X since Musk’s purchase of it: “No company over $1bn in revenue has ever lost 60% of its revenues in a 12 month period in a non-war period. I don’t think that’s ever happened. Twitter is literally the worst-performing business in history since a change in ownership.”
Perhaps, X was merely a political project for Musk, as such this could be described “as a strategic haemorrhaging of value.”
Trump set a furious pace from day-1, slashing and burning everything in sight. Depending on your politics this was either manna from heaven or mayhem.
For other countries it might come to be seen as a gift. Europe, especially, likes to dither about getting together, but here it’s been a rush to the start line, especially with defence. Even the UK is re-engaging with Europe and Brexiters aren’t complaining. And, everyone might be better-off as a result.
Whether the UK is a beneficiary or not, depends on the government. On their performance to-date, you wouldn’t put any money on it.
MAGA has become MEEGA (Making Everyone Else Great again).
At home, this week’s treatment of disabled people, sees them added to the list of those that can’t fight back, along with pensioners and immigrants, as the government seeks easy victims for its outmoded economic policy, and attempts to combat Reform.
Domestically, both Labour and the Tories are a shambles. My first reaction on seeing the local election poll predictions included in the text was, “no way”! But, on reflection, why not? Neither of the main parties are credible, and we have another spending statement next week which will bring on more austerity, although we don’t call it that anymore.
Lyrically, we start with Bowie’s Always crashing in the same car”, which sums up the government in both the US and UK. I was going to write accident prone, but they aren’t, incapable and cruel might be more accurate. We finish with Marvin Gaye’s “What’s Going On?” What else is there to say
My enjoyment levels are being tempered now.
Philip’.
@coldwarsteve
Philip Gilbert is a city-based corporate financier, and former investment banker.
Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s
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