The Daily Parker

Politics, Weather, Photography, and the Dog

Disaster averted in London, but not elsewhere

A little less than 50 years ago, the Greater London Council finally abandoned a plan from 1966 that would have obliterated Earls Court, Brixton, Hampstead, and many other central neighborhoods:

If events had turned out differently, Southwyck House would be perched on the edge of the Motorway Box, a 50-mile, eight-lane ring road built across much of inner suburban London, including Brixton. This was only part of the planners’ ambitions. The Box, or Ringway One as it was later titled, was to be the first of three concentric gyratories. Together they would have displaced up to 100,000 people.

Baffling as the idea might seem now, it must be viewed in the context of a time when politicians and planners were panicked about imminent gridlock across the UK’s towns and cities as ever more vehicles took to the roads.

The solution they collectively turned to was the inner-city motorway, an innovation that arguably changed postwar cities as fundamentally as modernist architects’ tower blocks. Here was an entirely new type of street, one that did away with shop fronts, pedestrians, chance encounters or indeed anything recognisably human-scale. For the first time in centuries of urban life, a street was not a public realm, just a conduit between private spaces.

In 1969, while the Ringways plan was being finalised, New York’s mayor, John Lindsay, scrapped [Robert] Moses’ proposal for a massive freeway across lower Manhattan, after pressure from a new breed of activists who had started to ask, for the first time in the automobile era, whether cities should be designed around motor vehicles or human beings.

Most prominent was Jane Jacobs, the visionary urbanist and writer whose idea of a successful city centred on a necessarily organic and unplanned “ballet” of street-based life proved hugely influential in subsequent decades.

Such radical ideas were less embedded in London, and opposition to the Ringways came mainly from a string of small and fragmented local campaigns. But a near-miracle was at hand. In 1970, with the GLC on the verge of starting construction, [Prime Minister Harold] Wilson’s [Labour] government unexpectedly ordered a public inquiry, seemingly spooked by the scale of what was about to be done.

If only other cities had stopped the destruction in time. Here in Chicago, we have three major expressways converging on downtown. In all three cases the construction devastated neighborhoods (usually Black and brown ones) and permanently separated others. They're ugly, and they don't really work; induced demand destroyed their utility almost immediately. And here we are, in 2022, with the city proudly announcing that the "spaghetti bowl," where three massive highways meet just west of Downtown, will reopen this week after a $800 million rebuilding effort.

Cities can recover, but at great expense and often only because an unrelated disaster forces them to act. (See, e.g., San Francisco's Embarcadero Freeway and Rochester, New York's Inner Loop North.) And yet here we are, with 100 years of data about the external costs of high-capacity, limited-access highways in urban areas, unwilling to remove them. Even in places where residents almost universally want the roads removed, politicians refuse to act.

When they write America's obituary, they will list "cars" as one of its causes of death. I'm glad London avoided it.

"An absolute disgrace"

Conservative MP Sir Charles Walker (Broxbourne) has "had enough of talentless people putting their tick in the right box, not because it's in the national interest, but because it's in their own personal interest:"

I had to watch that twice. Just imagine any American politician speaking so frankly with a journalist. Wow.

Giving 150%, William Henry Harrison style

Liz Truss has announced she will be the shortest-serving UK prime minister in history:

Liz Truss has resigned as prime minister and will step down after a week-long emergency contest to find her successor, she has announced outside Downing Street.

It follows a turbulent 45 days in office during which Truss’s mini-budget crashed the markets, she lost two key ministers and shed the confidence of almost all her own MPs.

Truss said she had entered office with “a vision for a low-tax, high-growth economy that would take advantage of the freedoms of Brexit”.

She went on: “I recognise that, given the situation, I cannot deliver the mandate on which I was elected by the Conservative party. I have therefore spoken to His Majesty the King to notify him that I am resigning as leader of the Conservative party."

Opposition parties called for an immediate general election, saying the Conservatives had no mandate to govern.

Keir Starmer said: “After 12 years of Tory failure, the British people deserve so much better than this revolving door of chaos. In the last few years, the Tories have set record-high taxation, trashed our institutions and created a cost a living crisis. Now, they have crashed the economy so badly that people are facing £500 a month extra on their mortgages. The damage they have done will take years to fix.”

The Economist says "Welcome to Britaly:"

The comparison between the two countries is inexact. Between 2009 and 2019 Britain’s productivity growth rate was the second-slowest in the g7, but Italy’s was far worse. Britain is younger and has a more competitive economy. Italy’s problems stem, in part, from being inside the European club; Britain’s, in part, from being outside.

But if Britaly is not a statistical truth, it captures something real. Britain has moved much closer to Italy in recent years in three ways.

First, and most obviously, the political instability that used to mark Italy out has fully infected Britain. Since the end of the coalition government in May 2015, Britain has had four prime ministers (David Cameron, Theresa May, Boris Johnson and Ms Truss), as has Italy. The countries are likely to stay in lockstep in the near future.

Holding elections has not resolved Italy’s problems. But there is reason to feel more hopeful about Britain, where political instability is now a one-party disease. The Tories have become nigh-on ungovernable, due to the corrosion from Brexit and the sheer exhaustion of 12 years in power. Ms Truss is right to identify growth as Britain’s biggest problem. Yet growth depends not on fantastical plans and big bangs, but on stable government, thoughtful policy and political unity. In their current incarnation the Tories cannot provide it.

Forget a Tory leadership contest; Truss needs to call an election on her way out. This shows the strength (and the weakness) of the parliamentary system. When they get the worst leader in the history of the country, who took over from the second-worst leader in the history of the country, they can change course immediately without waiting until a fixed point in the future. But will they?

Liz Truss clings to her job

New Chancellor of the Exchequer Jeremy Hunt today essentially admitted that PM Liz Truss massively screwed up her mini-budget, as if his mere presence at Number 11 didn't admit the same thing in itself:

Truss stayed on the sidelines while Hunt — a political rival who was tapped on Friday for the top cabinet post — announced that the government would not slash taxes and instead may allow them to rise.
 
Truss left it to House of Commons leader Penny Mordaunt, another rival, to defend the government in Parliament, where both opposition lawmakers and some mutinous politicians from the ruling Conservative Party are calling on the prime minister to quit after just six weeks in office.
 
Labour Party leader Keir Starmer pushed the refrain that Truss was “in office but not in power.”

Although there is no general election in sight, two polls published Monday showed Labour more than 30 points ahead of the Conservatives.

“Who voted for this?” signs have been popping up at protests and in opposition lawmakers’ social media feeds.

Well, 160,000 old, white, rich people voted for it, which may have made this crash-and-burn spectacle inevitable.

The Tories have nowhere to go but a general election at this point. I wonder how much they'll drag the country through a horrible winter before they finally admit that.

The Tory clown car

Guys, you really need to go to the country now. You're making Jeremy Corbyn's Labour Party look like a model of competence:

Liz Truss started her premiership with a mad dash for growth. She continues to insist that boosting Britain’s growth rate is her mission. But whatever remains of her time in office is now focused on a different goal: restoring the faith of the bond markets in Britain.

Ms Truss’s reversal is a humiliation. She had spent the Conservative Party leadership campaign promising to abandon the planned rise in corporation tax. She brushed aside warnings from Rishi Sunak, her rival, that her plans for unfunded tax cuts represented a dangerous “fairy tale” which would stoke inflation. In the end the fiscal statement on September 23rd included cuts worth £45bn ($50bn), an even more lavish giveaway than the one she had dangled during the contest.

Much of her party is determined to get rid of her. Her project of deficit-funded tax cuts and a smaller state always had shallow support in a party that combines a new-found taste for state intervention with an old liking of sound money. Even those Tories who backed her project now have little reason to keep her in place, save for the embarrassment of installing its third leader in a year. The question preoccupying MPs is not “if” but “when”: should they move against her now or wait until after the fiscal plan on October 31st?

In a public letter thanking Mr Kwarteng for his 39 days as chancellor, Ms Truss declared that he had “set in train” structural reforms to planning law, as part of her mission of lifting Britain’s parlous productivity. In truth, those reforms exist only on paper and face a difficult battle through Parliament. “We share the same vision for our country and the same firm conviction to go for growth,” she wrote. Convictions are all she has left.

Labour Party leader Sir Keir Starmer didn't hold back:

In an interview with the Guardian, the Labour leader said Truss had driven the economy “into a wall” while “trashing our institutions”, and changing the prime minister again without allowing the country to vote would not be acceptable.

However, Starmer said he had told his shadow cabinet not to be complacent about the party’s 30 points-plus poll lead, and that Labour was “not going to sit back” but fight for every vote.

He said people were “looking to Labour for the answers to the next election” and the party needed to carry on putting in the work to win the contest, rather than assuming the government’s incompetence would cause the Tories to lose.

Asked if a general election was necessary immediately, or if Truss is replaced, Starmer said: “Yes … We are in the absurd situation where we are on the third, fourth prime minister in six years and within weeks we have a got a prime minister who has the worst reputational ratings of any prime minister pretty well in history. Their party is completely exhausted and clapped out. It has got no ideas, it can’t face the future and it has left the UK in a defensive crouch where we are not facing the challenges of the future because we haven’t got a government that could lead us to the future. For the good of the country we need a general election.”

Of course, the Tories have no requirement to call an election until 2025, so I expect we're about to see which bozo comes out of their Mini Cooper to move into Number 10 before Christmas. Maybe Jeremy Hunt?

Not the shortest term as Chancellor ever

UK Chancellor of the Exchequer Kwasi Kwarteng is out on his ass so that PM Liz Truss (who also holds the title First Lord of the Treasury) can put off going to the country for just a little longer:

Jeremy Hunt has been appointed as Liz Truss’s new chancellor, in a stunning reversal of political fortune and a sign that the beleaguered prime minister wants to reach out to other sections of the Conservative party.

Hunt, the former foreign secretary and health secretary, who has twice tried unsuccessfully to become Conservative leader, was named chancellor after Kwasi Kwarteng, in the job for just over five weeks, was sacked by Truss ahead of another U-turn over tax cuts.

Both Labour and the Liberal Democrats said Truss now needed to stand down. Rachel Reeves, the shadow chancellor, said: “We don’t just need a change in chancellor, we need a change in government.”

Kwarteng now holds the record for the shortest-serving Chancellor ever to survive the office:

Mr Kwarteng, formerly Ms Truss’s close political ally, is carrying the can for the financial and political turmoil unleashed by his mini-budget on September 23rd. His tenure of just 39 days in a job that dates back to the Middle Ages is not the shortest. But it’s not far off....

Mr Kwarteng’s chancellorship is the second shortest of modern times. Only Iain Macleod, who died on his 31st day in office, in 1970, spent less time in 11 Downing Street. Mr Kwarteng’s immediate predecessor, Nadim Zahawi, was chancellor for just 64 days. His tenure, it turns out, was not even the shortest of the year.

Mr Kwarteng’s successor, Jeremy Hunt, is the sixth chancellor in just over three years. Philip Hammond gave way to Sajid Javid when Boris Johnson replaced Theresa May as prime minister in July 2019. Mr Javid fell out with Mr Johnson after less than seven months. Rishi Sunak quit this year to force Mr Johnson from office. Mr Zahawi kept the seat warm while the Tories chose a new leader. And now Ms Truss’s catastrophic start has cost her ally his job. It may yet cost her hers.

The parliamentary system means that the government doesn't have to call an election if they don't want to, though an act passed earlier this year will force Parliament to dissolve five years after its opening. As that won't happen until January 2025, the Conservative Party could continue to drag the country through chaos until just after the end of President Biden's first term. Let's all hope they just get out of the way next spring.

Mystery of 96-year-old woman's death deepens with new revelations

The Registrar General for Scotland finally released a death certificate that raised more questions than it answered:

Queen Elizabeth II’s cause of death is described as “old age” in the register of deaths released on Thursday.

The registrar general for Scotland, Paul Lowe, confirmed that the Queen’s death was registered in Aberdeenshire on 16 September.

Suspicious, innit? She survived in power for 70 years and this is the best you've got? Apparently Scottish law allows this sort of obfuscation:

Old age is acceptable if the doctor certifying death has cared for the patient for a long time, was not aware of any disease or injury that contributed to death and had observed a gradual decline in the person’s general health and functioning.

The Queen had been experiencing sporadic mobility problems during the final period of her life and used a walking stick regularly in public. Her use of a walking stick came after she was admitted to a private London hospital for “preliminary investigations” in October last year – her first overnight admission for eight years.

Oh? The People deserve a full investigation! A similar fate could befall the current heads of state of not just the UK, but Cameroon, Lebanon, Norway—or even the United States.

We demand the truth!

Bank of England fights "moron risk premium"

After Chancellor Kwasi Kwarteng's shocking mini-budget announcement last week, worldwide markets (and the IMF) have clobbered Sterling and the Conservative government in general. Today the Bank of England intervened in bond markets to try undoing the worst damage:

The Bank will start buying government bonds at an "urgent pace" to help restore "orderly market conditions".

So called Liability Driven Investment funds - which support defined benefit pensions schemes - were facing a collapse in the value of the bonds they hold, which in turn could have forced them to rush to sell other assets, sparking yet more market panic.

The Bank has already said it will "not hesitate" to hike interest rates to try and protect the pound and try and stem surging prices. Some economists have predicted the Bank of England will raise the interest rate from the current 2.25% to 5.8% by next spring.

Despite the Bank's action, the pound continued to fall with some analysts warning it could even reach parity with the dollar.

"What today shows us, is that the market doesn't see this as a problem that just the Bank of England can clean up," said Jane Foley, a currency strategist at Rabobank. "This is just firefighting".

Economist Tony Yates, formerly of the Bank, believes the markets expect a reversal to the Tories' new policy, either as a volte-face soon or at the next election:

The combination of falling sterling and rising rates is particularly damning. Normally a country embarking on a monetary-policy contraction to combat an inflationary surge—imparted by a fiscal loosening—might be expected to see a rise in its exchange rate. But the government’s move has shaken markets’ faith in its fiscal competence and its grasp of macroeconomic realities. That loss of confidence produced the exchange-rate fall.

Mr Kwarteng’s delusions will come to an end. The worst return to reality would see Britain slide into a full-blown financial crisis. In this regard the fall in sterling is less important than the rise in the cost of government finances. That is partly because investors are demanding a premium: they expect to compensate themselves for the upheavals of recent days and the uncertainty they have introduced. (The economists Paul Krugman and Dario Perkins have called this a “moron risk premium”.) In a doomsday scenario this premium generates a self-fulfilling vicious cycle. It raises spending (on interest payments on existing government debt) and lowers revenues (a dearth of confidence will lead to less economic activity). This will raise the “moron premium” further, worsening the funding gap. And so on.

Ironically the fiscal plans of a prospective left-wing government are providing the confidence anchor for the right-wing government it is expected to defeat in the next election. And the more this is expected to happen, and the sterner and clearer Labour’s plans become, the less awful the crisis will be in the meantime. The stupidity of Mr Kwarteng’s policy and its unpopularity are helping to limit the damage done by it. Markets believe that things won’t carry on as they are indefinitely.

Of particular concern, most mortgages in the UK have floating rates, unlike here in the US where fixed rates are most common. So the rising interest rates and declining pound will start hitting mortgage borrowers hard, just when gas prices blow up later this autumn.

I only wish I had a few extra bucks right now for a trip to the Ancestral Homeland. Given the current Tory resistance to change in the face of direct evidence, though, I suspect the exchange rate will remain pretty favorable to Americans through the winter.

Sterling drops to lowest price ever

The pound fell to $1.033 in early trading this morning before rebounding to the still-ahistorical $1.08 by mid-day:

Chancellor of the Exchequer Rishi Sunak hasn't had the job for three weeks and he's already tanked British currency markets. The Guardian's economics editor Larry Elliott calls the mini-budget that started this catastrophe a "schoolboy error:"

Part of the story of the pound’s weakness is a function of dollar strength but that does not explain why sterling has fallen so rapidly since the end of last week. There are three UK-related factors behind the fall.

First, once a currency hits the skids it is hard to stop it. Momentum trading took over in the aftermath of Kwasi Kwarteng’s mini-budget and it has proved hard to halt.

Second, Kwarteng committed a schoolboy error by pledging further tax cuts in a full budget planned for later this year. If the markets are worried about the state of the government’s finances and the increase in borrowing needed to fund your plans, it is not the wisest course of action to add to those concerns. Kwarteng’s inexperience has been exposed.

Third, the financial markets don’t really know how the Bank of England will respond to the events of the past three days. Threadneedle Street raised interest rates by half a point last Thursday but there has been speculation of an emergency meeting of the Bank’s monetary policy committee as early as Monday.

The Economist expands:

Five-year British yields have risen from 1.5% at the beginning of August to above 4.5% now: an increase of about one percentage point in just two days.

That combination of rising yields and a falling currency has prompted discussions of a broader crisis of confidence in Britain’s economy and its assets. The government’s tax cuts will mean a growing budget deficit and higher public-debt levels in the future. Britain’s current-account deficit reached 8.3% of gdp in the first three months of the year, the deepest in modern history, driven by surging energy prices. A gaping current-account deficit is something that often worries those who invest in developing economies.

But in other ways Britain is an unusual candidate for a currency crisis. Its exchange rate is flexible, meaning that there is no link to another currency, as was the case when Britain was forced out of the European Exchange Rate Mechanism in 1992. Its financial markets are deep and sophisticated. It has minimal debt denominated in foreign currencies, and its central bank is independent from the government.

The most simple explanation for the sell-off, then, is that investors do not believe that the government’s tax cuts will lead to the real economic growth Mr Kwarteng wants. Instead, they foresee higher inflation that the Bank of England will be unwilling to fully offset with interest-rate increases. Currency analysts at the Bank of America suggest that a combination of Britain’s changing fiscal stance and the long-running effects of its decision to leave the European Union have led to a profound rethink of the pound by investors. That leaves the currency more vulnerable in the years ahead.

I was joking with friends that I should hop over there to finally get a pint and a bap for under $10, until one of them pointed out that it would be a $1210 pint and bap given airfares and hotel costs. Ah, well. It doesn't look like the pound will recover before the end of the year, so maybe Christmas in London again? Any bets on whether PM Liz Truss will have to call an election before then?