December 05, 2004

Who Won World War Two?

Before he trotted off the countryside to celebrate his father's birthday this weekend, Adrian Ashe penned these notes for the U.K. version of Friday's Daily Reckoning. European-based readers may have seen them already. But if you're on the other side of the pond, they're well worth looking at. - First the fear, now the fraud. Last week, Tony Blair got the Queen to tell her subjects they’ll have to carry I.D. cards if they want to work, shop, love, laugh or cry in his brave new Britain. Yesterday, Gordon Brown did his bit to help the State’s creeping fascism along. - “Mr Speaker,” said the Chancellor to the House as he delivered his Pre-Budget fiction, “since 1997 mortgage rates have been lower than in any seven year period since the late 1960s. Interest rates have been lower than in any seven year period since the early 1960s. Inflation has been lower than in any seven year period since the 1930s. And employment has been higher than in any seven years since records began.” - Tell us Gordon - how did you do it? Was it by getting the Bank of England to cut interest rates 8 times in two years, so the global E-Z money binge could work its magic here in Britain? Was it by fiddling the unemployment figures, so that more than 50% of the nation’s workless show up as ‘inactive’ rather than ‘feckless’? Was it by putting fully 18.8% of the UK workforce onto the government payroll - way ahead of Germany or Holland with a mere 11%? - Not at all, said Culpability; “The strength of our economy is matched by strength that comes from the decisions we made after 1997 to cut our national debt” - a bold and bare-faced lie. And what did Her Majesty’s loyal opposition manage in response? Wibbling and wobbling as best he could, Oliver Leftwing replied: "The chancellor's failure to give Britain's taxpayers value for money will be the terrible legacy of this government." - Oh for pity’s sake! “If the Conservatives do not believe in low taxation, what do they believe in?” begs William Rees Mogg in the latest issue of the Fleet Street Letter. “What do they stand for?” Not much, it would seem. - According to a poll just out from, some 54% of British voters think taxes would rise if the Tories won the next election. Nearly 40% of Conservative supporters believe it, too! - Rising taxes are a fait accompli. As a proportion of GDP, the British government’s take will have increased between 1996 and 2005 - unlike in the US, the Eurozone, or the 30 member states of the OECD on average. Up 1.7% to 38.5%, the burden still won’t deliver enough cash to feed Leviathan. The Treasury’s published Pre-Budget report includes two nice, bright pie charts - one showing central government spending, the other detailing tax revenue. “Total managed expenditure: £485 billion; total receipts: £451 billion.” - Result? Misery, dear reader - both for taxpayers after the election in May, and for our some distant point in the future...when the extra gilts Gordon Brown is issuing come to redemption. Prudence let slip yesterday that gilt issuance for 2004/05 will rise more than 6% from his March guess-timate to £50.3bn. - The price of UK government bonds already in circulation plummeted on the news, sending the yield on 10-year gilts shooting 6 clicks higher to 4.68%. The stock market, meantime, skipped 16 points higher without a care in the world. It closed at 4,751. - “The Chancellor predicted in March that he would need to borrow £10.5bn this financial year to bridge the gap between tax revenues and non-investment spending,” notes the pro-business think tank, the Institute for Fiscal Studies. “But over the first seven months spending has been stronger and tax revenues weaker than projected...He would need around £23bn if these trends persist.” - “The Chancellor is predicting that the tax burden will rise by 2.2% of national income over what is likely to be the next parliamentary term,” the IFS continues. “This represents an increase in taxation equivalent to £26bn in today’s money, compared to the £16bn seen since Labour came to office. The view of the voters may depend on whether they think it has been well spent.” - What?! Not even the IFS thinks tax itself should be at issue in British politics today! New Labour’s shysters and conmen have effected total control of the debate, just as the right-wing think tanks behind Mrs Thatcher’s policies did in the early ‘80s. So instead of deregulation and genuine economic liberalism being the a priori of British politics, it’s State interference and a culture of dependency that are assumed to be ‘good things’ before anyone dares open their mouth in Westminster. - Voters shouldn’t blame their elected MPs, though. Whitehall is right next door, after all. And nearly one-in-five of the working population is now on the government payroll. - So the idea of shrinking government...of giving personal responsibility back to the individual...of slashing taxes to free up capital and encourage investment...of taking a scythe to the civil service head-count...these thoughts are unthinkable for British MPs. But as Ludwig von Mises wrote in the dark days of 1940, “only those who unconditionally and unrestrictedly consider the market economy as the only workable form of social cooperation are opponents of the totalitarian systems and are capable of fighting them successfully. Those who want socialism intend to bring to their country the system which Russia and Germany enjoy.” - Michael Howard, you have a job to do. Do it, will you? “An ideological struggle cannot be fought successfully with constant concessions to the principles of the enemy,” as von Mises wrote. “Those who refute capitalism because it supposedly is inimical to the interest of the masses...are actually fighting for totalitarianism. The ‘progressives’ who today masquerade as ‘liberals’ may rant against ‘fascism’; yet it is their policy that paves the way for Hitlerism.” - Sixty years on, and the government want to put mandatory I.D. cards on the statute book. Remind us - who won WWII?