25 September 2022.

We are entering a new era (pronounced error) in Conservative governments. Unless I fell asleep we have not had a general election but this new administration under the well-known LibDem supporter Liz Truss seems intent, at least economically, in overturning everything the previous administrations, in which she served, stood for and introduced. She now sits in Parliament in the seat (pronounced deceit), occupied by my old mate BOJO.

Her leadership rival Rishi Sushi was a mixed bag but his economic policies have been abandoned. The new chancellor, Khasi Carton (he is after all a member of the Privy) seems intent on seeing the country go down the pan. Lib Truss and Khasi have decided on a new economic policy as their way forward, Well, actually they said we must find something new but appealing to the poor inhabitants of places like Hampstead. Heath had a go they thought, let's follow his ideas or to be more precise those of the then chancellor who in his spare time seems to have been a barber.

They then combined this with something called trickle down economics which I thought was what happened to old people stuck in a queue for a long time. Khasi then introduced a farcical event which was also called a mini budgie.

The trickle down idea is that if you make massive tax cuts for the rich they will then have too much money and it will trickle down to the poor, This has been tried before, by Ted Heath's barber, but it didn't work and Heath lost the general election two years later. Some might say so there is hope. Normally when a government makes such massive tax cuts and admits it will have to borrow an enormous amount to fund its plans, the figures are examined by the Office for Budget Responsibility (cleverly known as the OBR) to see if they add up. However Khasi decided to follow another barber and when asked by the OBR if they could see his figures he kept shouting "figures oh no, figures oh no, figures oh no, figures oh no, figures oh no, figures oh no, figures oh no".

Many people say that economics is a science. I will neither disagree nor agree. Within economics there are two terms conjured up by the famed economist John Maynard Keynes (Milton to his friends) during the 1930s. These are known as the Marginal Propensity to Save and the Marginal Propensity to Consume. In simple terms Keynes observed, presumably in the 1930s, that if you gave people a rise there was a part of that rise they would spend (MPC) and part they would save (MPS). A formula was developed to calculate this. I wasn't alive in the 1930s but I'm sure it was just like today so old formula can be used.

It is partly this fact that drives Khasi's farcical event and trickle down economics. Give the wealthy more money and they will spend lots of it thereby bringing about growth in the economy and ultimately, sometimes very ultimately, helping the poor. At certain times in an economic cycle, bit like the old Moulton one which can be folded up and hidden away, the formula might work. However, at the moment, we have rampant inflation. Interest rates are rising to try to slow inflation down. Interest rates rise to encourage people to spend less and save more. Are you spotting the problem here? Khasi wants everyone to spend to give growth, the Bank of England wants everyone to slow spending to curb inflation.

To my mind and probably that of a demented flea with Alzheimers, there is a contradiction here. What happens to Lib Truss and Khasi's plans if the rich, with so much more money, only save that money. Growth will not happen and the poor will be so stressed that it won't just be economics that trickles down. We'll all be mopping things up. It would seem as though many financial observers and the financial markets are far from convinced about the cut taxes plan. When I say "far from convinced" I mean they think it's stupid.

There is also another problem with dear old Milton's formula and that is it involves people doing things. People are not useful when in a formula; they don't always react the same way. Burn any metal piece of magnesium and you wil get magnesium oxide. Give every Joe Bloggs an extra £1,000 and they won't all save 20% and spend 80%. QED; economics isn't a science and formulae cannot be applied to it.

But we must now all wait and see whether this big trickle down gamble by Khasi and Lib Truss pays off. However I believe there is now a possibility that Sir Keir Starmer will stand down as Labour leader and be replaced by the returning Jeremy Corbyn. After all now the magic money tree has been found, Corbyn's policies are completely viable.