If you remember the Washington Consensus, you weren’t there. Power dressing, powder cocaine and a genuine belief in a market-oriented approach to economic reform from Eastern Europe to Latin America. Fast forward to today and it’s all about relaxed tailoring, teetotalism and strategic (or not so strategic) protectionism.

Such has been the broader shift following the 2008 financial crisis, the Covid-19 pandemic and the return of imperialist land wars in Europe that even parties of the centre-right appear comfortable (or at least resigned) to capping energy bills amid a global bottleneck or prioritising domestic resilience over supply chain efficiency.

And yet, the fundamentals of human behaviour remain unchanged. We still feel, think, want to have other people see us in a particular light. And from the £100,000 childcare tax trap to congestion pricing, we still very much respond to incentives. And when it comes to the latter, what could be more tantalising than flying over a body of water on a lie-flat bed, sipping on sparkling wine and twisting those teeny-tiny salt and pepper shakers?

Free at the point of reservation

Well, not to be a downer but it isn’t free. Often, you need to have the right credit card, and that comes with a substantial annual fee1. Second, British Airways is famous for its punchy and rather opaque “taxes and charges”, which can run into the hundreds of pounds on top of the points you must redeem.

Then there’s friend of the newsletter, HM Treasury, with its sky-high Air Passenger Duty, the highest in the world. And of course, every economist’s favourite, the opportunity cost.

Do redeemers ever ask themselves what else might they have done with their money? Rather than points, they could have opted instead for a credit card that gives them, say, 2% cash back on each purchase. Then there is the issue of inflating the benchmark cost. If a business class ticket costs £8,000 but you would never actually pay that out of pocket, then I’m terribly sorry but the real saving is from the £500 economy ticket you would otherwise have bought.

I could go on. But essentially, and unless you generate points from other people’s spending (e.g. employer-funded travel) then it’s all a bit tricky.

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And it can lead to some truly dismal decisions, such as taking out a mortgage with a particular provider because they offer you airline points with each monthly payment. Now, I’m not a financial advisor but picking your mortgage seems too important to be decided by maybe getting a slightly cheaper holiday but you maybe also lose your home?

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“What the heck are y’all doing in Houston for a weekend?” I remember this question, posed by the Uber driver as he skilfully navigated the maze of short-term parking around George Bush Intercontinental Airport, for a couple of reasons. First, because you don’t forget your first-ever Texas “y’all”. And second, because there was no good answer.

A city break in Paris or Prague, why not? Even New York is doable if you don’t mind the jet lag or $30 Big Macs. But the sprawling, business-oriented capital of the southern US? That is sure to invite a sceptical eyebrow, not least from the locals.

I wish I could have told the driver that I was a consultant for one of the oil majors or a glutton for Texas barbecue. But on the basis that I’d never see him again and the truth is the easiest thing to remember, I blurted it out: “This was the only destination for which British Airways still had Avios availability.”

And this is how I came to celebrate my 30th birthday surrounded not by friends or family, but in downtown Houston with 40,000 or so Astros fans, eating hot dogs and trying to establish the rules of baseball.

Trust is earned, respect is given and loyalty is demonstrated

I’m not sure who to blame — Jimmy Carter or my brother-in-law. One of them signed the Airline Deregulation Act of 1978 into law, granting carriers greater freedom to compete on price, which in turn drove American Airlines to launch the first frequent flyer programme, AAdvantage, in 1981.

The other merely introduced me to the concept of Avios, British Airways’ loyalty currency, around a decade ago. I forget which is which. Either way, I got hooked, joined the BA Executive Club (far less exclusive than it may sound to the uninitiated), signed up for the credit card, smashed the sign-up bonuses and watched the [for legal reasons, definitely not a currency] currency roll in.

The system rewards obsessives as well as those who excel in the grey zone, finding sweet spots and working to the letter if not always the spirit of the terms and conditions. You can skip the next part if you like — the granular detail is both unnecessary and also kind of the point.

The heart of the gospel is redemption

Say you want to book a flight to Cape Town using points? Well, given that BA generally only makes two business class seats per flight available for redemptions, you’ll have to either be flexible or fast. For instance, did you know that BA makes flights bookable up to 355 days in advance? So, if you want to snag a popular destination such as Cape Town, you’ll need to book on exactly that day.

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And I mean at 12:01am. So you should just head to the website? No, stupid. A normal punter placing those flights in their online basket doesn’t actually put a hold on them. And so by the time you hit ‘book’, having spent 15 minutes inputting all manner of personal details, they will be gone. Instead, you have to ring the call centre.

But the UK phone line isn’t open at one minute past midnight, you rube.

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It was a masterclass in conflict resolution. As the blue lights began to flash and sirens blare, my Dad pulled over the hire car onto the hard shoulder. Somewhere between Nice and Marseille, he’d been caught speeding. The gendarmerie got out of his vehicle, walked over to ours and gestured for the driver’s side window to be rolled down.

Then, he began to talk, not unsurprisingly, in French. Seemingly unable to follow, my Dad responded apologetically in English. At which point, the policeman offered a Gallic shrug and walked away. The effort — back-up translators, paperwork — to deal with this infringement was no longer worth it.

I mention this only because my Dad, in fact, speaks fluent French and loves nothing more than to deploy it, whether in France or Café du Marché in Clerkenwell. He just tried on his best dumb and polite and got away with it.

Something that the newly installed chancellor of the exchequer appears to be going for, to less promising effect.

Zut alors!

Amid a terrific long read in the Financial Times yesterday (tl;dr taxes may have to rise just to keep still) one section stood out. The notion that, on entering Nos. 11 and 10, the chancellor and prime minister were somehow taken by surprise at the parlous state of the public finances. The paper quotes one Labour insider, who said:

I don’t think John Healey knew; I don’t think Andy knew. Until you get the proper briefings you can only know so much. John was not in access talks with the Treasury until it was way too late.

This is, to put it kindly, implausible. In lieu of pretending he can’t speak French, we are asked to believe that Healey can neither read nor count. True, until you are installed as chancellor, you don’t have the might of the Treasury machine behind you, with access to all manner of market-sensitive briefing material. But come on.

You don’t need access talks with civil servants or secret modelling to know that the public finances are in a mess, bond yields are uncomfortably high and spending pressures, from an ageing population to climate and defence, are only rising. The Office for Budget Responsibility publishes documents to this effect multiple times a year, as do a range of widely respected think tanks.

What is to be done?

Obviously, this Labour insider in question knows that Healey knows this. And this dumb and polite schtick could be forgiven if it were part of a wider pitch-rolling strategy to raise the broad-based taxes (income tax, national insurance, VAT) that would bring in proper money to plug gaps across the public realm and reassure the markets that the UK government remains capable of doing difficult things.

Indeed, “Things are worse than we thought” is a tried and tested political trick because it converts a choice into an inevitability. We didn’t choose to raise taxes or change policy. Horrible, unexpected circumstances forced us to! But that only works if you actually go on to do the difficult things, which on the big taxes, the government has ruled out. And we’ve been here before, right?

Following the 2024 election, Rachel Reeves did the ‘omg guys, things are worse than we thought’ thing, to understandable eye-rolling from the audience. But did she use it to do politically painful things like raising income tax or did she scramble around for random pots of money, such as farmers’ inheritance tax, which required an awkward U-turn and in any event was never going to raise the sort of sums required?

Just my job, five days a week

I declined to join in with the guffaws when Healey, having resigned as defence secretary weeks earlier over the Treasury’s refusal to commit greater funding towards defence, declined to make the commitment on becoming chancellor. This sort of thing happens all the time.

Spending departments ask for money, the Treasury politely declines; a reshuffle takes place, ministers change jobs, everyone suddenly sees the issue differently. But in this instance, Healey appears to want the political benefit of saying the situation is worse than expected without accepting the political consequences that ought to follow.

If the public finances really are in such a parlous state, then he must raise serious money, make deep cuts to spending or accept the market reaction to doing neither. Being dumb and polite might get you out of a speeding ticket, but it doesn’t wash when your job is to be smart and cause offense.

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Books

The Husbands by Holly Gramazio

So, this is what it’s like to live in West Norwood. I’ve only whizzed past on the Southern train to Brighton en route to my (humblebrag) walk to Eastbourne but it sounds exhausting. At least for our protagonist, Lauren, who comes home a little tired and emotional from her best friend’s hen do, only to discover her husband on the landing. Trouble is, she’s not married. Cue Eastenders outro drums.

It’s a good news/bad news situation. It transpires that her attic is a little bit magical, in that each time her husband enters, a new one — equally convinced that she is his wife and with the wedding photos and WhatsApp messages to prove it — re-emerges.

Good news, because Lauren can send back the ones she doesn’t like. Bad because — I mean, do you think this represents a positive development in one’s life.

After some inevitable expository throat clearing (🙋‍♂️), the book goes exactly where you expect it to and is all the more delightful for it. There are plot holes, obviously, but this is not science-fiction and the author, much like the continuous band of husbands, never outstays her welcome.

Ungovernable by Simon Hart

Something of a nothing burger. I’m not entirely clear who this book is for. Nothing against the author, plucked from relative obscurity (backbench MP) into total obscurity (Wales Secretary under Boris Johnson and then chief whip to Rishi Sunak). But the book is curiously lacking in critique of how and why the Conservative Party became ungovernable or, most egregiously of all, juicy revelations.

As it happens, I worked for a whip in a previous life and it mainly involved being shouted at and sending texts on their behalf because they were too lazy to do it themselves. That said, I have a lot of time for the convention of whipping, which is ultimately about getting the government’s business through.

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Hart comes across as a decent chap and the Tories would be better off if they had more of his ilk in their ranks but the diaries, like a lot of election manifestos, over-promise and under-deliver.

Video

I’ve watched Arsenal’s double-winning, 1997-98 season review roughly 700 times, but never before had I seen the Spurs equivalent from that season. No spoilers, but it is deeply, deeply amusing.

This, from You’ve Got Mail, is by some distance, the greatest musical scene in film history. The willing adults in the audience, the arm gestures at the end… perfection.

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Manchester United played us off the park. It wasn’t so much men against boys as men against a 36-year-old Dennis Bergkamp, isolated and immobile, having been handed a lone striker role. Such was United’s dominance throughout the first 120 minutes of the 2005 FA Cup final that I was utterly convinced Arsenal would win the shootout.

Following the game, and with traffic at a standstill, we turned off the M4 and sought refuge in a country pub. The roast chicken was so fresh it may still have been clucking as Jens Lehmann saved the decisive penalty from Paul Scholes.

As we got back in the car and turned on the radio, I heard Gooner and broadcaster David Frost being asked whether United had been robbed. He paused for a moment, before magnanimously conceding, “Perhaps they were borrowed from.”

Mistakes were made

On Sunday afternoon, Manchester City scored a goal at Old Trafford that probably should not have stood. Erling Haaland’s 60th-minute winner was confirmed by the video assistant referee (VAR), despite the fact that City midfielder, Enzo Fernandez, was clearly interfering with play and therefore in an offside position.

Cue uproar from the podcasters, bafflement from the manager and an apology from the Premier League’s refereeing body. Only the trivial matter of parliament currently being in session prevented the Liberal Democrats from demanding it be recalled.

Football supporters, much like the rest of society, are rarely satisfied with the status quo. In prelapsarian times (in this instance, the 2018/19 season, the last without VAR) the interminable demand was for both consistency and common sense from referees. The two of which, you may have noticed, are not necessarily compatible.

What everyone could agree on, however, was that referees made mistakes and that those mistakes were having an impact on the outcome of matches. Given that technology allowed fans watching on TV to instantly see officiating errors from a thousand different angles, was it not ludicrous that the only person whose opinion mattered — the referee — was operating blind?

And so in November 2018, Premier League clubs voted unanimously to introduce VAR.

High variance to the Arsenal

This desire for correct decisions is perfectly rational. Who is going to argue passionately for dubious offsides or ill-gotten penalties? The issue isn’t how VAR is operated, its impact on the matchday experience or even the fact that it is still capable of making obvious errors. Rather, it betrays a fundamental misunderstanding what makes football so great (or maddening, depending on the result).

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Football is a low-scoring game. Since the sport began in 1992, the average number of goals per game in the Premier League has been around 2.65, with the typical match being decided by the odd goal. That makes for a lot of randomness: few chances, one lucky deflection, a single moment of individual brilliance from an otherwise inferior side.

Compare that to a sport such as basketball, where each team scores roughly 100 points per game, typically across 40-50 scoring possessions. At which point, the law of large numbers grinds into gear, and the team that is a few percentage points better should be able to more reliably leverage that advantage.

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The Reserve Bank of Australia has a problem. Well, two problems, really. The first is the garden variety energy cost/capacity constraints/surging AI investment inflationary pressures that central banks around the world are grappling with. The second, however, is a little more local.

From New York to Tokyo via Frankfurt (I can get you there Lufthansa business class for a smidge over €9,000 if you can be flexible on dates), monetary policymakers tend to err on the side of caution when it comes to public statements. And for good reason: these people literally determine the price of money.

When Andrew Bailey, Kevin Warsh or most glamorous of all (an ultra-low bar, verging on negative interest rates) Christine Lagarde speak, their words can affect everything from bond yields and currencies to whether it would be a good idea for you and me to pop to the shops and stock up on tinned goods.

At the same time, Australians are known for their idiosyncratic take on the English language: the liberal use of swear words, determined informality and abbreviations. So, in the arvo, Albo will put on his sunnies and fire up the barbie, mozzies be damned. And this can make for some interesting moments.

[Yes, I’ve resorted to cliché about Australians and god knows we’ve been here before, but they can’t hurt me anymore.]

Can I borrow a feeling?

Earlier this week, deputy governor of the Reserve Bank of Australia (RBA), Andrew Hauser, went on television and got a little impassioned. Speaking to the ABC, he said that people were “furious” about persistent inflation, calling it the “one big problem”. And he did so with a fair amount of gusto and gesticulation.

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Now, an important caveat which is annoying for the purposes of today’s newsletter but such is my Socratic dedication to truth-telling: Hauser is in fact not Australian. Like seemingly everyone on Manly Beach (the Irish diaspora, for its part, seems to have adopted Coogee), he is British and a one-time Bank of England lifer.

But clearly, the bloke’s lived in Australia long enough to have picked up some of the cultural cues.

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Everyone likes to think they have a personal vote. Following the Conservative landslide of 1983, the newly elected Member for Richmond and Barnes1, Jeremy Hanley, received a phone call from the prime minister. She had been to the constituency prior to polling day, which Hanley went on to win by a mere 74 votes.

The conversation went like this. “Mrs Thatcher, I want to thank you for getting me the 74 votes that I needed. Your visit made all the difference.” To which she flatly replied, “No, Jeremy. You won the 74 votes. The other 21,000 were for me.”

When it comes to elections, the outcome is almost always — and to a truly disheartening degree — beyond any local candidate’s control. The popularity of the national party, the vibes of the economy, the demographics of the particular seat — little can be done about them, at least not during the short campaign.

Nevertheless, there is one metric that can be, if not exactly decisive, then at least surprisingly persuasive. Forget money or charisma, though a liberal sprinkling of either never hurts. Rather, it’s whether the voter has met the candidate. Which sounds almost cartoonishly parochial but hear me out.

A handshake and a smile

What you actually say to them on the doorstep isn’t really the point. Perhaps there’s a Mariana Trench-sized pothole the local council hasn’t filled in or they want to vent about a particular policy grievance. In either case, let them. The important thing is to just shake their hand, exude a base level of empathy and, unless obviously hostile, ask if you can count on their support.

Now, even in UK parliamentary constituencies, which at around 75,000 registered voters is smaller than many other democracies, shaking hands with a statistically significant number of residents can prove difficult. What you need, therefore, is a system, and it pains me to see it be done wrong.

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I never enjoyed door-knocking because I am, in these special, very limited circumstances, a normal person. As it happens, I don’t get a kick out of walking around suburbia in the cold, trying to work out which if any of the seven doorbells are operational, hoping no one answers because the British public can be, let’s face it, a capricious lot.

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If you want to annoy a British economist (though why limit yourself to a single nationality?), mention the Roaring Twenties. Not the jazz, cloche hats or Gatsbyesque champagne fountains — economists are rarely invited to parties. But the frothy GDP growth, conspicuous consumption and wild speculation that came to an abrupt end with the stock market crash of 1929. Because it didn’t really happen here.

Following a brief post-World War I recession of 1920-21, the US economy entered a period of expansion, characterised by a new kind of mass consumption, powered by technological advances from electrification to the automobile. The numbers are absolutely staggering and I make no apology for ambushing you with stats:

• Real GDP grew by 42% in the eight years after 1921

• The number of cars on the road more than tripled, from 6.7 million in 1919 to 23 million in 1929

• The percentage of households with radios rose from 19% in 1925 to around 40% in 1929

• Unemployment hovered at around 5%

• And the big one: the Dow Jones Industrial Average rose sixfold from 63 in August 1921 to 381 in September 1929

Back in Blighty, things were a little more… sedate. The economy exhibited substantially higher unemployment, lower growth, a decline of traditional industries such as steel and shipbuilding, falling wages (which, in the coal industry, triggered the 1926 General Strike), even a severe bout of deflation in the early part of the decade.

Things weren’t all bad, of course. And Britain did recover faster from the Great Depression. But this was in large part because there was less of an asset price boom from which to unwind and as a result of abandoning the gold standard in 1931, which allowed monetary conditions to loosen and sterling to depreciate.

In sum, as far as Britain was concerned, the decade was less Roaring and more Spluttering Twenties. I mention this first because, I’m sorry, I thought it was interesting. And two, it’s low-key happening again.

Bringing the English weather

Yesterday, the Governor of the Bank of England1 sat down with the Commons Treasury and sprayed remnants of cold sick in various directions. Citing energy pressures as a result of the Iran War and food price rises driven by drought and additional El Niño-related effects, Andrew Bailey warned that another round of inflation was on the way.

And while Bailey didn’t say anything concrete on interest rates (perish the thought), and analysts expect the Bank will leave rates unchanged this month at 3.75%, his comments have only fuelled predictions of a quarter-point rise by the year’s end. So far, so normal, save for the West Wing adjacent quip that there was no “secret plan”.

Meanwhile, Bailey’s US equivalent, Kevin Warsh, has been making similarly hawkish sounds. Speaking last month at the big central bank/economist get-together at Jackson Hole, the Fed chair made clear that he would be prepared to upset Donald Trump and hike interest rates in order to maintain price stability.

See, the US is dealing with inflation too, for some of the same reasons (Hormuz, Strait of) but also some others, of which Britons can only dream.

America sneezes, Britain catches every influenza imaginable plus some new ones too

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You order a pizza via a popular delivery app. The whole thing is seamless. Pizza arrives piping hot. This is a disaster as you’re now going to order another dozen this calendar year in an attempt to recreate the magic and each will be a congealing mozzarella of disappointment.

You’ve stumbled into a phase where your shoelaces keep coming undone. Talking multiple times a walk. You could obviously do the double bow but it just feels like a level of commitment too far. Did this happen to anyone else in their late-thirties?

It’s raining and it isn’t supposed to. You checked two different apps. You think about your trust issues, which you can directly pinpoint to the time you saw The Perfect Storm in cinemas with your mother and, on George Clooney et al. sailing into the eerie calmness of the storm’s eye, she says hopefully, “Oh, maybe they survive!” Moments later, George is sleeping with the fishes.

A bunch of young kids are playing football in the park and the ball hits you flush on the chest while you’re lying down on the grass. You play it cool, obviously, and wait in anticipation of pro forma apology or at least mild embarrassment from a parent. Neither is forthcoming.

You lose your favourite shoe model to discontinuation. You now have to go to Amazon and import the last remaining stock from Canada. You are warned you may have to pay an additional import charge.

You go for dinner at a young person place that appears to morph into some sort of dance party after 9pm. The security staff are polite by the standards of a nightclub but frightfully rude for a restaurant.

A person who won’t text you back achieves a significant life milestone and you send a card by way of congratulations.

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You download an audiobook by a first-time author. It shows. After a couple of expository missteps the plot settles down but it’s too late. You’re rooting not for the protagonist but the author and it’s not helping with the suspension of disbelief thing.

You realise that, on reflection, your plan to reread the first four books of Robert Caro’s ‘The Years of Lyndon Johnson’ over the summer and for this somehow (?) to compel the final volume into existence has proved only a qualified success. It did produce this fun piece but, at roughly 150 hours of audiobook for a single newsletter, you may be single-handedly responsible for offsetting any AI-related productivity gains in the ONS data.

You recently moved to a property on what is effectively a dead end. Yet the street is somehow busier than most dual carriageways. Who are these people and where are they going?

It’s Sunday night, you’re in the supermarket and you’re craving… a ready meal? You haven’t tried one in more than a decade because you vividly recall feeling mildly depressed every time you had one at uni. Though it’s conceivable you were just mildly depressed. You buy salmon, just to be safe.

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The older we get, the harder it becomes to make friends. In kindergarten, all you really need to make a meaningful connection is to discover the other person at the crayon station is also called Jack or, no way, you like football and lunchables too? This is uncanny!

But as the years go by, schedules tighten, interests diverge and standards rise. That acquaintance you were thinking about upgrading to friend status was rude to the wait staff (or, even worse, cloyingly polite as a flex?) Thank you, next.

This is also a problem that nationalist movements face.

Milei-feuille

In recent years, figures on the right of British politics have sought to play in the ideological sandbox with Javier Milei. The Argentinian president isn’t a nationalist in the traditional sense — he’s a self-identified libertarian and ‘anarcho-capitalist’1. However, his governing principles: disdain for multilateralism, heavy anti-elite rhetoric and personalistic leadership style are close enough for the purposes of today’s newsletter.

Last year, Reform UK leader Nigel Farage praised Milei for his spending cuts, describing them as “the beginnings of an economic miracle which is happening in Argentina.” Not to be outdone, prime minister of the month for September and October 2022, Liz Truss, named Milei as her favourite conservative leader after Churchill and Thatcher. (When later informed of Truss’ admiration, Milei replied, “Who?”)

Having declined the much-sought after Truss endorsement, Milei has seemingly spurned Farage too. In a speech last week, amid the usual faltering economy and falling polling numbers, Milei reasserted Argentina’s claim to the Falkland Islands, pledging to accelerate construction of a naval base near the archipelago and toughen sanctions against oil companies drilling in the area.

This followed a suggestion from US president Donald Trump that he was reconsidering America’s support for British sovereignty over the territory. And so, like a jilted bestie who has just learnt they are to be a bridesmaid but not maid of honour, Farage hit back (via Robert Jenrick), warning he would use British armed forces to “crush” Argentina.

We are, as ever, one chilled bottle of rosé away from someone leaving the WhatsApp group.

[Insert country] First

There is a tension at the heart of any two nationalist allies and the clue is rather in the name. Nationalism prioritises the interests (or perceived interests) of one’s own nation (or favoured groups within said nation) above all others. And while governments of all ideological bents do this to a greater extent (in democracies, locals vote), and even when they don’t (see: Sino-Soviet split), the issue tends to be more pronounced for a few reasons.

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Two nationalist leaders may admire each other’s domestic playbook, rhetoric or repressive apparatus while at the same time still viewing international relations through a zero-sum prism. Think: trade wars, resource competition and, in this instance, territorial disputes.

Nationalism’s core tenets — chief among them the paramount position of national sovereignty — are also inherently more resistant to multilateralism and supranational bodies. Meanwhile, personalist politics, built around a single, allegedly irreplaceable leader, tends to make relationships more volatile, since there is less institutional glue binding the two together if and when the personal rapports begin to fray.

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Mr Speaker: Questions to the prime minister! I call the Labour MP for Good Grief My Majority Is Less Than The Lib Dem, Green and Independent Vote Combined Central.

Labour MP: Will the prime minister join me in expressing some economic populism I don’t really share because I’ve run a sensible think tank but I can repackage for short-form video content, and agree that we should be protecting welfare, not cutting taxes for millionaires?

Prime Minister: My hon friend is correct and this government is etc and so on…

The pyramid of doom

The leaves are turning brown, the transfer window has shut1 and the Labour government is facing a tight budget: autumn is coming. And everywhere the chancellor looks, the data appears to disappoint. At the risk of engaging in some cringe-inducing parliamentary call-and-response:

And that’s before we get to the long-run. A recent paper by Ben Ansell, professor of politics at Oxford University, for the Institute for Public Policy Research, sets out the sheer scale of the fiscal pressures Britain faces this century, largely as a result of an ageing population, as well as higher spending on defence and the transition to net zero.

This delightfully chimes with what, in my Treasury days (or, as the South Koreans would call it, my Leeds Days2), we referred to the graph of doom. Essentially, for many of the same reasons, UK debt spirals to roughly 275% of GDP by 2075.

Now, despite the best efforts of successive governments and the British people in the odd plebiscite, the UK economy remains large and contains multitudes. Consequently, super long-term projections such as these are about as accurate as my personal bête noire, monthly GDP figures.

Nevertheless, the direction of travel on spending is pretty clear. As, indeed, is the tax burden.

Middle earners, low taxpayers

The overall tax burden is at record levels3, driven by effective rates on high earners and corporate profits. Simply put, those with the “broadest shoulders” are carrying more of the weight. For instance, income tax paid by the top 10% of income tax payers rose from 53.5% in 2010-11 to 60.3% in 2023-24, according to the Institute for Fiscal Studies.

At the same time, middle earners or, to use the nomenclature, “working people”, have seen their income tax and National Insurance contributions fall since 2010. Indeed, at the point of the last election, the effective personal tax rate for the median earner with no children fell to its lowest point since 1975.

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And while, as a new paper from the Resolution Foundation points out, frozen income tax thresholds have contributed to the UK seeing the largest rise in taxation on average workers across 33 comparable OECD countries, this was from “a very low base”. As a result, Britain remains in the bottom third of countries for the level of tax on the average worker and lower than before the financial crisis. The killer quote:

No country raises more in total tax as a proportion of GDP without also asking more of single average earners.

Politics aside, the era of eschewing broad-based taxes in favour of desperately plugging leaks in the ship of state by raising lots of little taxes on random bits of wealth may be coming to an end.

Now, the politics

Thank you, Captain Obvious. All the prime minister has to do is raise taxes on his own voters (the young and middle-aged, graduates and urban professionals, public sector workers etc) having inherited a manifesto commitment explicitly ruling out such a thing. Oh, and his entire schtick is protecting said voters from the cost of living. Fair challenge, but a few things:

If the best time to raise broad-based taxes was autumn 2024 and the second best 2025, now is still third best. Raising income tax would be painful, but it would not only help to fund various bits of the state and a hybrid war against Russia, it would also represent a powerful sign to the bond markets that this government was serious about fiscal responsibility, something that may also lead to yields falling.

Of course, none of this precludes extracting more money from the better off. You can do both! This was the principal error behind the High Value Council Tax Surcharge on properties valued at more than £2m (aka the mansion tax), a measure that the Office for Budget Responsibility expects will raise a pitiful £400m a year by 2029-30. Instead, the policy should have been used as a lefty shield while simultaneously raising taxes on middle earners. It’s called politics.

Believe it or not, this is a good news newsletter, albeit not a very Friday one. The money is there. But it will require someone actually willing to:

1. spend political capital and

2. make the argument

A habit Britain’s politicians have rather lost.

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The fundamental issue with the ‘Bayeux Tapestry on loan at the British Museum discourse’ is that my visit to Normandy in 1999 to witness said embroidered cloth is wholly remembered for my introduction to French service station toilets and the concept of squatting.

And this sort of thing happens all the time. Only last week, while reflecting on my leader writing past, I recalled how my memory of the week following the late Queen’s death in 2022 was that the Evening Standard’s comment editor had gone on annual leave, I had to cover and it was a total nightmare.

Surely we all have personal, often trivial relationships with otherwise national events?

I could go on. John Prescott punching a voter during the 2001 general election? That would be my Dad getting bumped from a radio slot to make way for the breathless commentary. The September 11 terror attacks? My school locker being broken into. The death of Osama bin Laden? Phil Neville — who tweeted about the news.

On autopilot

One of the odder aspects of the first Covid lockdown (the proper one that people broadly speaking followed) is that, while a lot of flashbulb moments were happening, it was also a bit same-y. Like a mid-2000s Coldplay record but, you know, low key terrifying.

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During the Passover seder that spring, when the youngest child asked “Why is tonight different from all other nights?” the answer was: er, we’re all in our livings rooms, on Zoom, nibbling on food we’d rather not eat. It’s not that different.

For those fortunate enough to work from home, every day was just pretty much like the last, with little need for the brain to disengage the autopilot. The topography of memory resolutely flat, like one of those dead straight desert highways, with their dangerous loss of perspective that drivers are warned about.

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Age, as the saying goes, is just a number. Which is fine, so long as you have only a passing interest in your chances of staying alive. Following a sharp decline after birth, mortality rates in adulthood have a nasty habit of doubling roughly every eight years. Like productivity, age isn’t everything but, in the long run, it’s almost everything.

In that spirit, when the US national debt surpassed the $40 trillion mark last month, there was a smattering of news stories. The figure has more than doubled in the last decade while the Congressional Budget Office projects that total borrowing will reach $64 trillion in the next.

In isolation, these numbers are about as informative as monthly GDP figures. But US debt-to-GDP currently stands at a seat-shifting 125.8%. And while neither debts nor deficits appear to command much salience during the midterm elections, investors do care.

The US government cares too, particularly when 30-year Treasury yields hit 5.33%, their highest level since the eve of the Global Financial Crisis.

Yield to temptation

Why are borrowing costs so high? A quick and dirty bullet list:

• The US runs large and persistent deficits — nearly 6% of GDP (even at close to full employment!)

• Robust economic growth — projected to be 2% this year

• Resilient inflation — hovering at around 3.4%, underpinned most recently by energy price pressures

• Competition from the hyperscalers — even the US government has to compete with the tech giants for capital as they ramp up borrowing for data centres and other AI-related investments

• A new Fed Chair — after a shaky start followed by reassuringly anti-inflationary noises at Jackson Hole, investors remain sceptical about whether the Kevin Warsh is too afraid of incurring the president’s wrath to ever raise interest rates

• Uncertainty — over the pace of borrowing, over the policies of the Trump administration more widely, over the idea that the US will ever cut spending or raise taxes

To be clear, the market for US Treasuries is still functioning normally — this isn’t a buyers’ strike. The US dollar is still the global reserve currency and many buyers of Treasuries remain governed by mandates explicitly requiring them to hold the stuff.

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Rather, the market is sending a clear signal — if the US wants to keep borrowing at these levels and if inflation stays this sticky, it’ll cost them. And it’ll also cost you.

Heads America wins, tails the world loses

US Treasuries act as the benchmark for global finance, providing the curve against which all other assets — government debt, corporate bonds, mortgages — are priced. Consequently, a sustained hike in yields has the nasty habit of drawing global capital into dollar assets, making it harder for everyone else to borrow, including the UK.

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By the time I got around to watching it, I hadn’t managed to keep any food down for going on 72 hours. So when I say the speech made me well up, do take it with a pinch of oral rehydration salt. Because by that point, I’m fairly certain an advert for contents insurance would have reduced me to tears. But this is Mary Carillo we’re talking about.

Unless you are a proper tennis nerd or live in the United States, it is possible you have never heard of Carillo. But if you’re reading this newsletter, my hope is that you and I share one thing above all else: an admiration for great storytelling1 and people just generally meeting the moment. And boy does that describe Carillo.

My first piece of advice for anyone giving a speech (though, come to think of it, no one has ever asked) is simple: assemble a supportive audience. This is the primary reason why bad wedding speeches are quite so disastrous: it takes a special kind of incompetence to fall on your face in front of a crowd that only wants you to succeed.

Sure, that Tony Blair address to the Women’s Institute was wildly ill-judged, but even at the height of New Labour, those people weren’t voting socialist anyway.

That voice

Carillo enjoys a few other advantages that many speakers lack. She was being honoured with a prize (induction into the International Tennis Hall of Fame), she had, I think it is fair to say, second billing (the other inductee being Roger Federer) and, most handily of all, she talks in front of a microphone for a living. Still, not many can pull off what she does.

Carillo has this quality of making the listener feel completely at ease. Part of this stems from her distinctive voice: deep, rich and never far from breaking into mid-sentence laughter. Even in her serious moments, that Long Island warmth shines through, buttressed by a genuine authority about her subject. All in, it’s a devastating combination.

She was captivating from the off, calling Billie Jean King, fresh off introducing Carillo, “the most singularly American person I’ve ever known”. She told stories — of her tennis origin (winning in the “ferociously competitive” six and under age group at the annual Douglas fishing contest in Queens, New York), of the time she first took a set off Tony Carillo (her dad) and of her childhood friend, John McEnroe,2 who was, she recalled, “so damn good, even when he was so damn short”.

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Like all the great storytellers (and indeed tennis players), she mixed up her paces and played with variety. Carillo followed a sincere call for truth-telling (the “occupational hazard to piss off people in power”) with what she described as a “brief but moving poem”. A transcript cannot possibly do it justice, but nonetheless:

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Roger Federer does not hold the most grand slam titles, the most Masters 1000 titles or the most weeks at world no. 1 — that would be Novak Djokovic. He cannot lay claim to the most titles at a single major, the most consecutive weeks in the top-10 or the career golden slam — that’s Rafael Nadal. Nor does he even have a winning head-to-head record against either man.

There is simply no statistical route — none — to arguing that Federer is the most accomplished men’s tennis player of all time. And yet, as he is inducted into the International Tennis Hall of Fame on Saturday, Federer will do so as the most popular and important player in tennis history.

In the words of fellow Hall of Famer and tennis historian (look, ‘newsletter writer’ is a perfectly fine job title but *tennis historian* is better) Steve Flink, Federer transcended the sport. And he achieved this in large part by making people feel things to a quite unusual degree.1

Popular! You're gonna be popular!

During his playing days, Federer was written about in a manner more often reserved for spiritual leaders. David Foster Wallace contributed the most celebrated item in a 2006 essay for the New York Times, “Roger Federer as Religious Experience”, which chronicled the man at the height of his powers.

Five years on, Brian Phillips did the same for the Swiss’ gentle (and at the time, seemingly terminal) decline, with the melancholic subtitle “The long autumn of Roger Federer”. Indeed, I have had one or two stabs myself. He just had that effect on people.

There had, of course, been popular players before. Björn Borg was tennis’ first true teen idol while Evert became America’s sweetheart. Jimmy Connors and John McEnroe were brash and box office but divisive. Later, the dominant pair of the 1990s, Pete Sampras and Steffi Graf, were more admired than loved. Federer was something else.

He was wildly popular at every stage in his career. When being overtaken in the rankings, first by Nadal and then Djokovic. Amid his late-career resurgence. And even during his unipolar moment, of 2003 to 2007, when he won 11 of the 16 slams on offer, fans still overwhelmingly wanted him to win.

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Federer could play Andy Murray at Wimbledon, Andy Roddick in New York and Rafael Nadal in Madrid and still have at least half the crowd on his side. Little wonder, then, that Federer won the ATP Fans’ Favourite award 19 times in a row between 2003 and 2021.

The obvious question is: why? Why did people want Federer to win so badly?

If you can’t love yourself…

While Nadal played to suffer and Djokovic to prove the haters wrong, Federer did it simply to play. And he let fans become co-conspirators. Calvin Tomkins, longtime art critic for The New Yorker, once observed that “the beauty of tennis, like the beauty of dance, is kinaesthetic, in that we respond to certain shots as though we had made them ourselves.”

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“Don’t worry, no one reads leaders.” These were the words Evening Standard editor Emily Sheffield said to me on my first day as the paper’s leader writer, presumably by way of reassurance. And, with notably rare exceptions (my mother, people writing long reads with titles like “Whatever happened to the Evening Standard?”), she was absolutely spot on.

Leader columns are something of an anachronism. Then again, so is any section of a newspaper, what with its puns, tiny fonts and news stories frequently overtaken by events before they even hit the shelves (or, for the baby boomers, get tossed onto the doorstep).

During its zenith, the Evening Standard published six editions a day1, acting as a sort of pre-internet rolling news source. And it more than held its own against the nationals. As editor of the Sunday Times, Andrew Neil would eagerly wait in his Wapping office for the first edition to drop, noting that “what it chose to make the page-one splash of its West End edition was invariably what the nationals ran with next day.”2

Where you lead, I will follow

The obvious question is: how can a newspaper, consisting of thinly sliced trees, take a view on anything? What generally happens is that the line gets hammered out at conference. The position is usually obvious, and generally determined by a combination of the predilections of the editor, proprietor and readership — though not necessarily in that order.

For instance, did The Sun endorse Labour ahead of the 1997 general election because Tony Blair travelled to Hayman Island, Australia, to meet Rupert Murdoch? Did he provide any specific assurances on the euro? Or did it have more to do with the fact that his party was 20 points ahead in the polls and the self-styled newspaper of the people couldn’t be seen to be backing such an obvious loser in John Major?

The specific leader is really oddly drafted, by the way. At one point, it suggests that the Tories have “all the right policies but all the wrong faces.” What the heck does that mean? For more, see this BBC Newsnight clip for how gloriously uncomfortable the paper’s editor, Stuart Higgins, felt about the whole thing.

Clearly, I am in no position to judge. As The Evening Standard’s leader writer and, later, chief leader writer — a title bump I negotiated in lieu of a pay rise which also masked the fact I was the only leader writer — while I was never put in a position to write a leader in favour of ivory dealing or encouraging toddlers to take up smoking, I did draft the one endorsing Liz Truss for Conservative Party leader and, consequently, prime minister.

For reasons I’m only too pleased to share, it remains one of my absolute favourites.

Truss issues

Regular readers may be aware that I’ve been fairly critical of Truss. There’s this:

And this:

To name but two. But one thing I learned from Melanie McDonagh, the doyenne of (extremely right-wing but beautifully crafted) leaders is to make them as close to your actual opinion as possible and wait to see how much the editor identifies and makes you take out.3 In that spirit, my 300 words comprised 80% “Guys, are we sure this is a good idea?” and a single paragraph actually doing the endorsing.

The plan was, if I may, a triumph. Obviously, no one, even in the spectacularly insular world of British journalism, was paying any attention to the Standard’s view. I’m not even sure why we felt the need to take one. Contrast that with the endorsement of Sadiq Khan for a third term as mayor in 2024, which:

1. Caused a bit of a stir, given the paper was historically a Tory-supporting one

2. Was at least an Earth-bound reflection of Khan’s record: doing very little in the first term before choosing to burn through political capital on the Ultra-low emission zone (Ulez) in pursuit of better air quality

Busted

Well, a triumph until The Independent’s chief political commentator (and Blairite-in-chief) John Rentoul shared a screenshot of the piece on Twitter, if memory serves me correctly (the website, now called X, is a sewer without a functioning search bar) pointing out that the endorsement was, erm, rather well hidden.

As it happened, Truss was gone within 50 days and so we never got to see what life might have been like under a prime minister that weird. And in any event, my overriding memory of her premiership is shaped more by the fact that the Standard’s comment editor went on holiday the week after the Queen died, I had to cover for him and it was a nightmare.

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You can have your bright cold days in April and your worst of times, but I’ve taken the view that this remains the greatest opening to a chapter in the history of the English language. It is from Nick Hornby’s About a Boy, and involves a dead duck.

I’m almost certainly breaching copyright law at this point so let me just state — for the benefit of readers at Mishcon de Reya or Bird & Bird — that I’ve purchased the book in hardcover and paperback, seen the film in cinemas and got the DVD.

My interest is partly time travel. It was late summer 1999, something I know for a fact because Arsenal had just drawn Fiorentina in the Champions League group stage1 and a single scoop of stracciatella still cost 3,000 lire.

We were staying, as it happened, in Florence when I heard some disturbing sounds emanating from my parents’ bedroom. I rushed in to find my dad in bed, fully dressed, thank goodness, holding a book while seemingly having some sort of fit. In between sobs, he began to read aloud:

Marcus couldn’t believe it. Dead. A dead duck.

And then the uncontrollable laughter started up again and he had to admit defeat.

Before the holiday was over, he bequeathed the book to me. Which, on reflection, given its [spoiler alert] suicide attempts, drug use and sexual references, was perhaps a bit much for a ten-year-old. But it was the 1990s and grownups had only recently stopped giving toddlers plastic bags with which to entertain themselves.

And anyway, it wasn’t until I picked it up again many years later that I realised just how meaningful the book was to me.

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Which one?

About a Boy is classic Hornby fare. Based within earshot of the Holloway Road, it's a witty, bittersweet story centred on an aimless, thirty-something man, Will, who befriends (in the amazingly non-creepy sense) a lonely 12-year-old boy, Marcus, after pretending to be a single father in order to pick up women.

The title is a play on “About a Girl”, the third track from Nirvana’s debut studio album, Bleach. Which makes sense, given that music is one of the central themes of Hornby’s writing, and the fact that the novel’s climax is set against the death of Kurt Cobain (which presumably explains why the film adaptation departs from the book, not least because licensing Nirvana’s music would have been prohibitively expensive).

But the title also functions as a description. The novel spends its entire length flitting between Marcus and Will, bringing their divergent coping strategies into sharper focus. The former is a pre-teen forced to grapple with grownup fears and challenges, while the latter is a 36-year-old in permanent adolescent, emotionally avoidant mode. The ‘boy’ in question could easily refer to either.

About Me

Now, it’s scarcely unique to see oneself reflected in (or at least to convince yourself of such a thing) in a character. But, somehow, on each subsequent reading, I see myself in both potential candidates for ‘Boy’. Partly because, as the film critic Mark Kermode said of all great coming of age stories:

It makes you think it’s about you. That I grew up in a completely different world in a different country in a different culture and a different gender, a different national whatever but I understand what that character is feeling. You take care of the specifics and the generalities will take care of themselves.

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But also because I really do see myself in both. There’s Marcus, autistic-coded, devoid of agency and prone to treating everything from bullying kids to his mother’s depression as just the weather. And then there’s Will, with almost cartoonish levels of agency but with neither job nor obligations, seemingly untethered from anything with structural integrity.

And this is where things get truly spooky: he finds the British Museum painfully dull:

Was there a more boring place in the world than the British Museum? If there was, Will didn’t want to know about it. Pots. Coins, Jugs. Whole rooms full of plates. There had to be a point of exhibiting things, Will decided. Just because they were old, it didn’t mean they were necessarily interesting. Just because they’d survived didn’t mean you wanted to look at them.

The End

The book finishes hopefully enough. Well, not for Cobain, but at least for all the fictitious characters. Alright, not for the duck either, but all the fictitious human characters. Marcus has a bit more of a support structure and is going to be alright, while Will is learning to let others in. Even Fiona, Marcus’s downtrodden mother, might eventually get an evening off.

As for me, I’m still definitely one or both of the boys: time-rich and agency-poor or the other way around — depending on the hour of day and how the newsletter draft’s going.

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Charles Darwin, like many men, was confused by birds. In a letter to the botanist Asa Gray, sent a year after the publication of On the Origin of Species, he despaired: “The sight of a feather in a peacock’s tail, whenever I gaze at it, makes me sick!”

Darwin’s confusion was grounded in the fact that male peacocks, with their colourful and cumbersome tails, appeared to contradict his theory of natural selection — the idea that evolution favours whatever helps an organism avoid getting eaten for long enough to produce viable offspring.

Surely, the peacock would have a higher chance of survival if it spent its finite metabolic resources on better camouflage or stronger claws? Why would evolution come up with something so impractical and obviously wasteful? We know now this is nature’s equivalent of costly signalling.

In 1991, a research team led by Marion Petrie found that peahens prefer peacocks with “elaborate trains” (unlike human females, who to my knowledge keep a wide berth from men with an interest in retro British Rail insignia).

Peacocking on wheels

Friend of the newsletter, Ogilvy vice chairman and walking anecdote machine Rory Sutherland makes a similar point about cars. A Lamborghini Huracán and a heavy goods vehicle can cost roughly the same amount. Yet no one is driving an HGV in order to signal their wealth or show how really very well they are taking the divorce, thank you for asking, Sandra.

The HGV is expensive because it’s big and heavy and enables the owner to earn money by hauling things up and down the country. The whole point of a supercar lies in its sheer impracticality. Sure, the Lamborghini has a top speed of 200mph but try reaching even half that on New Bond Street.

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Which brings me, to absolutely no one’s surprise, to a recent short-haul flight.

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Day one:

Do you want to be right, or happy? My therapist wasn’t referring specifically to hotel buffets. But that’s only, I suspect, because it was our first session and he was yet to grasp the importance I ascribe to breakfast.

Point being: regardless of the hotel’s price point or Tripadvisor rating, you cannot expect to get things right on your maiden circumnavigation of the omelette station. And you don’t even want to.

Say, by some quirk of fate, you managed to deposit the top five buffet items onto your plate: the eggs royale observed the laws of thermodynamics (smoked salmon placed on the side to avoid being cooked by the residual heat of the poached eggs), the bacon caramelised and the OJ as freshly squeezed as the day is long… big whoop.

Ask yourself: how would you know you’d smashed it if you didn’t also try the not so good: the pancakes left to wilt under a heat lamp, the supermarket quality bagels or the mushrooms left to marinate in their grey juices? The first morning is all about trial and error. Pile them high, scoff them cheap.

And remember: just because you’re judging the other guests for what’s on their plates, doesn’t mean they’re judging you.

Day two:

That difficult second album. If you’ve travelled far, your jet lag hunger may start to mimic pregnancy cravings. Pickles and ice cream, biting into lemons like an apple, dousing vinegar on everything (everything). Here’s the good news — your children are fully grown and you’re at a hotel buffet. So, try anything you didn’t have space for or see yesterday, allowing yourself a hard ceiling of two repeat items.

Still full from last night’s supper? Pull yourself together. If you don’t hate yourself by the time you get up to leave, I’m beginning to question your commitment.

Day three:

You encounter the sudden urge to have cereal? Which you have every day of the week? Pour yourself a bowl! Weetabix tastes sweeter when consumed within 500 yards of salt water.

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For seconds, remember the number one rule of improv: “yes, AND”. So it’s granola and Nutella, waffles and massaman curry, cheese and honey and cold cuts on sourdough.

Day four:

The era of experimentation is over. The moment of optimisation is upon us. Day four is the ABBA Gold of breakfasts — just play the hits.

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Housekeeping: I’m taking an August break. If your need for Tony Blair quotes, Roger Federer forehands or fuel duty revenues is urgent, please head here, here or here.

Sometimes, in my quiet moments, when I’m waiting for my Samsung washing machine to play its little ditty and my resentment log is fully up to date, I think about the gap between idea and execution.

For instance, do you remember the ubiquitous Budweiser “Wassup” advert? The premise was several guys watching sport in their own homes, calling each other up on the phone and asking, “Wassup?” To which the answer was, “Watching the game, havin’ a Bud.”

Such was its cultural breakthrough (ads held that power in the pre-streaming, algorithmic social media era) that Thierry Henry mimicked it in his celebration of *that* goal against Manchester United at Highbury in October 2000.

I have no idea why this campaign was so successful. For that, you’ll need to ask your neighbourhood marketeer. What I do suspect is that the creatives at DDB Chicago didn’t come up with it following a 14-page brief. I mean, what’s the core idea here? Guys on the phone saying “What’s up?”

What can be surmised is an ordinary situation, the use of a phone as dramatic device and increasingly absurdist repetition — all serving to make Budweiser shorthand for hanging out with your mates. It’s not that there is no idea here, it’s just that, like the beer in question, it’s pretty thin gruel.

The clearest inverse to this example comes not from another 30-second advert but an entire feature film. Yesterday, written by Richard Curtis and directed by Danny Boyle, rests on a single idea: that a jobbing musician wakes up in a world where The Beatles never existed and discovers he’s the only person who remembers their songs.

It’s a clean, high-concept hook that, for obvious reasons, also contains a lot of great music. But somewhere in the first act, it becomes clear that the filmmakers lose confidence that the idea, strong as it is, can sustain an entire picture. Consequently, the thing descends into gimmicky romantic comedy with plot holes big enough to drive a Yellow Submarine through.

So, the film centres on “average-looking, moderately talented musician gets famous by pretending Beatles songs are his.” When it could instead have explored the question of what happens to the world when the Beatles — and by extension a fair chunk of modern culture — never existed.

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The film does briefly nod to this when the protagonist googles Britpop band Oasis, only to find no results. Before retreating to its “Oh, gosh, English people can’t express their feelings” comfort zone. At which point, the whole thing would have been better off serving as a five-minute SNL sketch with tight pacing and pop stars.

Imagine (see what I did there) musical guest Ed Sheeran realising he’d discovered a billion-dollar back catalogue and after a little confusion, having a duet with Kate McKinnon. I’d watch.

Here’s the not quite M. Night Shyamalan twist, though. And why, after all that, the gap between idea and execution isn’t always so clear: “Wassup” wasn’t even an original idea.

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