What the Failure of Liz Truss’s Economic Agenda in the UK Can Teach the U.S.

By Sonali Kolhatkar

Americans, relieved that they were rid of Donald Trump and his incessant scandals, looked gleefully to their neighbors across the Atlantic as British Prime Minister Liz Truss resigned after a mere 45 days in office. Truss had the shortest term of any British prime minister in history, disgraced by the consequences of her own economic prescriptions. There is a lesson to be learned from Truss’s rise and rapid downfall that applies to the United States, a nation beset by similar economic troubles but with a very different governmental structure.

The main takeaway from Truss’s downfall is that tackling inflation by rewarding the rich is a fool’s errand. Fashioning herself after Margaret Thatcher, the godmother of conservative capitalism, Truss had hoped to join the ranks of former prime ministers Tony Blair and David Cameron as a champion of “trickle-down” policies.

A central idea favored by Thatcherites—one that may sound familiar to Americans—is that when ordinary people are struggling, leaders must ensure the rich get richer so that the crumbs of their excesses will trickle down to the poor. Going hand in hand with this is the aggressive deregulation of industries to free them from the fetters of any protective measures that could impact profit margins.

Here in the U.S., President Ronald Reagan promoted this ludicrous concept in the 1980s as perhaps the grandest grift of all time, overseeing massive tax cuts for the wealthiest Americans and an aggressive deregulatory agenda. According to the Center for American Progress, when “Reagan took office in 1981, the marginal tax rate for the highest income bracket was 70 percent, but that fell to just 28 percent by the time he left office.”

In spite of decades of evidence that trickle-down economics doesn’t work, Republicans, when in control of the U.S. Congress and the presidency, have aggressively pushed through the same policies. Recall the 2017 tax reform bill forced through the legislative process by then-Senate Majority Leader Mitch McConnell and signed into law by Trump. That bill continued what Reagan started by infusing cash at the very top in the form of tax cuts. It too, like its predecessors, failed.

Truss repackaged this same grift in the UK, with critics coining a new moniker for it: Trussonomics. Influenced by right-wing think tanks such as the Adam Smith Institute and the Institute of Economic Affairs, she pushed a “mini-budget” centered on major tax cuts for the wealthiest in Britain with no plan on how to compensate for the loss in revenues.

The Guardian’s economics correspondent Richard Partington explained that this triggered “a run on sterling, gilt market freefall and spooked global investors. Even the International Monetary Fund (IMF) intervened with a stunning public rebuke.” The British pound plummeted in value, and the Bank of England was forced to intervene by buying up bonds and raising interest rates. Eventually, members of Parliament began expressing enough loss of confidence in the new prime minister that Truss was forced to resign just over six weeks into her tenure.

Since the 1980s, both Republican and Democratic presidents in the U.S. embraced “Reaganomics,” in spite of critics repeatedly calling out the lunacy of enriching the wealthy to address poverty. By the time Joe Biden took office in January 2021, there was so much damage done that the new president felt moved to articulate that trickle-down economics doesn’t work. Biden repeated his criticisms as Truss took office, saying on Twitter in September 2022, “I am sick and tired of trickle-down economics. It has never worked.”

But talk is cheap, and another major lesson for Americans is that while it’s easy to find relief in our more stable system of government in which presidential elections are prescribed every four years, Britain’s less stable parliamentary system is far more responsive to popular will.

The best example of this—one that stands in stark contrast to the U.S.—is Britain’s National Health Service (NHS), a free, government-funded universal health care system that is the envy of Americans. In 1948, Aneurin Bevan, Britain’s then-health secretary, promoted the idea of a health care system that would serve all people. According to historian Anthony Broxton, Bevan pushed a parliamentary vote on the bill that would create the NHS, asking, “Why should the people wait any longer?”

Americans have waited and waited for a similar health care system. We are still waiting. A New York Times analysis explained how health care spending in the U.S. began getting out of control at the precise time when Reagan-era deregulation began. Decades of attempts to install a universal, government-funded free health care system in the U.S. have failed.

In an MSNBC op-ed, Nayyera Haq wrote, “in the nearly 250 years since the founding of the United States, American government has not followed Britain’s path of providing a universal health care system or welfare programs for the majority of the population.” Haq concluded, “The elevation of status quo over popular will has all but frozen the ability to respond to that will, weakening the American system far more than Truss’ tenure will destabilize Britain.”

While Americans can’t very well switch our government system into a parliamentary one, we do have midterm elections in just a few weeks. It turns out trickle-down economics is indeed on the ballot, and Republicans are using every means at their disposal to ensure its win.

The GOP has rigged elections in its favor via a cunning combination of gerrymandered districts, voting laws that thwart likely Democratic voters, and legislative control at the state level where electoral rules are decided. In Florida, Republican governor Ron DeSantis has embraced antidemocratic tactics to such an extent that he created a police force to arrest largely Black (and therefore likely-to-be-Democratic) voters who he claims are casting ballots illegally. In other words, Republicans have engineered a system of minority rule bordering on fascism.

Blowing wind into their sails is the corporate media, insisting that worries over inflation could help Republicans win majorities in both houses of Congress—in spite of decades of evidence that the GOP has a record of economic failures. It has become a central Republican talking point to inflate—pun intended—worries about rising prices, blame Democrats for inflation, and make the case for their own electoral victories. Economist Dean Baker criticized the media for “hyping inflation pretty much non-stop for the last year and a half.”

While polls show that relentless coverage of inflation has moved voters toward Republican candidates, few outlets are asking questions about the GOP’s plan to tackle inflation. House Republican leader Kevin McCarthy has published a rosy plan, very thin on specifics, to fix the nation’s economic woes if his party wins majorities. A one-page description of his plan includes a vague prescription to “bring stability to the economy through pro-growth tax and deregulatory policies.”

In other words, Republicans are yet again promising to deliver a wolf in sheep’s clothing. Call it Reaganomics, Thatcherism, or Trussonomics, trickle-down economics is the great lie that has failed time and again. If Truss’s spectacular fall should teach Americans anything, it is that it will fail again. Unlike the Brits, we’re likely to be stuck with the ill effects of such failure for a lot longer.

This article was produced by Economy for All, a project of the Independent Media Institute.

Author Sonali Kolhatkar is an award-winning multimedia journalist. She is the founder, host, and executive producer of “Rising Up With Sonali,” a weekly television and radio show that airs on Free Speech TV and Pacifica stations. Her forthcoming book is Rising Up: The Power of Narrative in Pursuing Racial Justice (City Lights Books, 2023). She is a writing fellow for the Economy for All project at the Independent Media Institute and the racial justice and civil liberties editor at Yes! Magazine. She serves as the co-director of the nonprofit solidarity organization the Afghan Women’s Mission and is a co-author of Bleeding Afghanistan. She also sits on the board of directors of Justice Action Center, an immigrant rights organization.

It turns out that many of today’s billionaires are selfish, lonely men fantasizing about how they will survive the end times they have played a part in creating.

By Sonali Kolhatkar

 Independent Media Institute

 This article was produced by Economy for All, a project of the Independent Media Institute.

In mid-September, for just a few days, Indian industrialist Gautam Adani entered the ranks of the top three richest people on earth as per Bloomberg’s Billionaires Index. It was the first time an Indian, or, for that matter, an Asian, had enjoyed such a distinction. South Asians in my circle of family and friends felt excited at the prospect that a man who looked like us had entered such rarefied ranks.

Adani was deemed the second richest person, even richer than Amazon founder Jeff Bezos! A Times of India profile fawningly quoted him relaying his thought process in the early days of his rags-to-riches story. “‘Dreams were infinite but finances finite,’ he says with engaging frankness,” according to the profile. There was no mention of the serious accusations he faces of corruption and diverting money into offshore tax havens, or of the entire website, AdaniWatch, devoted to investigating his dirty deeds.

Adani made his money, in part, by investing in digital services, leading one economist to say, “Wherever there is a futuristic business in India, I think… [Adani] has a stronghold.”

The moment of pride that Indians felt in such an achievement by one of their own was short-lived. Quickly Adani slipped from second richest to third richest, and, as of this writing, is in the number four slot on a list dominated by people who have made money from the digital technology revolution.

In fact, ranking multibillionaires is a meaningless exercise that obscures the absurdity of their wealth. This year alone, a number of tech billionaires on Bloomberg’s list lost hundreds of billions of dollars as the gains they made during the early years of the pandemic were wiped out because of a volatile stock market. But, as Whizy Kim of Vox points out, whether or not they’re losing money or giving it away—as Bezos’ ex-wife MacKenzie Scott has been doing—their wealth remains insanely high, and most are worth more today than before the COVID-19 pandemic.

What are they doing with all this wealth?

It turns out that many are quietly plotting their own survival against our demise. Douglas Rushkoff, podcaster, founder of the Laboratory for Digital Humanism, and fellow at the Institute for the Future, has written a book about this bizarre phenomenon, Survival of the Richest: Escape Fantasies of the Tech Billionaires.

In an interview, Rushkoff explains that billionaires worry about the end of humanity just like the rest of us. They fear catastrophic climate change or the next pandemic. And, they know their money will likely be of little value when civilizations decline. “How do I maintain control over my Navy Seal security guards once my money is worthless?” is a question that Rushkoff says many of the world’s wealthiest people want to know the answer to.

He knows they ask such questions because he was invited to give private lectures by those who think his expertise in digital technology gives him unique insight into the future. But Rushkoff was quietly studying them instead and has few flattering things to say about these wielders of economic power.

“How is it that the wealthiest and most powerful people I’d ever been in the same room with see themselves as utterly powerless to affect the future?” he asks. It seems as though “the best they can do is prepare for the inevitable calamity and then just, you know, hang on for dear life.”

Rushkoff explores this tech billionaire “mindset” that he says has resulted in a generation of people who are “almost comedic monsters, who really mean to leave us all behind.” Adani is a perfect example of this, having invested in the very fossil fuels that are destroying our planet. He has large holdings in Australia’s coal mining industry and has sparked a massive grassroots movement intent on stopping him.

The admiration that some Indians feel for Adani’s ascension on Bloomberg’s list of billionaires is based on an assumption of cleverness. Surely, he must be one of the smartest people in the world in order to be one of the richest? Elon Musk, the world’s wealthiest man by far (with twice as much wealth as Bezos), has enjoyed such a reputation for years.

Those who are invested in the idea of merit-based capitalism can justify the unimaginable wealth of the world’s richest people only by assuming they are intelligent enough to deserve it.

This is a façade. Rather than smarts, the wealthiest people on the planet appear to be rather small-minded idiot savants who share a common disdain for the rest of us.

After being around tech billionaires in private, Rushkoff concludes that they are invested in “this notion that they really can, like puppeteers, kind of control society from one level above,” and that this approach is “different than the era of Alexander the Great, or Caesar.” If the question that vexes them most of all is how, in a disastrous future, will they control the guards they hire to protect their hoardings, then our economic system is a farce.

“Even if we call them genius technologists, most of them were plucked from college when they were freshmen,” says Rushkoff. “They came up with some idea in their dorm room before they’d taken history, or economics, or ethics, or philosophy” classes, and so they lack the wisdom needed to oversee their own perverse amounts of wealth.

Having spent time with many tech billionaires, Rushkoff worries that “their education about the future comes from zombie movies and science fiction shows.”

Billionaires are not simply drawing their wealth from a vacuum. According to data from the World Economic Forum, “the world’s richest have captured a disproportionate share of global wealth over recent decades.” This means that, if you were rich to begin with a decade or two ago, you are likely to have seen your wealth multiply by a greater amount than middle-class or lower-income people.

Not only are tech billionaires undeserving of their wealth, but they also are fleecing the rest of us—and fantasizing about hoarding that wealth in the worst-case scenarios while the rest of humanity struggles to survive.

The danger is that if society valorizes such (mostly) men, we are in danger of internalizing their childish, selfish mindset and giving up on solving the climate crisis or building resiliency on a mass scale.

Instead of relating to them, we ought to feel sorry for a group of people so cut off from humanity that their vision of the future is a very lonely one.

“Let’s look at these tech-bro billionaire lunatics. Let’s laugh at what they’re doing… so they look small rather than big,” says Rushkoff. He thinks it is critical to adopt the perspective that “the disaster they’re so afraid of looks entirely manageable by more reasonable people who are willing just to help each other out.”