Monday, 25 September 2023 03:26 GMT

Truss Must Heed Abe's Ghost, Not Thatcher's

(MENAFN- Asia Times)

TOKYO – As Liz Truss riffs on Margaret Thatcher and Ronald Reagan, a more recent failed experiment with supply-side economics leaps to relevance from the region: Japan's so-called“Abenomics.”

Last week made for an intriguing split screen. On one half, moves by the new – and already embattled – UK prime minister to for the nation's top 1% fell flat in global markets. On the other, a state funeral for former Japanese prime minister Shinzo Abe, who had bet his legacy on a similar fiscal maneuver.

To be sure, Truss is backtracking on her tax cut plans to scrap the 45% income tax rate – for now, at least. But these zombie ideas never really die. Odds are, Team Truss – led by Finance Minister Kwasi Kwarteng – will try his ploy again presented in more palatable clothing. And soon.

The rise and fall of Abe's legend as a great reformer sheds light on why gilt traders just aren't having the Truss government's reversion to Thatchernomics. The crux of the problem: just like Abe's 2012-2020 tenure in , Truss in London has a 1985 problem on her hands.

To continue reading, please to your AT+ Premium account. Not yet a member? Please signup for , , , or .


Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.