This gonzo economic theory continues to live on, notwithstanding its repeated failures
Within weeks of taking office, Britain’s new prime minister, Liz Truss, and her chancellor of the exchequer, Kwasi Kwarteng, proposed a radical new set of economic measures that echoed the trickle-down policies of Margaret Thatcher and Ronald Reagan – heavy on tax cuts for the rich and deregulation.
Last Monday, after a backlash from investors, economists and members of his own party, Mr Kwarteng reversed one of the proposals, deciding against abolishing the tax rate of 45% on the highest earners. But proposals for other tax cuts worth tens of billions of pounds remain intact, as the government insists it is on the right path.
Robert Reich, a former US secretary of labor, is professor of public policy at the University of California, Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com
