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Hey,

0:31

it's Michael.

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We're gonna start today's show in

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just a minute. But before we do that, I wanna

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It's called hard fork. You're gonna

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1:34

Okay. Let's start today's show.

1:36

From The New York

1:38

Times, I'm Michael Alvaro. This

1:41

is The Daily.

1:46

After

1:50

just forty four days in office,

1:53

British prime minister, Liz

1:54

Truss, has resigned making

1:57

Hearst the shortest premiership

1:59

in the country's

2:00

history.

2:02

Today, my colleague,

2:04

London bureau chief Marklander on

2:08

what led to her downfall and

2:11

why Britain has entered a period

2:13

of such profound political

2:16

dysfunction.

2:21

It's

2:22

Friday, October twenty first.

2:31

Hey, Mark.

2:33

Hey, Michael. How you doing?

2:36

I mean, good lord. What

2:38

a hot mess that country is. It's

2:41

really amazing. So

2:43

we wanna talk about

2:45

how it is

2:46

that the

2:47

prime minister of

2:49

the UK touched

2:51

off an economic crisis and self

2:53

emulated. So Tell

2:55

us the story

2:57

behind Liz Truss' downfall.

2:58

And

3:00

what I think will be going down

3:02

as the most disastrously short Prime

3:04

Ministry in the history of

3:06

Britain.

3:07

Well, to

3:08

really get to the beginning of this, you have to go

3:11

back to the summer when Boris

3:13

Johnson was forced out of

3:15

office after a series of scandals. Right.

3:17

And there's a contest within the Conservative

3:20

Party to to side who's going to replace

3:22

him. The two candidates who ultimately

3:24

emerge are, of course, Liz Truss and

3:27

a guy named Rishi Sunak. Trust

3:30

was the foreign secretary under Boris

3:32

Johnson. She served in the parliament for

3:34

many years. Mhmm. And she's a

3:36

real diehard conservative who

3:39

is trying to fashion herself

3:41

as the next Margaret Thatcher, sort of a

3:43

free market evangelist very

3:46

much in the Thatcher mode. Right.

3:48

SUNEC, on the other hand, is this wealthy

3:51

hedge fund manager. And he's actually

3:53

served as the equivalent of

3:55

treasury secretary under Johnson

3:57

-- Right. -- but resigned from Johnson's

3:59

cabinet

3:59

in the midst of all these scandals.

4:02

And what was the defining dynamic of

4:05

the

4:05

Truss Sunak contest?

4:07

Well,

4:08

it really broke down if you wanna

4:10

get to the most simple terms to the

4:12

question of taxes. Liz

4:16

Trust basically said, I'm gonna cut

4:18

your taxes. I'm gonna cut

4:20

corporations' taxes. And

4:22

in doing so, I'm gonna unleash

4:24

this new era of much

4:26

faster economic growth. Mhmm.

4:29

Rishi Sunak said, wait a minute,

4:32

I'm not opposed to reducing taxes,

4:34

but we are in a period of

4:36

double digit inflation. interest

4:38

rates are going up. We need to

4:40

tame inflation before

4:42

we can start talking about reducing

4:44

taxes. And Mark, can you just explain

4:47

for the economically challenged. Why

4:51

cutting taxes in the minds of people

4:53

like Sunak would be

4:55

a problem in an inflationary period,

4:57

why he told her

4:59

and the country that this was a bad idea.

5:02

Well,

5:02

basically, when you're in an

5:04

inflationary situation, when prices

5:06

are high and rising, and you

5:08

cut people's tax is essentially you're

5:10

putting more money into their pockets

5:13

and you're in a sense fueling the

5:15

inflation because people are gonna

5:17

spend more. And rather than curbing

5:19

inflation, you're actually adding to

5:21

it. Right. And indeed, in addition to

5:23

Sunak, you had lots of economists

5:25

and investors and others who

5:27

were also saying that

5:30

Liz Truss' policies were in the words

5:32

of Sunak, a fairytale.

5:39

Nevertheless,

5:39

trust beat

5:41

Sunak. And the reason

5:43

she does has to do with the peculiarity of

5:46

parliamentary law in Britain,

5:48

because trust is replacing a

5:50

sitting prime minister, She

5:52

doesn't need to win in a general

5:55

election. She only needs to

5:57

win in this intra party contest,

5:59

which in

5:59

this case involves winning the votes

6:02

of roughly a hundred and sixty thousand

6:05

rank and file members of the

6:07

party. And who are these people?

6:09

Well, they tend to be older,

6:11

wider,

6:11

richer, and more conservative

6:14

than the country at large. These are

6:16

people for whom a tax cut is

6:18

uniquely attractive. So

6:20

that message is really

6:21

tailored to them and they

6:23

respond to it and she wins the contest.

6:26

So good afternoon.

6:28

I have just accepted

6:30

her majesty the queen's kind

6:33

invitation to form a new

6:35

government.

6:36

Trust takes office

6:38

I have a bold plan to grow the economy

6:41

through tax cuts and reform.

6:43

On Tuesday, September sixth,

6:46

I am determined to

6:48

deliver. Thank you.

6:53

And two days later, Queen

6:55

Elizabeth dies. This

6:57

is a momentous, you know,

7:00

deeply emotional moment for the whole

7:02

country. and Liz Trust

7:04

becomes overnight one

7:06

of the mourners in chief for

7:08

Britain. Right. So it's a moment of

7:10

extremely

7:10

high visibility for the

7:12

new prime minister, but it also

7:15

has the effect of taking her

7:16

completely off what

7:18

was gonna be the rollout of her

7:20

economic program. And the country

7:22

really needs to wait almost for

7:24

a full two weeks before

7:26

the government can get back to the business

7:28

of governing. So in parliament does

7:31

finally reconvene I

7:33

know called the chancellor of the exchequer to

7:35

make his statement, chancellor, Liz Trust

7:37

sends her chancellor a guy named quasi

7:39

Corteng, the equivalent of the treasury

7:41

secretary to the House of Commons

7:44

to roll out this package of tax

7:46

cuts. Now, mister speaker, we

7:48

come we come to tax,

7:51

central to solving the riddle

7:53

of growth. and it's

7:55

a stunner.

7:59

I can

7:59

announce today that we will cut the

8:02

basic rate of income tax to nineteen

8:04

pence. It's even more radical

8:07

and sweeping than she talked

8:09

about during the summer. That means

8:11

a talk cut for over thirty one million

8:13

people in just a few months time.

8:15

This means There are tax cuts

8:17

for ordinary people. tax

8:20

rate will not rise to

8:22

twenty five percent. It will remain

8:24

at nineteen percent and we will have

8:26

the lowest rate of corporation tax

8:28

in the g twenty. Tax

8:30

breaks for corporations. I have

8:32

another measure, mister speaker. Take

8:35

the additional rate of income tax. At

8:38

forty five percent, it is

8:40

currently higher. There is also a tax

8:42

cut for the wealthiest earners.

8:44

but I'm not going to cut the additional rate

8:46

of tax today, mister speaker. I'm

8:49

going to abolish it altogether -- Yeah.

8:51

-- for me. And the cumulative

8:54

value of all of these tax cuts runs

8:56

into the tens of billions of

8:58

dollars. Our growth plan has delivered

9:00

all those promises and more. mister

9:02

speaker.

9:14

And

9:14

what's particularly startling about

9:16

it is these are unfunded

9:19

tax cuts, which means -- Mhmm. -- the government's

9:21

not offering corresponding cuts in

9:23

spending to pay for this. They're

9:25

just announcing it kind of in the

9:27

classic style of

9:29

supply side economics that these tax

9:31

cuts will somehow pay for themselves

9:35

through increased economic

9:37

growth. So this is

9:37

a plan that is very much in keeping with

9:40

Lids Trust's free market,

9:42

Reagan style approach, but

9:44

ends up going much further than

9:47

anyone expected and therefore

9:49

costs even more than

9:51

anyone expected.

9:52

That's right. And it really rattles

9:55

international financial

9:56

markets because, of course, it's not just

9:58

the UK that's dealing

9:59

with inflation, It's a

10:02

problem around the world. Everyone

10:04

is also trying to figure out how to deal

10:06

with the impact of Russia's war

10:08

and Ukraine.

10:09

So this is the last thing that

10:11

anyone wants or needs to hear that the

10:13

United Kingdom, a major global

10:15

financial player, is about

10:17

to plunge itself into

10:20

a deep whole of debt.

10:22

So

10:22

the rejection of Lids Trust's

10:24

economic program in the financial

10:26

markets is instant and ferocious.

10:29

And in the following week, all

10:31

hell breaks loose. First,

10:34

the city of London woke up to a

10:36

currency crisis The pound dropped

10:38

in value to just

10:39

one US dollar and zero point

10:41

three four cents early Monday morning

10:43

taking the currency to its lowest level

10:45

since the early seventies. the

10:47

pound plummets against the dollar.

10:49

The

10:49

decline against the common currency highlighted

10:52

how the pound's recent fall reflects

10:54

concern about Britain's economy. And

10:56

it makes life more expensive

10:58

for brits. Right. Because

10:59

when the value of your currency is

11:02

lower, then everything gets more expensive

11:04

at a moment when inflation is already a

11:06

huge problem. Yeah. And the

11:06

next thing that happens is And we're seeing

11:09

epic bond market declines. UK

11:11

rates climb as much as fifty basis

11:13

points that

11:14

the price of British government bonds slubs,

11:16

and the yield on those bonds

11:18

spikes upwards. And

11:20

that has two major effects. Worried

11:22

about the credibility of the chancellor's plans,

11:25

traders have been selling government

11:27

bonds the instruments it uses to borrow

11:29

money, forcing the government to pay

11:31

much more in interest to borrow funds over the

11:33

long term.

11:34

One is that it makes it more offensive

11:36

for the British government to borrow money,

11:39

which makes the fiscal whole caused

11:41

by the tax cuts even larger.

11:43

Investors

11:43

fear the big market moves are

11:45

a particular threat to pension funds

11:47

and could cause spillover damage

11:49

across the financial sector.

11:51

The

11:51

other is that because UK pension

11:54

funds are tied to government bonds,

11:57

there's suddenly a risk that there's

11:59

not gonna be enough cash to

12:01

keep them afloat. Where the

12:02

Bank of England has made an

12:04

emergency into venture, which it

12:06

says is needed to

12:08

maintain financial stability.

12:11

Finally, I've said before I'm worried there's a

12:13

ticking time by my mortgage The interest

12:16

rates for mortgage loans start to

12:18

increase. And then last week, that

12:20

went up to a peak of six point

12:22

one percent. I'll show you This is

12:24

really important in Britain because unlike in

12:26

the US where a lot of people have

12:28

thirty year fixed rate mortgages,

12:31

many more people in the UK have

12:33

either variable rate mortgages or

12:36

five year, two year

12:38

at most ten year mortgages. So when

12:40

interest rates go up on mortgage

12:42

loans, people begin to feel that

12:44

right away.

12:46

And

12:51

all of this,

12:51

just to be clear, is because

12:53

of the announcement of this

12:55

massive unfunded

12:57

tax cut program? Yes,

13:00

that's

13:00

right. I mean, even though it

13:02

appears to be almost impossible

13:04

to imagine so much could spin out

13:06

of one announcement. That announcement

13:09

has the effect

13:11

of

13:11

really in a moment

13:14

completely undermining investor

13:16

confidence in the British

13:18

economy, And so for

13:20

millions of people in Britain who

13:22

are negatively affected by all

13:24

this, it quickly becomes clear who's to

13:26

blame. It's Liz

13:28

Truss and her tax cuts.

13:30

And so suddenly, this

13:33

brand new prime minister is in

13:35

a great deal of political

13:37

trouble.

13:44

We'll

13:44

be right back.

13:50

This

13:52

fall, the Morgan library and museum

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welcomes the whole family for a wide range

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in Museum is at Madison Avenue and

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thirty sixth Street in New York City.

14:20

Plan your visit at the morgan dot

14:22

org. It's Melissa Clark from New

14:24

York Times cooking, and I'm in the kitchen with some of

14:26

our team, Nikita Richardson. What are you

14:28

making for Thanksgiving this year from our recipes?

14:30

I'm making the cheesy Hasselback

14:32

potato

14:32

rattan, featuring layers of thinly

14:34

cut potatoes. Very easy, but it's

14:36

a real show stopper. Bon Vreland, give us

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14:43

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have to roll out pie dough. You can

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find the thanksgiving recipes you need at

14:50

NYT cooking dot com slash thanksgiving.

14:53

So

14:54

Mark, what does this very

14:55

embattled Prime Minister,

14:57

Liz Trust, do once she realizes

15:00

that her economic plan has

15:02

plunged her entire country in the

15:04

financial chaos? Well,

15:05

her initial instinct is to be

15:07

really

15:07

defensive. Well, look, I understand it's

15:10

difficult times for people and we're facing a

15:12

difficult winter.

15:13

she puts the blame on

15:15

a lot of other people. She says,

15:17

you know, interest rates have

15:19

always been set. since nineteen

15:21

ninety seven by the independent Bank of

15:24

England. We don't have anything to do with that.

15:26

Politicians don't get involved in setting

15:28

interest rates. she blames

15:30

inflation on We have

15:32

a very very difficult

15:34

economic global situation.

15:36

because of the war that Vladimir Putin

15:38

has perpetrated in Ukraine. Vladimir

15:41

Putin, but this isn't this isn't

15:43

Putin. This isn't just about Putin. I

15:45

mean, your chancellor on Friday

15:47

opened up the stable door and spooked the horses so

15:49

much, you could almost see the economy being dragged

15:51

behind them. And she sort

15:53

doesn't take any responsibility for having

15:55

influenced any of these things with

15:57

her own policies. And

15:59

she

15:59

sort of says, you know,

16:01

change is hard, people are gonna

16:03

resist it, but everyone is

16:05

gonna benefit in the long run because

16:07

the economy is gonna grow so

16:10

much faster. So it's a very

16:12

defiant, stay

16:14

the course. You know, don't give

16:16

an inch kind of response. And

16:18

this goes on for a few days, but

16:20

the markets continue to gyrate,

16:23

interest rates continue to spike,

16:25

and she realizes that

16:27

she's gonna have to backtrack on

16:29

something. Big breaking news

16:31

for you that

16:32

will impact almost all of We're

16:34

hearing that Liz Truss is preparing to scrap

16:36

plans to remove the forty five

16:38

p top rate of income

16:40

tax for the highest. So what

16:42

she and quasi writing do is

16:44

they decide to do a u-turn

16:47

on one of the big tax

16:49

cuts. The fact

16:49

is that the abolition of the forty

16:52

five p tax rate became

16:54

a distraction. The one on the super wealthy.

16:56

That is why we're no longer

16:58

proceeding with it. I get

17:00

it. and I

17:01

have listened.

17:03

And

17:04

that sort of

17:05

calms the waters for a

17:08

little

17:08

while, but Everyone realizes

17:10

that tax

17:11

cut only accounted for a very small

17:13

part of the total cost of this program.

17:15

So the markets are pretty much

17:17

back

17:17

to being unstable within a day

17:19

or two. So what she does

17:22

another week or so later

17:24

is she calls quasi court Tang,

17:27

arguably her closest associate in the

17:29

government. You'll be chancellor and list trust will

17:31

be prime minister this time next month.

17:33

Absolutely, one hundred percent. I'm not

17:35

going anywhere. she fires him.

17:39

He gets thrown

17:39

under the bus and that's the first

17:42

major high

17:44

profile casualty of this

17:46

whole affair. And she hopes that

17:48

by basically giving the

17:51

market quasi emitting she

17:54

can kind of calm the waters.

17:55

My priority

17:56

is making sure we

17:58

deliver the

17:59

economic stability

18:01

that our country needs. That's

18:03

why I had to take the

18:04

difficult decisions I've

18:07

taken today. But guess

18:08

what? It didn't work. She

18:10

had to do something more. And she

18:12

did that in the form of selecting

18:15

Jeremy Hunt to be the new

18:17

chancellor. Why do you want

18:18

to work? with this government.

18:20

Because I want to do the right thing for

18:22

the British people. Jeremy Hunt is

18:24

a longtime, well known,

18:27

conservative politician He opposed

18:29

Liz Truss during the leadership campaign,

18:31

and Didi ran his own very

18:33

short lived and unsuccessful campaign

18:35

for the job. He was

18:37

a supporter of Rishi Sunak and an arch

18:40

opponent of her economic

18:42

program, fascinating. And almost

18:44

to soon as Hunt takes the job.

18:46

Good morning. Liz Trusses first

18:49

chancellor lasted thirty eight

18:51

days. This morning, We'll hear from the He

18:53

goes on TV and he begins

18:55

peeling away planks of her

18:58

agenda. We are going to have to take

19:00

some very difficult decisions

19:02

both on spending and

19:04

on

19:04

tax. Saying, you're not gonna get a

19:06

tax cut, and tax is not gonna go down

19:08

as quickly as people thought

19:10

in some taxes are gonna go up. Corporation taxes

19:12

are actually gonna increase. So it's gonna

19:14

be very, very difficult, and I think we have to be honest

19:16

with people about that. It's basically the

19:19

reverse of what Liz Trust

19:21

ran for office promising to do.

19:23

Right. And then you've got

19:25

this vivid Tableau where

19:27

we've therefore decided to make further changes to

19:29

the mini budget immediately. Monday

19:32

morning rolls around and

19:35

Jeremy Hunt goes to the House of Commons

19:37

to confirm before lawmakers

19:40

that this is now the government's policy

19:42

We've decided on the following changes to

19:45

support confidence and stability. Firstly,

19:47

the prime minister and I

19:49

agreed yesterday to reverse almost all

19:51

the tax measures announced in the growth

19:53

plan three weeks ago. And while

19:55

he is delivering this message It

19:57

is a deeply held conservative

19:59

value a value that I share

20:01

that people should keep more of the

20:03

money they earn. Liz Truss is

20:05

sitting behind him on the front bench.

20:08

with a sort of a far away smile on her

20:10

face, you know, looking for

20:12

all the world like a bystander

20:15

in her own government. But at a time when mask

20:18

markets are asking serious questions

20:20

about our commitment to sound public finances,

20:23

we cannot afford a permanent

20:26

discretionary increase in

20:28

borrowing worth six billion pounds

20:30

a year. Right.

20:31

I watched that scene, Mark, and suddenly

20:33

the question became,

20:35

who exactly is Prime Minister here? Is

20:37

it Liz Truss? or is it Jeremy Hunt? Yeah. I

20:40

mean, particularly for someone who

20:42

ran primarily, almost

20:45

exclusively, on this free market

20:47

economic message, it

20:49

really felt like Liz Trust all

20:51

of a sudden didn't have much of a reason

20:53

to be prime minister anymore. And

20:55

as that realization dawns

20:57

on people, it almost

20:59

quickly becomes a

21:01

political death watch. And

21:04

British media in their

21:06

typically dark humorous

21:08

way of looking at things begin

21:10

to look for metaphors to

21:12

capture just how tenuous

21:14

trust a situation is. Mhmm. And

21:16

the most memorable of these is in

21:18

the tabloid, the star,

21:20

where they actually get a head of lettuce from a

21:23

local supermarket chain, and they

21:25

put it next to a picture of

21:27

Liz Trust. And they ask

21:29

which of these has a longer

21:31

shelf life. Right.

21:33

But what is

21:33

the shelf life? Mark.

21:35

Oh, ahead of lettuce. Well,

21:38

I'm gonna confess, I don't exactly

21:40

know, but the shelf life of a head

21:42

of lettuces, but I think we can safely

21:45

assume it's measured in days and

21:47

not weeks. Right. And that turns

21:49

out to be a pretty good bit of

21:51

foreshadowing. Because over the

21:53

next forty eight hours, Liz

21:55

Truss' prime ministership begins to unravel really

21:59

quickly.

21:59

So

22:03

on

22:03

Wednesday,

22:04

Trust goes to the House of Commons for

22:06

an exercise called Prime Minister's

22:09

Questions. We don't come to the leader of

22:11

the opposition.

22:13

That's where members get to grill the prime

22:16

minister on

22:17

whatever topic they want. A

22:19

book is being written about the prime

22:21

minister's time in office. apparently,

22:24

it's going to be out by Christmas.

22:26

Is that the release date or the title?

22:30

and she comes under immediate

22:33

attack. I've got the list here, forty five p

22:35

Tax Cut, gone. Yeah.

22:37

Corporation Tax Cut, Gong.

22:39

Twenty p Tax Cut Gong.

22:42

So why is she still here? The

22:44

leader of the Labor Party, Keir Starmer,

22:47

essentially or why she's still

22:49

in office. Mister

22:51

speaker, I am a

22:52

fighter, a naught, a

22:54

fighter. she

22:55

insists that she's going to stay the

22:58

course, but within hours,

23:00

there's even more chaos engulfing

23:03

her government. She's forced to fire her home secretary. That's

23:05

now the second major cabinet

23:07

minister. She's fired in a

23:09

week. Order. And

23:13

the craziest thing happens on Wednesday

23:15

evening when

23:16

there's a vote in parliament

23:18

over whether the government should

23:21

ban fracking. conservative lawmakers

23:24

are beginning to rebel

23:26

against the government. They don't wanna

23:28

cast this vote. And there

23:30

are these

23:30

really surreal scenes

23:33

in the parliament where I

23:35

saw members being

23:37

physically manhandled into

23:39

another lobby. lawmakers are

23:41

being physically manhandled by

23:43

senior cabinet ministers

23:45

to come in and cast

23:48

this vote. backing the prime

23:50

minister. To be perfectly honest,

23:52

this whole affair is inexcusable. So

23:54

by the end of

23:56

Wednesday night, you have this

23:58

situation where it's clear that Liz

24:00

Truss has not only lost control of her

24:02

legislative agenda, Grace

24:04

as a Tory MP of seventeen years. It

24:06

is pitiful reflection on

24:08

the conservative parliamentary party at

24:11

every level. She's lost control of

24:13

her party, and she's lost

24:15

control of the government. I think it's

24:17

a shambles in a disgrace. I

24:19

think it is utterly appalling.

24:27

So

24:27

by yesterday morning, the game was

24:30

well and truly over. Mhmm.

24:32

Conservative lawmakers were coming

24:34

out one after the other saying

24:36

it was time for her to step down.

24:38

It was clear that if she

24:41

didn't negotiate some sort

24:43

of exit she likely faced a vote of no

24:45

confidence. And shortly after one

24:47

PM, the prime minister's office put

24:49

out a statement saying

24:51

she would speak to the nation,

24:53

and a podium was put up in front

24:55

of the famous number ten

24:57

door -- Mhmm. -- and at about one

25:00

thirty, I came

25:00

into office at a time

25:02

of great economic and

25:05

international instability. Liz Truss

25:07

came out and said. Given

25:09

the situation, I

25:11

cannot deliver the mandate on which I

25:13

was elected by the

25:15

Conservative Party I've

25:16

called King Charles and I've told him of

25:18

my intention to step

25:21

down. I will remain

25:22

as prime minister until

25:24

a successor has been chosen. Thank

25:27

you. So

25:28

in the end,

25:30

she did not.

25:33

outlast.

25:33

last The head of

25:34

lettuce. She did not outlast the

25:36

head of lettuce. She also set a

25:38

record for being the shortest serving

25:40

British prime minister in history,

25:43

forty four days from the day

25:45

she moved in to the day she announced she

25:47

was leaving. If I remember my math

25:49

correctly, it's four

25:51

Scaramucci's. If you wanna go back

25:53

and look at Anthony Scaramucci's famous

25:56

record as White House communications director.

25:58

So,

25:58

Mark,

25:59

it

25:59

feels worth zooming out here

26:02

for a moment because when

26:03

we think about what's

26:04

happened to Listras and

26:07

more importantly what's happened to British economy. It

26:09

feels like there are

26:10

two big lessons that emerge.

26:13

The first, And I'm

26:15

thinking

26:15

back to the warnings that were

26:17

delivered during her campaign

26:19

about this tax cut is that

26:21

you can't defy the basic laws.

26:24

of economics and of inflation. You

26:26

can't cut taxes and

26:28

borrow a bunch of money at a time

26:30

when prices are already record

26:32

high and hope that somehow

26:34

the market and consumers will

26:36

embrace that. That's just not

26:38

how it works. Yeah. That's right. I mean, this was an

26:40

economic program that was basically built

26:42

on magical thinking. And

26:45

magical thinking doesn't work

26:47

in a world where the markets are

26:49

as powerful as they are. So

26:52

even if she had managed

26:54

to win over

26:56

the population, and summer knows

26:58

that the economic experts, she

27:00

was never gonna convince the markets

27:02

that this was in any way

27:04

credible. only country that can

27:06

really get away with unfunded

27:08

tax cuts with ballooning the

27:11

deficit is the United States. And the reason

27:13

for that is the shear size of the US

27:15

economy, the fact that the

27:17

US dollar is still the

27:19

world's reserve currency, it gives

27:21

the US a

27:23

freedom of maneuver that really

27:25

no other economy has and

27:27

certainly not the

27:28

British economy, which for

27:30

all its strengths, is much

27:33

smaller. And so to

27:35

pursue a Ronald Reagan

27:37

style tax cutting program,

27:39

in Britain doesn't really make any logical sense.

27:41

And that's what Liz

27:43

Truss learned over a couple of

27:45

very bruising weeks. Mhmm. And

27:47

it sounds like the

27:48

second lesson,

27:49

Mark, is that when you're

27:51

elected prime minister by

27:54

a tiny portion of the electorate as

27:57

antitrust was,

27:58

you're likely to get an

27:59

agenda that

28:01

favors that small sliver of

28:03

voters and not feel especially

28:06

accountable to everyone else because

28:08

after all they didn't vote for you.

28:10

So there's a lesson here about the very

28:12

nature of British democracy. Yeah.

28:14

That's a big topic

28:16

of conversation in Britain right now because

28:18

after all, this country is about

28:20

to elect its fourth Prime

28:23

Minister through this system. Mhmm.

28:25

And when you set up elections

28:27

this way, it

28:29

naturally leads to more

28:32

extreme ideological positions. Because

28:34

after all, as we said earlier,

28:36

Liz Truss knew exactly what

28:38

she was doing in appealing

28:41

to these conservative party

28:43

members. And when she got into office,

28:45

she actually delivered what

28:47

she had promised. And this was, to

28:49

that extent, a crisis

28:52

foretold.

28:53

And

28:55

the problem

28:57

with having such

28:59

a slender mandate is that when things

29:01

go wrong, as they did in

29:03

this case, you have

29:06

no popular support to fall

29:08

back on -- Mhmm. -- when the markets

29:10

turned on Liz Truss, the

29:12

public turned on Liz Truss

29:14

even more ferociously, and

29:17

that's why she wilted faster than

29:19

that head of lettuce.

29:20

Well, Mark, thank

29:24

you

29:27

very much. Thank

29:29

you, Michael.

29:35

Members of

29:37

Britain's Conservative Party

29:39

are expected to choose

29:41

Liz Truss's successor by the

29:43

end of next week. Among

29:45

the likely candidates are

29:48

Rishi Sudak, the lawmaker

29:50

who had warned that trust's tax

29:52

cuts would backfire. And

29:55

probably Boris Johnson,

29:57

whose resignation as

29:59

prime

29:59

minister brought Liz

30:01

Truss to

30:07

power.

30:12

We'll be

30:16

right back.

30:18

Brighten up your

30:20

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30:50

Here's

30:51

what else you need.

30:53

Turn it a day. A new

30:56

poll has found that the majority of

30:58

the American public is

31:00

prepared to keep paying high

31:02

energy costs in order to help

31:04

Ukraine win its war

31:06

against Russia. Sixty

31:08

percent of Americans overall told

31:10

pollsters from the University of Maryland

31:12

that they will tolerate the higher

31:15

costs, including eighty percent

31:17

of Democrats and forty eight

31:19

percent of Republicans. The

31:21

result suggests that Russia's hope

31:23

that surging energy prices will

31:26

undermine Western support for Ukraine,

31:29

and ultimately help Russia

31:31

defeat Ukraine is

31:33

so far not working in

31:35

the United States. Today's

31:40

episode was produced by Michael

31:42

Simon Johnson, Rochelle Bond and

31:44

Will Read with help from

31:46

Chris Wood and Sydney Harbour. It

31:49

was edited by Anita Bottigel,

31:52

contains original music by Marian

31:54

Lozano and was engineered by

31:56

Chris Wood. Our theme

31:58

music is by Jim Brunberg and Ben

31:59

Lanford of WonderLane.

32:11

That's

32:12

it for

32:13

daily. I'm Michael Movado.

32:15

See you on Monday.