Liz Truss displays limousine conservatism

The fact that their ideas resulted in out-of-control crime and extra tax burdens on working- and middle-class Americans didn’t change their views. That’s because they were ensconced in a cocoon of privilege. Their doormen or secluded mansions protected them from criminals, and they were well-off enough that a few extra tax dollars didn’t inhibit their consumption. The limousine liberal was largely engaging in a morality play by which they could justify their own lifestyle to themselves.

Truss’s supply-side economics reeks of similar performance art. She claims tiny tax cuts will help unleash a torrent of economic growth and uncapping bankers’ bonuses will keep London’s financial markets on top of the world. It seems to not have occurred to her and her ideological allies, or their think tank gurus, that there’s no evidence that cutting tax rates by the levels she proposes would increase innovation or spur productivity. The experience of Kansas, which eliminated the state personal income tax on small businesses and then had to repeal those tax cuts when promised growth did not materialize, hasn’t sunk in.

Similar criticism applies to some of her other ideas. Enterprise zones were an intriguing idea when first proposed in the 1980s. Their tax reductions and exemptions from regulations were supposed to draw investment into downtrodden areas, revitalizing those neighborhoods and bringing their residents into the growth economy. But they largely failed when tried, at best creating little islands of prosperity to which already prosperous people commuted. Yet Truss has doubled down on this idea as a sop to the working-class regions of Britain whose defection from the Labour Party gave her party its historic landslide victory in 2019.

Truss criticized her opponents as an “anti-growth coalition” of people in London townhouses who socialize in the Westminster bubble. In fact, supply-siders are just as likely to live comfortably in London and mansions in the country. Like limousine liberals, they embark on policy changes that won’t impact their creature comforts while telling themselves that it’s intended to help someone less fortunate. How sweet.

Britain might suffer from low growth and productivity, as Truss contends, but what it really suffers from is regional cleavage. Margaret Thatcher’s economic revolution produced a new, vibrant Britain, but largely for a certain set of people. The new, educated middle class swarmed to London and its environs and basked in the glow of the capital’s consumer delights and multiculturalism. But the old industrial heartlands in Wales and northern England stagnated, as did similar areas in Scotland.

Decades of this uneven distribution of opportunity created two strains of national populism — English and Scottish nationalism. Each is fueled by support from once-thriving areas whose residents recall better times and want to be respected parts of the nation again. Scottish populism has fueled that nation’s independence movement while English nationalism has fueled Brexit and the 2019 Tory breakthrough in the historically Labour-voting “Red Wall.” Both seek to recover lost dynamism and status.

Truss’s crusade ignores these facts in her efforts to accelerate growth in the already-rich Tory South, and that risks destroying the foundations of her party’s majority. Bringing more investment bankers to London won’t help Stoke-on-Trent, nor will deregulation of existing industries likely alter the calculations that lead businesses to base themselves near the thriving capital. Changing this would require a serious government plan for boosting regional development, a turbocharging of the “leveling up” approach ineffectively championed by former prime minister Boris Johnson. But Truss emphatically rejects putting the government’s finger on the scales of development as needed.

It’s doubtful Truss or her team would worry much about Barnsley, Glasgow or Walsall continuing to stagnate if a London boomlet pushed up national growth figures. That’s a limousine conservative attitude in a nutshell. And like the limousine liberal’s views, voters will likely reject it.