In his book on the failure of Ronald Reagan’s economic revolution, former US presidential guru David Stockman wrote that the only thing worse than short-termism in politics is ideological hubris in government.
The so-called “father of Reaganomics”, Stockman was a key part of the economic overhaul, which has some eerie echoes of the UK government’s current strategy – not least tax cuts, supply-side reforms and spending cuts.
But in 1986, in his posthumous account of his time in office, Stockman concluded that such a revolution was impossible – partly because of politicians and their need to please voters – and he attacked “the false belief that in a capitalist democracy we can look deep into veil the future and chain the ship of state to a clear plan.”
Earlier this week, one former UK cabinet minister echoed this view, saying that while they understood the “theory” of the Liz Truss plan, “you can do it if you’re not fighting inflation”.
This is the head versus heart conundrum that many Conservative MPs are currently struggling with.
But with the controversial policy announced by Kwasi Kwarteng last Friday, Tories heading into their conference in Birmingham this weekend are now also weighing the prospect of what one newspaper has described as a “new era of austerity”.
In an attempt to calm jittery markets, Cabinet ministers are now talking about “tight spending discipline” and “trimming the fat” in government.
Amid double-digit inflation and expensive tax cuts, economists doubt whether such talk will even things out and warn that belt-tightening should resemble the early years of austerity.
This creates a number of problems of both financial and political nature.
First, where will this fat be cut from?
Given previous commitments to the NHS and security, any tightening of health and defense seems unfathomable. But other departments are hardly ripe for an inset.
Is it possible to shake the Ministry of Justice during a giant lawsuit? Can education really be valued after two pandemic years and in a period of rising prices?
Advancement Minister Simon Clarke suggested some of them capital spending commitments made during Boris Johnson’s time in No 10 could be a target.
But is it wise to stop construction when the government’s only goal is growth?
Political problems arise from all this.
Tory MPs will be the ones left on the doorstep, justifying the heavy-handed optics of tax cuts for the super-rich over potentially below-inflation benefit rises for the poorest in society.
Worse for middle-class Tory voters, rising mortgage rates wipe out any gains from tax cuts.
Then there’s the promised supply reform.
While some of the childcare and financial services measures may be easy wins, others related to planning and migration may be more controversial.
Since Liz Truss has gone all-in on growth, she will need to complete most of these measures to give her the best chance to turn short-term pain into long-term gain.
Allies say the government has a large enough majority to make these radical reforms a reality.
But remember, this is a majority earned in 2019 on a completely different platform.
Tory MPs are unconcerned that the prospect of rate hikes has suddenly turned into rising mortgage rates and government spending cuts.
Returning to America, David Stockman writes that a year into Reagan’s presidency, he realized that the revolution he had helped start was impossible.
“It was a metaphor with no connection to political and economic reality… It simply had no operational meaning in the world of democratic facts, where politicians have the last and final say,” he says.
Two years after the election, such a clash of theory with reality could be fatal for the prime minister and her party.