Burnham has solved economics. The solution is optimism. At his first PMQs, the new Prime Minister assured Parliament that his government would be ‘grounded in fiscal responsibility’ while simultaneously promising to ‘unlock a feeling of positivity and possibility’ in every part of the country. Borrowing costs are surging. He did not mention this.
The strategy is elegant in its simplicity: more devolution, more public control of essential services, more government, more taxes, more politicians. Kemi Badenoch, still operating under the delusion that money is real, pointed out that this sounds like ‘more government control, more taxes and more politicians.’ She was correct. Burnham did not deny it.
What exactly does a ‘positive economy’ produce? Apparently feelings. Specifically the feeling of ‘positivity and possibility,’ which markets have not yet priced in because markets are old and cynical and do not understand the power of vibes. The Bank of England, still trapped in the 1970s mentality of ‘interest rates’ and ‘inflation,’ has not yet adjusted its models to account for nationwide optimism as a monetary instrument.
The fiscal responsibility pledge is doing a lot of heavy lifting here. It means Burnham can promise more spending, more control, and more of everything while maintaining plausible deniability about where the money comes from. The answer, apparently, is that once everyone feels sufficiently positive, the economy will simply generate it. Like photosynthesis, but for GDP.
Badenoch is still talking about taxes. She has not yet understood that under the Positive Economy framework, taxes are merely a feeling you have before the positivity kicks in.