In the grand scheme of things, it is easy to overestimate the importance of Parliamentary performances. But they do influence the troops' morale. Over the past week or so, there have been widespread sighs of relief in Tory circles. BoJo seems to have regained his mojo. Could this be the beginning of a fight-back?
Six months really is a long time in politics. In December, in the pomp of his electoral glory, who would have thought that by summer, a fair number of his own MPs would have been speculating about his political mortality. At the New Year, Boris appeared to be the master of the battlefield. and the confident possessor of that vital political attribute, luck. Back then, no-one was talking about viruses. Labour was still troubled by Corbyn's leadership. It was not even clear whether the party retained the will to live. As for the Lib Dems, what was happening to them – and did anyone care?
There were two other sources of luck. The first was Brexit. Post-election, almost all the surviving remainers really had given up the will to live. It seemed likely that in the course of this year, the EU question which had regularly made the Tory party ungovernable and destroyed leader after leader would finally lose its malign potency.
Then there was money. Largely because of excellent economic stewardship during the era of so-called austerity, Boris had lots of cash to spend. There was a consensus that the Government would have no difficulty borrowing as much as £100 billion for infrastructure projects, at an interest rate of no more than two per cent.
Once that money reached the economy, VAT and income tax receipts would easily cover the cost of the loan. In Boris's favourite phrase, the Government would be able to have cake and eat cake: cake-ism for the indefinite future.
Boris has the perfect temperament for a good times Prime Minister and there seemed every likelihood that he would be able to indulge it. Even so, and for all its power, the premiership is a precarious place. Not since Rosebery in 1895 has a PM left office entirely of his own volition. It seemed unlikely that Boris of all premiers would have a peaceful and dignified end to his tenure – but with Boris, everything always seems unlikely. Nothing is ever impossible.
Fortune is a fickle jade. At the height of Boris's electoral triumph, coronavirus struck. Suddenly, Boris needed all his luck for his own medical condition. When he won the election, the support for him was a mile wide. But it was never more than a yard deep.
There is a paradox: one of many which analysts of the PM's personality will encounter. This endlessly genial character has very few close political friends. Margaret Thatcher, John Major and David Cameron could all have recruited praetorian guards. Is there anyone in the Commons who would die for Boris? Precious few. As long as he looks like a winner, there will be plenty of Tory MPs ready to rush to the aid of the winner. If the laurels and the garlands wither, there will be neither loyalty nor sentiment to save him.
When the inevitable inquiry into the recent discontents eventually reports – and it might be nip and tuck to make that happen before the next election – there will be lots of criticisms. It is unlikely that much of the upper health bureaucracy will emerge unscathed. There were mistakes, strategic, tactical and political. In one respect, the political errors were the most culpable, because they were the most avoidable. Several commentators made the same point. Boris should have done more to take the British people into his confidence. But that touches on a recurrent weakness. Whether in private life, public life or any other form of life, Boris cannot cope with bad news. When confronted with some, his instinct is to bluster his way through it.
That is trouble to come. But by the time it arrives, there will be other developments of far greater importance. The Government will have to take some of the most important decisions in modern peacetime history. They will influence the whole future of the British economy. Needless to say, they will also determine the outcome of the next election. In the course of all this, Boris will either succeed in relaunching himself, in such a way that will make the pandemic recede into history – or he will lose the Tory leadership, and Keir Starmer will be a strong runner in the Downing Street stakes.
The economic goal is simple: to restore the British economy to its status quo before the virus struck. Because of the pandemic, there is a massive amount of unused productive capacity, be it furloughed workers or closed pubs. In some cases, especially the catering industry, there are still regulatory obstacles to a full return, though these appear to be diminishing with every passing day. But in nearly all cases, the requirement is for a huge fiscal stimulus, to replace the twenty per cent fall in GDP.
Recently, the Government has been able to sell gilts at an interest rate only fractionally above zero. Although that is encouraging, it will not be enough, especially as the US and the EU are equally thirsty for capital. The Bank of England has also come to the Government's help. Judging by the smoke signals from Threadneedle Street, the Bank is willing to buy just about as many bonds as the Government wants to sell. The Treasury is now working to ensure that this instalment of quantitative easing reaches the real economy, unlike its post-2008 predecessor, which helped the big banks to pass their Basel stress-tests but did little to ease the stresses in the wider economy.
Our Bank is not alone. The Fed seems psychologically prepared for QE, as is the ECB, if it can circumvent the German constitutional court. So we are moving into a fascinating period in global economic history, with many commentators reluctant to predict the outcome. Those of a Keynesian disposition ought to be applauded. A fiscal stimulus would be used to avert a 1930s-style recession. A primitive palaeo-monetarist might be deeply unhappy. To him, it would sound like printing money, monetary incontinence which would lead inevitably to hyper-inflation. Which of them is right?
It would be foolish to ignore the risk of inflation. If the new money to replace the lost output turned into jobs and output, all would be well. If it turned into wages, prices and asset values, nothing would be well. There is an obvious difficulty. No-one can come up with a formula to tell us exactly how big the fiscal stimulus should be. There is a danger of an overshoot, leading to an inflationary spike. But if the supply side of the economy were functioning efficiently and absorbing the new money, that would be temporary.
If QE should work, then cake-ism will become a new economic model, based on a simple equation: ER=ES: economic recovery equals electoral success. So what will happen? I will be foolish enough to make a prediction.
This pandem-recession may have caged the animal spirits on which our economy depends. It has not eradicated them. A cake-ist future is still possible. Our remarkable Prime Minister can still deliver one. With Boris, there are only three rules. First, never underestimate him. Second, never be lured into believing that you understand him. Third, whatever the rules seem to be, he will break them. It will all be interesting to watch.