The politics of unreality (and the very real cost)

The world is potentially facing two enormous financial crises, while today’s figures confirm, if any confirmation was needed, that the UK continues to face acute economic difficulties.

While the underlying causes of these maladies are complex, and the potential remedies are far from simple, all are being exacerbated by the behaviour of political classes increasingly removed from the reach of even a rare, well-informed Joe Public.

In the UK, the Conservative Party’s dogmatic adherence to a 1930s-style ‘sound money’ fiscal policy is obviously not addressing growth, employment, inflation or living standards in any satisfactory manner.

In the Eurozone, national leaders and officials from the EU, ECB and IMF seem fundamentally incapable of forging a robust response to the continent-wide crisis of growth, sovereign deficits and unaccountable ‘market’ power.

In the United States, a weak Democratic president and an increasingly unhinged Republican party warped by witless Tea Party populism have clashed in a horrible fashion. An innocuous congressional vote on a technical matter (the level of the US’s debt ceiling) may yet lead to an American default and downgrade, and worldwide market panic dwarfing even that of autumn 2008.

In all three cases, politicians, non-elected leaders and whole, life-defining-for-billions institutions have evolved beyond true accountability, and seem unable to deal with foreseeable, avoidable problems in any sort of cogent way.

In place of leadership, shallow, silly tropes are rehearsed endlessly – ‘maxed out the credit card’, ‘Obama is obsessed with taxes’, ‘we do not foresee a default situation’, ‘the mess we inherited’ – as politics increasingly becomes little more than a dire spectator sport.

Meanwhile, jobs are lost or forfeited to more clear-thinking countries, talent goes unrealised, the quality of life of the average citizen declines and the scant remains of popular faith in politics as we know it are haemorrhaged with thoughtless indifference.

It’s a trite and often-uttered complaint of the layman, that ‘them politicians don’t live in the real world’, but it makes perfect sense in all three cases.

We’re used to this locally of course; infantile bickering and tribal politics uber alles, but, perhaps naively, we expect a gentle upward slide on the competence-meter as we look to the summit of national or continental politics.

In the UK, to take one example, a largely vapid, often wilfully ignorant media, mixed with the gutless, valueless ‘triangulation’ politics bequeathed by the age of New Labour has formed a political economy unable to process or explain important, complex matters in a sensible manner that values the intelligence of the general public. This applies to the US and seemingly most European states too.

Labour may have presided over some demonstrably wasteful spending, but its borrow-to-grow stimulus program was essentially sensible and, apparently, worked.

According to Larry Elliot in The Observer:

“Growth had resumed at the tail end of 2009, and Alistair Darling’s legacy to Osborne was an economy which was expanding at 1.1% in the second quarter of 2010, its fastest rate in nine years.”

Today, growth was estimated to be a measly 0.2% in the last quarter.

Sadly, Labour did not trust the electorate, the media, or its own social democratic instincts enough to clearly explain this to the man or woman in the street.

Hence the tame attack of “too far too fast”, and tongues tied in knots deflecting the question of “well, what would you cut?”

Anyway, about that deficit…according to the ONS’s June statistical report,

“…the public sector current budget was in deficit by £11.8 billion; this is a £0.4 billion higher deficit than in June 2010, when there was a deficit of £11.4 billion.”

So the deficit is up, growth is down, and the Business Secretary Vince Cable, interviewed in today’s FT, acknowledges that a lack of demand is the key problem, not the risk of a ‘Greek-style’ crisis.

Of course, this is exactly what Cable was saying before the Lib Dems entered government last year.

With households and businesses reluctant to spend or unable to borrow, the only possible source of increased demand is constructive, deficit-financed government spending, at least for as long as sensible, truly progressive taxation is weirdly taboo.

It’s that simple. And yet, none of the three main UK parties are capable of saying it, even where they know or believe it.

It’s hardly news that artifice and rhetoric routinely trump ethical outcomes in politics; it just seems that routine is finally delivering enormous, simultaneous reckonings on multiple fronts.

In the UK, the States and in the Eurozone, the lives of countless blameless citizens continue to be avoidably ruined, while none of the ‘democratic’ systems underpinning the political classes of these areas seem capable of breaking the spell.