The twin problems of socialised debt and the rise and rise of populism

Professor Tim Bale makes an argument quoted by Harry Wallop in the Telegraph on the rise and rise of UKIP (despite some pretty grim gaffes):

…they are articulating a wider feeling that politics has become disconnected from ordinary people. The key to understanding them is their populism rather than their policies. Ukip’s appeal is that they are outside that Westminster elite.

Both European integration and the immigration we saw under the Labour government play into that feeling, because those are two things that large numbers of people in this country don’t agree with, and which were done without really consulting us.”

At the same time, with the exception of China, states are getting poorer and much less able to do the things they have become accustomed to since the end of the second world war. Even Germany’s debt has tripled since 2008.

The reported rise incomes in UK is not being felt in part because of the stubbornly levels of personal and government debt. And the complex interdependent governance put in place to improve lives begins to feel like fiddling whilst Rome burns.

Into the growing trust gap step the populists, who don’t live by the rules set for them by the chattering classes, or indeed anyone whom they consider to be opponents. Including the press.

Just as people, at first, accepted a substantial lowering of production values on YouTube in order to hear fresh unmachined views of how the world might be, as pretenders to power populists aren’t held to the same levels of scrutiny as the established parties.

Add to that the fact that Europe is simultaneously their best card, and the election held to be least meaningful to the British public at large, and they are making some pretty big public waves right now:

At the same time, in Ireland, SF is set to take a seat in each of the four EP constituencies on the island despite (and in some cases perhaps because of) their leader being beset by troubles that would have killed any other senior democratic figure stone dead.

No one who votes for them minds that the UKIP leader exaggerated the numbers of Romanians and Bulgarians (29 million, as opposed to combined total of about 27 million), never mind those thinking about coming to the UK. It feels right, even though in fact it’s wrong.

Back in 2009, my old friend and colleague David Steven warned:

If we experience a long crisis (or a chain of interlinked crises), we are likely to see either a significant loss of trust in the system (globalization retreats), or a significant increase in trust (interdependence increases).

You need to stretch time horizons to get the latter – shared awareness (joint analysis of risks and challenges), as a basis for shared platforms (loose coalitions of leaders), which can lobby for a shared operating system (a new international institutional architecture).

And he added, for good measure…

Oh and be ready for the backlash – people are angry and rightfully so, but that may well lead us down some populist blind alleys.

Which brings me, finally, to debate around the imposition of ‘austerity’ which is making the ruling elites in peripheral EU countries so nervous (and unpopular), and making it tough to stretch governmental time horizons in the way David recommends.

As Martin Wolf noted back at the start of this crisis:

Outsiders were already aware it was a black box. But they were prepared to assume that those inside it at least knew what was going on.

This can hardly be true now. Worse, the institutions that prospered on the upside expect rescue on the downside. They are right to expect this.

But this can hardly be a tolerable bargain between financial insiders and wider society. Is such mayhem the best we can expect?

If so, how does one sustain broad public support for what appears so one-sided a game?

No one yet has a direct answer to this (except do your best until the electorate have another bout of ‘throwing the bums out’) since we are all so interconnected, as much by the internet as our collective reliance on black box international finance.

So, take it away Declan…. Stop The World and Let Me Off

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