Posts Tagged ‘elites’

“Yes, We Can!”

barack-obama-yes-we-canIt seems like just yesterday that Obama came to the fore of world politics with this optimistic and energising slogan, shouted back at him excitedly by hugely enthusiastic crowds.

Eight years later, despite Obama winning a second election and ending his Presidency with quite high approval ratings, (reflecting a generalised opinion that he’s a likeable guy), that promise frankly seemed to many people more like “No, We Couldn’t.”

Whilst there were some successes in Obama’s presidency, too many people felt left behind. From Florida to Michigan via Pennsylvania, North Carolina and Wisconsin, people came out in their droves in yesterday’s election to register their discontent.

Trump’s victory is going to be spun – everywhere, endlessly – as a great uprising against the elites, a sort of Western “Arab Spring”, and a repudiation of Obama (and by implication, Clinton), a generalised push back against left-of-centre liberal intellectualism, against feminism, against so many isms that people will be frothing at the mouth to get them out. And Brexit, we will be told constantly, was a similar rejection of the ruling European elite, and Trump, as he famously predicted the night before the election, was just Brexit plus plus – surely the only time a political event in another country has been quoted the night before an American election.

The problem is that this analysis of what’s going on in world elections at the moment is actually wrong. Too shallow. Too simplistic.

Not because people aren’t reacting against elites. They are. Blind Freddie can see that. But that’s really not the point. The real issue here is that people are scared, frightened, confused and casting about for someone to blame for what ails them, and the elites are merely the most obvious and useful target. After all, they’re in charge, so it must all be their fault, right?

“What must be their fault?” “This shit we’re in.” “So what do we do?” “Chuck the elites out.” “Yay! Pass the pitchforks.”

"Who's to blame?" "Dunno, but he'll do."

“Who’s to blame?” “Dunno, but he’ll do.”

The problem is that that analysis is skin deep, and chucking out the elites, if that’s going to be the solution, is only step one of a change, anyway. After all, if you’re going to chuck out the elites, you have to replace them with new administrators. Who are they going to be?

So before we assume we know what’s going on, let’s roll back a bit. WHY are people so scared and angry?

The answer is actually very simple. Breathtakingly simple.

The world has been going through a massive structural change – a fundamental change to free-er trade, and integrated global markets, fuelled by the freest and fastest movement of capital in human history. Massive movements of money wreak chaos in the world’s economic systems. Businesses get blown up overnight. Currencies wobble and slide alarmingly, with the knock on effect on future orders, travel, banking and a dozen other areas.

At the same time, new manufacturing bases like China, India, and elsewhere have sprung up to feed products and services into older, more established economies.

All this has cut the guts out of many key industries in America in particular, and because they have a Government which is periodically ideologically opposed to interfering in the economy, the people affected by the changes are often left to fend pretty much for themselves.

(Layered on top of this is a generalised concern about terrorism and conflict which keeps people permanently unsettled. The obvious fact that hardly anybody, in statistical terms, ever gets hurt by terrorism, is no compensation for those watching lurid pictures of those unfortunates that do, and especially when irresponsible politicians take every opportunity to talk up the threat instead of cutting it down to size.)

But back to economics. Because “it’s the economy, stupid”, right?

The only solution is for economies to be quicker, more flexible, and more innovative. The world might not want your eight cylinder Detroit-built gas guzzler any more, but it seems to want a super-fast electric Tesla, not just because it’s cheap to run, and environmentally friendly, but because it’s a bloody good car, chock full of driver goodness.

But for every Tesla there are dozens of clunky, slow-moving businesses, frantically trying to build firewalls around their markets, and failing.

Many of the people running these companies are more focused on merging with another company and making a quick buck out of stock options, and while they talk a good story about the need to expand and innovate it’s not really their focus. Otherwise they would, yeah? So sooner or later, the hungry and the fast eat the slow and the complacent, as they always do, and the hungry and the fast are increasingly somewhere else, not in our old, established economies. They are in places with fewer restraints on business – especially on labour issues and environmental protection – and they are frequently quasi-command economies where decisions are taken very fast, and without opposition. It’s a potent mixture.

The real problem has been that the political elites are locked into a zero sum game.

They can’t get elected, or re-elected, without saying they know how to fix things. But in reality, they don’t really know how to fix things.

The changes that are going on are so fundamental that they aren’t actually amenable to “being fixed”. Certainly not quickly, and certainly not just by saying it. Many of the changes taking place now are “forever” changes – the clock simply can’t get turned back. People are going to have to adjust, and no amount  of overblown rhetoric from the elite is going to smooth over or resolve the problems.

So if a business in America, for example, (or any old economy market), wants to continue to compete in low-tech commodity marketplaces that they once previously dominated, what are they going to do? Slash the wages of their workers to those of workers in China? India? Mexico? Vietnam? Indonesia? And increasingly – Africa, too? Install better (and more expensive) automation? And anyway, where’s the money going to come from?

What happens to the worker voters then? Longer hours for smaller pay – or being replaced by some whizz-bang new production line – isn’t going to go down well with a workforce that has been cosseted for generations by the terms won by pro-active and powerful unions.

So here is our fear.

The real terror we have is that Brexit will have little or no effect on whether or not Britain can compete on the world stage in the way that it used to when the country had preferential access to cheap colonial resources, and technological leadership in areas like car manufacture, aircraft design, heavy engineering, added value food manufacture, and much more. Brexit may, indeed, happen – or some version of it – but when it fails to produce some magical re-ordering of the state of Britain’s economy, and vast swathes of the country continue to be over-crowded and under-employed, where will electors turn next?

And what about America?

greatagainWhat if “Make America Great Again” turns out to be just so much more polly-waffle. Because America actually can’t be made great again, because it’s hopelessly under-capitalised (seen the deficit recently?) with a shrinking tax take, too turgid, not innovative enough, and rapidly being muscled out by new, cheaper more agile competitors.

And America’s too political. Just too damn political. So when someone calls for huge investment in “green energy” for example, sensible, laudable forward-thinking initiatives are killed by a bunch of old-economy oil barons protecting their turf, aided and abetted by politicians who are either in their pocket, or who would rather deliver a smart soundbite about how alternative energy sources will never match up to our needs, and anyway, “who believes all that global warming stuff anyhow?” rather than take on the task of educating the public as to why such investment isn’t just a good idea, it’s mandatory.

The very obvious point is that moving to alternative energy sources will simply make the planet cleaner, anyhow, and wouldn’t that be nice, even if global warming isn’t happening and 99% of the scientists in the world are wrong? And anyway, old-style energy sources are running out whether or not the planet is warming. One day we will run out of gas, oil, coal, and uranium, or it will simply be too expensive to extract what’s left. What then?

Doesn’t it seem to make sense to have a fall back solution?

Of course it makes sense, but we are idolising politicians who could care less if it makes sense. Look at Trump’s insistence that he will wind back support for solar energy and expand the coal industry. It plays well amongst unemployed coal miners, it played well in key swing states like Pennsylvania, and the owners of coal companies will be delighted. Not so much the future-focused industries. Among solar-power installers, SolarCity Corp. which Tesla Motors Corp. is currently trying to acquire, closed down 4% on Wednesday. Rival Vivint Solar Inc. was among the biggest decliners, ending the day off 6.3%, while SunRun Inc. tumbled 4%. Solar-panel makers and solar-power developers fared no better. SunPower skidded 14% and First Solar Inc. lost 4.2%. The American depositary receipts of China-based solar-panel manufacturer JA Solar Holdings Co. Ltd. fell 8.4%; Trina Solar Ltd. ADRs closed 2.3% down for the day. The Guggenhim Solar ETF  was off 5.6%.

This is just one industry sector out of dozens we could consider. We’re going to make America great again by massacring an industry of the future and pumping up a tired old industry of increasing irrelevance. Irrelevance, we say? Yup. Coal prices have fallen more than 50% since 2011 as it has faced stiff competition from plentiful natural gas which is easier to extract and transport, cleaner to use, and cheaper. That isn’t going to change.

We’re going to rob Peter to pay Paul – lose jobs and wealth in the solar industry to prop up jobs and profits in the coal sector. And in doing so, we will send the American ability to compete (against the Europeans, especially) backwards, again. And for what? So we can make it look like we are keeping in line with our hugely overblown promise. “Back to basics! None of this wanky new stuff! Let’s get those mines open again!” We’re in the process of doing exactly the same in Australia.

Politics, pure and simple.

But the stakes here are simply enormous. The howling, inchoate anger of the masses that saw Trump elected will absolutely not tolerate another failure. Trump has massively raised expectations of his (and by implication, the Republicans’) ability to fix things with a massive tranche of people who have lost all hope and trust in “the system’s” ability (or desire) to help them.

He’s their last throw of the dice.

He has blindly and repeatedly promised jobs, jobs, jobs with no plan as to how to create them, other than slashing taxes for business and for the well off, and vaguely “getting government off people’s backs”. Which is all well and good, except the evidence is that cutting taxes very often does not create jobs, because the “trickle down” effect of lower taxes for the rich is illusory, and there is no evidence that cutting corporate tax results in higher levels of investment in business, either.

And “getting government off people’s backs” is simply code for slashing the social credit: cutting money for hospitals, education, welfare, veterans, transport and more. Which are precisely the things that the disenfranchised people that vote for him need to survive. So in four Trump/Republican supporting areas in America last night electors voted to increase the basic wage – because they can’t live on what they’re getting now – an act which will now be opposed by the very people they voted for.

Sometimes, looking around can be instructive. This interesting little article about how constantly pumping up the electorate’s expectations has essentially wrecked the Icelandic economy and destroyed the trust of the voters is well worth reading.

Is there an alternative? Yes there is. We need politicians (and opinion leaders) who can explain the realities of the world in simple enough terms for people to understand. It is not a coincidence that Trump’s largest area of support drew from the under-educated. The same was true of Brexit. If the Legia Nord persuade Italy to leave the EU, or the National Front take power in France, the same will be true again.

That’s not a value judgement, it’s an indisputible fact that needs to be understood. If you haven’t finished high school, let alone done further education, you simply aren’t going to have the head skills to understand complex arguments. So what do we do in response? Do we work out how to make those arguments genuinely accessible? Do we re-examine our communications techniques to explain what’s going on to the widest possible number of people, to prevent an expectations bubble blowing up? No, we don’t – because we don’t think we can get elected that way. So we reduce our political messages to the mindlessly boiled down and un-achievably aspirational. We’re going to Make America Great Again. How? Sorry, I need to move on and talk about emails.

Trump has ratcheted the expectations for his incoming Presidency to impossibly high levels. If he crashes and burns, we genuinely fear for the very fabric of society. And we fear that effect appearing all over the world.

churchillOne of the most famous political speeches of all time was made by Winston Churchill when he took over Government in the most parlous situation in May, 1940. With Britain’s very existence at stake, he said:

“I would say to the House as I said to those who have joined this government: I have nothing to offer but blood, toil, tears and sweat. We have before us an ordeal of the most grievous kind. We have before us many, many long months of struggle and of suffering.

You ask, what is our policy? I will say: It is to wage war, by sea, land and air, with all our might and with all the strength that God can give us; to wage war against a monstrous tyranny, never surpassed in the dark and lamentable catalogue of human crime. That is our policy. You ask, what is our aim? I can answer in one word: Victory. Victory at all costs — Victory in spite of all terror — Victory, however long and hard the road may be, for without victory there is no survival.”

The national unity that was engendered, and the national effort it produced, has never been exceeded before that time, or after. Indeed, many consider Britain’s War Cabinet from 1940-45 to be the most effective UK Government of any era.

Blood? Toil? Tears? Sweat? An Ordeal? Struggle? Suffering?

Didn’t hear a lot about that sort of stuff in recent years, did you? And yet now is exactly when the angry, bitter, betrayed working and middle classes desperately need our political leaders and our media to tell them the truth.

They won’t, so we will.

A lot of the next ten or twenty years are going to be shit, quite frankly, and there’s no real sign that we know what to do about it.

Our kids will probably be less well off than we are, at least some of them will, and some of us will be, too. Our kids are going to have a whole heap of challenges we can only guess at now.

Our world is changing faster than we can manage, the stars are realigning, and the very first thing we need to do is face up to it, because unless we do, there is not just a vanishingly small chance we’ll work it out, there is no chance whatsoever.

We need a massive effort, akin to being in a war against a tyrant. And we are going to make mistakes, there are going to be mis-steps, and if we try to slay our opponents or burn the house down every time there is, we’re never going to get anywhere.

The days of plentiful cheap resources and endlessly expanding markets are gone. Forever. And we can’t rely on population growth to take up the slack, because it creates as many problems as it solves.

How we handle the coming change, with its inherent difficulties, will be the measure of our shared humanity. Let’s start by facing up to the challenge, and taking the people with us.

 

 

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