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After Queen Elizabeth’s funeral, I promised myself not to write about Britain for a long time. Although I am originally from these regions, my base is America, and has been for a long time. Yet Britain continues to be a world leader in creating often disastrous news. Plus, what’s happening there is virally linked to trends here.
The utterly predictable calamity of Trussonomics – the new buzzword, named after Liz Truss, for people who don’t know what they’re doing – is resonating strongly among American conservatives. Our politics have been plagued for years by the curse of wishful thinking – promises that bear no relation to a realistic ability to deliver; outlandish lies that respond to a felt need for self-delusion; a gullibility disguised as a ruthless “takeover”.
Conservatism in the largest English-speaking democracies is locked in a race to see which of them can find the bottom fastest. For the moment, the United Kingdom is in the lead. Apparently traders in the city have started calling the pound “shitcoin”, which says it all. I’m afraid America’s Trump-contagion variety will have something to say about that in the months ahead. My question to the Swampians, which I will also try to answer, is whether our democracies can learn from the disastrous consequences of magical thinking. Or are we too fucked up as societies to reclaim that habit of pragmatism for which we were once legendary? Rana, it goes without saying that I am also asking you this question.
It’s impossible to answer that without looking at how we got to this nice pass. The conditions for Anglo-American populism crystallized in the global financial crisis of 2008. It was really just a Western collapse (China and India continued to grow and were relatively spared). In fact, its main culprits were from the Anglosphere. Nothing enrages people more than the rich and well-connected being bailed out while the rest struggle.
As fate would have it, the task of cleaning up the mess fell to centre-left governments on both sides of the Atlantic – Gordon Brown’s Labor Party and Barack Obama’s fledgling administration. The centre-left was thus marked by the recklessness that triggered the crisis and suffered the most from its bad-tempered consequences. One of the casualties of 2008 was “expertise,” the idea that people with economics degrees or MBAs knew what they were doing. The efficient market hypothesis of the Chicago School has a lot to answer.
In a responsible world, you would largely blame the right for the market fundamentalism that has come to dominate since the 1980s. But it was the right that benefited politically from the fallout from 2008. by the left. We then had six years of pro-cyclical austerity from 2010 to 2016 during which the beleaguered middle classes bore the brunt of fiscal tightening brought about by the Tea Party Republicans in the US and the Conservative government of David Cameron in the UK. . Again, it was the right that perversely reaped the gains from the resulting rage and insecurity. But it was a different right than the one we grew up with. The twin shocks of Brexit and Trump’s election in 2016 were the culmination of wishful thinking. At least I hope they were.
Opinion polls in Britain show rising regret over Brexit – “regrexit”, as some call it. Of course, it is too late to rejoin the European Union, and it would be politically very difficult to get out of it. But it is a sign that people are digesting the lessons of this famous referendum. Keir Starmer’s Labor also has a 30-point lead over the Tories, which reinforces that point. This would never have happened under Jeremy Corbyn.
Perhaps we really are at a low point of bad British governance. Hopefully the same applies to America, but would only give a little more than even a chance of Biden beating Trump in a rematch in 2024. Should the latter return to power, or even the or one of his imitators, like Ron DeSantis, America’s mysterious and magical roller coaster would take another, possibly fatal, fall.
The only clear plan Trump has for a second term, which more diligent types have been working on, is to give him the power to fire federal bureaucracy and replace them with loyalists. It’s an anti-expertise, anti-qualification policy on steroids. Rana, how should experts regain public trust? I thought the scientists behind the vaccine would be proof of concept enough, but apparently not.
Join the FT on October 6 for the first Invest in America Summit in conjunction with the launch of the FT-Nikkei Investing in America ranking. We will discuss the proactive role that US states and cities play in attracting international business and investment.
No Swamp Note on magical thinking could not fail to mention Vladimir Putin. As I write in my column this week, Western liberalism is still skating on thin ice. “If Russia’s ‘partial mobilization’ and the West’s economic slowdown fail to weaken Ukraine, Putin will be left with a silver bullet: Trump’s return to power in 2024.”
While we’re at it, I urge my colleague Robert Shrimsley to break Britain’s vow of silence on Brexit to highlight his original role in today’s costly pantomime – Brexit ideology is at the origin of the rout of the British market.
In this context, it would also be remiss not to highlight wealth inequality – something Kwasi Kwarteng’s ‘mini’ budget has just made worse in Britain. Bad politics and bad economics: quite a mixture. Read the Congressional Budget Office’s very austere latest report on trends in the distribution of family wealth in the United States between 1989 and 2019. It’s sobering — and highly relevant — to read. The bottom half of America represents only 2% of the national wealth. The top 10% have seen their share rise, rise, and rise. . .
Rana Foroohar responds
Ed, three words: truth and reconciliation. This is the only way for the American or British ruling class to regain the confidence of their populations.
I’ve written extensively about how I don’t think we had a clear or honest narrative after the financial crises about what was wrong with Anglo-American capitalism (for more see my first book) . Since then, we have reaped the political harvest.
But I would go back even further, to the 1990s, and the evolution of the labor parties in both countries away from the workers and towards neoliberalism. This is the subject of my next book, Homecoming: The Path to Prosperity in a Post-Global World, which comes out October 18th (sorry, shameless take, but that’s totally relevant to your question). This failed political philosophy has locked the left as well as the right into assumptions about trickle-down “efficiency” theory and unfettered globalization itself, which have proven both wrong and devastating to many. people in both countries.
So while I agree that Trump and Truss are eyesores, you’d have to go back to Bill Clinton and Tony Blair to get the whole story. I’ll be writing a lot about the book over the next few weeks (and I’ve adapted it for an upcoming FT weekend article, as well as an FT movie series) and I’ll talk to you about it, soon, at our Global Boardroom Summit.
And now a word from our Swampians. . .
In response to “A not good, very bad week for the autocrats”:
“One can’t be jaded about nuclear threats, but Putin is utterly predictable and much less the loose cannon he would have us believe. Saying “it’s not a bluff” is the surest sign that it is. Since February 24, he has been making threats, nuclear power being one of his favourites, but the West has been even more supportive of Ukraine. Putin’s problem is that in the Siloviki gangster culture of the Kremlin, your violence is meant to intimidate your opponent into submission. If the opponent hits harder, the only thing to do is pretend you’re still a threat and hope for the best. If that fails, the rest of the gang can decide to get rid of the “loser”. After all, the KGB made sure to survive the fall of the USSR and orchestrated Putin’s rise: they surely plan to survive him. —Simon Noble, Madrid, Spain
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