Spooking the Markets

“Britain is one of the richest countries in the history of the world. The choice of private affluence and public squalor is a political choice. Saying there’s no money left is not only shockingly economically illiterate but also a lie. We need redistribution and structural change.” Joe Guinan, President @DemocracyCollab ‘A research and development lab for the democratic economy. ‘

Guinan and and Neil McInroy have written a piece called A Delusional Moment, largely about American politics and the fragility of the Biden administration, but much of it applies to the UK and Starmer’s incoming government. In it they take apart the hubris of the Democrat administration and the concept of self-delusion:

“The delusional moment- where virtue signalling is taken as reality, where progressive policy is only for tomorrow , where ‘tough choices’ means limp compromise, where mere describing the issue is lauded and where the true scale of crises is avoided.”

“We are in a #climatecatastrophe and there are far too few signs of required shift to wealth/ power. We are not winning and we must be wary of becoming beguiled by small victories. We are losing and in a dangerous delusional moment.”

Of course the UK and the USA face different problems, Britain doesn’t have armed militia (but it does have Suella Braverman as Home Secretary). But the systemic issues (and drivers) are the same.

In it they point out that in her first day message to her departmental staff, Janet Yellen, U.S. Secretary of the Treasury, spoke of “four historic crises” facing the United States:

COVID-19 is one.  But in addition to the pandemic, the country is also facing a climate crisis, a crisis of systemic racism, and an economic crisis that has been building for fifty years.

They point out that such pronouncements are now commonplace and can be found in such august places as the International Monetary Fund (IMF) and the Organisation for Economic Cooperation and Development (OECD). This is true. Even elite organisations can’t hide from reality anymore.

They argue: “A political economy is a system, and our system is programmed not to meet basic needs but to prioritize the generation of corporate profits, the growth of GDP, and the projection of national power.  It follows that if we are serious about addressing the challenges we face, we need to address the nature and basic operations of the system itself.  Systemic problems require systemic solutions.”

And they argue there has been progress (they are talking here about America).

But they also say “This is where the danger lies.  In the comforting illusions that we are finally making progress, that—after decades of misdirection, obfuscation, and inaction—the more thoughtful elements of the political center are at last awakening to the magnitude of the crisis.  There is an accompanying risk of hubris—at least on the evidence of some recent Washington think tank events, where Biden Administration officials and their allies seem perilously close to high-fiving each other at all that they’ve managed to accomplish to save the world.  It is all too easy to be seduced by encouraging signs, a possibility we would be the first to admit.”

“But the bigger picture, unfortunately, is that we are still losing—losing badly—in our struggle to tackle long-run systemic trends.  We have begun walking tentatively up a fast-moving downward escalator.  And further systemic shocks are in store.”

Indeed they are, and this is where the bizarre rhetoric unspooling from the Labour Party is worrying.

We are in political churn here and many of us have lived through it. Here’s the cycle:

• Disastrous populist Tories victim-blaming simplism founders on the rocks of their own corruption and incompetence.
• Electorate eventually twig to their utter uselessness despite surround-sound media sycophancy.
• Incoming Labour ‘alternative’ gear-up within the narrow bandwidth of acceptable Mittel Ingerlund politics.
• Everyone believes the political task is to ‘get rid of the Tories’, and given this dire low-bar Labour are elected (previously arguing for ‘change’ now – bizarrely – offering no change at all).

It’s the product of FPTP and a broken political culture.

The idea that scrapping the two-child benefits policy that has driven 250,000 children into poverty, and another 850,000 deeper below the breadline is somehow ‘radical’ is so miserably laughable that British politics is left irredeemably broken.

But we’ve been here before and in our living memory.

Guinan and McInroy’s concept of a Delusional Moment is right. It’s not to deny ameliorative change or deflect when good things are proposed and enacted, but, as they say:

“As our compromised system stirs belatedly into action, there is a danger of a real complacency about what will actually be required.  A daunting gulf remains between the magnitude of the systemic challenge and the scope and scale of the responses that are being conceived and proposed, and (partially) enacted—a gulf from which new monsters may soon begin to appear.”

and

“One of the signs that a crisis is systemic, rather than purely political or economic, is that key indicators decline or stay the same regardless of changes in political power or business cycles”

…

“The trends considered include poverty, wealth inequality, racial wealth inequality, income inequality, wage stagnation, the cost of higher education (and student loan debt), homeownership (and racial inequality), corporate taxation, taxation of the rich, union density, incarceration rates (including by race), labor force participation rates, healthcare costs, climate change, and life expectancy.”

Now the problems in Scotland and Britain are different, but not much.

Their point is that when you are in this level of systemic crisis and collapse the old ideas simply don’t work, This is not to say that Scottish independence would be a panacea or a Golden Bullet, because all of these massive challenges would remain, but simply to point out that Starmer’s agenda points to a level of absurdism that is incomprehensible.

People need to wake up to these realities and move beyond the circus of redundant strategies and failed ideas. Starmer’s idea that you can’t change social policy for ‘spooking the markets’ – and its woeful defence by his protean guard is such shite as deserves complete contempt, but it has to be out in the wider context of abject political failure.