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politicalbetting.com » Blog Archive » Ever get the feeling you’ve been cheated?
All around the developed world, political loyalties are breaking down. Electorates in Britain and the USA have gambled on reckless options in Brexit and Trump. The hard right is a formidable political force in traditionally prosperous countries such as Sweden and Austria (where they may enter coalition government after the imminent election), and anti-immigrant voters have found their voice in France and Germany. Secessionists ride high in Scotland and Catalonia. Centrists find themselves outflanked on the left too, with centre left parties recording historic lows in many countries. Everywhere you can find people who are mad as hell and who aren’t going to take it any longer.
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"Johnny Rotten finished the last Sex Pistols gig with the line “Ever get the feeling you’ve been cheated?” Right now, the public have that feeling. Politicians who fail to understand that are in trouble."
I cannot think of a better way to sum up the continued underlying public political discontent over the last decade.
GDP/capita still below 2007 peak.
Real wages have fallen since then also I think.
Those two statistics may be driving anti immigration sentiment.
Although worth noting it is the young who have seen the largest drops in wages since 2008...
I think Labour are doing better with middle class than before and worse with working class - but hat we are still far from crossover...
https://www.ft.com/content/dac3a3b2-4ad7-11e7-919a-1e14ce4af89b
I guess it depends if you see housing as a public sector resource or not...
Better and more varied above the line than below.
Thanks to the authors.
So it's a function of both cultural and economic concerns - a form of conservatism (small c).
I'm not sure I buy the argument that if the economy was growing strongly with real wages increasing well at all levels of society that concern about immigration would diminish (especially since in such a scenario it would still run at high levels) and what I find interesting about the subject is that - whilst concern does increase with age - there is still a high number of young voters that want reductions.
Is Primark still doing well or is there a new entrant in the market under cutting them?
On a more positive note enjoy this:
PS I challenge any Remainers to refute the Moggster's points
http://yourbrexit.co.uk/news/watch-jacob-rees-mogg-destroys-the-custom-union-argument-in-just-90-seconds/
In a macro-global way this is on the whole a good thing - nobody who has seen China evolve from a famine-stricken wreck to today's growing powerhouse can possibly wish they were back in the good old days. But it creates uncertainty and losers all over the west. Coupled with rapid social change - of which immigration is undoubtedly a part - it leaves people feeling uneasy and indeed cheated.
There isn't an easy solution. We need to recognise that we're a medium-sized economy unlikely to grow rapidly for a long time, and discuss rationally how to spread the opportunities and costs fairly, without kidding people that we're going to fund great improvements through accelerating growth.
Thanks to Alastair for a very stimulating piece.
"So voters are seeing public services under strain. They are feeling the taxes but not seeing the spending. Meanwhile, the private sector is also failing to impress. The country is changing and not in ways that the voters like. Johnny Rotten finished the last Sex Pistols gig with the line “Ever get the feeling you’ve been cheated?” Right now, the public have that feeling. Politicians who fail to understand that are in trouble."
To a large extent this is down to an increasing dependency ratio, as our working age population remains static (static at current rates of immigration). Population growth is almost entirely in the elderly over the next 15 years. Whether these costs are paid by taxes, or by private consolidation of wealth in housing, economically the burden falls on the workers. There is no getting away from this and reducing immigration exacerbates the issue.
Its this negativity and naval gazing that won Leave the referendum, we should be trading with the whole world instead of obsessing about what Malta and Croatia think
It's not entirely puzzling, but does not speak well of our politics, that the extent of the wealth destruction of the crash is so little appreciated.
Apologies for the splurge, but here's few other explanations for "why?" & "why now?" re Corbyn/Brexit/Trump/Catalonia that I find convincing;
The inability (or unwillingness) of existing state/party structures to contain/repress dissent of the status quo (GOP/Trump, Lab/Corbyn)
Splits in the elites (gove/boris) / political opportunists
Charismatic leaders (trump/farage/boris/corbyn).
The austerity argument I agree with, but it only really works if it's combined with a widespread subjective sense of relative deprivation. In order to get angry enough to ditch the status quo (when you weren't that angry before), you have to believe that we're not all in this together. You can't be happy with your lot, like you used to be. You have to feel your social/economic status has declined relative to others. This is where the flattening of information/networks comes in. Now you can check your bosses house price on zoopla. Fire up your facebook feed. etc etc.
All in all the mess continues.
However, I would also add I think the killer punch in education is not salaries but class sizes. Blair had the right idea to try and cut them, although he never really made it work, but they are now rising more or less inexorably due to massively increased demand while only limited increases in funding are available, and the concomitant workload is straining things to absolute snapping point.
I'm lucky personally this year as 75% of my timetable is A level where the classes are small anyway, but I can foresee an extreme crisis in eighteen months.
There simply is no way (and it has been coming since the late '70s in China's case) that developing countries were not going to post a threat to the first world and we are beginning to see that being played out now.
It is also possible to trade with the world while being part of a union with Malta and Croatia. Being in a union with the outer Hebrides and Northern Ireland doesn't make England any less global, does it?
Problem for the Cons is that they have since done nothing to attract back those voters and quite a lot to repel them further.
I think Brazil is the only country which actually pays the MFN rate of 8/9%, all the others pay 2-3% tariff, or nothing.
http://www.ico.org/documents/icc-107-7e-tariffs-trade.pdf
The marking load alone for a class of 28 children can be crushing.
"There is a loose inverse correlation between levels of immigration in an area and hostility to it (a phenomenon also seen in election results in the USA and Germany). This partly reflects that fact that immigrants are unsurprisingly more in favour of immigration than native. It is sometimes suggested that anti-immigration sentiment is driven in low immigration areas by observation of what has happened in high immigration areas. This would be more convincing if the areas most hostile to immigration didn’t include some of the most deprived areas of the country."
This "inverse correlation" is particularly apparent to me here in Berlin and fits in with my experience in Southern England as well. I live in a borough which has had constantly a high level of immigration since the fifties including it's "fair share" of the many 2015 refugees. There is in places very visible deprivation (unemployment, poor housing, alcoholism and homelessness). And most immigrants do not have the right to vote. If one buys into the anti-immigration rhetoric this should be a good area for the AfD, but they were firmly in 6th place in the election.
On the polish border east of Dresden, the AfD won one of their 3 direct mandate seats, something that the "Liberals" failed to do anywhere in Germany in 2013 and in 2017. I don't know the constituency well but I was there on holiday this year. The impact of immigration is low. There is some Polish influence, as Poland is just a few miles away, but it is not the "Multi-Kulti" mix that you get in Berlin. There threat of unemployment for the locals is not due to immigration.
If I had to guess what is driving this paradox, it is much more due to helplessness rather than deprivation. The drinkers who gather at xxx-platz in the Berlin at 8 in the morning have almost nothing, but they do know others who have crawled a couple of rungs up the ladder, got a minimum wage job and their own flat. They also meet many people with a good enough life without having to sell their soul to finance or business. You can easily travel round the city and if you want to seek help it is vbery easy to find.
In the AfD heartlands, rural areas not so far from a cities, there are not many job vacancies, it is hard to move on up the ladder and those who want to move to the city. Those who are visibly well off usually types who commute to Dresden in their BMWs and suits, which is no role model for the struggling. Public transport (although better than in rural England) makes life without a car difficult. The unemployed just stay at home (there is nothing for them to do in town) and the people who do have jobs fear losing it in the next 12 months with little chance of finding a new one. Essentially these problems have nothing to do with immigration, but somehow the nationalist's anti-immigration politics is popular in these areas.
We are overdue a recession and it could be a very bad one if the unravelling of QE goes awry. The central banks have little or nothing left in their lockers. The world is awash with debt. Assets are in a bubble.
And the UK is adding Brexit to the mix.
I really fear if voters think they've had enough of pain, they sadly have not seen anything yet.
You're wrong about the [relative] rise of the far right. That's not down to immigration, but a combination of integration and terrorism. That's why it's so damned foolish for the mainstream not to address legitimate concerns on those fronts, and to defend British cultural values.
https://twitter.com/Barristerblog/status/917403247555612672
Clearly a lot of it will depend on who leads the Conservatives into the next election, and also whether they are able to demonstrate contrition for some of their more egregious mistakes.
As I have said on here few times before: once a majority of people feel they have no stake in the society in which they live that society becomes unsustainable. We are not at that point yet, but we are getting there. When the tipping point comes, the very wealthy individuals and cash-rich corporations who have chosen to put money they could never hope to spend off shore instead of contributing a portion of it to the state are going to find that they no longer have any say in how things develop. It is, in other words, in their own interests to start embracing a greater degree of wealth distribution now.
Yes I know the jobs aren't actually there locally but rationality is hardly high on most people's political agendas...
The counterargument is that if you believe that free trade ultimately benefits everyone then you should work to lower them wherever they are. You can do that much more effectively inside the EU than you can outside it. And if producer countries want to help themselves forming their own EU like blocks like ASEAN that can negotiate from a strong position is a better strategy rather than relying on the social conscience of the likes of Rees Mogg.
But this is all minor stuff in the Brexit debate. UKIP wasn't a response to people's desire for better development in third world countries.
But it is also incredibly difficult to control and manage a class of 28. There are so many different things that could go wrong, and this when even the sheer effort of voice projection becomes exhausting.
If we saw class sizes in the state sector cut to 20, then things would change radically. For a start, that would kill private education stone dead far more effectively and far less disastrously than Corbyn's muddled and ill-informed tax policies. But no politician will dare do it because of the vast costs involved.
... Except in Britain, which in 2017 saw the traditional two party system stronger than it has been in 40 years
And then Labour let in millions of extra people into the UK. Mostly young, it was obvious that they were going to ultimately cause stresses on education - as well as housing and obstetrics. Yet they made no provision for this. Because it would have been too embarrassing to admit that their tens of thousands estimate was off by a couple of orders of magnitude.
Now Labour can happily snipe from the sidelines about the problems they caused - but for which they will take sod all responsibility.
He was describing a class of people who are capable and have been willing to move and go out into the world to make a success of themselves and thus, in an Adam Smith way, a success of the country as well. Once you have demonstrated that willingness to change and start again the same mind set makes you much more open to other change as well. Those who are more hesitant about change and less willing to move are inevitably more focussed on more parochial matters.
This by no means implies that the citizens of somewhere are less important or less valuable or have less fulfilling lives. But I think Alastair misses that it is them that Goodhart is trying to explain and give value to. The citizens of the world have an obvious value and don't need a justification.
There was a time when many ambitious Scots went abroad or even just to England to make something of themselves and achieve success or riches. It is the decline of that ambition and drive that is a major part of Scotland's problems right now.
1) Is it not the case that public sector workers voted Remain? I suppose they probably voted for Jezza.
2) On class sizes, how big are you talking? There were 38 in my year 11 maths class (2002-03).
Of course, a wise government in Madrid would look at the extreme fragility of the independence coalition in Catalonia and leave it to fall apart as the impossibility of actually implementing UDI becomes clear. But over the years, one thing that the PP has shown is that it has no solution to the Catalan question that does not involve making the separatists stronger.
There is no Spanish or Catalan word for compromise. With nationalists in charge in Madrid and Barcelona that pretty much guarantees this thing is set to run and run. And one day, when Catalonia is independent, every village, town and city will have statues erected of Mariano Rajoy, the man who made it all possible.
https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationprojections/bulletins/nationalpopulationprojections/2015-10-29#changing-age-structure
The growth is mostly in the elderly, the rise in fertility rate more a return to a population replacement rate after the trough fertility rate at the millenium.
Either that stable working age population needs to increase its productivity, or the elderly* need to be less greedy.
*DOI I will be one of those elderly in 2039!
I believe the evidence says that below 30 or so - smaller class sizes don't make much difference to learning outcomes.
In any case - Labour in 2017 wanted to spend 6% more per pupil, while the Tories wanted to spend 3% less.
They were a mirage - but spending has proved hard to cut.
Similarly that would show up in the gross asset and income figures
In absolute terms, you have a point.
But Exhibit B - some facts. As a % of GDP, the National Debt is lower than it has been through most of the past 300 years.
But that masks the reasons the National Debt rose: war. The Napoleonic Wars, then the two World Wars massively spiked National Debt. The worry about the current rise in the National Debt is that it was not linked to war, but incompetence in managing the banking system. Bailing out the banks was like having a very bloody medium-sized war, in historical terms.
A war we weren't obliged to fight to protect our way of life being over-run, our democratic institutions being toppled. Just a war to stop the cash-machines running dry.
The real worry is that it is a war we may yet have to return to fight again.
https://www.ukpublicspending.co.uk/uk_national_debt_chart.html
@Anna_Soubry: 2/2 Brexit ideologists should do the same. On June 8 people rejected their no deal #HardBrexit.
The problem with this latter approach is our boredom threshold and I certainly agree with Alastair that we, as a country, have got very bored with the discomfort that gradual rebalancing causes. The fact that the job is a long way from finished hardly helps because we see a finishing line slipping ever further beyond the horizon. Those who like to pretend that spending £50bn+ more than we are willing to pay in taxes is not a problem are getting a hearing.
But the fact is that we are still living beyond our means both in terms of public spending and in terms of our trade deficit. These 2 are linked because it is the extra demand that this excess government spending creates that sucks in some of the imports. But they are also linked in a more negative way. Both ensure that our children are going to be poorer than us living in a rented economy where much of the profit earned goes in interest payments and dividends to the foreign owners of our debt and businesses.
The government can be rightly proud that its inch by inch approach has helped generate record employment and relatively high growth compared with those countries that pulled the plaster off more quickly. But there is always a price to be paid and that is likely to be lower growth than those who rebalanced quicker going forward and longer term problems with debt and foreign ownership.
http://www.dailymail.co.uk/news/article-1275878/Three-quarters-Britons-want-emigrate-Australia-popular-destination.html
Many seem keen on a softer life rather than seeking their fortune though.
I recall a conversation 25 years ago with a British junior surgeon who had gone to New Zealand "Its still a rat race here, but the other rats are a lot slower!"
And the Tories didn't "want" to spend 3% less. It is what they believe the requirements of the national economy dictates. Labour may have "wanted" to spend 6% more, but their reckless economic experiment - their New Venezuela - would have been much more likely to result in far greater cuts than 3%.
Companies need to remember they have stakeholders not just shareholders; business owners that they owe part of their success to the community and environment in which they operate
OT I've met the first genuine Trump fan i know in Britain. Formet police officer, They like his style.
This may require coordinated action - but even the UK on its own might be big enough to shake things up. Once one country acts on this - others will follow. The UK also needs to sort its own house out on tax havens.
Stories like this show how ridiculous the situation is at present:
http://www.independent.co.uk/news/uk/crickhowell-welsh-town-moves-offshore-to-avoid-tax-on-local-business-a6728971.html
Today shows like X-Factor and the Apprentice sell the lie that that we can all be famous millionaires. All we have to do is work hard and let your innate talent shine. Sadly that's not true. You also need luck. You need money. You need connections.
Anyway, I am not suggesting that these Scots had to leave permanently but that the whole country gained from their entrepreneurial spirit. Scotland has a major problem with the lack of such a spirit today. The public sector is far too large and offers too many cosy billets to make the risks worth running. We do not have a viable economy as a result which means we can thank the good sense of those who recognised that in 2014.
http://catalanmonitor.com/2017/10/08/catalan-independence-arrogance-of-madrid-explains-this-chaos-john-carlin/
So it's kinda all your fault
It is that having turned up little or no solid evidence despite massive publicity and a couple of years work, they have sought to justify the effort by releasing a report which actually ignores exculpatory evidence they know about. And spun the evidentially meaningless "we would have interviewed him under caution" as an indication of guilt.
That a Chief Constable should put PR over justice in this manner is utterly unacceptable.
And why do we have to have austerity?
Well a giant part of the reason is that we have free movement of goods and people with an area (the Eurozone which is most of the EU of course) where they have been pursuing demand crushing policies for a decade. Witness Germany's mad budget balancing law and what has happened right across the South, all to support the fiction that government debts are sustainable and going to be repaid.
Hence we have had a giant influx of goods and people both of which are terrible for our current account. And following the laws of economics (the ones that are actually true) a corresponding budget deficit, which austerity is a very moderately successful attempt to control.
If UK consumers magically favoured UK goods and businesses favoured UK labour to the extent that our current account deficit shrank to zero the spending taps could open the next day. I suspect that Corbyn has a better feel for this than a lot of commentators on the right.
I guess you could say we have free movement of austerity and are importing quite a lot of it.
"...the failure of the Remain campaign to win the referendum lies firmly on the shoulders of one man – Cameron. His combination of arrogance, lack of attention to detail, his unwillingness to take on party colleagues for fear of provoking rifts following the vote, and ultimately his failure to understand the way in which the EU system functions, or for that matter the people who run it, were more weakening to the Remain campaign than the arguments promoted by the Leave side."
https://www.conservativehome.com/platform/2017/10/james-elles-oblivious-to-detail-arrogant-rash-fearful-of-conflict-how-cameron-wrecked-britains-european-dream.html
The real effect has been on productivity. Why should I increase my productivity with a piece of machinery, when there is a surplus of cheap labour which can do the job and are easy to get rid of (much easier than a large or specific capital asset). And if that surplus keeps growing, then it's much easier to put off capital investment because wages for manual tasks are depressed. Productivity increases drive wage increases or consumer choice through price competition. We imported our 'competition' through China pricing, but that gain is now over.
Also, the tax take from a minimum wage worker is fairly low. If that minimum wage worker requires housing but cannot afford it, the state will subsidise his low wage to pay his rent, put his children through school, look after his health, and pay his pension. The employer benefits, not the employee - as he no longer has to pay a wage commensurate to the cost of living - he does not have to raise his productivity to afford it.
Minimum wage worker on a 40hr/p/w - £15,600
Tax threshold £11,500
Ni Threshold 8164.
Total earnings related taxes = £1710
Then the question has to be, how much do the services that this individual has access to cost? How much is lost to the exchequer because productivity investment has been diverted into low tax yield employment? How many more people are on minimum wage because of the ever increasing labour force?
I know a few teachers who much prefer the work life balance there... they said much less pressure in terms of lesson plans and so on...
Other corporate friends say their UK experience is very well respected in Aus, and that the UK is seen as being 'a bit ahead'/latest experience etc...
https://twitter.com/GMB/status/918000490050478080
This is not unique to the UK. Apart from Africa and the Middle East the population pyramid is more or less changing in the same direction worldwide.
Voters feeling sorry for themselves - well we lived high on the hog for too long running up huge debts. We get all we deserve.