Political power is not what it’s cracked up to be

Our prime ministers and premiers wield far less power than most people believe… Instead, power is distributed across multiple actors – business leaders, media, unions, peak bodies and political factions in addition to the individual political leaders. Most leaders today operate a never-ending mental calculus of how they accommodate the competing demands of these groups in a way that will extend their period of office. Simple as that.
David Hetherington, Senior Fellow at Per Capita

Succinctly put Mr Hetherington. Our political captains are not the only hands on the tiller. Indeed they are arguably not able to move the tiller at all.

At least that is what we thought until they told us to go home and shut the door, which almost all of us did without blinking.

So, yes they are powerless in the face of competing demands when their primary objective is to stay in office. And they really like it in office, it feeds their egos that have voracious appetites. But no, they are not without power. They told us to jump and we said, “how high?”.

This was a fascinating response.

Clearly we were spooked by a nasty virus that at best would make us sick or could signal the end, if not for us, then grandpa. It made sense to stay home and bake.

Only something similar happened in the early 1930’s in Germany.

People were spooked by a massive and disastrous global recession that for the Germans meant that foreign investors, who had come in to help rebuild an economy battered by WWI and the reparations that followed, left in a hurry, taking their money with them, the Americans who are always sniffing an opportunity in particular.

Along came a political opportunist and mesmerising public speaker who exhorted the German people to jump and they did. History tells us what happened next.

Before this connection turns you off as completely nonsensical. Pause for a moment.

The people who jumped back in the 1930s were highly educated, well to do citizens, familiar with success and a high standard of living that they enjoyed in the boom period of the 1920s.

Sound familiar?

They believed they were living in a democracy and that their leaders had their best interests and the country at heart. They also knew that somebody needed to take tough decisions to deal with what was spooking them; the prospect of economic ruin.

Familiar too?

The point is that modern politics may well be at the mercy of multiple actors, especially those with money, but it is not entirely toothless. Leaders can turn on a dime and make remarkable things happen. Not all of them nice or in our best long term interests.

Even if our politicians were genius-level decision-makers, the global disturbance from this pandemic will deliver recessions and depressions with horrible suffering for those already struggling. They will be joined by way too many folks who have not known unemployment, perhaps experiencing it for the first time in their adult lives.

I was one of the one-in-ten for a brief while back in the UK in the early 1980’s — a number on a list, as UB40 famously crooned.

My buddy and I applied for over 100 jobs each in a little competition to see who could land one first. We both failed and ended up in further education seeking higher degrees to help us along, he in atmospheric physics, me in ecology. So smart enough but not employable enough. It seems a long time ago now but it was a real struggle at the time. One in ten was felt by everyone.

When unemployment reaches 14% we are at one in 7.

When it reaches 20% we are at one in 5

These are the numbers of serious discontent.

If at least one dude in the round at the pub is unemployed, there is unrest among all the pub-goers. At any moment any one of them will join the queue for the dole check.

This, of course, is what is driving the political decisions to lift restrictions. Unrest is never pleasant. But to lift them only to go back to the ‘simple as that’ would be a massive opportunity missed.

Alright, enough doom and gloom.

Here is a slightly brighter note.

A new normal

This would be very nice.

How about the renewal of safety nets some redistribution of wealth to pay for it and much greater attention to issues that affect all of us.

Only we can’t expect that to come from the politicians who are telling us every day about stage 2 or stage 3 restrictions and when they might be lifted to get everyone back to normal. The one that we just left behind, potentially forever.

The politicians need normal to be what it was otherwise their juggle among the vested interests will be too hard and the balls will fall.

Unless they have got it all wrong.

There is an idea going around that Modern Monetary Theory might offer an alternative, a radical economic theory that budget deficits are are good, not bad and that government debt is necessary as the source of healthy economic growth. The idea is that investments that enhance productivity such as better health, greater knowledge and skills, improved transport are worth funding, even if it results in a budget deficit.

The theory is that spending is necessary to put money into the economy before governments can tax or borrow. Government spending actually precedes taxation. Then taxation is used to keep everyone in employment.

In Covid times this sounds like a plan.

And it presents a way to avoid a rapid return to political influence from business and the peak bodies that they pay to cheer for them with unstinting help from their media lackeys.

Wouldn’t that be nice?

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