February 27, 2008

The global pendulum is now swinging to the left

Posted in International Economy · 25 comments ·

Barack Obama is both the symbol and the messenger of the change under way in American — and, indeed, global — politics and society. This change, put most simply, is the swing to the left in socioeconomic policy that has already begun, and that is likely to gather speed quickly, accelerated by the worldwide downturn.

There is nothing unusual about pendulum swings in ideology, nor is there anything new suggesting that straitened economic circumstances trigger political change. After all, Karl Marx spent long drunken evenings with other continental communist emigres in north London pubs waiting for the global economic crisis that would precipitate the end of capitalism. Marx understood that in a downturn, positions change, old orders are overthrown and new dispensations are conceived.

While we are not at a Marxian tipping point, it is very clear that a win for Obama will herald a re-emergence of the liberal left in the US. We are not just talking about a trendy, farmers’ market, free-Tibet type liberalism; we are talking about something more grainy, more muscular and altogether more interesting.

It was easy enough for Obama to appeal to the type of people who we saw at the Oscars the other night. After all, he was one of them — good-looking, tolerant, sufficiently ethnic to be exotic, well-travelled and super slim. What is more interesting has been his breakout from the bear-hug of the likes of George Clooney, Brad Pitt and Jack Nicholson, and his growing appeal to blue collar workers.

A New York Times poll yesterday indicated that Obama was picking up votes from the type of lads who prefer Nascar racing to baseball, Motorhead to Radiohead and Philly steaks to focaccia. In Irish terms, Obama has moved seamlessly from Rathmines to Rialto, taking Ranelagh with him.

This is a profound turning-point, because although Obama might be the symbol, his success is being driven by a broad-based public yearning for something different. Recent history suggests that where the US goes, the world will follow. Some 30 odd years ago, Reagan and Thatcher dragged the world to the right. Today, Barack Obama will nudge us to somewhere we have not been since The Jam were at Number one.

Thinking back to the era of Hillman Hunters, Ska, bondage trousers and the SFX, it is impossible not to attribute the rise of Reagan and Thatcher to the politicians who went before them. Thatcher could never have emerged without the antics of James Callaghan, the three-day week and Red Robbo. Similarly, Reagan could never have enveloped America with the comfort-blanket of optimism had Jimmy Carter not humiliated American prestige in Iran and presided over the late 1970′s recession. Confused, Americans needed a message of hope and got it in the guise of Reagan, who promised, redemptively, a “morning in America”.

Ronald Reagan, the Irish-American President who epitomised the American dream more than most, declared that “the difference between the American and any other person, is that the American lives in anticipation of the future because he knows what a great place it will be”. This is Obamaesque in its tone and aspiration. The attraction of both Reagan and Obama lies in the contrast with what went before them.

Obama’s best asset is George W Bush, with his smirking vacuous grin, his illegal war in Iraq, his redundant economic policies and the implosion of the economy he has presided over. His tax cuts for the rich and proximity to big business are now embarrassing many Americans. When Bush, Cheney and their tatty entourage are compared with the polished, noble eloquence of Obama, they look like a bunch of creeps on the make. The Hopemeister’s message of messianic deliverance is made all the more uplifting when seen against the smash and grab antics of the outgoing regime.

Americans are worried about bread and butter issues such as the price of petrol, their monthly outgoings, the fall in house prices and the rise in unemployment.

For the average man, the debt crisis in the US has exposed just how much the ideology of the right has been subverted by greed at the very top. The idea that the free-market ideology would lead to greater wealth for all, flies in the face of the facts. We know that the rich have got richer, the middle classes have become more indebted and the poor have fallen further behind.

In the late 1970s, the world was broken. The great phase of economic expansion, rising living standards and a better life for all, which lasted from 1945 to 1975, came to a thundering end with the stagflation of the late 1970s. Unemployment rose and the western world was plunged into a period of self-doubt. Reagan and Thatcher claimed they could fix the problem, the electorate believed them and we experienced another 30-year cycle of right-of-centre ideology which seeped into most parts of the globe. Some of their ideas worked, other didn’t.

Now, with the financial markets in a global tizz over enormous debts incurred at the tail end of this free market era, and the average man worried about the impact of China and India on his job and his wages, there is a sense that we need a new era of new thinking. Already, last week, we saw in Britain a move which would have been unthinkable last year. Gordon Brown, in a move that owed more to Tony Benn than Tony Blair, nationalised Northern Rock. Rather than let the delinquent bank go to the wall, New Labour moved sharply to the left and delved into the 1960′s bag of tricks which many thought had been discarded for good. The pendulum is swinging throughout the globe. Ironically, just as Fidel fades from the stage, another young, handsome, charismatic, intelligent outsider is waiting in the wings. While totally different characters, they both have global appeal, speak the language of the little guy and have a ruthlessness which is necessary for high office.

The age of Obama is upon us.

  1. nick

    Couldn’t agree more. BO will win on the back of an enormous American thirst for change.

  2. Philip

    I hope you are right. The level of contentment is definately at an all time low over there. About time it got woken up again.

  3. Jonathan Benson

    Socialism eh? I think I have seen enough of socialism if Bertie Ahern is a socialist. :)
    True enough we are mid table on the equality charts but the turn down the road to inequality has been taken some time ago by this government. Who knows where these policies (stealth taxes, high VAT, wildly unaffordable housing) will ultimately lead.

    Incidentally David, does a return to the liberal left in the US mean a reigning in of the globalisation agenda? If so this could be bad news for Ireland in the short to medium term.

  4. John Q. Public

    Don’t be so sure about the pendulum swinging to the left. Nobody knows anything about Obama for God’s sake, he appeared only last week and all he says is ‘hope’ and ‘change’ over and over again. He looks clean-cut and he’s black, big deal! There are lots of politicians and academics in America with decades of experience, what qualifications has he got to run the USA? none. By listening to Hillary’s recent speeches one would assume that she leans to the left insofar as her criticisms of Bush’s invasion of Iraq yet she was all for it when it happened. She voted for it and now listen to her, she makes me sick!
    It’s never the actual Presidents that actually run America anyway but the invisible forces behind the seens, the super-rich and powerful. Do you really think that Bush invaded Iraq all on his own? Yea sure, the guy couldn’t tie his own shoe laces. All Obama has in his favour is the contrast in politicians (we hope) that went before him, a two-faced bitch of an opponent who was married to a degenerate sex-addict, he’s black and looks good in a suit, that’s it! Great CV.
    By the way, take a look at this: http://sunnyplaceshadypeople.wordpress.com/2007/11/22/barack-obamas-resume/

  5. AndrewGMooney

    John Q Public: Where’s your ‘trusting nature’ these days? Cynicism is so easy, it’s much harder to be a consitantly credulous fool – like most voters in UK-USA.Inc

    Not so fast, David…..

    Morrissey famously wrote in “America Is Not The World”, with his customary diplomacy:

    “America your head’s too big, Because America, Your belly is too big. And I love you, I just wish you’d stay where you belong.
    In America, The land of the free, they said, And of opportunity, In a just and a truthful way.
    But where the president, is never black, female or gay, and until that day,
    you’ve got nothing to say to me, to help me believe
    In America, it brought you the hamburger. Well America you know where, you can
    shove your hamburger. And don’t you wonder, why in Estonia they say, Hey you, you big fat pig, you fat pig, you fat pig!”

    Like Morrissey, I love America, American Culture and almost every American it has been my privilege to encounter. BUT: I am extremely concerned that the first female or black President will reap the whirlwind of Dubya’s good-ol’boy mega-corruption and it will all end in tears. As for the ‘gay’ candidate. Well, it’s some ‘wide-stanced’ Republican closet case in Minneapolis Airport. Hello Larry! You’re a bit late with the ‘personal freedom’ agenda, mate.

    What we’re seeing here is NOT a ‘swing to the left’, it’s Socialism For The Rich. Wall-Street Welfare. “We’re the Big-Swinging-Dick-Hedge-Fund-Masters of the Universe-Cry-Baby-Wusses”: And if we go down: We take Sovereign Currencies and Governments of The Nation State with us. Let’s just keep to Wal-Mart debt slavery where the Risk is underwritten by the Working Poor through Taxes. Fc-uk ‘democracy’! Like Leona said: “Taxes are for the little people”

    Tibet? There is simply nothing more grainy, more muscular and altogether more interesting than Tibet and it’s indestructible refugee culture in Dharamsala. Other than the historic, abandoned cultural ethos of the ‘real’ Ireland I knew as a lad. I always dreamed of being welcomed. I never was: Stranger In A Strange Land I Called Home, etc.

    Classical Economics no longer makessense, because the conditions which gave rise to them in Auld Reekie no longer exist. The Information Age is gathering pace. A new economic model is emerging. It’s based on Non-Standard Indicators of Wealth. I drive a Ford Fiesta because I prefer to keep my hard currency in Government Bonds. I am not impressed, to any degree, by so-called ‘Wealth’. I need Sound Money. The Rule of Law. Mains Water. Sewerage. Medicine. And Art. Everything else is delusional nonsense.

    My brain is my only source of wealth. Trust me: One day you will die. You won’t be reaching for your duty-free anti-ageing wrinkle-reversal serum when you ‘Cross the Threshold’. Or your Manolos. Or your turbo-gas-B-B-Q in ‘deckland’.

    Can you skin a rabbit? I can.


    Kind regards.

  6. Paul

    I too can skin a rabbit.

    My neighbours repayments on his Mercedes are they same as my mortgage, But he insists that
    he needs his merc ?? !!

    Sometimes this country just makes me laugh.

  7. Maxdiver

    I’m not sure BO becoming president will change that much.

  8. John Q. Public

    Things can swing too far to the left you know. Liberal left-wing looneyism is destroying Britain and Ireland and foreigners are taking the piss in so many ways. Check this: http://www.rte.ie/aertel/115-01.html

  9. John Q. Public

    woops, that page is gone now it seems, typical RTE! Don’t want to give too much news about foreigners claiming fraudulent benefits. It lasted a few minutes anyway. 7 times more benefit fraud among foreigners than from irish nationals. RTE are probably thinking up some nicey nice story about them now like their human rights up in Mosney or somewhere.

  10. Vandala

    John Q.

    Here is your story: http://www.rte.ie/news/2008/0228/welfare.html

    …although I don’t entirely buy the results of a “random” survey. It’s probably just as likely that Irish people are more experienced at scamming the system !

  11. coldblow

    Good article although AndrewG was right to point out the misplaced reference to Tibet.

    It seems as if the conservative American-Anglo economic consensus might now be finally caving in. Far from wishing to return to the glory days of Benn, Hatton, Militant and Co (of whom Mayor Livingstone is a salutory reminder) I believe that Gordon Brown desperately wanted to find a solution, any solution, for Northern Wreck which didn’t involve the N word. Even the Conservatives’ proposals weren’t that different. The problem for New Labour up till now was that they couldn’t challenge the economic consensus without committing political suicide – assuming, that is, that they didn’t actually accept it in the first place. Hence their appeasement of the “City”. Even though it was the obvious solution they still wouldn’t have gone for nationalization if it wasn’t for the vast sums involved and for the fact that it was now obvious to everybody that any further indulgence of the anarchic value-free parallel universe/ kindergarten that is the Financial “Community” would be criminally irresponsible. A one-off nationalization is now possible because it looks like the current rules have finally been discredited by the very people they served to enrich

    I understand that last year when still unknown Obama supported/ sponsored legislation to crack down on super-wealthy tax-evaders. Apparently he also wants/ wanted to cut and run from Iraq. That’s all I know. But what exactly would a swing to the Left imply – a sane readjustment to reality (another New Deal) or a return to the insane value-free fifth dimension still inhabited by many of the Orthodox Left (What’s “Left”?)? And in the age of Amusing Ourselves To Death does this even matter any more or is America too far gone for regeneration? Let’s hope not. .

  12. John Q. Public

    Vandala, thanks for finding that, good on you. We are more experienced because we have been here longer. By letting illegals into our country we are just adding to the problem. Why let so many in to learn from the masters? Why not put the same amount of time and effort into stopping them coming here in the first place.
    Anyway who do you think is backing Obama and why?

  13. VincentH

    It is a mistake to equate the current issue with a total collapse. For many in the US and elsewhere, this crux means a little nearer to a well fluffed pillow, not their arse parked on a bare pallet, yet.
    Your BO and attendant shift to the left, while a hopeful belief for many, requires one or two other things for it to happen. And one of them, that inflation is not a dirty word, another is protective taxes.
    While Northern Rock in the direct control of the Bank can only be a good thing. But remember that NR is a bank which the Bank could afford.

  14. aidan

    I am not convinced by obama, he uses alot of floury language that appeals to the unsophisticated voter, this is still only the democratic convention, but you are right there is a very real chance that he could make it to the white house. Many people are comparing him to JFK, merely because that was also a period when america was looking for change, however america was in a totally different place then in 1960 than it is today, then its economy was the strongest in the world and it was successful in WW2 and Korea, now its economy and iraq is in a shambles , the change america wanted in 1960 is not the change it needs today. I think McCain is by far the better candidate who has experienced adversity and is not afraid of unpopularity, but McCain’s is not popular to the unsophisticated, no oprah for him, obama has never really been tested, if obama is elected he will be more jimmy carter than JFK, this period is much like the mid 1970s, carters presidency followed nixons term( if you ignore gerald ford who got in by default), and nixon is so similar to bush with vietnam then and now iraq

  15. David, here is confirmation of your analysis from the American Heartland, Mount Horeb, Wisconsin, a village of 6,000 eleven miles to the west of Madison, Wisconsin, our state capitol. In our recent primary, roughly 1200 people voted for Obama and 240 for McCain! The numbers say it all and confirm your analysis. I teach busines for a living, and there is fear in my students about their futures, or lack of them. Sadly, given the damage of the Bush crime family has done to this country, all of the kings horses and all of the kings men may not be able to put America back together again. My wife and I are looking toward Canada, where at least the budgets are balanced and the social safety nets are funded. Again, you are one of the few analysts worth reading. My wife and I hope to get to Dublin in 2008, and having a chance to meet you face to face would be the highlight of our visit. Thank you!

  16. geoff dickson

    Quote from Obama..
    “there was no Al-Qaeda in Iraq before the USA invaded”. This guy is scary!!

    Notice that his message “Yes we can” is copied from Bob the Builder cartoons.
    (check youtube,com)

  17. Philip

    Mr Rux presents a very scary scenario – large demographic shifts of well educated/ older skilled folks to economies which are better managed and have well supported safety nets. Maybe BO sees this. I know people who are jumping ship out of the US and also others leaving Ireland for Germany and Sweden and France. They are all highly skilled and in their 40s plus…not the sort you wnat wandering off.

    It’s like any business or country that’s poorly managed…the good guys leave first and then trouble is not too far down the road.

    Could it be that Left leaning policies are the new competitive edge countries need to develop if they are to retain the talent they need to grow? If you are getting more ignorant, feeling less safe and secure and loosing confidence in the health care the reaction to this will be the only rational one of getting out when the government cannot get it’s act together.

  18. SpinstaSista

    Philip, I think we will see more highly skilled people leaving Ireland. Some people believe that this is not a country for honest and hardworking people. Despite the Celtic Tiger the mindset seems here to be as narrow as ever.

    Apparently people in the 40 plus age group are finding it more difficult than ever to survive in the US as companies prefer to hire younger and cheaper workers. If Barack Obama gets elected president, how will this impact on the baby boomers? I think Obama’s charisma is far more significant than his colour – ironically he is able to communicate with people in the same way as Bill Clinton but Hillary does not have the same appeal.

  19. Mark

    I have to say, I’m not so sure that hype surrounding BO has anything to do with a swing to the left.

    I think there are other factors that explain the ‘Obamania’ that we are seeing. His orations, speeches, easy treatment by the media, a dislike of Hillary and of course the fact that he is black are more pertinent to his success imo. All of which I happen to think are bad reasons to select a presidential candidate on. Hillary is clearly the better choice.

    HOWEVER, mark my words, even if his does get the nomination (and I don’t count Hillary out yet……Florida may still come to her rescue) there is no way he will be President. He will be ripped apart by the Republican machine and sooner or later he will stumble in front of the worlds cameras….

  20. Philip, my great grandfathers left Prussia in the 1800′s for the USA because of the abuse they received there. Given the world history that followed their departures, it was a smart move. I never imagined that I, their great grandson, would be in their same situation – looking to immigrate because of abuse because of little if any prospect of the society getting its act together again. Vote with your feet.

  21. shtove

    All I know about Obama is that he’s a fine speaker (much better than Clinton), and he’s endorsed by … Paul Volcker, former chairman of the Fed who ramped up interest rates in the early ’80s to break inflation.

    I guess people will pay a lot more attention to how east Asian countries govern themselves. But a return of protectionism could be the chosen path for the US.

  22. Reality Check

    Paul Rux, You may be leaving and I (Pharmacist) could very well be heading for your shores, if the pig headed Irish Minister for Health gets her way. As of tomorrow March 1st, she will set in motion a train of events which will cost 5,000 jobs in the Pharmacy sector.

    I won’t bore everyone here with the minutae of the details, suffice to say she along with the HSE expects my business to operate at a loss. She is saying aided by the health department (HSE) that a properly constituted negociating body (my union) cannot refuse to accept conditions imposed on it and if individual pharmacists object they are acting in an anti-cmpetitive way which is a criminal offence. That is the sort of stuff that even the likes of Idi Amin and Robert Mugabe would be laughed at for saying.
    I live in a Banana Republic.



  23. Tom

    The wholesale margin on supplying the drugs involved in the scheme is a whopping 17.8 per cent, the highest in Europe. Like the taxi drivers your days of cosy cartels and no compitition are over, Im with the HSE on this one.

  24. Reality Check

    Tom it is clear from your glib response about cosy cartels that you are wholly misinformed about this issue.
    The facts however speak for themselves.

    The HSE commissioned a report by Indecon to assess the pharmacy wholesale market in Ireland. It states:

    “Given the differences in market structure across Europe we do not believe that referencing Irish wholesalers’ prices to international comparison is particular helpful”

    In other words trying to compare differing systems Of Pharmaceutical wholesaling is like trying to compare apples and pears simply because there are differing systems of distribution and reimboursement, again not the Pharmacists saying this but an independent report commissioned by the HSE.

    The Indecon report states

    “Given the likely impact on the sector of such a change, there is merit in considering likely effects in more detail and in gradually introducing changes over a period of time. The current market structure has evolved in response to specific incentives introduced through price regulation. Sudden changes to this structure could pose problems for elements of the sector”

    18% to 8 % is one fell swoop if far from gradual

    “The timing of significant changes in payment terms is crucial. We believe that changes and the impact of changes should be evaluated in advance in conjunction with key stakeholders. This needs to be carefully managed to avoid unnecessary market disruption”

    The HSE told the IPU about this reduction on the morning it was announced.

    An example of a country at the mythical average is Norway. Norway has a population similar to Ireland and has 600 pharmacies controlled by 3 chains.

    Ireland has 1600 pharmacies.

    No reason for such a high margin once you are happy with 1000 less pharmacies that is
    The HSE are paying pharmacies 8.2% less than they are invoiced from their wholesalers.
    After 1st of March if a pharmacy pays €100 for an insulin product dispensed on the medical card, the HSE will pay the pharmacy €95.07. = dispensing at a loss
    Tell me Tom if you know of any particular business that operates successfully at a loss?

  25. Frank the tank

    Its interesting to see how much interest there is in the democratic party presidential campaign in the US. No doubt its got a lot to do with Ireland’s close ties with the people and companies in the US. I think global warming is the number 1 threat to our survival never mind economic prosperity in Ireland. The following article in last Saturdays Guardian makes for very chilling reading http://www.guardian.co.uk/theguardian/2008/mar/01/scienceofclimatechange.climatechange
    I think that Ireland will do well out of global warming weather wise but I don’t think we will be prepared for the influx of refugees. If James Lovelock, is to be believed 80% of the world population will be wiped out because of food shortages by 2100 and one of the few places left to grow food will be Ireland. The USA is not swinging left this time round, but it will shortly be swinging green.

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