Monday, December 16, 2019

Part I

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A Fundamental Realignment of British Politics: Transformative National Election Reshapes the UK Political Landscape

The astounding reality is that the President of the United States faces impeachment in the House of Representatives this week, and as the week begins, that isn’t the biggest news story. The bigger news story with long-term importance comes from the United Kingdom, which had its vote last Thursday. The voting returns went into late Thursday and early on Friday, but the results were a resounding landslide victory for Boris Johnson and the Conservative Party in the United Kingdom. The actual election result is the best for the Conservative Party since 1987 in the landslide victory won then by Margaret Thatcher as Prime Minister and head of the Conservative Party. That’s particularly important when you consider the political instability that has marked Great Britain over the course of the last several years, and the tottering nature of even Conservative governments since the Brexit vote was adopted by the British people early in 2016.

Since then, there has not been a resounding direction, one way or the other, amongst the British electorate, but all that changed on Thursday when the British people sent an unmistakable signal. And as we look at the election results, it tells us that this is one of the biggest events in recent political history in the entire West. Just consider the landscape now in the United Kingdom. The Conservative Party won 365 seats, the Labour Party, that is the main competitive party against Conservatives for the course of the last many decades, won 203 seats. That’s a difference of 162 seats. The Scottish National Party won huge in Scotland, that’s another part of the story, and will have 48 seats in the new parliament. The Liberal Democrats won 11 seats.

Boris Johnson might be one of the most improbably politicians in any Western nation, but the reality is that he has now won a term, not only at the head of the Conservative Party, but as the Prime Minister of the United Kingdom, and if all goes well, for at least five years. And as we see in a parliamentary system, the party in power doesn’t lose a vote. It becomes something like a parliamentary dictatorship, because by the very nature of having a majority in parliament, especially a majority of this margin, the party can’t lose, which means it can accomplish everything it sets out to do legislatively.

But it’s also telling that, as the British people went to a vote, and even as the polling surveys indicated a likely victory for the Conservative Party, there were those who doubted it, and who believed that a repeat of 2017 would happen, when the Labour Party under the leadership of Jeremy Corbyn, performed better than expected. But what happened on Thursday is not just that the Labour Party failed to surprise with a victory, it actually collapsed in its worst political defeat for a matter of decades.

As a matter of fact, looking at the Labour Party right now, it is hard to imagine how that party recovers. And it’s because, as you look at the Labour Party, in the United Kingdom, you’re looking at a party very much like the Democratic Party in the United States, it is the party of the left. And, during much of the 20th Century, especially the last half of the 20th Century, there was a great deal of common ground between the Labour Party and the Conservative Party, but no more. All that began to break apart in the 1980s and ’90s, and by the time you reached the election that took place in the United Kingdom on Thursday, you’re looking at two diametrically opposed political parties, with the Labour Party, which is the Democratic Socialist Party in the United Kingdom, headed by an avowed socialist. You can leave off the word ‘democratic’ when you think of Jeremy Corbyn as a socialist, and the voters repudiated the left.

When you think of Jeremy Corbyn as head of the Labour Party in the United Kingdom, you just need to imagine Bernie Sanders as the head of the Democratic Party, and the Democratic Party’s presidential nominee. If you can imagine that, then you can consider the Labour Party in the United Kingdom. But there’s a little bit of history here that we need to remember, the Labour Party became the second dominant party in the United Kingdom in the early decades of the 20th Century, and back in 1918, the very last year of World War One, the Labour Party adopted what was known as Clause IV. That infamous provision in the party’s manifesto openly embraced socialism, including the common ownership, or government’s state ownership of the means of production. That’s the very essence of socialism.

But by the time you reach the 1990s, it is clear that socialism has failed everywhere, and Britain’s Labour Party, in order to have a fighting chance in the political context then, had to abandon an official commitment to socialism, and instead it rebranded itself as something like a democratic socialist party. Now, just think of the fact that Bernie Sanders actually identifies himself as a democratic socialist. Under the leadership of party leader Tony Blair then, the Labour Party was convinced to remove Clause IV, again, it had been put in in 1918, it was taken out in 1995, and that set the stage for Tony Blair as head of the Labour Party to repackage, rebrand Labour as New Labour and become the British Prime Minister himself in 1997.

But Jeremy Corbyn is no Tony Blair, he is actually a man far further to the left, and so what we have seen in the United Kingdom is something parallel to what we are witnessing right now in the United States in the Democratic Party, this massive shift to the left. But here you also see the problem of the Labour Party, which is mirrored amongst the Democrats in the US, their party base of activists has moved radically to the left. But as it turns out in Thursday’s vote, it is clear that the British voters had not moved so far left, not at all.

The big political news in the United Kingdom is not just the scale of the Conservative Party’s victory, it is the fact that the Conservatives, under the leadership of Boris Johnson, pierced, if not demolished, the so-called red wall in the United Kingdom. That is the red wall behind which in the North, there were safe Labour seats, many of which had not voted Conservative in almost a century, and some never had.

But as it turns out, even as Donald Trump won surprisingly amongst blue-collar voters in the Midwest, you had Boris Johnson doing the very same thing in the Northern areas of the United Kingdom. Just consider the fact that if you’re looking at a map of the United Kingdom, the area to the north is the industrialized area that has suffered most economically over the course of the last several decades. It has always been economically behind London and the South, and for that, there is a great deal of resentment. But those Northern voters had considered themselves Labour voters for decades, predictively Labour, so much so, that they constituted that so-called red wall. So as you’re thinking of the significance of Thursday’s vote, just recognize it represents a fundamental realignment to British politics, and it is a realignment that is almost certain to remain for some time.

Gerard Baker, editor at large for the Wall Street Journal, wrote just before the election, “It’s a defining moment in the development of modern western politics. A potentially pivotal event in the age of populism, with ramifications that go beyond British shores.” He wrote then, “If Mr. Johnson wins, he will do so at the head of a Conservative Party, whose voting base will have been radically transformed. A party that has, for most of the past half century, stood foremost of neo-liberal economics, allied to a liberal approach to social issues, such as same-sex marriage and racial integration, is becoming a party of economic populism and nationalism.” The article cited Matthew Goodwin, who is Professor of Politics at the University of Kent, who said, “We are seeing a realignment of Conservative politics. By backing Brexit, Boris Johnson is attracting working-class voters who are more socially conservative, who want government to be tough on crime and immigration, and who lean to the right on other social issues.”

He continued, and remember, this was written just before the election, he said, “On the other side, the election represents perhaps, a last stand for the liberal internationalist desperate to reverse the Brexit vote. Labour and the Liberal Democrats, parties of the left, whose politics are now defined, not by traditional economic issues that emphasize the plight of the working-class voters, but in line with their democratic cousins in the U.S. by personal identity, the rights of minorities, and a globalist worldview.” He went on to say, “Those parties are hoping to win enough seats to work to block Brexit and to force another referendum.”

Again, that not only didn’t happen, it didn’t happen in a colossal landslide. Labour suffered its worst defeat since 1987, but the bigger thing to consider, is the fact that Labour has not won an election since 2005. It has now lost four straight national elections in the United Kingdom. As you might expect, the editorial board of the New York Times, does not like this one bit. The vote in the United Kingdom is a huge signal to the United States. Let’s just consider that for a moment. In 1979, Margaret Thatcher was elected British Prime Minister, the next year, Ronald Reagan was elected President of the United States. In both cases, just a year separated in their elections, you had two of the titanic conservative figures of the 20th Century, who entered office at virtually the same time.

Similarly, you had Bill Clinton redefining and rebranding the Democratic Party in the United States when he won in 1992. Tony Blair did the very same thing with his New Labour in 1997. Then consider the fact that Donald Trump is elected President of the United States in 2016, and now Boris Johnson is Prime Minister of Great Britain in 2019. It doesn’t take a mathematical genius to see the parallelism.

So what does that mean in the United Kingdom? It means there’s fundamental reshaping. It means that the electorate in the United Kingdom is voting differently than it had in the past. And it means that when you’re considering the Labour Party moving left and the Conservative Party moving right, the vast majority of British voters actually went with the Conservative Party.

There’s another dimension that is unique to the United Kingdom, and that was the fact that this election is basically a referendum on the Brexit vote. In 2016 a majority of Britons, given the opportunity in a referendum, voted for the United Kingdom to leave the European Union. That was set in motion accidentally by the then Conservative Prime Minister David Cameron, who bears responsibility for very inadequate leadership at the time, but Boris Johnson, then the Mayor of London, seized the opportunity and took up the Brexit argument, and thus, he is not like his two predecessors as Conservative Prime Ministers, converts of a sort to Brexit. He’s political position, when it came to Brexit, was fixed before the Brexit vote, that gives him huge credibility.

And it’s also interesting to see, there was a moral point that was evidently taken by British voters, even some of the voters who are disappointed in the Brexit vote. If in a democracy, you ask the people their opinion by referendum, then you had better do what they say by their vote. But I think there’s more to it than that. By this landslide vote, it is apparent to me that the British people were making a very clear statement on Brexit itself, a far wider statement by margin, even than they made in 2016. They prized their British identity, and they prize British sovereignty. They did not want to leave that sovereignty compromised by continued involvement with the European Union, which gave bureaucrats and others, many of them unelected in places like Brussels, control over the local economies of cities, and of even people like fisherman, in the United Kingdom.

But there are two other huge issues of vast worldview importance as we consider the U.K. vote. One of them is the fact that, even as I mentioned Margaret Thatcher and Ronald Reagan just a few moments ago, the actual positions taken by the Conservative Party in 2019, are extremely different in economic terms, than the policies of Margaret Thatcher and Ronald Reagan. This too is a parallel with President Trump, who was elected as a Republican President even as he reversed many Republican traditions on economics, especially when it came to government spending. Boris Johnson and the Conservatives in 2016, were actually proposing a vast increase in government spending, but nowhere near as vast as what was promoted by the socialist Jeremy Corbyn.

Stephen Fidler and Gerald Seib, writing for the Wall Street Journal, summarized the situation this way, “Boris Johnson’s big election victory this week drove another nail into the coffin of the brand of Conservative politics Ronald Reagan and Margaret Thatcher first rode to power four decades ago.” The Journal reporters summarized, “As Mr. Johnson’s decisive win in a hotly contested national election illustrated, the Conservative movement in the West,” that means in all Western nations, “now has become markedly more populist and nationalist, and appeals to a distinctly more working-class constituency. Fiscal restraint, once a cardinal tentative conservative matters less, rewriting the rules that have governed the global economy matters more.” That’s both true and deeply insightful.

But one of the key issues for us to understand, is that the Western economies have been transformed over the course of the period between Thatcher and Reagan on the one hand, and Trump and Johnson on the other. You’re looking at virtually 40 years of economic change, and that economic change has rewritten the conservative rules of economic theory, or at least the rules as undertaken by the Republican Party at the current moment, and also the Conservative Party in Britain. Boris Johnson promised to, in his words, “Get Brexit done,” and at the core of that pledge and of the theme of the Conservative Party in this big victory was the fact that Britain should be Britain.

The populist nature of the victory of both Donald Trump in 2016 and Boris Johnson in 2019, is revealed by the fact that many of the voters, who had been in previous elections predictably Democratic in the United States and Labour in the United Kingdom, switched their votes. Their national concerns trumped their economic concerns, but it’s also true that their economic concerns changed. But looking at this election, the voting patterns are the other huge issue of worldview analysis.

Part II

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A Huge New Generation Gap: U.K. Election Shows That Young Voters Are Headed Left... Far Left

But what’s the most important voting pattern? It is not the South in the United Kingdom versus the North. It is not class-based distinctions that had been the basic framework for British politics for over a century, that is, with the wealthier voting for the Conservative Party, and the working-classes voting for the Labour Party. The big lesson of this election was that the working-class shifted its vote to the Conservatives, but there’s a bigger issue here, and that has to do with the age of the voters. Labour won overwhelming amongst younger British voters, especially those who are just able to vote through the university years, and into the 20s. If they had been the sole electoral base of the United Kingdom election, Boris Johnson would not have won in a landslide, the more socialist candidate, Jeremy Corbyn would have won, also by a landslide.

This pattern was noted by James Sloam and Matt Henn, they’re writing for the London School of Economics as they wrote, “On the surface, the 2019 general election result was a devastating defeat for younger voters. 18 to 24-year-olds again came out strong in support of Jeremy Corbyn’s Labour Party, but were heavily defeated. Over the past decade,” they wrote, “young people in the United Kingdom, have emerged as a cohesive political force in strong support of Remain,” that means remain rather than Brexit, “and Labour, but have suffered a string of electoral defeats. Yet,” say these writers, “these recent events must be contextualized within broader intergenerational trends, both within and beyond the arena of electoral politics.”

The bottom line in all of this, those who are hoping for a more liberal, more socially progressive, more internationalist and globalist future for Britain, are here being told that, if they just wait for the younger generation of British voters to come along, they will get everything they hope for, and in a big way. The authors of this analysis for the London School of Economics, refer to these younger voters in Great Britain as the young cosmopolitans, and they are basically the very same young cosmopolitans as are now in so many ways, the driving energy of the Democratic Party in the United States. They would include millions of college and university students raised in the culture of the academic left, and also those who have recently graduated. They would include those working in the United States overwhelmingly, in the centers of finance, and even more so, in places like Silicon Valley.

Soon after the first of the year, we’re going to be looking closer at these patterns, because they do tell us a great deal about how our societies are changing on both sides of the Atlantic. And we are looking at an ever greater generational distinction, with more conservative positions held by older Americans and older Britons, and far more liberal positions held by the young. But at this point, the young have not been able to dominate electorally, but the big lesson from this is just a matter of time. Given enough time, they will.

But bringing this to a close, what does this say, this British election to American politics as we look to the 2020 American Presidential election? Well, if there is a parallel between Britain and the United States, it tells us that this British vote reveals that when you are looking at the Democratic left, it is highly, enthusiastically, energetically driven on campus and by younger Americans, but the larger electorate is turned off by that liberalism. But the other lesson is, that apparently given the structure of the political left on both sides of the Atlantic, the left can’t help itself. That is to say, it is largely in the control, in both Britain and the United States, of those who are pressing for an ideological extreme.

So even as the vote in the United Kingdom means that there are real warning signs for a presidential candidate like Elizabeth Warren or Bernie Sanders, it is at the same time unlikely that, that will change the pattern of Democratic votes any more than it changed the decisions of the Labour Party to keep Jeremy Corbyn at the top. Corbyn, by the way, has announced that he will not lead the Labour Party into another national election, but politically speaking, that’s probably an announcement he didn’t need to make.

One final issue very quickly as you look at the U.K. vote, we could be looking at the end of the United, as in United Kingdom. And that is because, separatist nationalist movements, especially in Scotland, also gained massively in last Thursday’s vote. The Scottish National Party is officially a secessionist party arguing for Scotland to remove itself from the United Kingdom, and to separate from Britain. It’s not at all clear that, that will happen, but it does point to the political crisis which underlines how difficult it is to hold together very different regions within one single political unit.

Part III

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Judiciary Committee Votes to Advance Articles of Impeachment Against President Trump Along Partisan Lines: The Stage Is Now Set for the House Vote

 

But next, we do shift back to the United States and the historic vote that took place on Friday in the House Judiciary Committee, in which the Democratic majority in that committee approved two articles of impeachment against President Trump. Before the vote we looked at what those articles represented, we will not go over the same territory now, because we will have to return to this after the vote in the Full House on Wednesday. But the big point is this, the stage is now set for the most partisan impeachment process in American history. The vote in the Judiciary Committee was 23 to 17. What do those votes mean? Well, there are 23 Democrats and 17 Republicans.

Not a single Democrat voted against the articles, not a single Republican voted for them. When the full vote is taken on Wednesday, it is unlikely that there will be many, if any, Republican defectors, but there will be some Democrats, especially in more moderate districts, that will choose to vote against the articles of impeachment. As we shall see later this week, one of those Democrats in New Jersey, has actually announced that he will not only vote against the articles of impeachment, but in light of the impeachment process, he will shift his party identity from Democrat to Republican.

The great moral, cultural, and political divide in the United Kingdom was made very clear at national election on Thursday, but it was also made abundantly clear in that House Committee vote on Friday. In both cases, we have seen the fact that, in America and in the United Kingdom, you have not only two different political parties, but you have two very different political polarities, and we now have basically people within both of these nations who are existing in largely separate partisan, moral, and cultural worlds.

Americans are now divided between those for whom the impeachment of President Trump in these circumstances makes perfect sense, and those to whom it makes no sense at all. Those are not arguments that can share common ground. That is not a bridgeable divide. It is going to come down to a simple matter of math, which means the votes, first in the House of Representatives and then eventually in the United States Senate. The fact is, that there’s really no suspense whatsoever in this process, but that’s not due just to the events of the last several weeks, that is due to the increasing divide on moral and cultural terms in the United States, over the last several decades.

Part IV

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Where Did All the Money Go? Missing Money Is Just Further Evidence of How Strange We Humans Really Are

But finally, as we think about economic programs and policies, I want to note a front page article that appeared in the Wall Street Journal entitled, “Show Me The Money. Seriously, Where Is It?” It’s by David Winning and James Glynn, and they write about an astonishing phenomenon, which is that most of the printed money in the world appears to be missing. That is to say, the central bankers don’t know where the money is. The two reporters for the Wall Street Journal tell us, “Some Australians are burying it, the Swiss might be hiding it, the Germans are probably hoarding. Banks are issuing more notes than ever, that’s paper currency, and yet they seem to be disappearing off the face of the earth. Central banks don’t know where they have gone or why, and are playing detective trying to crack the same mystery.”

One astounding fact about the United States is that, a federal reserve economist estimates that 60% of all U.S. currency, including three-quarters of $100 bills has left the country. What could explain this? Well, crime could explain part of it. Cash is portable, and if you’re going to pay somebody for ill-gotten gains, better to do it with paper rather than a traceable credit card, or other kind of digital financial transaction. But crime’s not enough to explain this, there must also be an enormous amount of hoarding. And here the article tells us that, when you are looking at various nations that have paper currency, it is amazing how many people hoard it and hide it. It’s also amazing how many people hoard it and hide it, and then either forget about it, or throw it away.

The Journal tells us, “Construction workers recently dug up an estimated $140,000 buried in packages at a site on Australia’s Gold Coast. In September a court in Germany ruled on a case brought by a man who had stuffed more than 500,000 Euros,” that’s close to three-quarters of a million dollars, “in a faulty boiler, only to see it incinerated when a friend made a fix on a cold day while he was on vacation.” The Bundesbank in Germany thinks that more than 150 billion Euros are being hoarded in Germany. In Australia, $7.6 billion is basically just missing. As the Journal says, “Maybe at the beach or in couch cushions.” The Governor of the Royal Bank of Australia, surmised that the biggest use of cash is as a source of wealth, “in safes, under beds, and at the back of cupboards both here in Australia and elsewhere around the world.”

My favorite statement however from a central banker came from Australia’s, who said, “Our estimates are only reliable if our assumptions are reasonable, which we believe is probably not the case.” The head of the relevant section of the European Central Bank simply said, “Everyone says that they are not hoarding cash, but the money is clearly somewhere.”

Evidently, this is just further evidence of just how strange we human beings are, but as a final thought for The Briefing today, if you are hoarding that cash in the furnace, it might be a good idea to get it out.