How not to lose a referendum (or elect Donald Trump)

Good advice from Wolfgang Munchau in today’s FT.

Here’s a summary of his Five Rules:

  1. Do not rely on opinion polls

  2. Do not double down when you’ve lost. Come to terms with the fact that

    “an insurrection of sorts is under way against financial globalisation and its institutions.”

  3. Do not insult or provoke the voters.

    “After the Referendum, the losing side kept on pointing out that pro-Brexit supporters were older and on average less educated. Hillary Clinton’s infamous depiction of half of Mr Trump\s supporters as deplorable fits the same category. The more you insult the other side, the more you end up driving undecideds into their camp.”

  4. Beware of provocation e.g.

    “make sure that former European Commission presidents do not offer their lobbying services to large US investment banks, as just happened with José Manuel Barroso and Goldman Sachs.”

  5. Do not scare the voters.

    “Project Fear was a disaster in the UK. If your median voter’s income has stagnated for more than a decade, they are not going to be scared by the threat of a recession….The problem with scare stories is that they no longer work with unpredictable electorates. More often than not they are also not true or vastly exaggerated.”

Great stuff. I’ve lost track of the number of discussions I’ve been in since Brexit in which some or all of these five rules are routinely broken.

Policy-based evidence

Geoffrey Wheatcroft, writing in The New York Review of Books on Tony Blair’s letter to George W. Bush on July 28, 2002, which contained the declaration: “I will be with you, whatever.”

It has taken some people a long time to grasp this. The story falls into place when those words are read in conjunction with the Downing Street Memo written in the greatest secrecy five days before Blair’s promise of fealty, in which Sir Richard Dearlove, the head of MI6, the Secret Intelligence Service, reported on his recent talks in Washington. “Bush wanted to remove Saddam,” the memo said, “through military action, justified by the conjunction of terrorism and WMD. But the intelligence and facts were being fixed around the policy.”

Quote of the Day

“In watching the campaign coverage this year, I’ve sometimes had the same distressing feeling I felt in the run-up to the war in Iraq — that we in the media were greasing the skids to a bad outcome for our country. In the debate about invading Iraq, news organizations scrupulously quoted each side but didn’t adequately signal what was obvious to anyone reporting in the region: that we would be welcomed in Iraq not with flowers but with bombs. In our effort to avoid partisanship, we let our country down.

Nick Kristof, writing in the New York Times.

Just imagine…

Richard Haass, President of the Council on Foreign Relations, has been thinking aloud:

Imagine it is 2020. The director of the CIA requests an urgent meeting with the US president. The reason: North Korea has succeeded in making a nuclear bomb small enough to fit inside the tip of an intercontinental ballistic missile capable of reaching the continental United States. The news soon leaks to the public. High-level meetings to devise a response are held not just in Washington, but in Seoul, Tokyo, Beijing, and Moscow as well.

This scenario may seem unreal today, but it is more political science than science fiction. North Korea just carried out its fifth (and apparently successful) test of a nuclear explosive device, doing so just days after testing several ballistic missiles. Absent a major intervention, it is only a matter of time before North Korea increases its nuclear arsenal (now estimated at 8-12 devices) and figures out how to miniaturize its weapons for delivery by missiles of increasing range and accuracy.

It is difficult to overstate the risks were North Korea, the world’s most militarized and closed society, to cross this threshold…

Yep. Which is just another reason for being worried about a President Trump.

Missing the Zeitgeist

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Christopher Caldwell has a sobering piece in the Financial Times which helps to explain why US mainstream media have been so discombobulated by Trump’s success: they’ve paid no attention to Fox News for all the time that the channel has been broadcasting. But way back in 2009, the then Executive Editor of The New York Times, Jill Abramson had warned her colleagues that they were insufficiently tuned in to “the issues that are dominating Fox News”. Needless to say, nobody listened.

Caldwell’s analysis is acute and perceptive. “Fox News’s competitors, with a few exceptions like Abramson”, he writes,

always sold it short. They were wrong to. Fox News succeeded because it was brilliant enough to identify a market failure, not because it was sleazy enough to cause one. Murdoch, Ailes and those who build up Fox News did so by identifying a group of news consumers who were being ignored by news producers. It is only now, in the election season of 2016, that we can see how dire a problem this snub revealed, not just for the media but for the whole political system. It was a sign than the informed opinions of the broad public had ceased to count in American political and social life.

The Fox News people understood that you can’t solve this problem by being “more objective”. When it is being ignored by elites, the broad public prefers opinions to facts — because while everyone has opinions, as the saying goes, facts are increasingly things that get handed down by experts. In short, Fox News bet 20 years ago that the “objectivity” of a nation’s elites could be a kind of bias. The past year’s events in the US show that it has won that bet.

It’s a good piece which, of course, also makes one reflect on the UK. I suppose you could say that, for us, the tabloid press constituted our own version of Fox News.

Getting to Denmark

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I’m writing this in one of my favourite haunts, the Paludan Cafe in Copenhagen, which is both a lovely cafe and an enchanting bookshop — the only bookshop in which I’ve seen university seminars conducted at 8am. It’s a beautiful Autumn day — sunny and mild — and I’ve walked through the city centre from a meeting in the University’s Law Faculty, marvelling as I went at how attractive this town is. It has a quiet spaciousness and a slower pace of life than London. And of course it has wonderful cafes.

In his book The Origins of Social Order the political theorist Francis Fukuyama argued that the messy, centuries-long groping of societies towards liberal democracy could be interpreted as the inchoate pursuit of a common (though unstated) goal: getting to Denmark. In other words, attempting to replicate the particular kind of liberal democracy that the Danes have been able to achieve: a prosperous, democratic, liberal, tolerant state in which, by international metrics, people are happier than they are anywhere else on the planet.

I never come here without thinking of that. This is indeed a seductively attractive polity. Copenhagen — which is the bit of the country I know best — is the most civilised city I know. And yet, even in this liberal democratic paradise, all is not well. The country’s parliament has just passed a law which permits the state to seize the assets of asylum-seekers to help pay for their stay while their claims are being assessed. The new law will also delay family reunions by increasing the waiting time from one to three years. 81 of the 109 MPs in the Parliament voted in support of the new legislation. Responding to public outrage, Parliament clarified that jewellery, including wedding rings, and other sentimental possessions would not be taken. But the UN and human rights organisations have condemned the legislation, saying it breaks international laws on refugees.

Yesterday, when I was walking to my hotel from the railway station, I crossed the square in front of the ornate City Hall, and noticed a large group of non-white people milling around. A guy was haranguing them with a megaphone, in a language I couldn’t understand. Some people were writing slogans on banners. Eventually, the group formed itself into a long file of marchers and set off downtown, shouting slogans (and holding up smartphones to get the obligatory video footage for subsequent uploading to Facebook). Finally, I found a banner that was written in English: “we want jobs, not charity” it read. These were refugees, and they were clearly unhappy with their experience of Mr Fukuyama’s nirvana.

How the Internet is changing our politics

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My longish opinion piece on the US election in today’s Observer. (Hint: it’s not all good news.)

Ever since the internet went mainstream in the 1990s people wondered about how it would affect democratic politics. In seeking an answer to the question, we made the mistake that people have traditionally made when thinking about new communications technology: we overestimated the short-term impacts while grievously underestimating the longer-term ones.

The first-order effects appeared in 2004 when Howard Dean, then governor of Vermont, entered the Democratic primaries to seek the party’s nomination for president. What made his campaign distinctive was that he used the internet for fundraising. Instead of the traditional method of tapping wealthy donors, Dean and his online guru, Larry Biddle, turned to the internet and raised about $50m, mostly in the form of small individual donations from 350,000 supporters. By the standards of the time, it was an eye-opening achievement.

In the event, Dean’s campaign imploded when he made an over-excited speech after coming third in the Iowa caucuses – the so-called “Dean scream” which, according to the conventional wisdom of the day, showed that he was too unstable a character to be commander-in-chief. Looked at in the light of the Trump campaign, this is truly weird, for compared with the current Republican candidate, Dean looks like a combination of Spinoza and St Francis of Assisi…

Read on

How traditional political parties are disintegrating

The Republican Party is now a coalition of globalization-loving business executives and globalization-hating white workers. That’s untenable. At its molten core, the Republican Party has become the party of the dispossessed, not the party of cosmopolitan business. The blunderers at the Chamber of Commerce and the Business Roundtable bet all their chips on the G.O.P. at the exact instant it stopped being their party.

David Brooks writing in today’s New York Times

Apple, Ireland and neoliberal delusions

Imagine this scenario: an International authority decides that a transnational company has deprived a sovereign state of anything up to €19B in back taxes plus interest over 25 years. The company, naturally enough, screams blue murder and declares its intention to appeal the judgment. The ruling, says its CEO, is “total political crap”. So what does the sovereign state decide to do? Why, it’s going to appeal the ruling and stand shoulder-to-shoulder with the transnational company. If you wanted a case study in how power has shifted from states to corporations, then this, surely is it.

The country in question is the Republic of Ireland, and the company is Apple. The ruling that so enrages both comes from the European Commission, which has decided that that Ireland must recoup the sum of up to €13 billion in unpaid taxes (plus interest, which could bring it closer to €19B) from Apple because the deal the country struck with the company 25 years ago amounts to illegal state aid to a corporation. The commission said the deal allowed Apple to pay a maximum tax rate of just 1%. In 2014, the firm paid tax at just 0.005%. The usual rate of corporation tax in Ireland is 12.5%.

Now Ireland is a small country which, despite the hype to the contrary, is not in great economic shape. There has been a much-vaunted ‘recovery’ from the devastation caused by the collapse of its major banks and the bursting on an insane property bubble, but that recovery is largely an illusion, and confined mainly to Dublin, the capital city. Last year, the Fine Gael government called a general election and campaigned under the slogan “Keep the Recovery Going”. Outside of Dublin the electorate replied “er, what recovery?”, with the result that neither of the two main political parties was able to form a government, and now an uneasy coalition rules with the assistance of five independent members of Parliament.

Ireland’s health service, for example, is in very poor shape. Likewise its social services. So €19B is a very significant sum for a country in such conditions. It would, for example, be enough to run the health service for an whole year. You’d have thought, therefore, that the European Commission’s ruling would be seen as manna from heaven. But that is not how the country’s benighted government views it.

To understand why, you need to know a bit of modern Irish history. The Republic gained its independence from British rule in 1923, and for the first 50 years of its independence it was a poor, backward, inward-looking, priest-ridden country dominated by Eamon de Valera and his Fianna Fail party. Its main industry was agriculture and its biggest export was its young people, who left in their hundreds of thousands to seek better lives in the UK, the US and Australia. At one stage in the 1930s, ‘Dev’ waged an “economic war” with Britain under slogans like “Burn everything British except their coal”. But eventually, in 1959, Dev stood down from the premiership and became the (non-executive) President, and was replaced by his son-in-law, Sean Lemass, a technocrat who realised that the country had to become outward-looking in order to survive. Along with a visionary senior civil servant, Dr T.K. ‘Ken’ Whitaker, Lemass concluded that the country’s salvation — given that it had no natural resources, lay in attracting inward investment from foreign — mainly American — companies. The vehicle Lemass charged with making this happen was the country’s only truly dynamic government agency — the Industrial Development Authority — which had the mission of attracting overseas investment to Ireland.

In this, the IDA was spectacularly successful. Foreign corporations came to Ireland in droves, and in the process began the transformation of the country, creating jobs and bringing wealth on an unprecedented scale. The companies were lured with all kinds of incentives, including planning and infrastructure provision and exceedingly generous tax holidays. The resulting turnaround was then given a spectacular boost in 1973, when Ireland joined the European Community (as it then was), which led to a massive infusion of development funds from Brussels, much of which were sensibly spent on infrastructure and reviving the moribund rural economy.

The deal which brought Apple to Ireland conformed exactly to the IDA template. The company set up a manufacturing plant in Cork, Ireland’s second city, and eventually located its European HQ in Ireland. The taxation deal which so exercises the European Commission dates from this period. And it explains the strange reluctance of the current government to refuse the windfall that the Commission has now bestowed upon it.

As the Irish Times columnist, Fintan O’Toole, puts it,

Since the Whitaker/Lemass revolution, the unspoken rule of all Irish policy has been – don’t do anything that in any way threatens to upset the huge, mostly US-based corporations whose investments shape both the economy and a remarkably enduring political consensus. This is not mere cravenness. If Ireland has sold its soul to the corporations, it has arguably got a very good price for it – not just jobs and tax revenues but a relatively peaceful transition from conservative nationalism to global modernity. It is not surprising that the entire Establishment is of one mind on the Apple ruling – there must not be the width of an ultra-thin sheet of silicon between Apple and Ireland on this. The tricolour has an Apple logo in the centre and we will all rally behind it to ensure that the tax bite out of the apple is as tiny as the corporation wants it to be.

O’Toole, who is Ireland’s most perceptive and trenchant columnist, is strongly of the opinion that the government should take the windfall and put it to imaginative use. It could be used, for example, to

  • Build 50 new hospitals
  • Build an extension to Dublin’s Luas rapid transit system that is needed to ease the traffic congestion that is choking the capital’s social and economic life
  • Boost the supply of sorely-needed social housing
  • Fast-track the construction of a metro system in the capital
  • Abolish the country’s crippling property taxes
  • Provide a break from the additional Universal Service Charge levied to pay for the bail-out of the country’s zombie banks
  • And encourage the formation of a sovereign wealth fund.

The decision to ignore these necessary measures and appeal the European Commission’s ruling therefore represents a clear strategic decision by the government. Or, more precisely, it suggests that the country’s ruling elites are not interested in funding the measures needed to reduce inequality and improve the country’s provision of social services. This mindset believes, O’Toole argues, that

even this vast windfall might in fact be a booby prize. If we take this money from Apple, we will make the corporations angry. When the government talks of ‘reputational damage’ it ostensibly means damage to Ireland’s reputation from the EU ruling’s implication that the State was being used as a tax haven. But the reputational damage it actually fears is quite the opposite – damage to our well-earned reputation among corporations for facilitating tax avoidance on a global scale.

He’s right. Ireland has become the world centre for corporate tax avoidance. The decision to appeal the ruling suggests that neoliberal ideology rules OK in the Emerald Isle. And it shows that the Irish state has actually given up on the idea of sovereignty. It ignores the fact that

amid a longterm crisis in global capitalism, massive corporate tax avoidance is becoming politically unsustainable. And a vision of Ireland that places the facilitation of that tax avoidance at its heart is therefore not sustainable either.

In that sense, the Irish government has deliberately chosen to put the country on the wrong side of history. Or, as Yeats might have said, my countrymen have disgraced themselves — again.