Will the political recovery be U, V or L shaped?

Collecting votes in Ireland

The term ‘paradigm shift, rather like ‘black swan’, is often misused and overemployed. However, the increasingly fractured world order is beginning to throw up more and more examples of genuine paradigm shifts, such as the result of the recent Irish election and the turmoil at the heart of German politics.

Both correspond to the broad terms of a paradigm shift – the crumbling of a long-established order, a fallow interregnum marked by disorder and questioning, followed by the making of a new way of doing things.

In the case of Ireland, the aftershock of its financial crisis has seen Fianna Fail slip from a period of multi-decade political dominance, Fine Gael’s failure to supplant Fianna Fail, the rise of many independent TD’s (members of the Dáil, the Irish parliament) and new parties, and now the sudden rise of Sinn Fein. When the dust settles, the Irish political spectrum will likely follow more traditional lines, Sinn Fein leading the left, Fine Gael to the right with Fianna Fail disintegrating towards both the left and right.

In Germany, Angela Merkel’s decision to welcome over a million refugees into Germany was her ‘poll tax’ moment, and this set in train the rupture with the stability that stretched back to Helmut Kohl. German politics is now in the disordered interregnum, where parties of the centre are trying to adjust to new issues (climate change, immigration, geopolitical shift), as those of the fringe attack the old consensus. The easy populist solution would before a centrist politician to spend some of Germany’s budget surplus, though this may not resolve the identity crisis in German politics and society.

The cases of Ireland and Germany can be added to a heap of plausible examples of paradigm shift – Brexit and Trump obviously, the role of central banks in markets and the impact of technology on our lives. As such, many people no longer push back on the idea that we live in a ‘world upside down’.

To come back to politics, US academic Larry Diamond has written of a democratic ‘recession’, and political theorists might, as economists did then years ago, debate whether the political recovery will be U, V and L shaped.

In that respect, what is of interest for politicians in Ireland, Germany and the likes of Spain, is to see how other ‘paradigm shifts’ are evolving.

In Europe, Emmanuel Macron’s playbook (perhaps I should say ‘stratégie’ or Grand Plan) has been to capture and hold the political centre, which in my view makes a great deal of sense. He has also aligned the apparatus of state, in that most institutions willingly work to his agenda (the same would not be true if say Jeremy Corbyn had become British Prime Minster). Given the economic and political tasks he is taking on in France and Europe respectively, his performance is easy to criticize, and many take advantage (as the Griveaux incident shows).

Viewed from Cork or Dublin though, he has two blindspots. One is to make the style of government more human and grass roots driven. The other is to take credit for the sharp fall in French unemployment. If unemployment in France falls below 7% by the end of this year it will have a wholly underestimated, positive effect on state finances, on ‘happiness’, human development and on the integration of immigrants. Macron should acclaim this achievement more.

One politician who would not be shy of doing so is Donald Trump, who while not consciously holding the centre, is using the prospect of rising financial wealth, a strong economy and his willingness to harry economic competitors as an inducement to Americans to tolerate ‘four more years’. Unless the Democrats can reverse the shift to the left that most of their candidates have taken, they risk being perceived to demand that middle America commits to an uncertain economic future.

This sense of the unknown was what finished Labour in the UK. However, instead of cementing his political capital at the centre of UK politics, Boris Johnson, by shedding the services of so many capable Tory MP’s and ministers (Julian Smith the former Northern Ireland Secretary was voted politician of the year by the Spectator) is drifting towards the touchline of British politics.

A person to person comparison with say the macron government, or even with the cabinets of John Major and Tony Blair, shows the new Johnson cabinet in a poor light. This makes me think that the paradigm shift in UK politics is by no means over. The centre is being deserted and there is an opportunity for Labour, or more likely in my view, a new party, to fill it.

Have a great week ahead,

Mike

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