In Scotland and Beyond, a Crisis of Faith in the Global Elite

SEPT. 20, 2014

In Scotland this week, a measure to become an independent country and end the United Kingdom as we know it failed, but it would have succeeded with a swing of just 5 percent of the vote. Earlier in the week, a right-wing anti-immigration party in Sweden claimed its largest-ever share of parliamentary votes. And in the United States, new census data released this week showed that middle-income American families made 8 percent less last year, adjusted for inflation, than they did in 2007.

What these stories have in common is this: They lay bare a crisis of faith in the global elite.

Pulse of the People: Scotland’s Independence Vote Shows a Global Crisis of the ElitesSEPT. 18, 2014
There has been an implicit agreement in modern democracies: It is fine for the wealthy and powerful to enjoy private jets and outlandishly expensive homes so long as the mass of people also see steadily rising standards of living. Only the first part of that bargain has been met, and voters are expressing their frustration in ways that vary depending on the country but that have in common a sense that the established order isn’t serving them.

It was evident not just in last week’s votes in Scotland and Sweden, but also in a wave of votes for parties of the far left and the far right in European parliamentary elections earlier this year, in the rise of the Tea Party in the United States and in instability in Japanese politics that led to six prime ministers since 2007.

The details of Scotland’s grievances with the English ruling class are almost the diametrical opposite of those, say, of the Tea Party or Swedish right-wingers. The Scots want more social welfare spending rather than less, and they have a strong antinuclear environmental streak. (Scotland’s threatened secession was less the equivalent of Texas pulling out of the United States than of Massachusetts or Oregon doing the same.)

But there are always people who have disagreements with the direction of policy in their nation; the whole point of a state is to have an apparatus that channels disparate preferences into one sound set of policy choices. What distinguishes the current moment is that discontent with the way things are going is so high as to test many people’s tolerance for governing institutions as they now exist.

There is simple economic math behind it. Consider the United States, which has had stronger growth than Britain, Japan or Continental Europe since the financial crisis and the deep recession it spawned. The United States economy is now 6.7 percent bigger than it was at the end of 2007.

But that masks what has been a miserable last several years for most working Americans. The Census Bureau said last week that the inflation-adjusted median household income — pay for people at the exact midpoint of the income distribution — was $51,939 in 2013, up just $180 from 2012 and still 8 percent below 2007 levels.

It gets worse. The 2007 peak in real median household income was slightly below the 1999 peak. In other words, a middle-class American family is worse off financially today than it was 15 years ago.

Discussion of the economy generally focuses on things like job creation and the growth of the gross domestic product. But you can’t eat G.D.P. Median income is the rubber-meets-the-road measure of how the mass of Americans are living, and the results aren’t good.

The sense that the system isn’t working for most American workers pervades public opinion polling, including a recent New York Times/CBS News Poll. Seventy percent of respondents disapproved of congressional Republicans, but congressional Democrats fared barely better, with 61 percent disapproval. Fifty-three percent disapproved of President Obama’s handling of the economy; similar numbers disapproved of President George W. Bush at this point in his presidency.

Or, instead of polls, you can look at results, where every election seems to have the potential to be a wave election, in which one side makes major gains. The idea of overwhelmingly electing President Obama and congressional Democrats in 2008 and turning around and overwhelmingly favoring Tea Party Republicans in 2010 may not seem consistent, but it’s what you might expect in a world where the political mainstream has delivered consistently mediocre results.

In Britain, a Labour government led by a Scottish prime minister (Gordon Brown) and his Scottish finance minister (Alistair Darling) supported the so-called financialization of the British economy, with the rise of global megabanks in an increasingly cosmopolitan London as the center of the economic strategy.

Then, in 2008, the banks nearly collapsed and were bailed out, and the British economy hasn’t been the same. That economic failure ushered in a coalition government in 2010 that is even less aligned with the Scots’ preferred policies, bringing an age of austerity when the Scots would prefer to widen the social safety net.

But it is in Continental Europe that the consequences of bungling by mainstream elites are perhaps the most damaging, and the most dangerous.

The decades-long march toward a united continent, led by the parties of the center-right and center-left, created a Western Europe in which there was a single currency and monetary authority. But that authority did not have the political, fiscal and banking union that would make it possible for imbalances among those countries to work themselves out without the benefit of currency fluctuations. When it all came to a head from 2008 to 2012, national leaders were alarmed enough by the risks of budget deficits that they responded by cutting spending and raising taxes.

As such, the imbalances that built up over the years in Europe are now working themselves out through astronomical unemployment levels and falling wages in countries like Spain and Greece. Even the Northern European economies, including Germany’s, are experiencing little or no growth. While the Great Depression of the 1930s brought an initially sharper contraction in economic activity, the European economy is performing worse six years after the 2008 crisis than it was at the comparable point in the 1930s.

In European Parliament elections in May this year, major inroads were made by parties of the extreme right and left. The entire post-World War II effort to build a united Europe will now include parties that use Nazi imagery and those that consider themselves communist. When The Huffington Post can post something called “9 Scariest Far-Right Parties Now in the European Parliament” and not be accused of exaggeration, something has gone wrong in the European project.

The details of the policy mistakes differ, as do the political movements that have arisen in protest. But together, they are a reminder that power is not a right, it is a responsibility. And no matter how entrenched our governmental institutions may seem, they rest on a bedrock assumption: that the leaders entrusted with power will deliver the goods.

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