Politics In the Eye of the Storm, for now

Tropical cyclones, as is well known, have a ‘eye’ that is relatively quiet. As the howling winds of one wall of the cyclone pass over and relative quiet descends, it is easy to think the whole thing is over.

We now appear to be in the eye of an economic and political cyclone right now, giving a strange, almost unnatural, calm to this years political Party conferences.

The first part of the cyclone passed over us over 2008 and 2010 with both economic and political crises. So although we can see the cloud wall of the other side of the cyclone, this years conferences experienced only minor squalls. No leadership challenges or crises, just the odd limp rumors. No big policy splits. No factions to speak of.

It won’t last of course. Even if by some miracle the European and American political classes manage to avoid a second recession, or even depression, we are in for a period of economic hardship and consequent political instability.

Real household incomes in the UK are set to fall by between 7-10%, as bad as the Great depression. We face another lost generation as youth unemployment soars, probably worse than Thatcher’s in the early 1980s, the consequences of which we are still living with. 

Nor has the pain of the services and benefits cuts really bitten yet. Some of the pain may have come early, but it has not, as some continue to say, been gotten over with. It will continue and deepen as we experience an unprecedentedly long period of public spending recession.

We have had some glimpses of the political fault lines that will emerge as the cyclone hits us again.  Last week’s Labour conference saw Ed Milliband revive some good old fashioned social democratic ideas and raise the spectre of tackling feral capitalism. Expect some fire and brimstone Thatcherism at this weeks Tory conference in response, a good portion directed at their partners in Coalition the Liberal Democrats. But most of this has, so far, been all sound and fury and very little real substance, yet.

So this Party conference season will have been weirdly becalmed between the once and future storms. Reality will soon enough bite back.

One thought on “Politics In the Eye of the Storm, for now

  1. I would agree, the storm is raging about us, look at the volatility of the world stock markets and commodity prices. The consequences of which are yet to be felt.

    One interesting fact, during the last crash of 2008, governments response was to regulate our banks, instructing them to recapitalize their balance sheets. To do this the obvious course was to sell equity and buy bonds. Now who has bought the “risk free” bonds within the Euro zone?

    Maybe a discussion on the governments investment policy into UK Plc would be of interest. We are taught from an early stage that investment in research and development is very important, that we should invest in our main asset, our work force. To this extent there are even tax breaks for such development. Now what is UK Plc doing about developing it’s main asset?

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