Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: And I think you can definitely see it in the
Speaker 2: United States. If you look at the values of Republicans
Speaker 2: and Democrats in the nineteen nineties, you can see that
Speaker 2: they're like two sort of mountains, but they're quite close
Speaker 2: to each other, and over the last thirty years those
Speaker 2: have progressively moved apart.
Speaker 3: Welcome to Voteromics, where politics and markets collide. This year,
Speaker 3: voters around the world have the ability to affect markets,
Speaker 3: countries and economies like never before, so we've created this
Speaker 3: series Votermics to help you make sense of it all.
Speaker 3: I'm Stephanie Flanders back in the London studio this week.
Speaker 1: I'm Adriom Woodridge and I'm Alegri Stratton.
Speaker 3: So at the top of the show, you just heard
Speaker 3: from Ben Paige, chief executive officer of IPSOS and Multinational
Speaker 3: Market Research and Consulting. Later in the episode, Legra and
Speaker 3: I chat with him about what the polls are telling
Speaker 3: us around Europe, around the US and the UK elections,
Speaker 3: so stick around for that. He's had thirty five years
Speaker 3: plus in the business. We also have John Author's talking
Speaker 3: about whether the Federal Reserve chair Jay Powell is going
Speaker 3: to be playing politics with his interest rate decisions over
Speaker 3: the next six months. But first there's plenty for us
Speaker 3: to talk about this week. But the top of the
Speaker 3: agenda is the domestic but also the global fallout from
Speaker 3: what's happening on the ground and in and in diplomatic
Speaker 3: discussions around Rufa and Gaza. Maybe start with the domestic
Speaker 3: Allegra and Adrian because we saw in those lob We're
Speaker 3: not going to talk too much about the UK rather
Speaker 3: obscure local election results, but we did see probably the
Speaker 3: one negative point for Labor in those otherwise very sort
Speaker 3: of optimistic results. Very bad news for the Conservatives would
Speaker 3: be that their vote was not holding up in some
Speaker 3: key areas thanks to the debate over the Middle East.
Speaker 1: Yeah, I wouldn't be too worried about it. I think
Speaker 1: that the results were pretty forceful and sent a very
Speaker 1: strong message to Downing Street. But it is very interesting,
Speaker 1: and particularly it's interesting since that West Midlands result was
Speaker 1: closer than Labor would have liked because, as you say, Steph,
Speaker 1: because of the.
Speaker 4: Gaza the mayor or.
Speaker 1: Yeah, and what we've seen since then is the new
Speaker 1: Labor West Midlands mayor come out and say he would
Speaker 1: like an arms embargo, and you've seen already noises off
Speaker 1: from other parts of the party saying hold on a second.
Speaker 1: You're the West Midlands mayor and you're not the foreign
Speaker 1: affairs spokesp person, and you don't write foreign policy for us.
Speaker 1: And I think if we do, at some point this
Speaker 1: year get a Labor government, I think these tensions are
Speaker 1: going to be the new sort of defining tensions of
Speaker 1: what we all write about, because it isn't straightforward for
Speaker 1: a Prime Minister Starma to do an arms embargo, potential
Speaker 1: straightforward for a Labor leader opposition needed to do in it.
Speaker 1: I'll say, yeah, okay, we do believe in an arms embargo,
Speaker 1: but I think for a PM it has all kinds
Speaker 1: of implications for our global relationships and we perhaps can
Speaker 1: discuss that at length. And I think, yes, it gave
Speaker 1: them a fright, but I don't think it's in enough
Speaker 1: places for it to be mission critical to them getting
Speaker 1: in at the next election.
Speaker 5: It's not a major problem for Labor now. I think
Speaker 5: it will be a very significant problem when they take
Speaker 5: power if what's happening in Israel continues to happen. I
Speaker 5: think for Biden. It is a huge problem because it
Speaker 5: splits his party much more than it splits the Labor Party,
Speaker 5: because there's a very significant, long term, long standing Jewish
Speaker 5: vote for the Democratic Party. On the other hand, a
Speaker 5: lot of young people who ought to be part of
Speaker 5: the Democratic base are very angry. It also creates because
Speaker 5: of all the protests in the United States, which are
Speaker 5: spreading here a little bit but are very big in
Speaker 5: the United States. Creates a sort of sense of disorganization
Speaker 5: of society falling apart of Plogesian dot being really in control,
Speaker 5: and that is very good for people who pose as
Speaker 5: strong men like Trump. So I think this could be
Speaker 5: one of the things that in a tied election actually
Speaker 5: shifts it towards Trump and the Republicans.
Speaker 3: Just as we're recording this on Thursday, you've had President
Speaker 3: Biden be explicit about holding back on heavy arm shipments
Speaker 3: if there is a full scale invasion of Rougher. Our
Speaker 3: sense is that certainly in the last week or so,
Speaker 3: it was the Israelis who were choosing to make that
Speaker 3: pressure public, so that the administration had actually still been
Speaker 3: doing through diplomatic channels questioning pausing shipments. But again that
Speaker 3: was actually intended to be private, and it was Israelis
Speaker 3: who decided to make that public. So it's an interesting
Speaker 3: game that they're playing, wanting to make things more politically
Speaker 3: tense for Biden because the Republicans are obviously coming back
Speaker 3: concerring his starts. The other thing I was struck by,
Speaker 3: and we actually had a story about it this week
Speaker 3: about Gaza is China's new wedge issue to split the
Speaker 3: US from the global South, and what that was trying
Speaker 3: to get at was I felt the global fallout for
Speaker 3: the US in terms of its diminished moral standing coming
Speaker 3: at a time when actually Biden had wanted to be
Speaker 3: on the front foot providing a counterweight to China's increasing clout,
Speaker 3: whether it's in the Middle East, but also explicitly in
Speaker 3: places like Latin America and Africa. And we are seeing
Speaker 3: China intervene actively to stir up countries and point to
Speaker 3: the Biden's position in Gaza as a reason not to
Speaker 3: be building more ties with the US, and I think
Speaker 3: that could be very corrosive.
Speaker 5: Absolutely, We've seen China for a long time has been
Speaker 5: posing as a sort of development model for the emerging
Speaker 5: world that follow us, and you will have state driven growth,
Speaker 5: and that's a wonderful thing. Now it's going back to
Speaker 5: the old days of follow us, and you'll be putting
Speaker 5: a stick in the eye of the evil capitalists who
Speaker 5: are causing all this trouble. The evil United States is
Speaker 5: going back to the old world of advocating the position
Speaker 5: of the oppressed in the world. So China can shift
Speaker 5: between the development model on the one hand and the
Speaker 5: sort of the anti evil imperialist model on the other hand.
Speaker 1: And of course, a couple of years ago, back when
Speaker 1: I was in government, there was the American and Boris
Speaker 1: Johnson following suit response to the Belton Road initiative. So
Speaker 1: the sort of trendy idea of the time was, I
Speaker 1: mean it began being cooked, remember, built that better and
Speaker 1: then build that world, and it morphed all the time.
Speaker 1: And then Boris wanted it to be called the Clean
Speaker 1: Green Initiative, and that was helping the global South become
Speaker 1: more climate resilient through aid from America and France and
Speaker 1: journal and so on and so forth. These ideas that
Speaker 1: one has, I don't hear people talk about their very
Speaker 1: much debt initiatives.
Speaker 4: It's probably more likely to do.
Speaker 3: Also, I thought was fascinating. We've got this Institute for
Speaker 3: Strategic Dialogue saying that there's a pro Chinese Communist Party
Speaker 3: operators known as Spammerflage, using accounts posing as right wing
Speaker 3: Americans and targeting the Guards of Water to flame internal
Speaker 3: US division. We think of Russia as playing these games,
Speaker 3: but obviously it is also China. And I'm quite keen
Speaker 3: to hear what these right wing spamouflages are actually called
Speaker 3: fos games.
Speaker 5: You're probably playing into the hands of Trump because, as
Speaker 5: I said earlier, disorder leads to a desire for a
Speaker 5: strong man. Now do we think that the Chinese actually
Speaker 5: want Trump?
Speaker 4: In Paris?
Speaker 5: Clear that Netinna who would rather have Trump than Biden,
Speaker 5: But what about the Chinese and the Russians may well
Speaker 5: be the same thing.
Speaker 3: All right, We're going to do it's a handbrake turn now,
Speaker 3: this being about the collision of politics and markets. The
Speaker 3: fact that we are just at the sort of turn
Speaker 3: of an interest rates cycle, both in the UK and
Speaker 3: in Europe and in the US, I think does pose
Speaker 3: a question for many central bankers both sides of the Atlantic,
Speaker 3: how they're going to navigate a time when they're just
Speaker 3: deciding whether or not to start bringing interest rates down,
Speaker 3: managed to dodge a recession, and the timing is going
Speaker 3: to be quite unfortunate, sort of on either side of
Speaker 3: an election potentially. I was asked about it on Bloomberg
Speaker 3: Television on our special around the Bank of England interest
Speaker 3: rate decision. Very excitingly no change in interest rates, but
Speaker 3: those of us with variable rate mortgages we at least
Speaker 3: have prospect of potentially having a rate cut next But no,
Speaker 3: because it's still bloody staying with it anyway. But I
Speaker 3: think it's in a funny kind of way. Although the
Speaker 3: Bank of England Governor Andrew Bailey has to worry about
Speaker 3: his own politics, the image and the fact that he's
Speaker 3: had a lot of criticism, the fact that Labour's so
Speaker 3: far ahead makes you feel that any decision the Bank
Speaker 3: of England takes is not going to be considered to
Speaker 3: be so politically decisive going into this election, whereas the
Speaker 3: US it's quite a different story. Are one of our
Speaker 3: best read opinion columns, alongside Adrian Obviously, John Author's joins
Speaker 3: us Now from New York because actually your column this
Speaker 3: week addressed the subject of whether or not pow, the
Speaker 3: head of the US Central Bank would be playing politics
Speaker 3: with monetary policy over the next six months. What do
Speaker 3: you think.
Speaker 6: I think, ultimately, given the utter intensity of the political
Speaker 6: climate here at the moment, it's more or less impossible
Speaker 6: for the Fed to do anything that might not have
Speaker 6: a political impact. I think where the notion that Powell
Speaker 6: was behaving particularly politically took hold was in the pivot
Speaker 6: so called, particularly last December, when the whole language about
Speaker 6: the possibility of rate cuts and the speed with which
Speaker 6: they would want to cut suddenly changed very sharply. The
Speaker 6: other point that people give to suggest that he is
Speaker 6: tried to duce up the economy to help Biden was
Speaker 6: actually from last week when the FED reduced qt quantitative tightening.
Speaker 6: The amount by which it was actually selling bonds into
Speaker 6: the market that was more than was expected. I think
Speaker 6: you can probably account for them more by the normal
Speaker 6: factors that would affect the Fed than by any particular
Speaker 6: desire to help Joe Biden. Bearing in mind that Jay
Speaker 6: Powell is actually a registered Republican who served in Republican administrations.
Speaker 1: John just sketch for us what would be the behavior
Speaker 1: by Pow that would incense and enrage a President Trump.
Speaker 6: The most I think if he starts cutting rates now,
Speaker 6: he is going to have to take a lot of
Speaker 6: abuse from Donald Trump. Yes, because this is what they
Speaker 6: have been braced for, that the Fed would cut before
Speaker 6: it really was justified, to create more light at the
Speaker 6: end of the tunnel, to cheer things up. I find this.
Speaker 6: I can very easily believe that the Fed will make
Speaker 6: a mistake, just as I can very easily believe that
Speaker 6: the back of England could make a mistake. I cannot
Speaker 6: imagine that any move would be made for political reasons,
Speaker 6: and apart from anything else, We've all cited Milton Friedman
Speaker 6: on the lags of monetary policy often enough over the
Speaker 6: last few years of a rate cut now would have
Speaker 6: a minimal impact on anybody's sense of the economy between
Speaker 6: now and the election.
Speaker 1: That's not really on the cards, is it right now?
Speaker 6: What a rate cut or it is fair to say that.
Speaker 4: There are.
Speaker 6: If the Fed really wanted to cut rates, if it
Speaker 6: was if the White House was breathing down the Fed's
Speaker 6: neck in the way that Donald Trump very publicly breathed
Speaker 6: down the Fed's neck four or five years ago, you
Speaker 6: can definitely construct an excuse to start to start cutting rates.
Speaker 6: The number of generally conservative common tators who say that
Speaker 6: inflation is actually below two percent already, it's just because
Speaker 6: of quirks in the way that housing inflation shelter inflation
Speaker 6: is calculated, which is a rabbit hole I go down.
Speaker 6: There are plenty of There are plenty of reputable people
Speaker 6: making the argument that that is a much more of
Speaker 6: a real problem than it appears.
Speaker 3: You've hinted there to the irony of the criticism by Trump,
Speaker 3: or the possible criticism by former President Trump, because a
Speaker 3: lot of Republicans, including him as saying he wants to
Speaker 3: get a new he wants to replace j. Powell if
Speaker 3: he wins, so that we could then have someone who
Speaker 3: cuts rates more.
Speaker 6: If you want to analyze Donald Trump's economic policies consistency.
Speaker 4: There is, yes, but we try all the time.
Speaker 6: But I do think in the current environment there's another
Speaker 6: one of these many areas where there's where it's quite frustrating.
Speaker 6: There are valid arguments to be made about central bank independence.
Speaker 6: Paul Tucker, the ex Deputy Governor of the Bank of England,
Speaker 6: write a book called I Think It was Unelected Power
Speaker 6: something like that about ways in which at the moment
Speaker 6: central banks probably are too independent of the of the
Speaker 6: political process. Given how important monetary policy is, it's quite
Speaker 6: strange that there is so little democratic direct input into it,
Speaker 6: so that there are very valid arguments to be had
Speaker 6: about this. It's just those valance expressed in this ugly debate.
Speaker 3: So that's a tip to Donald Trump if he wants
Speaker 3: to have good reason in arguments and someone helping him
Speaker 3: make the case for reducing the fed's independence, you can
Speaker 3: call you. It sounds like John.
Speaker 4: Or Paul Tucker.
Speaker 5: Yes, yes, people seem to be much more worried about
Speaker 5: inflation than the underlying figures seem to indicate. And I
Speaker 5: wonder if those people are so completely crazy, because there
Speaker 5: seem to be an enormous number of hidden charges, hidden
Speaker 5: costs that hit people when they actually come to pay
Speaker 5: their bills.
Speaker 3: Do you sound like your people when you say.
Speaker 5: I read presents people perceive you I represent the ordinary man.
Speaker 6: Okay, we do have Michigan, a University of Michigan, which
Speaker 6: does huge amounts of research on consumer sentiment consumer opinion
Speaker 6: does and has for the last few years, given data
Speaker 6: for people who separate data for people describing themselves as Democrats, Republicans,
Speaker 6: and independents, and the divergence is quite stunning at this point,
Speaker 6: higher than it's ever been before. And Republicans think inflation
Speaker 6: is higher than Democrats think it's lower. Republicans think we're
Speaker 6: all going to hell in a handbasket, Democrats don't, in
Speaker 6: a quite dramatic fashion in a way that does suggest
Speaker 6: that the narrative is framing perception in both on both wings,
Speaker 6: but perhaps more dramatically because the Republican. Whatever else you
Speaker 6: think about Donald Trump, he's very good at getting his
Speaker 6: message across. People are very unhappy about it.
Speaker 1: Last question, just to bring your attention to the United Kingdom,
Speaker 1: can you give me the month when you think that
Speaker 1: Andrew Bailey starts cutting.
Speaker 3: We're running out of time, so this is going to
Speaker 3: be a short one, but we just need to lay
Speaker 3: our bets obviously rich month.
Speaker 6: From this side of the Atlantic, it looks to me
Speaker 6: as though he could go next time in June. I
Speaker 6: think I think you were commenting earlier if if there
Speaker 6: is some way in which the Conservatives are going to
Speaker 6: pull out this election, it's not going to be anything
Speaker 6: the Bank of England does in either direction, and to
Speaker 6: some extent that he's really, really exempted from some of
Speaker 6: the political pressures that Powell is under, and he also
Speaker 6: has a weaker economy that for whom for which the
Speaker 6: case for rate cuts is stronger. So my initial take
Speaker 6: looking at what he said today is that he's definitely
Speaker 6: nudging people towards expecting a cut earlier. So may well
Speaker 6: be June.
Speaker 3: All right, place your bets well. That also puts you
Speaker 3: in line with our estimable chief UK economist, Dan had
Speaker 3: some Bloomberg economics, i should say, in the Fed's to Feds,
Speaker 3: or at least again pointing to a bit of research
Speaker 3: that that Bloomberg did. We have David Wilcox, who was
Speaker 3: the chief economist at the FED for many years, now
Speaker 3: working for US as an advisor, and he actually looked
Speaker 3: at how the weather just taking the sort of standard
Speaker 3: there's a tailor rule which is too complicated to go into,
Speaker 3: but a sort of basic policy rule that the FED
Speaker 3: is if some version of the FED usually follows. And
Speaker 3: he looks back and says, have they departed from that rule,
Speaker 3: that sort of mechanical rule more or less than usual
Speaker 3: in the year before an election, And they actually find
Speaker 3: they seem to have stuck more closely to that rule
Speaker 3: in the twelve months before elections than at other times,
Speaker 3: which is an interesting I guess that's another thing that
Speaker 3: the Fed could be putting in people's face as well.
Speaker 3: For how many elections going back, going back a good
Speaker 3: twenty five thirty years. I think he finds that he
Speaker 3: was a little bit. It was a bit too tight
Speaker 3: relative to that rule with Bill Clinton's ninety six real
Speaker 3: election campaign, and a bit too loose leading up to
Speaker 3: George W. Bush's re election campaign. But anyway, there's no
Speaker 3: we can't find it in the data. Suffice to sayeteen.
Speaker 6: Ninety six would have been one of the one of
Speaker 6: the examples of the economy going quite unreally well, it didn't.
Speaker 6: It didn't do too much harm. If they were if
Speaker 6: they heard a little on the side of conservatives.
Speaker 3: Then no, exactly exactly, Thanks John, Thank you. So I
Speaker 3: do think that set us up well for the Ben
Speaker 3: Page interview, which Adrian sadly you missed. Remind me of
Speaker 3: your excuse again, it's.
Speaker 5: Very far from being an excuse. I got to my
Speaker 5: train station. I got to my train station in Petersfield.
Speaker 5: I noticed that there were no cars there. I waited
Speaker 5: for the train for a bit. There were no trains,
Speaker 5: and then I finally found a uniformed person and I said,
Speaker 5: when it's the next train? He said, it's not until Saturdays.
Speaker 3: You know, you work for a news organization that's aware
Speaker 3: of things going on. Without even going down to the station,
Speaker 3: you could have found out there was a strike.
Speaker 5: I didn't listen to any rival news organizations that morning,
Speaker 5: or he could.
Speaker 1: Have walked here. Okay, So while Adrian was stuck on
Speaker 1: his train platform, Stephanie and I were joined by Ben Paige,
Speaker 1: who is CEO of Global CEO no Less of IPSOS,
Speaker 1: the polling organization which many of you will know about
Speaker 1: very well. With him, we talked about dissatisfaction amongst voters
Speaker 1: in the US, the UK and Europe and why he
Speaker 1: thinks that's translated into more support for the far right
Speaker 1: or nationalist candidates instead of an active socialist agenda.
Speaker 2: There are places like France where there is a socialist
Speaker 2: party and then they picked up some votes. Melanchean did
Speaker 2: quite well last time, but I think your broader point
Speaker 2: is absolutely right, and I would put it down to
Speaker 2: immigration and demography. The last time people were feeling this squeezed,
Speaker 2: we hadn't had these cumulative waves of migration from the
Speaker 2: south to the north, and the change that people have
Speaker 2: now observed. Also, of course you've got aging populations in
Speaker 2: many western countries and in Japan. Italy going to be,
Speaker 2: of course, the oldest country on earth, almost guaranteed no
Speaker 2: more Italians at all than one hundred and seventy years.
Speaker 2: If they don't sort themselves out, they're literally become extinct
Speaker 2: on current trends. So I think all of that means
Speaker 2: that you've got a sort of in some ways a
Speaker 2: scapegoat for the situation. People feel unsettled. And of course,
Speaker 2: actually even before the global financial crash in two thousand
Speaker 2: and eight, you were seeing the overall GDP grow, but
Speaker 2: not GDP per capita because partly because we were just
Speaker 2: importing lots of people, so the pie was growing, but
Speaker 2: actually we were also importing people as well. So I
Speaker 2: think all of this means that it's a different situation
Speaker 2: than if populations were just stable, and therefore the appeal
Speaker 2: of the right that it's.
Speaker 4: Someone else's fault.
Speaker 2: There are minorities we can identify that are disrupting things.
Speaker 2: They're the answer those simple messages which can cut through
Speaker 2: and when people visibly notice change that's when you see
Speaker 2: this sort of unease. And in in fact, we've measured
Speaker 2: in Britain something called the Hirpindel Index of racial heterogeneity,
Speaker 2: which is I know, I didn't even know what it
Speaker 2: was called. We just observed it literally in the data
Speaker 2: and it's basically how heterogeneous racially a population is. But
Speaker 2: basically the faster the rate of change, the more basic
Speaker 2: crudely unhappy people were. So if you remember back to
Speaker 2: Barking and Dagenham, this is very parochial, but two thousand
Speaker 2: and eight the BNP won in every single ward they
Speaker 2: stood in and when we ran it through the maths,
Speaker 2: Barking and Dagenham had been a white island in the
Speaker 2: rest of London because of the Ford Motor Plant. Those
Speaker 2: families that had spent their lives there, and gradually Black Londoners,
Speaker 2: of whom there are plenty, had noticed that there was
Speaker 2: plenty of cheap housing in Barking and Dagenham, so they
Speaker 2: started but moving there and that's when at that point
Speaker 2: you get this reaction. So I'm using that as a
Speaker 2: sort of dramatic extreme example, and of course at the
Speaker 2: next election Labour took those seats back, but it shows
Speaker 2: that people are susceptible, and so if they're feeling under
Speaker 2: pressure and they noticed that migration is changing the country,
Speaker 2: they will be more willing to listen to right wingers
Speaker 2: about scapegoats, etc.
Speaker 1: I'm interested in this idea. I don't want to be parochial,
Speaker 1: but nonetheless, if you've got a Kirstarma government coming in
Speaker 1: the UK or your polls.
Speaker 4: Suggest so, yes, absolutely.
Speaker 1: Firstly, how does a left wing government ride that trend
Speaker 1: in your opinion? And secondly, I'm just wondering whether we're
Speaker 1: moving into this period where you have a lot of
Speaker 1: one term governments because people come in, they are there's
Speaker 1: a sea change, there's a swing in opinion, and then
Speaker 1: they just can't ride the beast because the dissatisfaction is
Speaker 1: just so volatile.
Speaker 2: Well, I think Allegli, you're right to pick up that
Speaker 2: it's highly likely at the moment that Labor will be
Speaker 2: deeply unpopular eighteen months to twenty four months after they
Speaker 2: win the election.
Speaker 1: That long, and that's not a facetious question.
Speaker 2: It's interesting because they may be able to if they
Speaker 2: can come up with enough messaging about what is going
Speaker 2: to happen. Then one of the things that I always
Speaker 2: find very striking is if we go back to the
Speaker 2: nineteen ninety seven wins and he puts in place spending
Speaker 2: plans with Brown that Clark said were just unmanageable and
Speaker 2: unstickable to But they do it because people's expectations were
Speaker 2: so high. And of course there was also economic growth,
Speaker 2: and the economy was picking up in nineteen ninety seven,
Speaker 2: so public services didn't improve to start in the much
Speaker 2: in the first four years, but everybody knew the money
Speaker 2: was coming. The cavalry were coming down the hill, and
Speaker 2: they were willing to suspend disbelief. So there is a
Speaker 2: period that they will have a grace period. The question is,
Speaker 2: and I think you're right to ask the question, how
Speaker 2: long will it be? I think it's not so much
Speaker 2: strong man, strong woman. Let's think of Italy. People are
Speaker 2: grasping around for solutions to this massive macro problem that
Speaker 2: we can see in the West and indeed in Latin America,
Speaker 2: the loss of the future. This idea that nine out
Speaker 2: of ten people in most of these countries believe, looking
Speaker 2: back at the last fifty or sixty years, that the
Speaker 2: normal state of affairs is the next generation is richer
Speaker 2: than the current one, and now over the last two
Speaker 2: decades have seen that turned.
Speaker 3: I guess we should always ask ourselves, is it really
Speaker 3: so different? Is everyone always unhappy with this state of.
Speaker 4: Political It's fair.
Speaker 2: You're absolutely right to say that people are always unhappy.
Speaker 2: And even in I think nineteen ninety seven, forty six
Speaker 2: percent thought the country was going to the dogs, but
Speaker 2: the figure is now seventy six percent. People have always
Speaker 2: believed that politicians are duplicitous. You remember the wonderful nineteen
Speaker 2: forty four survey where the British were asked, do you
Speaker 2: believe that the politicians in Parliament are acting in their
Speaker 2: own interests, in the interests of the country, or in
Speaker 2: the interests of their political party? And in nineteen forty four,
Speaker 2: as we fought the Germans in Europe with a coalition government,
Speaker 2: only thirty five percent believe the politians are acting in
Speaker 2: the interest of the country. But the point I would
Speaker 2: make now is that let us fall into six percent.
Speaker 2: And so trust in politicians has never been high, but
Speaker 2: it is now the lowest we've ever measured, and we're
Speaker 2: spontaneously now getting in Britain, and I think in many countries,
Speaker 2: people just saying when I ask them what the biggest
Speaker 2: problem is. They don't say inflation, they don't say public services.
Speaker 2: They say it's just useless politics.
Speaker 4: And I think that.
Speaker 2: But the challenge for the politicians is that trying to
Speaker 2: please our populations that they now serve is far more
Speaker 2: challenging as an audience and a group of people than say,
Speaker 2: the populations that they were trying to please fifty or
Speaker 2: sixty years ago. Because of fragmentation, because of just a
Speaker 2: demographic change, and because of income distribution, show that there
Speaker 2: are now many rich people that just weren't who weren't
Speaker 2: there in large quantities in the past. So for in all,
Speaker 2: for all those reasons, it's much harder to be a politician.
Speaker 3: I'm sort of obsessed with this, but the fact that
Speaker 3: we spend all our time looking at billionaires on television,
Speaker 3: that they're so visible and they're so overrepresented in dramas,
Speaker 3: that I think it's much more part of people's lives,
Speaker 3: this kind of super rich phenomenon, which as you say,
Speaker 3: was not necessarily a feature of previous eras.
Speaker 1: Don't augment your earlier question, Stephanew I was really struck
Speaker 1: in your research where it's in July nineteen seventy eight
Speaker 1: forty percent thought Britain was the worst place to live.
Speaker 1: July twenty three, that goes to seventy six. But the
Speaker 1: interesting thing for me was that in May twenty that
Speaker 1: was already at seventy one percent. Yes, because if I
Speaker 1: think back to some of the elections I've covered, we
Speaker 1: used to talk about apathy. Yeah, right, and now we
Speaker 1: it feels that we don't talk about apathy anymore. We
Speaker 1: talk about maybe anger.
Speaker 2: I think the other point you make, though, that already
Speaker 2: by two thousand and eight people were dissatisfied, is absolutely right.
Speaker 2: It's this failure of real wage growth again in Britain,
Speaker 2: but in many European countries and bits of the US
Speaker 2: where there was a long period of no real wage growth,
Speaker 2: and that's now cumulatively starting to have I think an effect.
Speaker 3: We talk about parties people feeling not represented, but actually,
Speaker 3: compared to some of the other European countries or even
Speaker 3: the US that you look at in some of your polling,
Speaker 3: quite a high number of people feel represented by one
Speaker 3: of the two main parties. In the UK, I know
Speaker 3: it was sixty nine percent versus only fifty five in France.
Speaker 3: The sort of disenfranchised group is actually larger in quite
Speaker 3: a lot of other things.
Speaker 4: Yes, we should.
Speaker 2: It's always worth remembering that Britain is only really moderately unhappy.
Speaker 2: It feels we feel like, oh god, actually when you start,
Speaker 2: it's always good to have some international contexts and on that.
Speaker 2: If you want to really look for real misery, look
Speaker 2: at South Africa and parts of Latin America, where the
Speaker 2: rising middle classes saw a more prosperous future which has
Speaker 2: then been snatched away from them, and that is where
Speaker 2: you're seeing people are dying in riots in every single week,
Speaker 2: which again people describe London as a sort of unlivable city,
Speaker 2: et cetera. Frankly, come on. So that's why I think
Speaker 2: some perspective is important. But nevertheless, for voters here, for
Speaker 2: wealthy voters in the United States, by any international standard,
Speaker 2: there is still a lot of discontent, and it is
Speaker 2: much greater than in the past.
Speaker 3: One argument that's sometimes made to me in France as
Speaker 3: they look, for example, as they look ahead to the
Speaker 3: next presidential election and there's obviously quite a strong chance
Speaker 3: of Marine La Penn winning the presidency on the current polling,
Speaker 3: they will say, you've inoculated yourselves in the UK by Brexit,
Speaker 3: a combination of Brexit and Jeremy Corbyn. The sort of
Speaker 3: extremities have already been attempted and have now been discredited,
Speaker 3: and as a result we have what looks compared to that, yes,
Speaker 3: like a slightly more kind of somber choice in this election.
Speaker 3: When you look at the polling and the sort of
Speaker 3: longer term effect of Brexit, has it changed people's view
Speaker 3: of kind of radical answers.
Speaker 4: I'm not sure that I would put it that way.
Speaker 2: They just want competence and whether that sort of somebody
Speaker 2: can come up with radical solutions that they appear to
Speaker 2: be able to execute competently. Actually, you could argue Brexit
Speaker 2: was in some ways a radical solution. Whether it was
Speaker 2: executed competently we can argue about. I think you could say,
Speaker 2: therefore that if you compare that to the situation in France,
Speaker 2: the French haven't yet done something that extreme. I think
Speaker 2: the question is whether the center holds in France. And
Speaker 2: this because of the one of the things I admire
Speaker 2: about the French system, and I think I believe that
Speaker 2: in Britain if we had this on the Brexit voit
Speaker 2: we probably wouldn't have left, is that they have a.
Speaker 4: Two round thing.
Speaker 2: You may get an outright winner the first time round,
Speaker 2: but you probably won't. And then at this point suddenly
Speaker 2: everybody comes back. And we saw it with Marie Lea
Speaker 2: Penn's father two decades ago. They didn't bother voting in
Speaker 2: the first round. Hang on a minute, it's that it's
Speaker 2: the Penn and then finally they come back in and vote.
Speaker 4: That is true.
Speaker 3: It is that view that has a supporter has allowed
Speaker 3: Macron to win, certainly to win reelection.
Speaker 2: Even though he's not particularly popular, so I think, but
Speaker 2: of course it's who's going to replace Macron? But I think, yes,
Speaker 2: let's not write off the center yet.
Speaker 3: When you're talking about what can government do, or when
Speaker 3: we naturally think what are the ways that an incoming
Speaker 3: labor government or any government who wants to change things
Speaker 3: around can deliver?
Speaker 4: I guess what.
Speaker 3: Makes me nervous When I look at the data. You
Speaker 3: can see this in the US, even when you have
Speaker 3: delivered on some of the things that people say is
Speaker 3: important to them. Wages that have grown faster than inflation, growth,
Speaker 3: employment growth, we've seen that in the US, But we
Speaker 3: actually see people not believe in those things if they're
Speaker 3: not already Democrat if they're not already supporting Biden. And
Speaker 3: it's this kind of idea of value based facts or
Speaker 3: belief based facts, that your beliefs about the world stem
Speaker 3: from your political views rather than the other way around.
Speaker 3: Is that something that's changed in your lifetime as a Polster.
Speaker 2: Absolutely, and I think you can definitely see it in
Speaker 2: the United States. If you look at the values of
Speaker 2: Republicans and Democrats in the nineteen nineties, you can see
Speaker 2: that they're like two sort of mountains, but they're quite
Speaker 2: close to each other. And over the last thirty years
Speaker 2: those have progressively moved apart. And basically, if your Republican
Speaker 2: guns must be good and that gun control is bad,
Speaker 2: and if you're a Democrat, even when you show people
Speaker 2: evidence one way or the other, you show people biased evdances,
Speaker 2: they just they will follow their political beliefs. Britain hasn't
Speaker 2: seen the same. We are not as polarized as America.
Speaker 2: We're more fragmented, i would say, than polarized in the UK.
Speaker 4: What's the difference, It's.
Speaker 2: Just been America is your Republican or Democrat. It's just
Speaker 2: a bit more wanced. And that actually what the first
Speaker 2: past the post system is doing in Britain is keeping
Speaker 2: together two parties that probably if we were in Europe,
Speaker 2: would have fractured into four parties. And that's why Macron
Speaker 2: was able to just wipe out the left wing and
Speaker 2: the Republicans in France, because that's what the system does.
Speaker 2: Our system is designed to preserve the two parts.
Speaker 4: More it's not.
Speaker 3: True in other parts outside the US. Does that mean
Speaker 3: there is at least a bit more hope that an
Speaker 3: effective politician could actually persuade voters that things have got better?
Speaker 2: I think some making things better is obviously very challenging,
Speaker 2: but we know what to do.
Speaker 4: We know we need to invest in infrastructure.
Speaker 2: We know we need to build houses in a way
Speaker 2: that we haven't built them before. We know we need
Speaker 2: to do things on skills. I think you could come
Speaker 2: in with a story to build those things and people
Speaker 2: willing will swing behind it.
Speaker 1: Well.
Speaker 2: I would say that people's fundamental beliefs in the welfare state,
Speaker 2: in public services, in the NHS, so to be honest,
Speaker 2: are always there. By twenty ten, they had bought the
Speaker 2: argument that we needed to save money, but it rapidly
Speaker 2: after austerity, they rapidly shifted back again. And now, of
Speaker 2: course we've got the effects of a lack of capital
Speaker 2: investment in public services screaming at us. And so the
Speaker 2: question is who and how is it going to be
Speaker 2: paid for? And that's where I don't think either of
Speaker 2: the parties, the Tories have set up a big bear
Speaker 2: trap with science bear trap next to it for labor,
Speaker 2: and labor are just keeping stum and saying, well, somehow
Speaker 2: do reform without spending more money, when everybody, actually most
Speaker 2: people know that more money needs to be spent, and
Speaker 2: probably some of it will have to come from more
Speaker 2: affluent over fifties, which is not.
Speaker 4: Something the authologician wants to.
Speaker 3: All the orthodoxy on what's politically it's possible, what's going
Speaker 3: to get you hurt in the ballot box is very
Speaker 3: similar to what it would have been ten or twenty
Speaker 3: years ago.
Speaker 2: I tend to agree that you have to show that
Speaker 2: you're going to be fiscally responsible, that you're going to
Speaker 2: be competent if you can somehow do it and show
Speaker 2: and the issue is always really hypothecation. People believe in
Speaker 2: public spending for public services in Britain, but they have
Speaker 2: to believe that you're going to do it, that you
Speaker 2: can do it competently. It's why Blair's pseudo increase in
Speaker 2: National insurance, which, of course, as we know, National insurance
Speaker 2: doesn't really go on the things that it's advertised to
Speaker 2: go on necessarily on.
Speaker 4: The Treasury hate it, yeah, but it was it was
Speaker 4: popular with the public. Put up.
Speaker 2: He put a penny on income tax on taxes, effectively
Speaker 2: to pay for something specifically that people knew needed money.
Speaker 2: And so you could probably get away with saying that
Speaker 2: we've now examined the books. The NHS needs more money.
Speaker 2: You know, it needs more money. We're an aging population.
Speaker 2: We can all these medical advances. We want to deliver
Speaker 2: these things.
Speaker 1: They're doing that more and more, like with the defense spending,
Speaker 1: they're saying, if you believe it, we'll do it. We'll
Speaker 1: fund it from reducing civil servant numbers.
Speaker 4: Which yes, game, yeah, let's see.
Speaker 1: To your point, it seems to be the way that
Speaker 1: they think. And as I said earlier, look, the Treasury
Speaker 1: don't like it because this definitely says it's just.
Speaker 4: It's money, right.
Speaker 1: Yeah, but to this point about people, they feel they
Speaker 1: need to have some kind of contract. You we are
Speaker 1: doing this out of this rather than we're just doing it.
Speaker 4: It's a good idea.
Speaker 3: We've been very grandiose talking about the state of the
Speaker 3: polls in general dissatisfaction. We've done a bit on the UK.
Speaker 3: We shouldn't let you go without asking you the sort
Speaker 3: of more mundane question that you have to al capolster
Speaker 3: who's going to win in the US.
Speaker 4: To be honest, at the moment, I would toss a coin.
Speaker 3: Well, specifically, I should ask you what should we be
Speaker 3: looking at to.
Speaker 2: Look at Biden's popularity and see if it goes back
Speaker 2: above forty percent, and look at the other thing, is
Speaker 2: that eighty five percent of the time, it's our eighty
Speaker 2: five percent rule. The person who is strongest on the
Speaker 2: key issue of concern to the American electorate wins. And bizarrely,
Speaker 2: Trump is doing better on many aspects of the economy,
Speaker 2: Biden is doing better on threats to democracy. I think
Speaker 2: that the court cases are a wild card. Biden's and
Speaker 2: actually Trump's age are both wildcard. Statistically, something could happen
Speaker 2: to either of them in terms of their medical condition
Speaker 2: by the autumn. But I think don't do not discounter
Speaker 2: a Trump win by any stretch of the imagination. And
Speaker 2: of course the people he is now surrounded with will
Speaker 2: be more competent than the ones he had the previous time.
Speaker 4: It looks like, well, more competent in implementing, in doing
Speaker 4: what he wants to do. But I just but on.
Speaker 3: That point about this, So the eighty five percent rule
Speaker 3: is just tell us exactly what that is.
Speaker 2: Is that the person who's best on the key issues
Speaker 2: of concern to the American elect today. What let me
Speaker 2: just double check it, because I'm always.
Speaker 1: The zigzags between defending democracy and the economy front of you.
Speaker 3: All right, So you look at that and that will
Speaker 3: tell you if it says defending democracy.
Speaker 2: If that rises and Biden's well ahead, then that will
Speaker 2: probably mean that Biden will be okay. The other thing
Speaker 2: is Biden hasn't really started campaigning yet, whereas Trump is
Speaker 2: on a permanent campaign. He saw a small improvement for
Speaker 2: Biden after his State of the Union address where he
Speaker 2: came out and started to lay it in. And so
Speaker 2: if you look mathematically at all polls that we've ever
Speaker 2: measured over decades, at this point, the poles can typically
Speaker 2: be seven points different than what actually happens, given that
Speaker 2: their neck and neck. Some weeks we have Biden ahead
Speaker 2: by a few points some weeks Trump it's really too
Speaker 2: it's really too close to call at the moment. There's
Speaker 2: so many wild cards.
Speaker 3: Looking at those poles. I mean, obviously, one debate that
Speaker 3: has been on the sort of edges of ebbed and
Speaker 3: flowed among Democrats as to whether the parties should have
Speaker 3: persuaded Joe to stand down, Yeah for this election. What
Speaker 3: are the polls tell you on that?
Speaker 2: Well, I think there's still an incumbency effect that I
Speaker 2: think clearly the candidate is old, so are some of
Speaker 2: the electorate. But the incumbency effect maybe is as important
Speaker 2: as the any what was the alternative?
Speaker 3: So there has to be a very high bar for
Speaker 3: not going with the incumbentant.
Speaker 2: And remember in American politics is it's more normal to
Speaker 2: get too terms. Legra is suggesting that we might be
Speaker 2: moving into this one term politics, both in the UK
Speaker 2: and the US, which in a volatile situation.
Speaker 1: Like the polling, don't you to tell you for every
Speaker 1: single incumbent is dire.
Speaker 2: Yes, that's right, but that in general the history has
Speaker 2: been the incumbency still counts and actually being parochial again
Speaker 2: back in Britain, incumbency helped in the mayoral elections.
Speaker 1: Is amazing to see the label lead be so solid.
Speaker 4: It is.
Speaker 2: It is quite but I think it's the it's the
Speaker 2: when you look at the bottom line, it is the
Speaker 2: deep unpopularity. Sunax ratings are the same as Liz Trusses,
Speaker 2: which is quite impressive given that she's back. You can
Speaker 2: you can quote me on that if you want to.
Speaker 2: And then in terms of the ratings of the government
Speaker 2: and satisfaction with the government of the day, again under
Speaker 2: Sunac's watch, it has now been cumulatively the worst rating
Speaker 2: I think we've seen for any government we've ever measured,
Speaker 2: which is quite impressive in Britain. That's kind of things,
Speaker 2: aren't We've just come out of a recession technically, but
Speaker 2: so I think it's more that people are utterly fed up.
Speaker 2: And I'm back to the Callahan quote from nineteen seventeen. Yes,
Speaker 2: you know, basically there comes a time when whatever you
Speaker 2: say and whatever you do will make no difference. The
Speaker 2: people have decided, and in the case of the Conservatives,
Speaker 2: I think that's the case in Britain at the moment.
Speaker 3: Bempage, thank you very much, pleasure.
Speaker 1: What I thought was very interesting but also very well
Speaker 1: captured was this phrase he had, which was the loss
Speaker 1: of the future. Was pretty gloomy, poetic, but also pretty gloomy.
Speaker 1: And I think that's what we've been driving out in
Speaker 1: a few of these episodes of autonomics now, which is
Speaker 1: the sense of the longer term, not recent, but the
Speaker 1: longer term diminishing people's expectations for themselves and their families.
Speaker 1: I loved I think you did too, the idea that
Speaker 1: the UK is not extremely unhappy. It's his phrase he
Speaker 1: had that actually, and then he went on to comparison
Speaker 1: to quite countries, we're not usually compared to South Africa,
Speaker 1: and yeah, I thought that.
Speaker 3: Was sort of that took the edge off it a bit.
Speaker 3: But I ahead also John Todd this chart which sort
Speaker 3: of suggested that relative to many other places, the average
Speaker 3: Britain actually feels more or less represented by the two
Speaker 3: main parties, which is of course often what you certainly
Speaker 3: not what you get when you listen to Reform talking
Speaker 3: about how that the number of people who are excluded
Speaker 3: from the political mainstream. I thought it was interesting that
Speaker 3: again on that many people in Europe feel much more disenfranchised.
Speaker 5: Yeah, I think it's quite interesting that actually that Brexit
Speaker 5: may have served a positive purpose in that sense that
Speaker 5: the people who felt excluded suddenly were included in Brexit.
Speaker 5: Not necessary to the benefit of the country in the
Speaker 5: long term, but there was a sense that the system
Speaker 5: was responding to their concerns in a way that it
Speaker 5: doesn't seem to quite so easily in Europe, certainly not
Speaker 5: on the European Union level. But I was very impressed
Speaker 5: by this notion of discontent and polarization. That there is
Speaker 5: a level of discontent. There's always discontent with the political establishment,
Speaker 5: but it's just much bigger than it ever has been before,
Speaker 5: and that is manifesting itself in a sort of anti
Speaker 5: incumbency sentiment. And looking forward, I think the anti incumbassy
Speaker 5: moods has some very interesting implications for the forthcoming British election,
Speaker 5: because aren't we at the beginning of a long period
Speaker 5: of one term president, one term prime minister. We had
Speaker 5: Thatcher for three terms, we had Blair with a very
Speaker 5: strong long term prime ministership. I'm not sure that we're
Speaker 5: going to get that with Starmer, partly because they don't
Speaker 5: have an agenda in the way that Blair and Well
Speaker 5: it's interesting that their inheritance is so bad.
Speaker 1: It is interesting because if they're a Starmer spokesperson here
Speaker 1: they I think they are talking about a two term
Speaker 1: They need two terms, something like leveling up. You can't
Speaker 1: do that in one parliament. You can't do that in
Speaker 1: it's two three.
Speaker 5: I think the two terms depends on the Tories really.
Speaker 5: I think if the Tours fall apart, which looks very likely,
Speaker 5: then they do get.
Speaker 3: To well and this is how you end up with
Speaker 3: what happens to reform. It's so significant because we could
Speaker 3: be just looking at a very we could be looking
Speaker 3: at a much stronger Labor Party if that depending on
Speaker 3: how that has torn the Conservatives apart.
Speaker 5: Ben's talking about the geology is exhausted to be looking
Speaker 5: for competence. But on the other hand, if you look
Speaker 5: at the fringes of British politics, you have the growth
Speaker 5: of a sectarian politics, of white identity politics with reform,
Speaker 5: various sort of gaza based sort of political insurgencies in
Speaker 5: heavily immigrant areas. There is something going on, perhaps still
Speaker 5: on the periphery of politics, but moving into the center
Speaker 5: of politics, which is a very different and in some
Speaker 5: ways Trump's style and far left American democratic style of
Speaker 5: politics which is all about identity and not about competence.
Speaker 3: Thanks for listening all the way to the end of
Speaker 3: this week's photon Nomics from Bloomberg. This episode was hosted
Speaker 3: by Me, Stephanie Flanders, Adrian Wildridge, and Allegra Stratton. It
Speaker 3: was produced by Sammer Sadi with help from Chris Martlou
Speaker 3: and Julia Mant. Editorial direction from Victoria Wakely, sound design
Speaker 3: by Blake Maples. Brendan Francis Newnham is our executive producer.
Speaker 3: Sage Bowman is Head of Podcasts. With special thanks to
Speaker 3: Ben Page and please, especially if you like it, subscribe, rate,
Speaker 3: and review this podcast wherever you listen to it.