Chasing Dragons

Reading the Financial Crisis Through the FT's UK Deficit Buster Simulation

With the UK election campaign in full swing, it has recently begun to dawn on media commentators that the focus on the high probability of a hung parliament and what kind of coalition might be formed--if any--has meant that very little attention has been placed on each party's specific plans for cutting the national deficit.

To help voters understand the scope of cuts that the parties are pledging to undertake based on their manifestos and their effects, the Financial Times has designed a UK Deficit Buster simulation where players get to choose what will be slashed in order to meet deficit reduction targets.

As a simulation, what makes the Deficit Buster effective is that it is able to convey how deeply unpleasant and intrusive these cuts are going to be. Vital front-line services are going to be effected and the impacts are going to be disruptive no matter the assurances that Brown, Cameron, and Clegg have given the public over the past three weeks.

Where the simulator is genuinely dishonest is that it provides no mechanisms for raising revenue from measures like an increase in tax rates on those with incomes over £150K a year (the wealthiest 0.6% of the population), the introduction of a financial transactions tax, or the elimination of out-dated military programs like Trident.

But beyond these specific points of weakness, what strikes me as most interesting is how the Deficit Buster simulation is indicative of a deeper problem with the way in which in the UK deficit is being understood as a political issue. And that problem is that the source of the current deficit is being willfully forgotten.

The origins of the current deficit have been completely de-contextualized. It did not appear out of thin air or as a product of carefree spending. It resulted from the financial crash and the UK government's attempts to mitigate its worst consequences. Just over a  year ago, Bloomberg reported that government bailouts to UK banks had already reached £1.4 trillion. This was in addition to other forms of economic stimulus spending. And the financial crisis itself arose from a failure to effectively regulate the banking sector, a failure made possible by the total acceptance of the necessity of financial deregulation across the big three political parties.

What is so amazing is the astounding feat of jedi mind trickery that Labour, the Conservatives, and the Liberal Democrats have been able to pull off despite these circumstances. In securitizing the deficit--that is by representing public spending as an existential threat that requires the imposition of emergency budgetary measures-- they have managed to deflect all responsibility for bearing the cost from the banking sector and placed it squarely on the laps of the general public.

The current situation--regardless of who gets elected--is one where those least culpable for the financial crisis--those on benefits, front-line public sector workers, children, and universities--are being asked to take primary responsibility for sorting its lingering effects as though this is a common-sense and uncontroversial solution to the problem.

Therefore, in the waning days of the election campaign, I would argue that if people are interested in real change, it will not come from accepting the deficit as a political issue and seeing which cuts you find the least objectionable. Rather, real change will only emerge if the electorate makes it clear that it understands that the positioning of the deficit as a political issue is itself extremely political and that it is not prepared to accept this framing. One can only hope that someone raises this as a question at tomorrow night's debate...

And here's a slogan: It's finance capital, stupid.

Photo credit: Helga's Lobster Stew

Rating the Leaders' Debate

Here are my impressions of last night's leaders' debate, the first ever of its kind in British history.

• Best overall performance: Nick Clegg (Lib Dems). Clegg's mission last night was to raise his public profile and that of the Liberal Democrats. He did so admirably. Clegg also provided some of the best analysis of the pathologies of Labour and the Conservatives by noting that their shared commitment to renewing the Trident nuclear weapons program demonstrated the inability to think beyond a Cold War geopolitical mindset and that the more Brown and Cameron argued, the more they sounded the same. Hands down he came across as the most impressive of the three candidates. Could this make the public less adverse to the prospect of a hung parliament? 68

• Biggest surprise of the night: Gordon Brown (Labour). Even outside of the Labour spin that attempted to lower expectations to the point where anything better than passing out on stage could be framed as glorious, most analysts expected that he would be pretty rubbish in a televised debate format. But Brown was solid, delivering his message clearly, and pressing Cameron at every available opportunity. He actually provided the two wittiest lines of the night while pounding the Conservative : 'you can airbrush your posters, but you cannot airbrush your policies' and 'this is not Question Time, this is answer time David'. 60

• Most predictable performance of the night: David Cameron (Conservatives). He was poised, confident, and articulate. But most of what he had to say lacked  depth, substance, or details apart from repeating the necessity of a £6 billion government spending cut to be financed through the euphemism of 'efficiency savings' . You also have to wonder about someone who is unable to comprehend that one can cut waste while maintaining spending levels. To give him credit, he put his public school education to work by starting with a clever rhetorical trick known as a captatio benevolentaie by personally apologizing for the MP expenses scandal. Still, I suspect that overall, Cameron's performance was a wash; it probably reinvigorated the Tory base but did not do enough to woo anyone on the fence or poach supporters from the other two parties. 55

• Biggest rhetorical flop of the night: The use of 'real people' anecdotes by all three candidates. This kind of folksy presentation is a staple of North American debates and psychological studies have shown that anecdotes have a more profound impact on audiences than systematic evidence. However, when Clegg, Brown, and Cameron deployed them, it seemed forced. Moreover, the anecdotes missed the mark by often being tangential to the issue being debated.

• Worst attempt at trying to appear 'normal': Cameron repeatedly stating that his son goes to a state school. Dave, you don't earn prol points for putting your child into the same system used by 93% of the population and then presenting it like some kind of heroic achievement.

• Most disgraceful consensus of the night: All three leaders showed a lack of creativity, imagination, and humanity in positioning immigration as a necessary evil imposed by EU rules that constitutes a security threat to the UK. It was disheartening to see the latent influences of UKIP, the BNP, and the Daily Mail coming through here.

• Biggest elephant in the room left unacknowledged by all three leaders: Why is it that public sector workers and the general public get targeted for massive cuts in wages and services in order to pay for the costs of mitigating the damage caused by the excessive risks taken by City bankers? How is that fair or equitable exactly?

Update: Post-debate polling indicates a big swing to the Lib Dems...

No Nukes Please, We're British!

The results of a recent poll of the British public taken by the Guardian/ICM show that 54% are in favour of complete nuclear disarmament rather than upgrading the UK's aging Trident nuclear weapons program. This is a marked shift from just three years ago when 51% backed renewal while 39% opposed it. What might explain this shift?

The costs of renewing Trident--estimated to be between £26-£76 billion over 20 years-- might have something to do with it, but in this era of massive bank bailouts, this expenditure is comparatively small potatoes. And there would also not appear to be any clear evidence of a socio-cultural shift in the UK towards becoming a more pacific polity.

More compelling reasons can be found by looking at the ways in which British officials have characterized the current geo-strategic context. The threat posed by nuclear weapons has been primarily framed in terms of proliferation. And the problem, we are told, is that those regimes seeking to develop a nuclear capability are defined by their irrationality, capriciousness, inconsistency, and willingness to die for their cause.

In other words, they cannot be deterred by appealing to the 'logics' of mutually assured destruction. By depicting these regimes in this fashion, officials undermine any argument about the utility of keeping a nuclear capability to deter rogue regimes. Thus, nuclear weapons are presented has having a very limited strategic value, unless officials are willing to admit that they have grossly mischaracterized these regimes.

Beyond the lack of strategic value, the focus on terrorism as the most pressing security concern facing the UK also undermines arguments for maintaining a nuclear capability. Nuclear weapons have zero tactical value in counter-terrorism operations, especially with the strong emphasis in the wake of 7/7 on domestic terrorism. Thus, if the threat is terrorism, and we are always told that not enough resources are being dedicated to fighting terrorism, why commit billions of pounds to a program that does nothing to contribute to the cause?

Finally, we are now two decades into the post-Cold War era and conflicts--both completed and ongoing-- like Kosovo, the DRC, and Sierra Leone are being defined as complex emergencies in which various economic, humanitarian, environmental and political dynamics contribute to patterns of violence. Once again, a nuclear weapons capability has zero strategic and tactical value in addressing these issues.

With the UK--for better or for worse--taking an active role in trying to resolve such conflicts and--as Afghanistan has shown-- taking an increasingly higher level of casualties in part because of poor and/or unsuitable equipment, a nuclear weapons program provides little value for money. If Afghanistan is as geopolitically important to the UK as British security officials claim, why divert scarce resources away from reaching key objectives in the region?

Therefore, within this discursive context of threat construction, the opposition to Trident renewal could be an indication that the British public has actually listened to the ways in which members of the government and military establishment have represented danger over the past decade. And they've made a decision that the sums of fear just don't add up.

Image credit: Steve Punter