Political risk analysts, like most humans, have a terrible time looking at themselves in the mirror. I remember at one seminar of the prestigious Council on Foreign Relations, we were asked to list the top three political risks in the world. Dutifully, the usual suspects were called upon: global terrorism, Putin’s adventurism, financial meltdown, and the rise of China. I, without irony, mentioned the United States of America. Amused annoyance greeted me; what was the trouble-making kid up to now?
I argued, if the United States is in real structural trouble – as I believed then and still believe now to be the case – so is the planet, for if the US sneezes the world catches a cold. At the time both political parties’ singular inability to be serious about entitlement reform (to this day neither is) seemed to me to be indicative of a much larger problem; political sclerosis was beginning to paralyse the American body politic.
Certainly everything that has happened in the poisonous 2016 presidential election merely confirms this startling thesis, providing a bolt of lightning to make clear to all but the most gormless analyst that America is in the throes of a political meltdown not seen in decades.
While the car-crash fascination of Donald Trump has gripped both national and international attention, it is frankly the Democratic race between the overly-entitled Hillary Clinton and loveable socialist curmudgeon Bernie Sanders that is even more indicative of the issue.
For the problem at the moment is that demagogues in both Europe and America are very often right in their assessments of a self-serving, smug, arrogant, incompetent elite who have never been brought to book for their idiotic failures which led to the Lehman crisis. Almost universally, however, their policy prescriptions following on from this correct assessment are fanciful at best, and downright dangerous at worst.
Sanders is emblematic of this trend. There has been almost no media vetting of his undergraduate views of the economy, as his economic illiteracy has been given a gigantic pass by the press, because it is just so much fun to hear someone rightfully rail against an American financial elite that has all too often walked between the raindrops.
It is a sign of how weak the Democratic Party’s political elite is that an ageing socialist (in America it is more likely the Loch Ness Monster will be elected President) from Vermont, with a deeply undistinguished record of non-achievement in the Senate, has run the universally elite-approved frontrunner so close for so long. Barring an FBI indictment for her email shenanigans (still a possibility), Clinton will hang on and win the nomination. But the Sanders phenomenon is the canary in the coal mine of how far the Democratic Party has strayed from the grown up economic policies of Bill Clinton.
What is there left to say about the Republican Party, except that Trump is right about one big thing? This is an elite that is getting the comeuppance it so richly deserves. Utterly oblivious to both poverty and the economically stagnant wages of the lower middle class for decades (with certain honourable exceptions, such as the current speaker of the House, Paul Ryan), the GOP elite lost its way, forgetting that its dogmas were there to serve the country, not to isolate themselves from it.
Free trade is a case in point. As everyone who regularly reads this column knows, I am an ardent free trader, both because enhanced trade tends to help all the countries involved (which is ideal for a status quo power like the US) and because it makes the daily lives of millions of consumers a little bit better.
But instead of making the very real argument as to how free trade benefits the world, the arrogant Republican elite acted as if this were self-evident, and only morons might be moved to disagree. Try telling that to someone who has lost their job as a result of a more open trading system.
The GOP elite reaped the whirlwind by forgetting that in a republic all policies must be argued for, with political links made to how they affect normal human beings. As with the Democrats, the Republican elite too has committed suicide.
This meltdown of both parties opting for fantasists instead of grown-ups is very dangerous for the world. For the problem at present isn’t the many little geopolitical fires raging across the planet; it is the lack of firemen. And worse, the fire station chief seems to be having a nervous breakdown.