'The economy, stupid': rarely have three words been so debased by overuse as the campaign message coined by James Carville, Bill Clinton’s chief strategist in the 1992 US presidential race; a slogan which has been the inspiration of countless headlines in the past three decades.
Tomorrow, Rishi Sunak and Jeremy Hunt will be hoping that Carville’s maxim does indeed hold true — that, in politics, the economy is what matters most — as the Chancellor delivers his Autumn Statement. After a week of mayhem, following the Supreme Court’s rejection of the government’s Rwanda policy, Downing Street badly needs a clear win.
By definition, what Hunt has to say about personal and business tax rates, benefit rules and pension reform will be financially consequential for millions of people. But even if the Chancellor pulls a rabbit out of the hat, he absolutely cannot assume that a significant political dividend will follow.
For evidence that this is so, Hunt need only look across the Atlantic where Joe Biden’s 81st birthday yesterday coincided with his lowest approval ratings to date. By any objective standard, the US president’s economic strategy has been a success, marked by the Inflation Reduction Act, $1 trillion Infrastructure legislation, low unemployment, falling inflation and encouraging post-Covid levels of growth.
When voters watch Sunak interviewing Elon Musk they see a dramatisation of the system’s serious unfairness
Yet none of this has translated into political advantage. Poll after poll has shown that US voters remain generally pessimistic about the economy and resolutely unwilling to give Biden credit for what improvements they do acknowledge in their standard of living. The formerly reliable correlation between economic success and political popularity, in other words, has been severed.
To understand why this is so, one only has to reflect upon how much has changed since Carville came up with his famous axiom. In 1992, the world was still giddy with excitement at the victory of capitalism in the Cold War.
But that confidence was shattered by the 2008-09 financial crisis and its aftermath, which suggested that the system was not only a deranged casino but structurally rigged to favour the rich over the poor. What, indeed, is “the economy” in 2023? The traditional indicators — inflation, mortgage rates, employment levels — now tell only half the story, as the nature of work has been revolutionised and so many employees barely scratch out a living in the gig economy.
The proliferation of food banks, fuel banks and baby banks (providing essentials for infants) reflects intolerable levels of inequality. When voters watch Sunak interviewing Elon Musk, they no longer see two role models, symbols of aspiration, but a dramatisation of the system’s fundamental unfairness.
This is emphatically not the old-fashioned “politics of envy”. Rather, it reflects a collapse of trust not only in basic economic justice but in the principal institutions upon which society is founded — from the political system, via the media, to the rule of law itself. In this respect, as in so many others, the pandemic has left deep and under-acknowledged psychological scars, compounding the sense of insecurity that has so altered the culture of politics and continues to fuel populism around the world.
Inasmuch as voters are watching the Covid inquiry, their worst suspicions — that those that govern them are narcissistic amateurs — will only be confirmed. Polarisation has also played its corrosive part, discouraging political and social tribes from giving credit to anyone outside their particular stockade for anything, however appealingly it is presented.
Hunt could announce a single flat-rate tax of 10 per cent and a 50 per cent increase in all benefits tomorrow — and at least half the country would not believe a word of it. This is not to say, of course, that they would not welcome the extra money in their pockets; simply that they would be almost entirely untroubled by gratitude to the PM and Chancellor and their “long-term decisions for a brighter future”.
This is the fiendishly adverse context in which 21st-century chancellors deliver their autumn statements and budgets: one in which voters no longer expect the measures announced to improve their lives, or to be implemented at all.
One might feel a batsqueak of sympathy for the governing party, were it not for fact that it has done so much in the past seven years to nurture the febrile populism underpinning the rupture between public policy and public sentiment.
So good luck tomorrow, Chancellor. And welcome to the new world, where the contents of an autumn statement or a Budget box held aloft, however radical, will barely be registered in the nation’s political psyche.
Matthew d’Ancona is a columnist