OK, "it's the economy, stupid". But what's the story?

Happy days were here again.  Now the global economy is heading south.  For the first time in years, politics is about money, or lack of it.   But the way that politicians and voters are responding has  raised some interesting  questions.

Take the US elections.  The credit crunch started over there and is biting.  So it’s very odd that the economy has not been a big factor in the primary campaign. 

Here’s an even bigger mystery.  On the Democratic side, Barack Obama is in the lead, largely because he is telling a compelling, personal story based on hope and a promise of change. He is often criticised, however, for having too few specific policies. 

On the economy, it’s a different matter. Look what John Hellemann of New York magazine has to say about Obama’s campaign:

"Now, the knock on Obama for months has been that he’s guilty of a maddening policy vagueness. That whereas Clinton has trafficked in specificity and substance, he’s stuck to vaporous theme and inspiration. But Obama’s recent economic shtick has been anything but nebulous. In fact, it has been nearly as laundry-listy as Hillary’s patented spiel. The proposals pile up, the numbers tumble out—$60 billion for infrastructure, $80 billion for middle-class tax cuts, $150 billion for green technologies—and the mind begins to reel.

“Something is better than nothing, to be sure, and many of Obama’s plans strike me as perfectly sensible. What’s missing, however, is an overriding theory of the case—a powerful narrative that both frames and makes sense of the changes whipping through the economy like a Bengali typhoon. Obama may not need such a narrative to win the Democratic nomination. But without one, he’ll find himself fighting in the fall without the gnarliest club at his disposal for the bludgeoning of John McCain—and for beating back Republican charges that, just below the surface, he’s a reflexive, old-school liberal."

Senator Obama has often fallen back on protectionist political rhetoric. Hellemann says that he should drop that and instead use an updated version of the economic narrative that worked for Bill Clinton in 1992. 

“What everyone remembers about Bill Clinton’s race in 1992, of course, is that he focused on the economy “like a laser beam,” as he put it. They remember “It’s the economy, stupid.” What they often forget is how cohesive, compelling, and even daring was the story he told about the source of the insecurity so many voters were feeling: the story of an economy in the throes of a profound, irreversible structural transformation, driven by technology and globalization. Clinton made no bones about the pain all this would cause. He didn’t hesitate to inform workers in old-line industries that many of the jobs that had disappeared were never coming back. But Clinton also laid out an ambitious agenda to upgrade the nation’s store of human capital, enabling anyone willing to make the effort to “make change their friend.”

“. . . Though it’s easy (and fun!) to bash Beijing and Gucci Gulch, they pale in importance beside other forces—information technology primary among them—in affecting the prosperity of working- and middle-class voters.

“For Obama, the challenge, which Clinton met so effectively in 1992, is to fashion a narrative that acknowledges and even embraces those forces and then describes how they can be channeled.”

As a liberal and a romantic (in thinking that politics should be informed by ideas and at least some intellectual honesty), I’ll buy that. But let’s not forget that in 1992 Bill Clinton had a populist story too. The core of it was: “I’m tired of seeing the people who work hard and play by the rules get the shaft.”

Back to this side of the pond. Tom McNally argues in Liberal Democrat News this week that the party should move the economy centre stage. He calls for a political appeal rooted in our commitment to fair taxes and genuine social mobility. 

This is, of course, what Vince Cable is saying, along with a lot more on fiscal and monetary policy, which has given the Lib Dems a new credibility on economic policy. I would add two caveats.  First, a platform of “making change our friend”, is no less valid than it was in the mid-1990s, when both Labour and the Liberal Democrats adapted Bill Clinton’s themes into pledges of greater investment in education. 

Second, whilst it is the basis of a sound, liberal policy platform, what Vince Cable and Tom McNally are putting forward is not a political story, with good and bad characters, a narrative flow and, crucially, a central myth and morality. To help project that, we need a new, fit-for-Britain version of Bill Clinton’s “feel your pain” rhetoric.

One such story is starting to be told but the wrong politician is telling it. Speaking at the weekend about the abolition of the 10p tax rate, David Cameron said.

"[Traditional Labour supporters] have been let down by Labour and those are the people I want to stand up for."

"People on low pay, families who struggle often to make ends meet, who have seen the cost of living rising and have seen their tax bill go up under Labour, those people who thought 'The Labour Party is for me'. I think they feel desperately let down.

"What I want to say to people like that is we are there for you."

Yes, it’s hypocritical, cynical and opportunistic.  For all that, there is an uncomfortable truth: Labour’s perfect political storm is helping the Tories to find their narratives.  Slowly, but surely.