The UK Vote
The Year of Voting Recklessly, to borrow from Bret Stephens, continues.
As of this writing, the UK still does not have a government, although it looks like the Conservatives will be able to pull together a very thin majority with a “confidence and supply” agreement with the Democratic Unionist Party of Northern Ireland. The process has been delayed because the DUP representatives did not work on the Sabbath. Yes, they are that wacky.
I haven’t seen that much analysis on the reasons for the dismal showing of the Conservatives, particularly compared to the walkover that everyone expected. My television time has been reserved for the French Open. However, the dominant themes are summarized below.
Theresa May ran a dismal campaign. At her best, she is far from an inspired speaker. In this campaign, in the words of an excellent Bagehot editorial from the Economist entitled “The second eleven: The British political class is not up to the job,” she “tried to make the election all about herself and then demonstrated that there wasn’t much of a self to make it about.” She was widely condemned for failing to participate in a televised debate with the other candidates, making her look cowardly and arrogant. There was also a lot of resentment against the calling of the snap election, something that May swore she would not do. A video went viral in which an elderly woman complained about being dragged to the polls again.
Conversely, Jeremy Corbin, her Labour Party opponent, proved to be a surprisingly adept campaigner, which was all it took for many to ignore his flat-earth attachment to socialism (and the Marxism of one of his senior economic advisors); his previous support for the IRA, Hugo Chavez (an affection that he once shared with Bernie Sanders) and Hamas; and the whiffs of antisemitism about him and his party. It also allowed people to ignore, to quote the same Economist article, that “he has never run anything but his own mouth.” And the fact that, in a recent vote, over 75% of his fellow Labour MPs thought he was too daft to lead the party, not to mention the country.
Democracy is a wonderful thing, no?
Another factor was the manifestoes of both parties. I have already commented on the misstep of the Conservatives when they challenged the gerontocracy with their proposal that wealthy older people should pay more for their old-age care. Some libertarian commentators have suggested that the rest of the manifesto, which was surprisingly non-Thatcherite and statist, may have also cost the party votes. I would like to believe this, but I doubt it’s true. Among other things, where would these voters have gone?
The Labour Party manifesto, conversely, was well received. And why not? Free lunches aplenty were on offer. No university fees and a jubilee for student debt. Stronger unions. A large hike in the minimum wage. More feed for the sacred cow of English politics, the National Health Service. Re-nationalizing the railroads, water companies and the post office. More bread and more circus, all paid for by those nasty companies and rich people. Younger voters, who apparently did not read the chapter in their history books entitled “Why the UK was the Greece of the 1970s (but with Shitty Food),” lapped it up. Polls indicated that two-thirds of the 18-24 age group went for Fantasy Island. And they turned out in large numbers, probably realizing that snoozing meant losing in the Brexit vote.
There also appears to have been some pushback on Brexit, particularly the “hard Brexit” to which May appears to be heading with her oft-repeated mantra of “no deal is better than a bad deal.” As an article in the WSJ points out, a major factor in the vote was the swing to Labour in constituencies that voted against Brexit. This suggests that there was a large amount of anti-Brexit tactical voting. Some voters may have wanted to send a message to the Conservatives about Brexit; they may have been surprised by how many others had the same idea.
Where does this leave us?
I have long said that Brexit is not a done deal. This is by no means a prediction since Brexit remains by far the most likely outcome. Commitment to Brexit was in the manifestoes of both major parties, with the Liberal Democrats equivocating with a call for a second referendum once the terms are known. Although still a low-probability event, this election, along with the long-anticipated weakening of the UK economy, the difficulties of Brexiting and the hardening of the negotiating position of the EU, has to increase the odds. The clock is ticking on Article 50 and the disarray of the government, along with the very weak position of May (for whose head many Conservative MPs are already calling), makes a successful Brexit negotiation look less and less likely.
The other major takeaway from the election is the theme of the Economist article cited above. It turns out that the US is not the only major country serving up mediocrities for high political office. Corbyn makes Bernie Sanders look competent and ready to lead. May, for all of her faults, is still much better than the buffoonery and crass opportunism of Boris Johnson. Although I would have never said this as recently as three years ago, the UK political leadership has following the national football team to the bottom of the European rankings.
Meanwhile, there is a chance that the perpetual bottom dweller across The Channel is heading in the opposite direction…
Vive la Révolution!
The election of Emmanuel Macron in France was surprising, but not astonishing. He has an Obama-like charisma combined with an actual résumé, and the opposition, particularly after the self-destruction of François Fillion, was very weak. The fact that his cobbled-together party looks to win more seats in the parliament than any French leader since De Gaulle, conversely, certainly qualifies for the superlative. This is completely contrary to my expectations.
After taking over 32% in the fragmented first round of voting, Macron’s La République En Marche party is now projected to win 390 to 430 seats in the 577-seat National Assembly. The second largest party looks set to be the right-of-center Les Républicains. The Parti Socialiste of François Hollande appears to be swirling down the toilet bowl with him. The second round of voting takes place this weekend.
This means that there will be an overwhelming majority for economic reform in France, something the country desperately needs, particularly with its labor laws. Now, the question is: can the politicians actually govern? Reforms will certainly be strongly resisted by the unions and other cossetted groups, such as the farmers and students, and they will take to the streets having been drubbed in the voting booths. They have never been good losers.
This will be fascinating to watch. There is a chance that we are looking at a moment like Reagan’s firing of the striking air traffic controllers in 1981. If Macron has the nerve. And if the French populace, unlike so often in the past, finally realizes that its interests lie with the reformers and not with the squealing piggies whose privileges are finally being withdrawn.
If you are not following me on Twitter (@EconomicManBlog), here are some of the treats you have recently missed:
The Reason podcast entitled “The US Was Right to Withdraw From The Paris Climate Accord“ was excellent. This featured Bjorn Lomborg, a Danish climate scientist and leader of a think tank called the Copenhagen Consensus Center. Lomborg accepts the science on climate change, but then makes a very good case why the Paris Accord is still misguided. The podcast is longish (20 minutes) but worth the listen; Lomborg is a refreshingly rational voice in a debate dominated by hysteria from both sides. Just one of his many good observations: if green energy is fast becoming as economical as its proponents sometimes claim, then why is the world projected to spend $3 trillion on subsidies for it over the next 25 years (which probably doesn’t even include the cost of backdoor subsidies such as “net metering” tariffs)?
Oren Cass does a good job pointing out the absurdities of the Paris Accord, especially its self-imposed and unenforceable pledges. His favorite: Pakistan’s one-page pledge to “reduce its emissions after reaching peak levels to the extent possible.” This is not an obligation; it’s a definition. With strong commitments like these, it is not surprising that 186 nations signed up, particularly when a large number of them hoped to be on the receiving end of the $100 billion of annual redistribution from wealthy countries that was also committed (and which will also probably never materialize). In short, the Paris Accord is the type a virtue-signalling farce that was a hallmark of the Obama administration.
Part of my childhood died last week. Yes, Adam West, who played the Batman of my youth, passed on to that great Bat Cave in the Sky at the age of 88. I didn’t realize how drolly funny he was until I watched this episode of Lookwell, a self-mocking TV show that apparently never got off the ground. I have to believe that this partly inspired the recent excellent British comedy Mindhorn.
Conversely, my Twitter followers got a thumbs down on Wonder Woman. This got strong reviews but was frankly awful. Dopey plot, tedious dialogue, terrible CGI, predictable gags, dark and dreary cinematography. Shows that, when a movie has a large PC tailwind, reviews should be approached with a great deal of skepticism.
There was also a heads up on Jonah Goldberg from National Review. I hadn’t been following him, but if this is representative of his work, I am now a fanboy. His observation that James Comey is more Lord Varys than Ned Stark in the King’s Landing of Washington is deadly. My favorite line: “I’ve long said [Comey’s] much too interested in protecting his reputation as a Boy Scout to actually be one.”
In a cheeky little tweet, I wondered when Theresa May was going to take full responsibility for the poor electoral showing against an incompetent opponent by blaming the Russians, the DNC, James Comey and misogyny. May has never once played the gender card during the election or in her current shame. I hope that you are taking notes, Hillary.
Finally, there is this incredibly sweet and uplifting story sent by my mother. This is a reminder that there is some simple, unalloyed goodness in this world, even if you have to go to Tasmania to find it.
From June 16 to about July 8, I will be completely cut off from the modern world. I will try to put out another post before I leave, but in any case, there will be nothing during this period. I will also not be able to respond to any comments that are made, although I will try to get back on these when I return.
Weybridge, United Kingdom
 A “confidence and supply” agreement is short of a formal coalition. Basically, the DUP is pledging to support the Conservatives in confidence and the twice-yearly budget votes, which is the minimum a government needs to stay in power. Outside of these two case, May will not be guaranteed a majority in Parliament.
 This is a reference to cricket. Equivalent to “the second team” in Americanese.
 English for “platforms.”
 The LibDems had a very poor showing in the election, although much of this can be laid at the feet of their leader, Tim Farron, who (to quote the Economist again) “looked more like a schoolboy playing the part of a politician in an end-of-term play than a potential prime minister.”
 Many commentators, myself included, have been surprised by the strength of the post-Brexit UK economy. This has been almost entirely driven by strong personal consumption, which is now tailing off, in part due to the fall in the English pound producing higher inflation and eroding real incomes. Investment, however, has been unsurprisingly weak in the face of Brexit uncertainties and this is now starting to dominate the economic picture.
 For example, the Financial Times has done a study that indicates that the UK will need to renegotiate at least 759 treaties with 168 countries. The staff of the Foreign Office responsible for these negotiations has atrophied during EU membership. As I have said before, path dependency matters: voting to leave the EU is not the same as voting not to enter it.
 The EU is now talking about a “divorce bill” of up to EUR 100 billion. The EU is also still insisting on making significant progress on the divorce discussion before taking up the issue of subsequent trading relations.
 “Soccer” for my American readers.