As the new year approaches, the buyer’s remorse of the post-Brexit UK and the widespread anxieties of the pre-Trump US suggest that the clash between disruptive populism and established political elites is far from over. In both countries the voters sent the political incumbents a cri de coeur for change, mainly for an overhaul of globalisation, at least in its current starkly neoliberal form; but the chosen reformers have inspired so little confidence since their unexpected ascendance that the mounting contradictions of their proposed remedies look set to trigger a backlash sooner than they bargained for.
Both economies have responded to the new dispensation ambiguously. England’s preparations for a separation from Europe have deflated sterling and shaken the housing market, but the weaker pound has also sent stocks soaring into record territory. Likewise, shares in America’s five largest US defence contractors surged by an average of eight per cent in the week after Trump’s election, with certain banks experiencing a comparable boost. However, their optimism was tempered, when a tweet by the president-elect about Lockheed’s ”out of control” costs on one programme quickly wiped US$4 billion off the company’s valuation.
The challenges facing the British and American governments are considerable. Consider, for instance, the thorny question of bringing back vanished jobs to America’s rust belt. The US media made a great deal of Trump’s intervention with Carrier to keep 800 American jobs, but much of this widely touted triumph was a sham. Not only was Carrier bribed by tax concessions that were far larger than the income generated by the remaining jobs but, as the economist Paul Krugman noted shortly afterwards, “at the rate of one Carrier-size deal a week, it would take Mr Trump 30 years to save as many jobs as President Obama did with the auto bailout; it would take him a century to make up for the overall loss of manufacturing jobs just since 2000.” In fact, since 75,000 of America’s 145 million workforce lose their jobs every working day, the Carrier deal doesn’t even amount to a rounding error. Trump continues to make large gestures, often with little concern for their consequences, but he will presently discover that it takes more than public relations to Make America Great Again. Researchers at George Washington University found that 99 per cent of the US jobs jobs created since the 2008 recession have gone to employees with post-secondary education. They concluded that “The United States is unable to help people match their educational preparation with their career ambitions—not because it cannot be done but because it simply is not being done. All the information required to align postsecondary educational choices with careers is available, but unused.” This realignment of skills and jobs should be a golden opportunity for the new administration to deliver on its promises, except for the fact that Mr Trump’s vision of a technologically advanced manufacturing sector would most likely result in fewer jobs rather than creating new ones. Likewise, his willingness to expand the use of fracking, clean coal and other lightly regulated fossil fuel energy sources will push the already low price of oil down even further. Once such contradictions become evident in the states that supported him most ardently, what will the new president do?
In Britain, the May government does not face nearly as much pressure to deliver results, but it will feel less than reassured by the remarks of the incoming US commerce secretary, Wilbur Ross, who told a group of Cypriot financiers in June that Brexit was a “God-given opportunity” to take jobs away from the UK. As the Independent drily reports: “The billionaire businessman will be responsible for negotiating a free trade deal with the UK and his reported comments will raise concerns [that] the incoming US administration will seek to exploit Britain’s isolation following Brexit.”
Foreign policy challenges are arguably even harder. As Britain braces for a “hard” exit from the EU, it has become painfully aware of a thousand unforeseen bureaucratic complications in its decision to leave. Not only is the constitutionality of the departure unclear, but the government has repeatedly embarrassed itself by seeming completely unready for the protracted negotiations that such a complex economic decoupling will entail. Meanwhile, as Europe scrambles to decipher the new US president, it remains without a coherent plan to stem the flow of migrants towards its borders. Last year more than 3,500 drowned during the crossing and there were loud protests about the need for a humane immigration policy. This year, in the absence of such a policy 5,000 more people drowned. In the US, the appointment of a former Exxon executive as Secretary of State raises troubling questions about the likely drift of America’s stance in the Middle East, not to mention the Trump administration’s support of expanded Israeli settlements, its ambivalent stance on NATO, its warmth towards Putin’s Kremlin, and its cavalier flirtation with the prospect of a renewed arms race.
Individually, these signs of unreadiness would be cause for concern, collectively they all but ensure that the next year will be, in the words of the old Chinese curse, the start of “interesting times.”
