Despairing of the triviality of our politics? Blame central bankers

It’s never a good idea to sneer at the voters

There’s something painfully unglamorous about British politics.

The French get a cheeky chappie champagne socialist, marauding les boulevards like a latter-day Benny Hill on a Vespa, looking for l’amour.

We get Twit-van-gate.

Of course, each story is entertaining in its own way. But given the problems that both the French and British economies are facing, it’s also quite depressing that our politics is dominated by trivia and non-entities.

There’s a reason for that. Quantitative easing hasn’t just devalued the currency…

Britain is in dire straits. So why is our politics so poor?

In case you missed it, Britain’s biggest political story last week was that a Labour MP resigned after taking a picture of a house in Rochester, with a white van on the drive and England flags plastering the windows.

She stuck it up on Twitter. She didn’t caption it. But steeped as we all are in the nuances of the great British class system, we all knew what she meant.

It’s never good form to sneer at the voters. It’s particularly bad form when most of your party’s sales pitch is based on arguing that the other lot are the toffs and the snobs, whereas you’re intensely comfortable with the salt of the earth and the man on the street.

Thing is, regardless of your view on the rights and wrongs here, it is all a bit of a distraction.

As Anatole Kaletsky pointed out on Reuters the other day, Britain is walking on incredibly thin ice. Everyone has seen us as a safe haven from the chaos in continental Europe. And London – the global financial capital – in particular, has benefited from offering a warm welcome to the wealth of rich citizens in unstable regimes across the world.

But that might not survive the election in May. It’s highly likely that we’ll see another coalition. Only this one may be even more of a shock than the Conservative/LibDem combo we ended up with last time. Who knows what rainbow of conflicting interests we might be stuck with?

And all this is happening at a time when Britain’s economic backdrop is still precarious, to put it gently. Whoever wins is going to have to do more tax-raising and spending-cutting if they are to have any hope of reducing our annual overspend, let alone the national debt.

So given the potentially dire straits we’re facing, why is our politics so lacking?

I think it boils down to this: our politicians – the people we vote for – have delegated their most important powers to other entities, none of which we vote for.

Recent history suggests that Britons vote largely on their perception of the economy. But the person with the most obvious influence over that right now is Mark Carney, governor of the Bank of England. Interest rates affect the interest on your savings, the cost of your mortgage, your day-to-day living standards.

It doesn’t matter if Nick or Ed or Dave or Nicola or Nige get into power. Mr Carney is still going to be holding the interest rate lever. You are powerless to affect that. You can say the same for Europe and to an extent for the US too.

And if you feel powerless, the first thing you want to do is to wrestle that power back. Hence the rise in nationalist parties of all stripes – from the SNP to the Front National to UKIP, they’re all born of the same impulse and frustrations.

And as a result we end up with a focus on populist distractions like immigration, with each party trying to out-lie the other in terms of tough talking.

Japan is taking democracy seriously

Is there a better way to do things?

Perhaps a little surprisingly (given that they’re practically a one-party state), the Japanese might be the ones who have got this most right.

It’s been pretty clear from the start that Japan’s current bout of near-reckless monetary policy has been driven by prime minister Shinzo Abe, rather than the Bank of Japan (BoJ) itself.

Abe was elected on a platform that included a promise of money printing. It was pretty clear that if the BoJ didn’t want to go along with it, he’d find some central bankers who would.

And now he’s called a snap election to consolidate his already secure lead. That’s linked to his decision to put off raising the consumption tax again.

In short, Japan’s current economic policy is visibly driven by the prime minister – the guy everyone voted for – not a distant civil service or a panel of technocrats.

It doesn’t necessarily mean that his plans will be successful. But it does hopefully make for more political stability than the alternative. And it’s one other reason that we’re still very keen on Japan as an investment.

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