Economic performance makes or breaks a re-election campaign. In the absence of a scandal (and sometimes in spite of one) strong economic performance will guarantee a government’s re-election. The poor economic situation allowed Bill Clinton to beat incumbent George H. W. Bush in 1992, and then 4 years later the buoyant economic circumstances allowed Clinton to overcome the Monica Lewinski scandal to be re-elected. Economic performance allowed Blair to win three elections and Brown to win zero. Now with a general election almost upon us, the economy is centre stage again.
Economic "leadership" is seen as a winning trait in a perspective Prime minister and with inequality up, wages down, homes too expensive for most people to afford, trouble in the Euro-zone and another financial crash on the horizon there has never been more need for economic leadership.
However, economic leadership is not what we are being offered. Cameron offers more of the same from a future Tory government, more protection for big business, more cuts to public services, more blaming of the poor for all our economic problems. I doubt a future Tory government will raise wages, living standards or reduce inequality. This is mainly because they refuse to legislate to achieve these aims; Cameron prefers to ask business leaders nicely to do these things, so that they can easily ignore their social responsibilities.
Defining economic success is half of the election battle. Cameron would prefer it to be economic growth figures, as GDP is up and the economy is larger now than it was before the crash. Labour are viewed as weak on growth, mainly as a hangover from the 2010 general election, when Cameron was able to blame complex global macro-economic problems on the simple fact that Labour overspent. Labour would prefer economic success to be defined as growth in wages and living standards, which have remained flat since the Tories took office.
In terms of policy, Labour offer some economic leadership. Miliband's plan is to promote responsible capitalism, which is neo-liberalism with government intervention to prevent the worst inequalities and abuses. However, this is not leadership or putting forward an alternative to the dominant economic narrative of neo-liberalism. This is a slightly different variant on the narrative Thatcher established in the 1980s and has essentially remained unchallenged since.
Labour's plan is to exploit peoples’ fear. Fear that things will get worse, fear that wages will not rise, fear that ordinary people will not feel the recovery, fear that your children will be worse off than you are. This is a bad move as Labour achieved large landslides when they captured a spirit of optimism. This was the case in 1945 with the welfare state, in 1966 with the “white heat of technology” and in 1997 with New Labour. Appealing to our aspirations works better for Labour, not our fears.
Politicians from the main parties are appealing to our fears instead of our aspirations; this has led to voters being frightened about the future and unsure who offers hope. UKIP aims to exploit voters’ fear that immigration and the EU will drag our economy under, Lib Dems that the two main parties will unleash widespread suffering without them as a coalition partner, Greens that our economy will be wrecked by environmental disasters, the SNP that a collapsing English economy will sink Scotland as well.
If all economic indicators were improving then the government would be doing better in opinion polls. Let us not forgot that the Tories led us into a double-dip, almost triple-dip, recession. The economy is growing but people who are not already very wealthy are not feeling better off, this is a failure of economic policy.
If Labour were offering an alternative narrative then they would be doing better in the polls as well. By playing along to the Tory's narrative of austerity, instead of offering one of their own, they are playing a losing game. 2010 was not long ago and fighting the debates from that election again will not bring about a Labour victory. The lack of a counter narrative is playing into the hands of the Tories.
No one offers any vision or leadership on the economy, only fear. Economic fear has gripped us as a nation despite the return of growth. We are frightened about unemployment, uncertainty, anti-business agendas, rabid capitalism, wages, inflation, deflation, the cost of the NHS, the lack of an NHS, the cost of immigration, too many pensioners, house prices falling, houses being too expensive, anti-EU rhetoric, pro-EU rhetoric and our shadows.
The climate of fear and uncertainty that surrounds our economic future is a product of the lack of leadership from politicians on the economy. Politician of all stripes would rather let the market and unaccountable large companies control our economic future, and the result has been inequality, economic instability and a public who worries that control of the economy is out of their hands. This has led to a view that ordinary's people's concerns are not taken into account when economic decisions are made and now most people are frightened about their future.
In the 1970s economic uncertainty, fear about the future and belief that the economy was out of our control led to strong leadership from Margret Thatcher and a radical new vision for our economy. Now those views have been allowed to run to their logical conclusion and people are concerned about the state of the economy. Again we need bold leadership from politicians and a new economic narrative to change direction and regain people's faith in the economy and their own futures.
We need a new economic narrative to replace the neo-liberal mantra, which has led us to this place of fear and confusion. We need a narrative that makes us optimistic about our future and feel in control our own economic wellbeing, not at the whim of free-market forces or governments that looks after the financial futures of large companies instead of its own citizens.
The fact that both main parties have the same economic narrative is the reason for the political deadlock. As the economy is the most important issue to most voters, presenting a new popular economic narrative would be a huge vote winner for a party that did so. It was an adviser of Clinton's who coined the phrase "it's the economy, stupid" to describe how election campaigns turn on this issue. Both main parties should bear this in mind when they are considering repeating the tired economic clichés voters are disillusioned with, or showing some leadership on this issue and presenting a new narrative.