What are Donald Trump’s chances in November?

Like many Britons who follow politics, I follow US politics enthusiastically. But I don’t like to comment so much on it here. I have no special connection to the US zeitgeist,and it seems to be a bit rude to comment on somebody else’s politics. But we can’t help but be affected by the US, so I feel I must comment from time to time. The big question is whether Donald Trump will be reelected as President this November.

At the start of the year Mr Trump’s position looked strong. The economy was doing well, he was delivering to his base, and all of his potential Democratic opponents had limitations and weaknesses. He easily saw off impeachment, successfully portraying it as a manifestation of partisan politics. Mr Trump’s divisive style never made him a shoo-in in this year’s election, but he was the betting favourite. But then things started to go wrong. The Democrats resolved their selection race with unexpected speed, in favour of Joe Biden, the candidate, apparently, that Mr Trump most feared. And then came the Coronavirus epidemic, which saw Mr Trump conspicuously flailing. This was followed by the Black Lives Matter explosion after the murder of George Floyd, and more presidential flailing. Mr Biden has a steady and growing poll lead both nationally and in the battleground states, a lead that is bigger and steadier than Hillary Clinton achieved at this stage in 2016. But we have over four months to go, and a lot can happen.

To win, what Mr Trump needs to do is to motivate his base, demotivate the Democrats’ base and win over independent voters. The first part of this is going well enough for him. Mr Trump’s base has two main components: his fanbase and anti-liberals. The fanbase consists of less well-educated white people, who have felt excluded by political elites for decades. Mr Trump speaks their language and expresses what they feel. They experience a sort of euphoria when Mr Trump expresses their values from the top of the political system; they are happy to disregard incompetence for the sheer joy of seeing one their own in charge. And with Mr Trump, unlike many other populists, what you see is what you get; there is no guile about him. This increases the bond of trust. The anti-liberals, on the other hand, are not admirers of Mr Trump personally, but they love him because because he is a bastion against the advance of liberal values. They are passionate about such things as stopping abortion and maintaining complete freedom over the ownership of firearms. They don’t believe in a strong Federal state, apart from having strong armed forces, so they aren’t bothered by Mr Trump’s evident incompetence. This group is diverse, but religious groups are prominent. They also include many business owners who dislike government regulation and taxes, and seek opportunities for cosy deals. For this group Mr Trump has delivered on his promises, most notably in the appointment of Supreme Court (and other) justices, but also with tax cuts for companies and the neutering of federal regulation; he has also held the line against gun law reform, in spite of a spate of mass shootings. For the anti-liberals the Democrats pose as great a threat as ever, and there is no sign that their enthusiasm for reelecting Donald Trump is fading. Doubtless Mr Trump’s partisan approach to the Covid crisis and the BLM uprising helps motivate this group too. They are on fire.

How about the Democrats’ base? Their main weakness is their candidate. He’s been around for a long time, and there is lot of grey in his record, not least around claims of sexual harassment. Before the BLM explosion there were signs that younger voters were becoming demotivated by all the questions being raised by his record. But Mr Trump clearly doesn’t get why people are so angry about the Floyd murder. To him this is just an isolated crime, and not evidence of a systemic failure. He doesn’t feel the pain of decades of being fobbed off with talk of progress. In fact his behaviour has given succour to the forces of darkness. He has thus become a channel for anger across the Democrats’ base, and has managed to fire them up.

And how about independents? This is a harder group for people on this side of the Atlantic to read. Mr Trump picked up many independents in 2016, because his campaign to undermine Mrs Clinton’s credibility was so successful, and her campaign to reassure them was so weak. Mr Trump fitted the American model of a successful and admirable businessman much better than the European one, so people there were prepared to give him the benefit of the doubt, while most Europeans had written him off as a nutcase. It is probably this group that is gradually coming over to Mr Biden as Mr Trump showcases his incompetence. But they are doubtless wary of the Democrats too.

So what next? The campaign hasn’t really got started yet. We know that Mr Trump will try to make it about Mr Biden and not himself, by hammering on his weaknesses. He already refers to him as “Sleepy Joe”. But this is surely not as effective as “Crooked Hillary”‘; voters are tired of hyperactive and hyper partisan politics; “sleepy” doesn’t sound so bad. But there are plenty of cracks in Mr Biden’s candidacy, so the attack could work. A further issue is whether the need to keep his base fired up moves Mr Biden into tricky policy territory. The demand to “defund” the police may not be as bad as it sounds, but it sounds like an invitation to criminals.

A big question hangs over the future course of the epidemic. Mr Trump is playing on the idea that the threat was exaggerated and lockdown measures were overdone (by Democrat governors and mayors), and he is supporting the lifting of the lockdown, even though many think this is premature. This builds on the different experiences of the epidemic across America. It has been devastating in big, crowded cities, such as New York and New Orleans, but much less so in less densely populated places. By and large Republican voters’ experience has been much less severe than that of Democrats. So if the disease retreats even as the lockdown is removed, and the economy bounces back, the Republicans will claim vindication while the pain of many cities will be forgotten as they will vote Democrat anyway. And the administration’s financial management of the crisis has been perfectly competent, largely because Mr Trump has been happy to leave that to others, and not disrupt it.

On the other hand, the disease could boomerang, hitting Republican areas hard, and disrupting the economic recovery. This is particularly likely as Autumn approaches and the weather cools: i.e. just as America approaches the vote. This could create a perfect storm for the Republicans. Mr Trump’s plan to hold mass election rallies in defiance of social distancing and mask-wearing looks especially risky.

And that points to something that I think will be the deciding issue against Mr Trump. He has become very dependent on his own judgement. When he was first elected, it was expected by many that he would surround himself with competent people, and let them do most of the work. And that seemed to be what was happening, with the recruitment of many generals to his administration, and with Steve Bannon advising on political strategy. But Mr Trump hates to be managed and he has replaced almost everybody with more compliant people who will go along with his madnesses, with the interesting exceptions of the Treasury and the Federal Reserve. This has made Mr Trump much more likely to make mistakes. Mr Biden, on the other hand, while gaffe-prone, surely knows how to ask for and accept advice.

But four months is an eternity in this crazy year.

Has Donald Trump made a serious mistake?

I was astonished a week ago when the US President, Donald Trump, launched a Twitter attack on Democrat Congresswomen, telling them to “go back to where they came from”. My first reaction was that he had lost the plot. Since then he has doubled down on this attack, incorporating it into a central theme of his campaigning. I have read and heard quite a number of comments on this from neutral and unsympathetic commentators. They all say that this is a clever strategy by the President, and makes life for the Democrats more difficult. This view is so widely held that I am compelled to challenge it. Mr Trump has blundered and is compounding his mistake.

Why is this comment so shocking? Rather too much hot air is being expended on whether or not it is racist or merely xenophobic. This type of comment is a favourite line of attack by racists, and can be taken to shocking extremes, as we see with the Burmese attack on the Rohingyas – an ethnic group that has lived in the country for many generations, but whom ethnic Burmese regard as being “from” Bengal. But you don’t have to be ethnically separate in order for people to think that you aren’t really “from here” and that your home is somewhere else, even if it isn’t. Mr Trump’s supporters don’t regard themselves as being racist, since they don’t think that it is ethnicity that they are attacking. But it really doesn’t make much difference what name you call it: it touches a very raw nerve on the part of anybody of immigrant stock. It says that however hard you try, you are not accepted as belonging. It says that the accuser is making no effort at all to be inclusive. It is particularly shocking in a country that is founded on immigration. No serious British politician would say such a thing intentionally (although I would not put it past The Brexit Party’s Nigel Farage, now that Mr Trump has blazed the trail).

Why do so many commentators think Mr Trump is being clever? First they say that it fires up his core supporters. That is clearly true. They are the type of people who think that it is a perfectly fair thing to say about somebody from a first or second generation immigrant background whom they disagree with, and they adore the way Mr Trump flouts the rules of political correctness. But Mr Trump needs more than his core support to win. In 2016 he persuaded many others that he stood for a fresh start against an under-performing political establishment. Stoking up fear and loathing does not get through to these voters.

The second thing that the commentators are saying is that the four congresswomen at the heart of Mr Trump’s assault are to the left of the Democrats and that by drawing attention to them he will put centrist voters off the party. But Mr Trump is drawing more attention to their ethnicity than he is to their political views with his “go home” attacks. He is attacking their views too, of course: I heard on the radio part of Mr Trump’s recent campaign rally implying that one of them was an Al-Qaeda supporter, inciting chants of “send her home”. Perhaps there is a parallel with his “lock her up” attacks on his 2016 opponent Hillary Clinton, but this served to reinforce his claim that there was something dodgy about her, rather than distract from it. Once again, it’s a great way to fire up the base, but it is far from obvious that the attack will be effective beyond that.

Meanwhile, consider the damage that he is doing to his own and his party’s standing. His attack could not be better targeted to anger or worry voters of Latino or Asian background, and their friends. The picture may be a bit more complicated with black voters, but the racist undercurrent won’t be lost on them either. Mr Trump is crafting his appeal to white, less educated and older voters, demographic groups that are all in decline (if you take the age criterion as being defined by a particular birth date, which seems applicable in this case). He is doing so at the cost of winding up everybody else. This is a strategically disastrous course for his Republican party, recalling the attack by that party on Latinos in the 1990s in California, which has proved catastrophic for them. The Presidential and Congressional elections of 2020 are more about tactics that strategy – but it is hard to see how the Republicans can do well without at least apathy amongst better-educated, younger or non-white voters. Stirring them up will make that harder.

A final line of defence for Mr Trump is that the attack is a “dead cat” – a tactic to distract attention from something that is more profoundly damaging. But there is no imminent election: it is hard to see what he is trying to distract people from and why it should be now.

Of course Mr Trump is not to be underestimated. In 2016 he showed a real mastery of the art of creating doubts about his opponents. He can point to enough success in his term to say that he has proved sceptics wrong: in many cases the disastrous nature of his policies will only be evident after 2020. His robust attitude to America’s trading partners, especially China, draws praise; the economy seems to be doing well enough to boost wages; he has made conservative appointments to the judiciary, which appeals to a sizeable chunk of the electorate. But the xenophobia takes voters who might be impressed by all this to a different place. He has not made his reelection impossible, but he has surely made it harder.

Some commentators suggest that his best chance of success is if the Democrats select a candidate from the left of the party. But after this episode one wonders whether amongst Mr Trump’s many remarkable achievements will be making a candidate from the left electable.

Liberals still don’t get the Trump phenomenon. He is not in danger

To judge from the headlines in the liberal press, or liberal commentators on the BBC, you would think Donald Trump’s presidency in the US was on its last legs. This follows the conviction yesterday of two of his (formerly) close advisers, and his being implicated by one of them in an illegal pay-off. But these commentators have failed to understand how the Trump phenomenon has rewritten the rules of US politics. Provided he maintains his health, Mr Trump will surely last until the end of his term in 2020. And if his liberal opponents continue to underestimate him, he could well win a second term.

The first point to make is that Mr Trump is utterly shameless. He is not the least bit embarrassed by anything that he has done. Call this narcissism if you like, but he will fight on. The second point is that his base of support both remains solid, and maintains a grip on the Republican party.

To his base, Mr Trump is the man who has delivered. Evangelicals have their conservative judges. Business leaders have their tax cuts and roll-back of tiresome regulations. Conservatives everywhere are enjoying are enjoying the rout of liberal values: it feels like fresh air. And the bad behaviour? That is utterly unsurprising; they knew the sort of man they were taking on. So long as he is doing the job of battering ram, they will forgive everything. Corruption is something that happens to liberals, in their eyes, and not to politicians on their own side. Indeed in they seem to think that corruption is less about illegal payoffs and more about the process of political compromise with people who are not like them.

So neither Mr Trump nor his base will be shaken by recent events. Legally the President looks secure too. There is debate as to whether it is possible to indict a sitting president with a crime – but if that came to be tested the Supreme Court has shown no appetite to challenge Republicans on anything important. It is unlikely that the special prosecutor, Robert Mueller, will even try. Everybody else in Trumpland is either dispensable or Mr Trump can use his powers of pardon. There is pretty much nothing Mr Trump would not do rather than admit defeat.

Which leaves the danger of impeachment, which is essentially a political process. It is looking likely that the Democrats will take control of the House of Representatives in the mid-term elections in November. That would allow impeachment to proceed. If there were grounds to do so against Bill Clinton in the 1990s, there will be more than enough against Mr Trump. But success depends on the votes of two-thirds of the Senate. Which means that half or more Republican Senators will have to turn against him. Given Mr Trump’s hold on the party grassroots, and his ability to undermine the credibility of any given opponent by a constant process of smearing, he looks secure. He will paint the impeachment as a politically tainted process, and not without a degree of justice. This is politics, and Mr Trump has proved to be America’s most effective politician.

The problem for liberals is that they persist in judging Mr Trump and his supporters by their own standards. Mr Trump’s behaviour would kill a liberal politician’s career. But Mr Trump does not need liberal votes. Instead he is playing an altogether different game: the politics of emotion, victimhood and identity. It is something liberals really don’t get.

But Donald Trump is politically vulnerable. His base is as loyal as ever, but it is a minority. He is making little attempt to win over anybody else: indeed he enjoys antagonising large sections of the US nation. This is one reason why it looks as if he will do badly in the mid-term elections. Another is that there are some cracks in his record for some of the people who had supported him.

To his supporters Mr Trump is a breath of fresh air because, unlike politicians before him, he is delivering on his election promises. That is true in the sense that he is doing things that mainstream politicians have not dared to do: notably the ratcheting up of the trade war, which has widespread public support. There are broken promises aplenty, of course, but these are either on secondary issues, or easy enough to pass off blame onto others. But I think there are two sources of trouble. One is healthcare reform. This is fiercely complicated, and the Trump administration is unable to do anything complicated. His attempts to push through a reform last year collapsed. That itself is not a problem: there are plenty of people to blame it on. And if he had succeeded it might actually be worse for him. The problem is that for many working class Americans, getting decent and affordable health care insurance is becoming impossible. A Republican reform of healthcare would not have helped. But the slow decay of the Obamacare system is making things worse. That is enough to create doubts for a lot of Trump voters, who increasingly realise that the Republicans are not on their side.

A second problem comes with the trade war. The process itself may be popular, but as it progresses it will create more victims. Already many farmers are worried. It may be enough to help the Democrats hold on to Midwestern Senate seats that would otherwise have been near impossible to hold.

This may be enough for the Democrats to overcome gerrymandered boundaries and win the House of Representatives, and even the Senate (tricky because the previous contests were six years ago on a Democratic high water mark). But the path to the presidency in 2020 is much trickier. Once Mr Trump is able to concentrate his political skills on undermining a single opponent, all bets are off. A lot of people blame his victory in 2016 on the Democrats choosing a weak candidate in Hillary Clinton. But in many ways Mrs Clinton was a strong candidate. Mr Trump would have successfully undermined any Democrat opponent, just as he did with his Republican opponents in the primaries.

And there is a trap for Democrats. It is tempting to follow the Republicans into the politics of victimhood and identity. There are plenty of people who feel victimised by the Trump regime. But that takes them away from many of Mr Trump’s less committed and more sceptical supporters. He may be able to rally them again. The Democrats need to show that they are standing up for these voters too, on healthcare and jobs in particular.

I continue to hope there will be a moment of revelation to Trump supporters, akin to what Hurricane Katrina did for George Bush Jnr. But the man has survived so many knocks, that I doubt this will happen. After that I just hope that the Democrats can choose a candidate with high ethical standards that can convince all working class Americans that she or he is on their side and Donald Trump isn’t.

The method in Donald Trump’s madness

It is two months since my last post. This may be the longest period of silence since I started this blog in 2011. This is mainly because I have been consumed with the process of getting 39 local election candidates nominated for council elections here in Wandsworth, and all the attendent duties of being agent and local party Treasurer, officer and volunteer. Along with other duties as school governor and party officer at regional and, now, even Federal Party level. Plus the occasional bit of time off and some family care issues.

Meanwhile the newsletter section of the blog was subject to over 1,000 fake subscriptions consisting of Russian web addresses. This was only stopped by implementing Captcha, which was somewhat trickier (and more costly) than I expected. In any case, the oncoming election, and my senior role in one borough, has constrained my ability to comment as freely as I like this blog to be. And it isn’t over. The election itself happens in a week’s time. After that I have to prepare and submit 39 expense returns. All I will say on these elections for now is that I have been involved in local elections in Wandsworth for 32 years, and in that time they have proved a graveyard of predictions. I will comment when it is all over.

Meanwhile there has been plenty else going on. In Britain we have had a kerfuffle in Labour over antisemitism. And there has been the so-called “Windrush Scandal” in which the Home Office has hounded legal immigrants with incomplete paperwork. I want to comment on both in due course. And politics in America continues its sinister course, with the Trump administration subverting institutions of the Republican Party, the US Federal state, and the world’s trading and diplomatic architecture.

Which draws me to today’s topic. Looking back over the last two years it is striking how liberals and established politicians have consistently underestimated Donald Trump. It has been easy to dismiss him as stupid and immature. And yet he has proved wily and dogged and he has always ended up on top. His critics need to understand him better if they are to devise an effective counter.

The first thing to say about Mr Trump is that his intelligence is of a different type from that we are used to in our leaders. It is very right-brained. We have traditionally adored and respected the left-brained virtues of logic, computation, complicated language and rules. But the right brain handles values, emotions, context and seeing thing as a whole. A healthy mind keeps the two in constant dialogue. We see Mr Trump’s left-brain deficiencies as fatal flaws; and yet neglect of right-brained virtues by liberal intellectuals is just as serious a deficiency.

Now let’s be more specific. Mr Trump’s world consists of competing individuals and groups who win, or lose or strike bargains with each other. It’s a world divided between adversaries and trusted insiders. To the former you must be merciless; to the latter you must show and expect unquestioning loyalty. In this way of looking at the world, the liberal system of collaboration and shifting coalitions with its infinite shades of grey is simply weakness. There is an acute sense of victimhood: that honest Americans have been made monkeys of by outsiders who have outmanoeuvred the country’s establishment.

Another aspect of the Trump view is that rules are a means to an end, and should not be elevated to an end in themselves, as liberal intellectuals do when they set the rule of law on a pedestal. Liberals say that the rule of law protects the weak; but does it really? The Trump alternative is for people to be part of a group with strong mutual loyalty and leadership that focuses on results.

The problem for liberals is that the Trump view is very widely shared, especially amongst less-educated people, but, clearly, not just them. Liberals tend to worship institutions that favour educated people through an unseeing meritocracy. They then try to compensate for this by offering handouts to the less fortunate, which creates a patron-supplicant relationship that undermines human dignity. Many on the left, who rail against “austerity”, just don’t understand why so many poorer people hate state benefits.

A further problem for liberals is that Mr Trump’s methods will produce enough results to justify the faith his supporters are putting in him. The tax reforms in 2017 were a huge coup, whatever we my think of them objectively. The pressure he is putting on China, North Korea and Iran may well yield some short-term results. His approval ratings may not be good in comparison to other presidents a year into office, but they are not particularly bad in absolute terms; they may not suffer the sort of middle-term decay that those predecessors were subject to. And he knows how to rally the sceptical floating voters when he needs them, not least by casting doubt on his opponents.

So what could stop him? The pundits predict that the Republicans could lose their control of the House of Representatives in November, though the Senate looks more secure. That would limit his ability to pass legislation. And yet it will also give Mr Trump a scapegoat on which to blame his failures. Nobody knows how to milk victimhood like Mr Trump. It may even give him a chance to reshape the Republican Party into his instrument in time for the next round of elections in 2020.

A further problem for Mr Trump is a declining base. This base is core to the Trump phenomenon: it is the loyalty group that is central to his identity. It is white, working class and ageing. It will be impossible for Mr Trump to form such a strong bond with other voter groups, and these are growing faster than his base. But in the medium term Mr Trump can keep this threat at bay by suppressing it, through promoting scepticism and apathy, plus changing electoral rules through things such as voter ID. In the longer term Mr Trump bumps into term limits and old age. But he can do a lot of damage before then.

I think there are two more important threats to Mr Trump, because these concern his base. The first is trade policy. Mr Trump’s narrative on trade is very appealing, but if he follows through by starting trade wars it will threaten the working class jobs of exporters. In the Trump narrative, of course, many more workers will benefit. But in the short term these benefits will be much harder to see. Midwestern farmers, who have been strong supporters, are already starting to wonder. Still, Mr Trump loves brinkmanship, and he may well feel he can strike bargains and claim victories before any serious damage is done.

The second problem is health insurance. One of the driving themes of Mr Trump’s presidency is to dismantle anything his predecessor, Barack Obama, put in place. Mr Obama’s crowning achievement was his health insurance system, and Mr Trump is desperate to dismantle it. And yet Obamacare tackles a genuine working-class problem of basic healthcare becoming unaffordable. Abolishing it would cause anger and hardship. Replacing it is the sort of massively complex enterprise that the Trump White House is incapable of. And, unlike tax reform, there is nothing like a Republican consensus on what any replacement regime should look like. Mr Trump will try to blame the Democrats as Obamacare gradually breaks down through neglect – but for once this line of attack will be hard to sustain.

So Mr Trump’s revolution may fail. But liberals, and not just in the US, would do well to ponder how to broaden their appeal so that they are not so vulnerable to right-brained populists like Mr Trump.

2018: Trouble is brewing between Germany and Italy and between China and the US

Prediction is a mug’s game; you are more likely to miss something important than demonstrate insight. And yet it is the only good way to put your insights to the test. Science may be mostly about gathering and reviewing evidence, but the true test of its worth is prediction. And so, in line with tradition for this time of year, I feel I must have a go.

When I started to think about it, my feelings about 2018 were anticlimactic. The British political deadlock will continue: there will be no election and no change of PM. The Brexit negotiations will somehow manage to put off the more difficult problems yet again, probably through a transition deal that will look very like staying in the Single Market. The investigation into the Trump’s campaign’s connections to Russia may snare members of his team but not the man himself; he will stay in office. The Democrats may take the House of Representatives, but they won’t manage to retake the Senate. And so on. Things will limp on much as they are now.

But none of that is very brave. It just guessable, keep-your-head-down fare that does not put my understanding of the world under any real stress. And yet proposing something more exciting is a matter of luck, especially if I am confining my predictions to a twelve month period. I need to look at things another way. Where do I see trouble brewing, even if the chances of something breaking in 2018 is less than 50%?

Let’s start with the world financial system. There is something unstable about it, even if it does not look as dangerous as it did in 2007 – it is more like the tech bubble of 2001. Asset prices look too high, largely because there is more saving than than the system is able or willing to convert into productive investment. This applies to the West, where too many assets are piling up in the hands of businesses and rich individuals, while many forms of investment are commercially unattractive to most people. And it applies to China, where there is something not right about the volume of money invested, especially through state owned businesses; a lot of useless assets don’t seem to have been written off.  But what will be the proximate cause of a financial crisis? A Chinese banking breakdown? Inflation breaking out in the US? A panic in the property markets? And when will the crisis strike? Personally I feel that government bonds are a better bet than other asset classes in the medium term, though that would not be the case if inflation got going. But that is more of a threat in America than it is in Europe or Japan.

And there is something not right with the capitalist system. Technology has changed the way it works, and our political systems have not caught up – rather like the mid 19th Century world in which Marx wrote Das Kapital. Most conventional economists really haven’t grasped this or it implications. The answer will be political change, but what? Without answers, political pressures will build up, and not just in the developed world. It is fashionable to suggest that liberal democracy is in danger, but the situation in the autocracies of China, Russia and Turkey, to name but three, don’t actually look any less tractable. But where will the political system crack? Governments have become better at repression. And there is no convincing alternative to sell. Yet.

What of Britain? The Conservatives look to be in deep disarray, but they have a lot of strengths – especially the widespread fear of the alternative, and the substantial funding that could unlock. We need to remember how close Theresa May came to a triumph, with the coherent ideology of Nick Timothy behind her – she might have destroyed Labour’s working class base. Their introversion did for them in the end. Can a new leadership revive their fortunes? I see similar strengths and weaknesses in Labour. Are they peddling new or old wine in their old bottles? I suspect more new than their critics give them credit for, which will make them a much stronger proposition. But there is an introversion too. The leadership is not sharing its thinking about what to do with this country; it just wants disparate people to project their hopes onto their vague pronouncements, so that they can gain power; only then might they share their real thinking with us. Meanwhile, the tensions within British society – the stagnation of the left-behind places, the squeezed funding for public services and benefits – will serve to increase frustration. Something spectacular could break the deadlock. But what and when?

And Europe? This looks like another deadlock. The populist xenophobes may have stalled a bit in 2017, but they are alive and well. It is striking that Poland’s ruling party remains very much in control, in spite of the fact that many Poles do not share their paranoia – their economic policies, which involve widespread cash handouts, are popular, and may not be as disastrous for the economy as many critics suggest. Economics is at the heart of politics – and politics is at the heart of economics. But the biggest threat to European stability comes from Italy, where elections are to be held in 2018. We might well get a strong pushback from that country against the way the Eurozone is run, at a time when German politics is being pushed in the direction of more conservatism on the Euro, and not putting Germany’s savings surplus to constructive work across the zone. That conflict could cause the system to break. But maybe the French can intermediate to give the Italians what they want while making the Germans feel they have won?

In America I see a strange mix of euphoria and anger. The tax reforms passed before Christmas were a big win for the Republicans, and it will give them real momentum. While the Administration, and the tax reforms, are generally unpopular, relentless propaganda from the many rich winners may baffle floating voters for a bit. That could be good for the Republicans in the congressional elections. It is a tall order for the Democrats to take either house, especially the Senate, where Republicans have plenty of opportunity to win back seats lost at Barack Obama’s high point. But the Administration’s malign neglect of the healthcare system could bite back.

Perhaps more significant for the world as a whole is the thought that China and the USA are on a collision course. Donald Trump is itching to start a trade war with China, to reverse what he sees as America being ripped off. China’s ambitions are increasingly global. At the moment the two have come to an uneasy accommodation, with North Korea a joint focus of attention. But this looks unsustainable; China will not stop North Korea from developing nuclear weapons, as only a military intervention of some kind will achieve that, and China surely does not have the appetite for that. But a trade war between China and the USA would be an attack on one of the central economic and political pillars of the early 21st Century world. It would be extremely destabilising economically and politically. China still needs exports to the US to sustain its economy; the US still requires to be bankrolled by Chinese money. This is surely the most likely source of a financial crisis.

And then there is the risk of war. North Korea is determined to develop a genuine nuclear threat to America, and this is a huge provocation. It’s not a happy situation when we seem to be relying on military men to provide the restraint on the President.

So to summarise: the two critical developments to watch are a clash between Germany and Italy over the economic management of the Eurozone, and a clash between the US and China over trade. Either or both could precipitate a global financial crisis resulting in a substantial reduction in asset values and the banking woes that would follow from that. I am cautiously optimistic that the problems of the first of these will be contained; I am not at all optimistic on the second.

Moral outrage against Trump is distracting people from his incompetence

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Donald Trump has made a whirlwind start to his presidency, acting much as he did on campaign. This has provoked predictable moral outrage from liberals across the globe. This leaves me with foreboding. It will not stop Mr Trump, or the political movement he represents.

As a Briton I feel a sense of deja-vu. It reminds me of 2010 when the Coalition government took power and launched an aggressive austerity programme, cutting many public sector jobs, benefits and grants to NGOs. There was moral outrage on the left. I remember screaming protestors at the Liberal Democrat conferences in Liverpool and Sheffield in the year that followed. The Lib Dems were particular victims: they were nearly wiped out at the subsequent General Election, and are only just starting to recover, thanks to the distraction of Brexit.

But all that fury came to nothing. The beneficiaries of the Lib Dem meltdown were their Conservative coalition partners, who gained a parliamentary majority as a result. This led to redoubled austerity and Brexit. The left’s response was then to move into even more extreme outrage, by selecting Jeremy Corbyn as Labour’s leader. This has only made the Tories look even more entrenched. For all its outrage the left has lost the argument amongst floating voters.

The left was convinced that the people were behind them in their anger. And, critically, they thought that they did not have to win over conservative floating voters. They dreamt of two things: attracting disillusioned Lib Dem voters; and getting people out to vote who had not voted before. Both strategies failed. Labour did manage to convert large numbers of Lib Dem voters – but in the process they weakened the party so much that many Lib Dem voters switched to the Tories to keep Labour out. And, anyway, since most Lib Dem seats were Conservative facing, weakening the party tended to benefit the Tories. And inasmuch as new voters were found, it was not Labour that benefited. Instead many disaffected voters turned out for the populism of Ukip, and then to vote for Brexit in the 2016 referendum. There is no army of left-wing non-voters waiting to be mobilised.

The hard lesson from this is that in politics passion cannot substitute for savvy. And it is no use just talking to people who agree with you already. That may boost your own feelings of self-confidence, but it will not help persuade the people who need persuading. Interestingly, this is not symmetric. The populist right have succeeded by stoking up anger, and loathing for “liberal elites” – and not attempting to persuade liberals. Such tactics in reverse are ineffective on the left.

I fear liberals in America are making the same mistake with Trump as the left did with the Coalition. Their outrage at Mr Trump’s actions is certainly justified. But to Mr Trump’s voters, many of them former Democrats, what he is doing must look like a breath of fresh air. A politician fulfilling campaign promises! Urgent action on trade and immigration! That there is a lot of outrage and not a little confusion will not concern them. On campaign Mr Trump was repeatedly outrageous, and that harmed his standing not at all. It doesn’t matter if liberals hate him.

And it will be hard for liberals to win the propaganda war.  There will be successes for Trump. Look at how the motor companies are changing their tune about jobs in the US; and NATO countries are talking more about their defence budgets; the economy looks just fine. And failures can readily be blamed on the usual suspects. Likewise some distinctly questionable handling of conflicts of interest will arouse shrugs: people sort of knew that would happen when they voted for him.

The smart people in all this are the mainstream Republicans, who control both houses of Congress. They are keeping their heads down and taking the credit as much as they can. It is by no means clear that Mr Trump will last the course. He is old for a first-term president; he is not grounded in the ups and downs of politics; an implosion of some sort cannot be ruled out. But the Republicans, and especially with Vice President Mike Pence, will be there to pick up the pieces, and create a more sustainable version of the Mr Trump’s politics that will lock the liberals out of power.

You can’t, and shouldn’t, stop people being angry of course. But opposition also needs to do two things. First is to avoid personal attacks, on Mr Trump or his supporters. Jokes about the size of Mr trump’s hands, or accusations that those that voted for him were bigots or idiots, need to be toned down and reserved for private conversation. Second, which follows, is that the conversation needs to be about competence rather than morals. The Trump administration (unlike the Coalition, by and large) is astonishingly incompetent at actual policy, as opposed to messaging.  To give this criticism credibility it means acknowledging the government’s successes when they occur.

Remember George W Bush. He was the target of a torrent of sneering attacks from liberals – but his power only grew. But when he appeared utterly incompetent in the face of Hurricane Katrina, and then Iraq,that’s when his popularity fell off a cliff. And yet his incompetence had been evident for years before that. I have read a similar account of Italy’s Silvio Berlusconi. Personal attacks did not harm him; scrutiny of his policies did.

So far, opposition to Mr Trump has failed these tests. The president’s executive orders have been badly drafted and are leading to muddle and injustice. But he is able to shrug all this off while liberals indulge in ill-directed anger. While liberals congratulate themselves on the size and noise of their protest marches, Mr Trump’s relationship with his base is intact.

What the left lacks is leadership, both here in Britain and in America. A liberal fightback can be successful. Demographics are in their favour. But they must rally around a clear and competent alternative. Alas none is in sight.

Making America small again. Trump’s victory marks the decline of the USA

“Make America Great Again.” That was the slogan of Donald Trump’s insurgent campaign to take the US presidency. It resonated with many Americans. They felt that the US had been subject to serial humiliations in its international dealings, and that Mr Trump’s more robust and confrontational leadership would help to reverse it.

But politics is full of paradox. To exercise power is to diminish it. Power accumulates to those who understand restraint. In Britain English and Welsh voters took to heart the slogan of “Take Back Control” and voted for Brexit. The country is now basking in the thrill of exercising direct power in its relations with its fellow European neighbours. And yet the result will be a medium-sized power adrift in a friendless world, seeking to trade freely when everybody else is becoming more protectionist It will be more rather than less subject to the whims of foreign powers. Britons may prefer it that way, but they will come to understand that the keys to “taking back control” actually lie in Westminster and their local council chambers, rather than in Brussels.

So it is in America. Mr Trump’s supporters will revel in the assertion their country’s direct power. And yet he will exercise this assertiveness in order to carry out a retreat. The result can only be diminishment, relegating the US to the middle part of a medium-sized continent.

Let’s look at some specifics. Consider the Trans Pacific Partnership (TPP): the multinational trade deal put together by President Obama. This was a central element of his Asian diplomatic strategy, designed to collect a number of Asian countries into America’s orbit in trading terms, conspicuously excluding China. Mr Trump (along with many Democrats) denounces this as a bad deal and will scrap it. That leaves a vacuum into which China is ready to pounce. It plans its own version of a free trade area, involving most of the same countries. Mr Trump has also questioned the value of America’s military alliances in the region. The clear message to countries there is that they must acquiesce with China’s increasingly imperial ambitions. The Philippines’ President Duterte looks a little less eccentric in his pivot to China. The USA is suddenly a much less important country.

Mr Trump’s promised assertiveness in trade relations with China makes little sense either. It comes at an important moment in the evolution of China as a nation. It has built its economy on international integration, especially with the US, and developed a large trade surplus in the process. But there is nothing particularly beneficial in a trade surplus – it implies that a country’s citizens are consuming less than they could – an act of self-denial. A trade surplus has political advantages – it makes you less beholden to foreign creditors – but China is already powerful enough for this not to matter much. So it is in the process of carrying out an economic pivot to  develop its consumer economy, and away from integration with developed economies – though the scope for integration with less developed economies remains. An economic model where it exports less to America and integrates more with other Asian countries, and even African ones, suits it just fine strategically. Mr Trump means to hurry it along, but it will disrupt the US economy more than the Chinese one.

In Europe the issue is not so much trade. The proposed trade deal between the US and the European Union, TTIP, looks dead in the water without any help from Mr Trump. The main issue for Europeans is military and diplomatic support for the European countries against Russia in particular. Mr Trump has said that the current balance involves America in a disproportionate level of commitment. He has a point. If America steps back from its military commitments, and caves in to pressure from Vladimir Putin to create and extend a Russian sphere of influence, then it will put European countries in a very tough position. It is not very clear where this will lead – but one thing is very clear: America will be less important to Europe. This is not necessarily a bad thing for Europe, but it will be very uncomfortable.

And then there is economics. We are still guessing what will emerge from Mr Trump’s presidency – but there could well be a short-term lift for America. Some form of fiscal stimulus is in the offing. Mr Trump and his advisers hope to lure in US corporate profits that are stacked offshore for tax reasons, and to use the proceeds to fund infrastructure investment. Unlike many of his Republican colleagues, Mr Trump will be reluctant to cut state handouts, like pensions or healthcare – though health insurance is under threat. This could give a short term lift to the US economy . And, as this week’s Economist points out, much of this gain will be at the cost of other world economies.

That should please Mr Trump’s supporters. But the problems will start quickly. The stimulus is badly timed. In many aspects the US economy is running at close to potential output. All the stimulus might do is suck in imports and push up prices. But there may well be a lot of hidden potential in the US economy – more workers could be drawn into the workforce, and other workers could be made to work more productively. But if Mr Trump is serious about rolling back free trade and driving out foreign workers, then he will cut the capacity of the US economy when it needs to be increased. A financial crisis is in the offing.

The truth about the American economy is that, far from being taken for a ride and funding lavish lifestyles of foreigners, American consumption is being supported from abroad. This is what a trade deficit means. A transition to a more self-sufficient economy, as wished for by Mr Trump’s supporters, will entail economic shrinkage. Americans may rail at the loss of jobs in many industries, but they exchanged these for cheaper products, made abroad or with automated technologies, or both. Reversing that means reducing living standards.

Except that most Americans could still end up better off. If the country can share out income more evenly, with lower profits and higher wages, and more of those wages paid to middle and lower level employees and less to the top layer, then this shrinkage need not be painful to the majority. But what chance is there of a Republican administration, run by senior businessmen, achieving that? To Mr Trump exploitation is simply good business practice, and profits are reward for enterprise. There is no sign of a mindset that wants a different distribution of the fruits of economic success.

America and the world is in for a rough ride. But strategically it has been clear for a long time that American power, relative to the rest of the world, is in decline. That is not such a bad thing  – it results from a fairer distribution of the world’s wealth. After the diminishment of Europe, it is now America’s turn. Mr Trump’s victory marks a big step along that journey. But it should surprise no follower of politics that he is claiming to do the opposite.

The centre collapses. What should liberals do?

Unlike on 23rd June (the day of the British referendum on the EU) I went to bed with a sense of quiet foreboding on Tuesday night. And that foreboding was confirmed by the shocking news of Donald Trump’s victory in the US presidential election.

It is a bad year for liberals. Some liberals did support the British vote to leave the EU, of course, and persist in saying this was a good thing. Well, maybe, but the campaign was not fought from the liberal centre, it was fought and won by those who persuaded the illiberal to vote in their masses – which is similar to Mr Trump. Meanwhile, illiberal governments face no serious challenge in Hungary and Poland, and in Turkey President Erdogan is crushing all forms of opposition, liberal and otherwise, following the example of President Putin in Russia. It does not seem so far-fetched to imagine that Marine Le Pen will take the French presidency next year. There are major populist uprisings in the Netherlands and Italy.

All this points to a collapse in the political centre. What do I mean by that? The centre is a set of political assumptions about the way the world should be run which has become the conventional wisdom of our governing classes, and which is shared by many political groupings. Those who did not support this centre used to be branded as extremists and pushed to the margins. Or sometimes parties would talk as if they were challenging the centre, but quickly adopted its principles once in power – France’s François Hollande comes to mind. Centrist principles incorporate free trade, free movement of capital and free movement of workers – an unmistakably liberal combination. Globalisation, and the economic growth that went with it, were embraced. Social liberalism ran alongside these principles, with the promotion of diversity at all levels of society. In Britain, Tony Blair’s enthusiastic embrace of these centrist values was the key to his taking the Labour Party to three election victories in 1997, 2001 and 2005. The Conservative victory in 2015 largely came about because it persuaded electors Labour had turned away from the centre – though, in a portent, the avowedly centrist Liberal Democrats were crushed in the process.

But Mr Trump’s campaign was based precisely on a rejection of the centre. He painted a picture of a politically corrupt and complacent elite who had let people down, and imposed social liberalism onto unwilling subjects. This brought previously apathetic voters out of the woodwork, and persuaded many who had voted for the left in the past – blue collar workers in particular – to change allegiance. By comparison Hillary Clinton struggled to raise enthusiasm for her campaign; this apathy may actually have been more important than enthusiasm for the insurgents. It would be wrong to blame that on her personally. She was in fact a strong candidate, but she represented a ruling philosophy that people have lost faith in. President Obama may be more charismatic, but his intervention seemed to have little impact. He seemed to be part of the problem.

Could the left have achieved a similar success with its own anti-establishment campaign? This is what Democratic contender Bernie Sanders attempted; and it is what Britain’s Jeremy Corbyn seeks to achieve. Like all counterfactuals this is impossible to prove. Many of the criticisms against Messrs Sanders and Corbyn – their lack of so-called “credibility” – seemed to positively benefit Mr Trump. But I think the rebellion is about more than changing personalities and attacking the political elite. There are overlaps in policy; Mr Sanders wanted to clamp down on free trade and attack big business – just as Mr Trump  does. But he also stood for big government and social liberalism. These do not resonate with the disaffected. It might rally a lot of younger, urban people – but not the white working class. It would not have been hard for the Republicans to paint Mr Sanders as in fact being part of the liberal elite, who would bring with him socially liberal values, more interference in people’s daily lives, and higher taxes.

But for all that, the liberal left shares a disillusionment of the conventional centre with the conservative insurgents. They see the economic gains going to a lucky minority, while working class, and many middle class, people face increased insecurity – especially if they are young. The trouble is that the left lacks a convincing policy agenda to address it. Their solutions have a lot of the “same old” about them. And in particular they lack ideas on how to promote a thriving business environment, beyond more active demand management through fiscal policy, also promoted by Mr Trump, it has to be said.

So how to respond? Of course Mr Trump and his associates equally lack a convincing policy agenda to address the concerns of the left-behind. They will throw them some socially conservative red meat, but it is hard to see their economic policies making them better off. Meanwhile many social benefits, starting with health insurance, will come under threat. This gives the left the raw ingredients for a fightback. The developed world is becoming more socially liberal, so liberals must hold their nerve. And as conservative economic and foreign policies fail to gain traction, there will be more sticks to beat the conservatives with. Competence may come back into fashion.

But the left still needs a convincing policy agenda of its own. The old centrist agenda needs to be picked apart and put back together again. In my view this means a strengthening of local communities. Somehow a flourishing global economy needs to cohabit with flourishing local economies. Our hope must be that as Mr Trump as his conservative allies test their economic ideas to destruction, it will open people’s minds to fresh ideas. But those fresh ideas need to be fleshed out.

 

The Oregon protest shows how different America is from Europe

What if a group of armed citizens seized a bird reserve in the Lake District and proclaimed their right to cut down trees and graze cattle on public land for free? It is actually unthinkable, on so many levels. And yet this is more or less what has happened as a militia group led by Ammon Bundy seized the Malheur National Wildlife Refuge in Oregon on 2 January. They’re still there, as the law enforcement agencies deal with them gently, letting pressure from local residents undermine the occupiers’ resolve. Such incidents are rare in the US, but not unthinkable, and that reveals a lot about the difference between our nations.

Of course Oregon is not like the Lake District. In the US West the Federal government owns huge tracts of land, and regulates, and charges for, its use by farmers and loggers and many others. In our National Parks the government places onerous regulations on private landowners. But that is even worse, probably, from the point of view of the Oregon protesters. They are building their case on an American idea that citizens should be self-sufficient, and that government agencies are violation of basic rights and freedoms.

That idea, of course, comes from America’s frontier history. Back in the 19th Century, and earlier, the settlers mostly did have to be self sufficient. The whole appeal of film dramas such as Westerns builds on this.  These frontiers have only formed a minority of the American nation, of course, and yet they command a special place in the American soul, for those of European (i.e. white) heritage. We may imagine how those of native American or African, and even Hispanic heritage work on a different version of how America came to be what it is. The European settlers came out to America to be free of oppressive governments. It is hardly a coincidence that movements like the Oregon protestors are white, and tend to have racist tinge.

Descendents of the Europeans who stayed behind have an utterly different outlook – though that racist tinge is there too, overlaid by an often intense nationalism, which has been subsumed by American nationalism in their descendents. For us government is part of our everyday lives. For some it represents the democratic will of the people; for others it a perhaps regrettable necessity. But we crave the order governments create, and feel that such things as welfare safety nets are part of what it means to be civilised.

And this is as true of the English as it is of their French and German cousins. Some English like to think that they are culturally apart from the rest of Europe (a delusion that their Scots compatriots in Britain tend not to share). We hear talk about common law and Anglo Saxon freedoms. And it is true that the English and British are different in many ways from other Europeans. But then so are the French, the Germans, the Danes, the Spanish, the Czechs, and so on. The idea that the British are uniquely different is a misconception. And a huge amount of history and culture binds us together as Europeans, and separates us from the United States in particular. Our attitude to the role of the state demonstrates that more clearly than anything else. Remember that many Americans feel that free ownership of military weapons is a fundamental right, and a vital protection. Europeans think that’s nuts.

That gulf between Europe and the US is clearly seen in US politics. Republican politicians only have point to Europe or Canada (which follows many European attitudes) to scare their supporters. To them these places are self evidently awful places to live in. Which puzzles, Europeans and Canadians profoundly. What is so wrong which lower levels of poverty, better health outcomes, longer holidays, and a lower chance of dying a violent death? We (and they) just don’t get it.

But two notes of caution for Europeans. First is that the US is not monolithic. I have already pointed out that many Americans do not share this anti-state vision – and the proportion of non-whites in the country is rising. That, perhaps, explains much of the violent polarisation in the country’s politics at present. Most Americans think that the Oregon protestors are crazies; that includes most people who live near Malheur. It’s always a good rule to avoid national generalisations; that is as true of Americans as it is of anybody else.

The second note of caution is that there is a positive side to this American idea of self-sufficiency, alongside its delusional aspect. It makes Americans more entrepreneurial and innovative. Americans can rightly point to their extraordinarily strong economic performance. And I think it helps to question what state agencies do and what they are for – though, I should add, I don’t think that US government agencies are any less inefficient than European ones.  Closer scrutiny does not necessarily lead to improved performance.

But personally, I am very comfortable in my European skin, much as I admire so much about America. And those Oregon protestors sum it up why quite nicely.

The slow suicide of Britain’s two party system. Only AV might have saved it

Two-party politics used to be the norm for developed democracies. Most countries’ politics were divided between tribal blocks based on the urban working class and on the aspirant middle classes. But the dominance of these two blocks has faded in most countries. There are two interesting exceptions: the USA and Australia. Here in Britain two-party politics looked as if it would triumph with the demise of the Liberal Democrat,s and the No vote in the referendum on the Alternative Vote (AV) in 2011. But now the system is its death throes.

It is worth considering the architecture of two party politics for a moment. Electoral politics is dominated by two political parties, each of which may govern on its own, without the need for support from smaller parties in coalitions or pacts. Each of these parties has a tribal character, defining themselves as much in opposition to the other as by their own core values. But there is an undeniable class base two. This divides the country into heartlands, where one or other of the parties dominates to the exclusion of all others, and marginal territory, contested by both parties, where elections are won and loss. Many, if not most, politicians build their own careers in the heartlands, where advancement depends on internal party politics, rather than winning over marginal voters. This leads to the system’s major flaw – the political classes are more worried about their own backyard and internal politics than in appealing to the electorate at large. Or they worry about marginal voters to the exclusion of the heartlands. Distance between voters and politicians grows.

The breakdown of this system follows the weakening of class loyalties from the 1960s onwards. New parties have emerged, from the liberal centre, from populist anti-political movements, from environmentalists, and from parties based on regional identity. In much of Europe coalitions became commonplace. Electoral systems played an important role. Those with proportional representation (PR) were the first to find that one party could not govern on its own. But in countries with single member constituencies one party could still aspire to win on its own. France’s two-round system promoted pacts and alliances between parties, and the major blocks split into separate parties – before the whole system started to be challenged by the populist Front National. Countries with First Past the Post (FPTP) systems have placed a greater role on party solidarity. But in New Zealand disillusion with two-party politics led to the introduction of PR; in Canada each of the two party blocks suffered existential crises that allowed more modern alternatives to replace them, at least in part. Australia’s AV system seems to have entrenched the two party system there, however. I will come back to that.

In the biggest and oldest developed-world democracy of them all, however, the two party system remains completely dominant. In the USA there is no alternative to the Republicans or Democrats, although the occasional challenge comes and goes – even as more and more voters self-describe as Independent. But the US system of democracy is unique. Apart from the widespread use of FPTP (some states use a two round system – which is why the Louisiana Senate race is not yet over after this month’s nationwide election), I think there are three, inter-related factors: primary elections, decentralised  power, and direct executive elections. Each party’s candidates are selected using primary elections which include much more than official party members. Such elections are part of the formal, state electoral process. Voters may register as Democrat or Republican. This allows them to take part in publicly-run primaries; in some states primaries are open – any voter can take part. That makes heartland elections competitive – and not a matter of manipulating small groups of insiders to secure your party’s nomination. It helps that each party’s national leadership is weak – so wheeler-dealing in Washington will not help a political career by much. This is a function of a system where much of the power is wielded at state level. One of the factors that keeps party functionaries weak is the prominence of direct executive elections, notably for President and state governors. In these cases personality often matters more than tribal allegiance.

It is an interesting paradox – for the two party system to be robust, the party leaderships must not be too strong. This allows the primary system to flourish, and gives outsiders a chance to break into politics. But party solidarity is important enough for those in power to rig the system to provide incumbent politicians with electorally safe seats through the gerrymandering of boundaries. A diminishing proportion of seats in the House of Representatives are competitive between the two blocks. A large proportion of the important politics is now in the tribal heartlands, and not in marginal territory. As a result of this, it would not be right to describe the state of politics in the USA as healthy. There is increasing polarisation, which is causing deadlock and the prospect of extremist policies. Most Americans seem fed up with the state of politics in their country, though not necessarily with the system itself.

Another case study in the survival of two-party politics is Australia. Politics is divided between two long-standing political blocks: Labor and the Liberal party, though the latter is a coalition of state parties (some of which refer to themselves as National or Country). There have been challenges to this duopoly over the years, but these have not made headway. No doubt there a number of factors that have contributed to this – but I think one factor is critical. And this is the AV electoral system. The legislature comprises single-member constituencies, and there is a single election day. Voters are asked to rank candidates in order of preference. If one candidate does not achieve more than 50% of the votes casts, the lower ranking candidates are eliminated and their votes redistributed. This is a bit like the French two round run-off system, except that with a single election day there is little scope for political deal making over second preferences. It is so important for candidates to maximise first preferences that it best not to talk too much about second preferences.

This makes it very hard for challengers to win seats. First their first preferences have to overhaul one or other of the two main parties. But to do so they cannot say “vote for me to keep the other guy out”, because that is an argument for second preference votes, not first. Second preference votes are useless without sufficient first preferences. And then, of course, you must have sufficient first and second preference votes to get a majority. In marginal seats challengers will be beaten by the lack of first preferences; in heartland seats there will be lack of second preference votes. As a result almost all seats go to one or other of the blocks. In 2013 in order to turn out a lacklustre Labor government, voters opted for a Liberal one that is now pushing forward a series of extremist policies on the environment and immigration.

So what of Britain? For a long time the main challenge to the two party system came from the Liberal Democrats, based in the liberal centre. It was skilful in winning seats under FPTP by establishing a local base, and then winning tactical votes from the weaker of the two blocks. This allowed it to win a substantial block of parliamentary seats in 1997, but not the balance of power until 2010. It then entered coalition with the Conservatives. And then disaster struck – the transition from a protest party to one of government was too much for the voters, and its poll ratings collapsed. Labour and Tory politicians breathed a sigh of relief – normal two-party politics could be resumed.

Ironically, in view of the Australian experience, the Lib Dems placed some hope by proposing to change Britain’s FPTP system to AV. This would have helped the party in the short term, where it had built up a sufficient local base to win second place in first preference votes. Both major parties agreed with the Lib Dem analysis, and for that reason opposed the change (Labour through faint praise rather than explicit opposition). In a referendum on the change in 2011 an overwhelming majority opposed AV. This seemed to secure the future of two-party politics.

But unlike the US, Britain’s politics is highly centralised. Party managers in Westminster like to keep a tight grip on their parties. And, again unlike the US, executives are elected indirectly, and candidates must master the internal politics of their own party in order to progress to high office. The idea of primary elections has not been allowed to gain traction. The Tories have moved small steps towards it, but without being able to harness state resources. The public has no way to channel its disillusion with politics than to vote for insurgent parties – since they are denied a role in the main party elections. And this they have been doing by supporting the populist Ukip in England and the SNP in Scotland.

Unlike the Lib Dem challenge, these insurgencies have affected the main parties’ heartland voters. They are creating unbearable pressures with both party blocks. The Conservative and Labour leaders try both to fend off the insurgent challenge, and to retain the political centre – and as a result both appear weak, driven by events rather than leading them. This is creating unbearable strains and it seems likely both will fracture, especially if they have to endure the pressures of being in government. Labour face calamity in Scotland, as the SNP overturn their heartlands. In England Labour are a fragile coalition of public sector unions, liberal centrists and heartland machine politicians; each’s expectations of the party seems completely incompatible. The Tories look likely to fracture over Europe.

Ironically, if both parties had embraced AV, they would have been in a stronger position to fend off the insurgents and maintain party solidarity. And yet this is just another face of a bigger problem that both party’s face. their obsession with winning the next election has meant a loss of strategic focus. The demise of the two party system looks alarming, as fringe parties gain prominence. But in the long term it is to be welcomed. As the USA and Australia shows, a two-party system is too easily captured by political extremes.