Something snapped in the last ten days. You can feel it. It is undeniable that the change is historic and unlike anything we have known in our living history. Everybody feels it. Many are beginning to know it is not temporary, at least in the relatively short span of an average life. A line has broken. The blame game has already started.
What does it mean?
Adrian Hamilton: It won't be long before the British blame foreigners
What won't go away is the sense of humiliation in this crisis
Thursday, 2 October 2008
Politicians and bankers still don't get it, on this side of the Atlantic no more than on the other. Out they have trooped – Gordon Brown, Alistair Darling, George Osborne and David Cameron – to say that they understand the anger of ordinary people in this crisis.
No they don't. Not for a moment. It's not about the end of capitalism. You could argue the opposite. It's precisely because people have accepted the Thatcher-Reagan doctrine, and knuckled down to a world of insecurity and rapid change, that they are so furious with the banks. Main Street played by the rules, Wall Street didn't and is being saved from the consquences of its irresponsible ways.
And then there is the anger of helplessness. Declining industries can be understood. What people really dislike is the sense that the markets are driving this crisis and the authorities are powerless to stop them. If Gordon Brown mentions the phrase "decisive action" one more time, I personally will go to Downing Street to throttle him. There's nothing decisive about what's happening now, more a rush to the first aid when the next bank starts failing. The Lloyds-HBOS deal still isn't settled. No onereally knows what taxpayers' full exposure will be in Bradford & Bingley and Northern Rock. France has joined Ireland in guaranteeing all deposits. Will we follow, or keep to a £50,000 limit?
Anger dies down as helplessness and passivity take over, and as more people watch the shake-out of thousands of jobs in the City. Shared suffering is a great leveller. What won't go away is something that people have paid much less attention to, which is the sense of humiliation aroused by this crisis.
For America, of course, the sense of humiliation is particularly acute. The US emerged from the Cold War as masters of the universe, militarily and financially. President Bush threw the former away in Iraq. He has now presided over the collapse of America's reputation for the latter. The symbolism of the world's only remaining hyperpower having to go cap-in-hand to the sovereign wealth funds of theMiddle East, India and China could not be more devastating.
But just because the Britishpublic has remained relatively quiescent compared to our American cousins doesn't mean they don't feel the sense of shame of it. For the last generation, workers have been told not to worry about the loss of jobs in cars, coal and steel. Those were old-fashioned businesses that could be left to others. Politicians of both parties boasted about the way we had moved on from manufacturing to services. They wallowed in the success of the City, the imagination used in the instruments of finance, the fact that it could compete with New York and even surpass it.
Not any more, they don't. Britain may be one of the first (the first say some) major economy to move from industry to services, but it is also too far down that path easily to return. What makes that adjustment particularly painful is the sense that the problems have come from abroad and that so have the winners in this financial debacle.
For years, the public reluctantly accepted that its football clubs would be owned from abroad and packed with foreign stars because at least it meant that the best clubs in the world were based here. They went along with the sale of our biggest companies abroad because we somehow accepted that foreigners could manage them better than us. And for the past decade we looked on at the purchase of our merchant banks, brokers and demutualised building societies because that was felt to put them at the forefront of the most recent trends.
Now our last bastions are falling, and again to foreigners. We've just sold our nuclear industry to the French, we're selling Bradford & Bingley to the Spanish and the UK part of Lehman Brothers is being dismembered by the Japanese.
I am not a little Englander. I've always believed in globalisation to throw open our businesses to all talents and the goods we consume to the best and cheapest producer. But for the first time since the 1970s I sense the mood is pulling away.
The British voter judged the government of Harold Wilson harshly for the rush for an IMF loan, and John Major for the frantic exit from the European Exchange Rate Mechanism. But they didn't take it as a judgement on themselves and on the way the economy was operating. Now the feeling of being misled by the entire government class is more palpable, and I fear the force of nationalism it may unleash and the populism it will encourage in all the parties.
The test of government is to make people feel better about themselves when all is going wrong. Our political leaders haven't even begun to appreciate that.