10 Years On

I have always had a soft spot for the old and/or weak. I walk past someone on the street in need of help and my heart rips into a million pieces. It might be a person without a home living on the street, a stranger needing help to push his dead car (something that actually happened this past week), or simply someone who really deserves more. This inclination is propelled by several factors. First, a general soft-heartedness and sentimentality. Second, a theological pull to serve and sacrifice. Third, a desire born simply out of being a half-decent human being.

And so it pains me to see the current climate of anger and animosity. In the political blog posts that I have done, I have tried to be ideologically neutral, believe I have succeeded, and will continue to do so. I do not demand specific solution to issues. I am not under the illusion that there is an easy panacea. What I call for are simple perspective changes that can arise through increased questioning, which can, in turn, lead to greater empathy and the development of more realistic solutions.

This week is significant for several reasons. First, we are around the 10 year anniversary of the financial crisis. Second, we are just off the back of the recent Swedish elections. Both these events are somewhat connected and both deserve some sort of commentary. Both relate to my interest in populism.

Now, you cannot talk about the financial crisis without mentioning the subprime crisis. This lighthearted video I was introduced to might better explain the subprime crisis:

Yet, it is important to note that: 1) the financial crisis is NOT the subprime crisis or vice versa, 2) neither crises were driven by “poor people borrowing”, as is a common narrative, but rather a skyrocketing of public debt in general, 3) the makings of the 2008 financial crisis began with poorly formulated governmental policies in response to the 2001 dot com bust.

Of course, 10 years on and the world is still trying to definitively explain its root cause. Individuals subscribe to the theory that fits their belief system (a pretty layered philosophical concept for another day). What I will not do, despite it being a wonderfully worthwhile endeavour, is to dissect each perspective. There are many others with the time and the expertise to do it better than I ever can. Let it suffice to say that while not all perspectives on the issue are right, no ideology has a monopoly on the truth and there is at least some consensus on the major details.

Numbers show that populism, measured in terms of vote share, has been on the up since the 2008 crisis. Voting populist does not necessitate an increase in populist attitude, but this statistic is still worrying. While there is an often mentioned correlation between economic crises and populism, one also cannot assume that economic crises cause populist sentiment to rise. In fact, randomised control trials show that from a myriad of issues that might influence populist attitudes, economic concerns are the least potent. This is not to say that the economy is of no concern; financial worries interacted with other factors (especially national identity concerns) strongly catalyse populist attitudes but financial worries in isolation do not have as strong an effect.

What should have been highlighted all the way back in 2008 were several things: 1) a growing divide, which in and of itself is not dangerous given the inevitability of inequality, 2) an intentional preying on the vulnerable without sufficient protections as manifested in the boom of subprime lending, which again is not only logical given profit-seeking incentives of firms but also beneficial to the system and homeowners to a certain extent, 3) a desperation from the weak to have more and be more.

Over the past week, there have been several commentaries on populism both in Europe and in the States. What is intriguing is an uncertainty regarding a proper way to fight populism. In Sweden, it is reported that the populist wave was staved off by “by doubling down on welfare” by Social Democrats. In America, with the 2018 midterms, huge efforts have been made to secure a “blue wave”. Here I clarify. I believe in the need to provide for those in need of help. I also encourage all to vote and to vote your conscience. But I am highly doubtful of either of these strategies reversing the tide of populism, especially within the States. A heavy-handed government approach to dealing with populism, either through welfare or through suppression, is but a temporary plug to the problem. A solution to populism must not merely sweep the issue under the rug, cannot only tackle only the symptom and not the root, and definitely should not merely drown out the other by making more noise. It cannot be partisan. It is a dose of reality that requires we distinguish challenging Trump’s personal madness versus refusing to acknowledge the result of an election. For in an election, there must be a diversity of opinions, some of which you would not agree with. And in life, there must be a boldness to stand up for what one believes in. The balance between the two seems to be muddled as of now.

It isn't pessimistic to say that increasing welfare will feed the people but not change their ideology nor solve their crisis of identity (a root cause of populism), and all this while ignoring the economic effect of such policies. It isn’t pessimistic to say that flipping Congress within the US will do nothing to reduce populism but only reinforce the notion that the needs of citizens who feel are being shafted. It is optimism that there is a better way for progress, for connecting, for integrating different opinions, needs, and wants. Yet again I say, I applaud work done to meet the needs of individuals in Europe. I am certain good can come from a blue tide. Neither, however, are solutions.

Perhaps there is a silver lining resulting from events over the past 10 years. A profit-driven private sector has been increasing its focus on socially-responsible and sustainable business. This change might be driven by two factors. First, the realisation that socially-responsible business represents a huge market that has not, until recent years, been tapped at all. Second, businesses have been faced with the necessity to evolve according to the needs of the labour supply. In this instance, a millennial generation has increasingly demanded jobs with companies that do a social good, and for a career that allows them to create a social impact. Part of this stems from the mess left by the policies of baby-boomers, albeit well-intentioned. Unheard of in decades prior, many firms now not only establish and run a non-profit foundation aimed at creating social impact, they laud their social programs, profit or not-for-profit, as a huge selling point. My forecast is that the greatest social changes that we will see will be spearheaded by corporations and individuals, not in government. Corporations also have a great advantage of being able to collaborate despite any political and ideological difference. The evolution is not complete and the geopolitical landscape is still being defined. While there is a continued need for a competent government, the readjustment of the market/corporations/etc. will be, in my opinion, what addresses the needs of individuals in a more efficient way than government policies have thus far. Market-driven corporations with a social focus have a much better chance of representing the people than an individual with authoritarian tendencies riding on a wave of right, or left populism as I suspect the pendulum will swing, ever will or should.