Corbyn’s election is a disaster – for all the other populist parties
Being a populist is easy – until you get in to power. That's why Jeremy Corbyn's victory will make things very tricky for all the other populists out there.
The LibDems got as close to power as they've ever got in 2010, propelled by a wave of anti-establishment disgust, and hope for change. There was no way they could deliver, and they didn't. Of all the parties, they took the biggest kicking in the 2015 election.
Brand meanwhile, made his name as an anti-establishment, fearless truth-telling anarchist. Then he endorsed the Labour party joined the system' and his credibility was shot.
Will Jeremy Corbyn go the same way? Maybe not. I can't see Corbyn ever selling out'.
But he's certainly going to make things tricky for all the other populists out there...
The four stages of sorting out a broken system
The most visible response to the crash has come from the central banks. The era of 0% interest rates and money printing has left many people confused, insecure and angry. It's also treated the symptoms, rather than the causes of the collapse.
You don't have to be a radical thinker to believe that a) the pre-crash system had significant flaws that led directly to the crash; b) those flaws have not been addressed, due to a mixture of poor leadership, confusion, and lobbying by vested interests; and c) the central bank solution has rewarded certain groups of people at the expense of others and not necessarily the most deserving' groups.
Trouble is, fixing' a system is a difficult, complicated business. There are four stages to it.
First, you have to recognise that there's a problem. That's the easy bit. The thing you're trying to fix is broken.
Second, you have to diagnose the problem. Sometimes that's relatively easy. If your tap is leaking, you call a plumber. If your smartphone is broken, you go back to the shop. But even then, sometimes the experts can't figure it out.
So imagine how much harder it is to fix' an economy. Particularly when you can always find an economist an expert' who'll back your diagnosis, regardless of what it is. (You just need to note that for every indignant, high-conviction letter sent to The Times by a group of economists, there exists an equal and opposing letter from a no-less indignant, equally convinced group it's almost a rule of physics.)
So you get a diagnosis together. This is no more than a leap of faith. And it's based on your own political and psychological biases. So you get no points for that either.
That takes us to the third bit. Coming up with the solution. Even if you get the diagnosis right, there's no guarantee that you'll have the right answer as to how to fix things.
Finally, even if your solution is a good one, you have to put it into practice that's the last stage, execution. And it's only if you can get to this stage, that you find out if it works or not.
In short, this stuff is complicated. And that's not generally what angry, insecure people want to hear.
Populism will eat itself
As we've noted several times already, this explains the new populism' we're seeing across the globe, not just in Britain.
But this sort of energy also feeds upon itself. For example, on balance, Corbyn's victory probably makes another Scottish independence referendum less likely.
Why's that? The SNP's landslide victory in the general election this year was hugely helped by the party's ability to paint Labour as Red Tories'. That's one thing they most certainly can't do while Corbyn is in charge.
That's why Nicola Sturgeon's immediate reaction on Twitter was to argue that there was no point in voting for Labour because they were now unelectable so you might as well vote for SNP.
You can see why she took that angle. But it's not a great argument, coming from someone who owes her position of power to people voting for a party deemed unelectable' by the complacent majority.
Want to stay in Europe? You can't be all that leftwing
We've grown used to a Blairite Labour party being very happy with a Europe that essentially reflected their soft left, big government, gravy train jobs for life and the plebs can pay for it' philosophy, and enjoying the Tories' deep rifts on the issue.
We've also grown used to Euroscepticism being viewed as the territory of the right, fed up with interference from a socialist-inclined Brussels.
But now you've got a Eurosceptic in charge of Her Majesty's Opposition. He's coming at it from a different angle. He thinks Europe is too neo-liberal'.
That's a massive shift. You can no longer paint Euroscepticism as a purely right-wing proposition. Now it's only centrists like the wet' Tories, the LibDems and oh, the SNP who want to stay in Europe. That's an interesting shift, to say the least.
Meanwhile, Ukip are going to lose some of their appeal to former Labour supporters who didn't appreciate the party's stance on Europe. That'll force them to clarify and shout more loudly about what else they stand for.
The truth is, this is all part of the post-crisis healing process. The political shake-up reflects the shattering of the myths people took for granted in the run-up to the credit crisis, and the reformation of new beliefs. This has all happened before.
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John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.
He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.
His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.
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