Spin is not enough, Mr Obama

President Obama is a thoroughly modern politician in the best and worst senses. Consider his recent outburst against the large bonuses Wall Street bankers paid themselves in 2008, at a time when their businesses were in a state of stress and in many cases reporting huge losses.

The President has correctly judged the public mood. Governments around the world find it convenient to blame the bankers. The bankers have been poor at stating their case, if they have one. The bankers clearly made large errors in the way they ran their businesses. Paying themselves large bonuses in any of the loss making businesses is absurd, just delaying the inevitable. Sometime these organisations have to cut costs to get them into line with what the customers will pay for. The President has decided to reflect the public mood, to show people he is touch with how they feel, by roundly condemning them.

To me reading the public mood, and saying the right things at the right time, is an important part of political leadership, but not the most important part. In a way it is the easy part. As an MP I see so many emails, letters and commentaries, and meet so many people who tell me how they feel, that it would be surprising if I did not have some feel for the public mood. Some colleagues need to spend lots of money on polls and focus groups to do this more scientifically, but usually come up with similar answers to those of us who trust our own judgement of what people think.

The more difficult part of political leadership for those in power is to decide how to solve the problems of the day, or to take action to prevent future problems emerging. To do this politicians have access to unbelievable amounts of public money and to the best advice money can buy. They are meant to be the generalists, the voices of commonsense, trusted to arbitrate and adjudicate between the competing strands of advice on offer to get things right. In recent years on both sides of the Atlantic politicians in power have concentrated on painting the mood rather than on solving the problems, with disastrous results.

President Obama, you might recall, was invited to the big meeting in the White House to discuss whether and how to bail out the banks at the end of last year. Why didn’t he then insist on a no bonus clause in the public financial support for banks which he then welcomed? Why didn’t he offer some leadership to his friends who control the Senate and House, to ensure that when they debated and voted on the package of financial support, they inserted a requirement that no bonuses be paid in state aided businesses? It is no defence to say he was not then President. Mr Bush was behaving in a non partisan way and was open to changes from the democratic candidate. More importantly Mr Bush understood that the Democrats held the purse strings through their votes on the Hill, so he would have to have listened if that was what they wanted.

We have learnt in the UK that clever media manipulators in office can get away with successful interpretation of the public mood for quite a long time before the public rumbles them. We are also learning that once the public loses faith, the disillusion becomes deep.

Mr Blair’s success in speaking for the public mood caused the Conservatives no end of trouble for the first five years or so of this government. I remember being a lonely voice behind the scenes arguing to the Opposition that it was no use our trying to do what Mr Blair did. If we spent money on polls and focus groups they would tell us that we were living in a Britain where the public liked their PM and believed in the lines that were being trotted out by Number 10. Of course they did, because those lines from Number 10 were informed by their polling to find out what people thought!

It was a nonsensical circular loop, which could only in the end work if the government walked the walk as well as talked the talk. If they did what they said and it worked the Conservatives would continue to lose. If, as I thought, the government failed to deliver the better world it said it was creating, the Opposition would win in due course. Opposition needed to highlight the mistakes, warn about problems ahead, and show it was different from the public mood. One example of an early disagreement was over Bank of England “independence”. The leadership told me correctly that people believed the government when they said they were making the Bank independent, and it was popular. I said that may be so but it was not true and would end in tears.

Sometimes in Opposition politics leadership comes from telling the public something they do not yet believe or even want to hear. Always in government successful leadership requires not just winning the immediate battle of the soundbites, but making the recommended action and making sure it works.

George Osborne’s decision to oppose the VAT reduction was an important moment in modern British politics. It was decisive rejection of what could have been a popular government move. Because it was right, public opinion followed the Opposition’s move. It has been followed up by the Opposition rightly pointing out that the government is spending and borrowing too much. The government’s soundbites about the global crisis, and doing something, may suit the focus groups, but they will not save them. What matters is what the government does and whether it works.

Mr Obama is an intelligent man. He has shown he is a superb modern politician, who can build a coalition of support and judge the public mood. Now he has to do something much more difficult – run his country well, trigger an economic recovery and lead the Western world politically. Attacking bankers for paying large bonuses is not the way to do that. He has the power now. So why doesn’t he sort out this affront to commonsense and decency? The financial sector cannot afford to pay bonuses if the underlying businesses are loss making and struggling to survive. No bank in receipt of state aid on either side of the Atlantic should be paying bonuses for 2008 to senior people.

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19 Comments

  1. sjm
    Posted January 30, 2009 at 9:35 am | Permalink

    Spot on as usual, John, and also many thanks for the rousing and passionate speech at our Association Dinner last night. I went home and declaimed as much as I could remember to my husband, but without the finer details, alas.

  2. Waramess
    Posted January 30, 2009 at 10:26 am | Permalink

    A quote from Mike Shedlocks post this morning

    “My friend “BC” just pinged me with … The banksters hold the marked cards, the politicians are the dealer, and the taxpayers are the patsy in this game. Of course the banks are not just ‘teetering’ anymore. They have actually gone bankrupt.”

    Looks like Mish’s pal hit the nail on the head. The banks are taking the pi**. The USA banks have just announced bonuses for last year of eighteen thousand million dollars.

    No point saving this lot John, they are past saving. Save only the barest necessity. Remember it’s our money you are all playing with

  3. Ian Jones
    Posted January 30, 2009 at 11:39 am | Permalink

    Fully agree on spin versus substance. Just look at the unions in the north with their wildcat strikes over “foreign workers”. I thought it was the unions who wanted all the equality legislation and here they are breaking the law!!!

    Cant abide by racism and this is nothing but racism. The unions are back to their usual tricks.

  4. Cliff.
    Posted January 30, 2009 at 12:08 pm | Permalink

    John,
    An excellent post as usual.
    I have thought from the first time I heard Mr Obama that he was an Afro-American version of Mr Blair.

    I agree with your point about political parties using polling companies to guide their policies, however as I think I have mooted to you previously, if the main parties both use these organisations for guidence, they will come up with the same message and this thus leads to no real differences between the parties and, no real difference and thus no real choice means no real democracy.

    During this government’s tenure, we have seen the party machine bullying elected representitive into backing the party line, it could therefore be argued that the party system and the tribalism generated by it, is ruining our parliamentry democracy, whatever happened to votes of conscience? I cannot believe the majority of Labour MP’s backed the 42 day detention without charge legislation for example…..Are party leaders too powerful in modern politics?…Is it possible to make party leaders more answerable to the members of their party and if that leader is also the PM, how can we make them adopt policies that are in the interest of the country rather than their own political survival or party’s interest? It seems our last two PMs were little more than dictators and forced through their own personal agendas; How will we be different once elected or won’t we be?

  5. Paul
    Posted January 30, 2009 at 12:15 pm | Permalink

    You can do amazing things with spin for a long period of time, but you can’t change reality. In the end, it comes back to haunt you. Not only is the economy catching up with Labour, but so is Education, Health, Crime and everything else that’s spun.

    Of course, all governments spin, including Mrs T. But this lot don’t actually *do* anything AFAICS

  6. Neil Craig
    Posted January 30, 2009 at 1:40 pm | Permalink

    Not a word I can disagree with there & it explains exactly why the Conservative Party is led as it currently is.

    This is also a major part of the reason I believe in PR – that it becomes possible to have a political platform which puts forward new ideas which appeal to only a minority, but if the platform exists persuading a majority becomes easier. To be fair I must admit that in Scotland, where there are 4 major parties they are all apparently agreed on more spending, more big statism, more smoking banning & more windmills.

  7. Johnny Norfolk
    Posted January 30, 2009 at 2:58 pm | Permalink

    The people that vote for the Obamas and Blairs/Browns, are the something for nothing types.
    They think that words and good ? inentions are all that is needed for a Eutopia.
    It does not work, it will not work.
    When will people understand that you need to earn before you spend and borrowing should be limited to the least you need not the most.
    Every generation is taken in by these people and history is forgotton. I remember Wilson, Healy and Callaghan and saw through Labours words.
    I am afraid the USA has much pain to go through, as have we.

  8. Johnny Norfolk
    Posted January 30, 2009 at 3:06 pm | Permalink

    Why is John Redwood mocked by the BBC. ?
    Why is John Redwood not on the Tory front bench. ?

    Because he speaks the plain truth without spin and lies.

    That just does not do, it has to be wrapped up in warmth and comfort with hidden meanings and get out clauses.

    When Labour and many voters in our country face up to the truth we may start to move forward but not untill.

    and BBC, John Redwood is part of the solution not the problem.

  9. Robert
    Posted January 30, 2009 at 3:08 pm | Permalink

    John on the nail as usual! I particularly felt that this resonated –
    ‘Sometimes in Opposition politics leadership comes from telling the public something they do not yet believe or even want to hear.’ This demonstrates real leadership and reminds people that politics is also about persuasion as much as telling them what they want to hear. it is only recently that the Tories tentatively have started to adopt this strategy. Gravitas they do not have, hence Clarke returning to the fold is part of their solution.

  10. Adml J Sparrow
    Posted January 30, 2009 at 3:13 pm | Permalink

    Classic spin last night on QT, Lord champange sociallist charlie something or other, sprouting on about Newliebour getting debt down to 39% from the Tory 43% failed to mention that it was Ken Clark’s policies that did it for them and had they kept going to 29% we would’nt be in today’s mess approaching 55%. Who knows even flat rate tax bands, No- only joking on that from NL, only the conservatives have the sense to go down that route.

  11. mikestallard
    Posted January 30, 2009 at 5:17 pm | Permalink

    I was reading First Post just now and was smacked between the eyes by this paragraph:
    “But there is another potential outcome. Even in the moribund democracies of the new century, the ‘angry crowds’ on the streets of Europe are a reminder that the public may not always passively endure the insane avarice of the financial elites who have brought about this catastrophe and the cowardly and incompetent politicians who serve them. Rather than something to be feared, the coming upheavals might herald, not the end of civilisation, but the emergence of a new politics.”
    Democracy is something very new and very strange in mainland Europe. Now it is under attack from the EU machine and also from the economic crisis. It is coming unstuck. If the unrest gets worse, and it must, actually, order is going to have to be restored somehow.
    Why do I keep coming back to Yeats? “Things fall apart, the centre cannot hold, mere anarchy is loosed upon the world”?
    The time for spin and smooth words is passing rapidly: bankers are only the fall guys.
    If we are not very careful, some genius will arise with the True Answer. Already Czechs have been prevented by Police from marching on a Roma settlement…….

  12. Adrian Peirson
    Posted January 30, 2009 at 7:29 pm | Permalink

    Wasn’t it Marx who said that Unbridled ( unregulated ? ) capitalsim would eventually lead to the collapse of capitalism, leading to Nationalisation of the Money supply, leading eventually to Communism. Has all this been deliberately engineered I wonder.

    http://www.progress.org/fold35.htm

  13. G F Warburton
    Posted January 30, 2009 at 10:10 pm | Permalink

    Some time in the past, probably until the sixties or seventies, banks were managed and run by bankers. Bonuses, if there were any, were no doubt modest and well earned.

    The clearing banks in the UK had good names, were solid, dependable etc

    Enter the spivs who sold a glorious future to the shareholders and, behind the respectable facade of the banking operation, opened casinos to gamble on shares, futures, to sell floors and buy ceilings (or vice versa), to invent ever more ludicrous derivatives on which they could gamble and ultimately, in their ignorance, to buy well packaged pigs in pokes.

    The spivs have brought the banks to their knees and they should be allowed no future in the financial life of the country.

    Proper training of bankers has all but disappeared. At my local bank, my wife’s ex-hairdresser sits behind the counter at her computer filling in the boxes. She is not a cashier or bank teller but is a product of the spiv’s thirst for profits to feed their bonuses.

    If the banks can step back 40 years to the disciplines that built their reputations, they have a future. If they continue to be run by the clowns who bought many millions or billions of pounds of junk, they will fail again.

    George Warburton

  14. Atlas shrugged
    Posted January 31, 2009 at 1:07 am | Permalink

    Dear John

    I is difficult to disagree with much of what you say. Your postings are always sensible and usually practical.

    HOWEVER.

    If you replace the word BONUS with BRIBE, then this whole problem takes on a WHOLE NEW MEANING. What is wages or bonuses and what constitutes a BRIBE can be a rather gray area at the best of times. In times such as these, things to me seem far more black and white.

    Many people who have been given these large bonuses/bribes have over the last few years especially have posted on the internet , claiming all sorts of irregular activities at their place of work.

    Several have stated that when they suspected that their employer was on some kind of corporate suicide bid, they reported their feeling to their boss. This resulted in them being ORDERED to carry on effectively ‘bankrupting the bank’ regardless of the consequences, or they would lose their job and bonus.

    Many have claimed that there has been a long planned conspiracy to bankrupt their own businesses, by the owners of The International Banking system. By doing so they intend to bankrupt individual nations, as a precursor to introducing World Communism/Fascism to the entire planet. My self being one of them. The details of this well planned scam were out lined in a book by one of Phillip De Rothschild’s girlfriends. Namely Ayn Rand in a famous best selling novel of hers called Atlas Shrugged.

    In my line of business going bust to make an enormous profit, is known as the OLDEST TRICK IN THE BOOK. Many companies are set up in the first place, simply to go bust on the creditors and shareholders. The directors of these companies often come out of it all with a clean criminal record and several millions in the bank. This in spite of hardly ever trading at a profit, during the entire life of the company.

    John please try to understand. The biggest crooks of all, sport very nice suits, get educated in the finest of public schools, talk with extremely posh accents, and would sell OUR grandmothers for less then the price of a tin of dog food. Less then that if they were then not required to pay up on the pension.

    We should not be bailing out corporate Britain and certainly not the international banking system. We should be watching it go down the toilet with a collective smile on our faces, and two stiff fingers trust into the air.

    Then BUY it all back for pennies in the pound FROM THEM. then privatise the lot, amking the general public the shareholders. Before doing so, start issuing our own currency, interest free. Otherwise it is the INTERNATIONAL BANKING SYSTEM that will end up buying up our entire existence, for virtually nothing at all.

    In my line of business I have seen this type of CRIME happen time and time again. Since I was born I have personally witnessed this country go through 4 booms and now 4 busts.

    I have absolutely no reason whatsoever to believe our current financial meltdown is not also a massive criminal conspiracy on a truly world wide scale.

    You make a VERY VERY interesting point about government and their advisers being the best MONEY CAN BUY.

    One thing is OBVIOUS to anyone outside the Bank of England, the entire shadow cabinet, and all the extremely highly paid and qualified expert economists within the civil service, FOR A VERY clear reason.

    This could not have happened without the whole lot of them being collectively criminally incompetent or just plain conspiratorial criminals. Who seem to be determined to pull off the biggest crime of this century and possibly any century.

    Your personal reassurance that it is not a criminal conspiracy of massive proportions, or that when in power Cameron will have the whole damned lot of them thrown in jail, while the key is forever thrown away, simply for their crass criminal incompetence. Would be much appreciated.

    We currently have the crime of CRIMINAL CORPORATE MANSLAUGHTER on our books.

    I estimate that our banking system will eventually be DIRECTLY or otherwise responsible for the premature and often painful deaths of many millions around the world. Some of these people will be residents of the UK, without doubt.

    If I can potentially go to prison because one of my workers losing a finger due to my personal incompetence. What punishment do you believe suitable, for the manslaughter of possibly a BILLION people?

  15. Richard
    Posted January 31, 2009 at 4:32 am | Permalink

    Too right – the Merill Lynch thing is unbeeeelievable. Senator MacCaskell is proposing to cap bonusses at $400k retrospectively for 2008 on all TARP funded orgs but whether this is sanctioned or just a baloon….well, who knows? I personally don’t think the IMF were right, I’m pitching at about -8%. Good grief. DTP.

  16. StevenL
    Posted January 31, 2009 at 4:58 am | Permalink

    “George Osborne’s decision to oppose the VAT reduction was an important moment in modern British politics.” (JR)

    I’ll give you this, however, party leadership GO included, did not do anywhere near enough to defend the fuel duty/price stabaliser.

    The revitalisation of the Tory party, and it’s subsequent high riding in the polls before the Brown bust, had a lot to do with party leadership embracing issues such as the environment.

    When oil prices fell (which you predicted here if I remember correctly) you went shy on the issue – were you marketing people advocating this kind of short-termism?

    The fact is, even if fuel had been fixed at £1 a litre through tax, the extra tax would help fiscal stimulus/debt repayment and also help the party’s ‘green’ ambitions which many people read as increased energy security for the long term.

    Reply: Labour of course invented their own version of the fuel stabiliser to claim petrol would now be dearer with the Tories. The Conservatives never put up a worked through scheme with prices and levels of tax, so they did not see why they should defend any particular higher level of petrol price in current circumstances. We will find out how serious they are about it by whether they launch it for the Election with prices and tax levels.

    GO and DC should have defended this policy, accomodation could have been made with commercial hauliers through the tax system.

  17. adam
    Posted January 31, 2009 at 6:57 pm | Permalink

    i dont know about capitalism but one thing that does contain the seeds of its own destruction is New Liebore

  18. Credit Company
    Posted March 20, 2009 at 3:07 am | Permalink

    Well said, finally a good report on this stuff

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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