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.