A Wave of Foolish Optimism?

As the world celebrates the most galvanising US Presidential Election in living memory and Barack Obama takes the applause for the most unlikely of victories - had you tried to predict it even a year ago - the Bank of England joined the frivolity and slashed the base rate by 1.5% to give Britain the lowest interest rates since the early 50s.

Have no doubt, what Obama achieved was a resounding victory for those who believed change was required, and even if that meant the selection of the first non-white President in history – something again no one might have predicted at the start of this process and that America had seemed to be against for so long.

Surely this is the dawn of a new era of optimism?

The State of the Unions

While we may rejoice at the swathing cut in bank rates and hope that not just those on Trackers get the benefit, we also got the announcement that house prices had dropped 15%. More importantly, not for the first time, and contrary to Gordon Brown’s assertions about our economic position, the IMF predicts that Britain will be worst hit by the downturn. At Glenrothes last night, Scottish dreams of independence all but evaporated as Labour held the SNP challenge in the wake of the failure of the two Scottish banks, HBOS and RBS.

Perhaps the best summary of the Blair-Bush-Brown era is a sustained period of missed opportunity. Both started on a platform of the most stable economics for some time and there was a new mood of change in Britain about the squeaky clean New Labour approach and their vision of a ‘Cool Britannia’. Much has turned out to be false hopes. As the era presided over a number of the most devastating terrorist attacks in the US, the UK, Russia, Bali, Spain, Pakistan, India and more, the ‘Team’ embarked on two major wars only one of which warranted global support.

As Britain laboured over huge investment and meaningless targets in all aspects of Public Service, laissez faire Government became the order of the day. But a more distinct feature of the period was the rise of the unelected officials who influenced and arguably ran the country culminating in the most bizarre moment when a ‘Political Adviser’ actually strode into a TV Station and ‘demanded’ to be put on a news program at prime time. At the height of the ‘David Kelly Affair’, Alastair Campbell wielded more power than the Prime Minister and flaunted all legal repercussions to give his side of the story on a matter that centred on a document that had been the basis of Britain’s decision to go to war with Iraq which proved to be a pack of lies that either emanated from a ‘spin machine’ or an incompetent Intelligence Service. The Joint Chief got promoted, Campbell retired at his own leisure to enjoy a life of notoriety – the BBC was flayed and the reporter involved in the story is minor hack. Mandelson was recently made a peer to get a key Government post even though he is unelected – so the show goes on.

It’s the Economy, Stupid

The era started with plenty of econo-speak about prudence and cycles and Brown could do little wrong. Despite taxes rising on an unprecedented scale, Britain wallowed in a new freedom of credit which fuelled an explosive growth in house prices. Average families could leverage the equity in their house and their cashflow due to cheap and plentiful credit and borrow and buy on a massive scale whilst savings went negative. As Britain ‘boomed’ a massive hole was appearing in the finances and sums didn’t really add up.

No matter, everyone was doing it – Britain just happened to expose itself more as an economy so very dependent on the Finance Sector for its GDP and house prices rising 160% in 10 years while average earnings actually declined in real terms – the factors underpinning the boom economy were actually going backwards at a rate of knots. The Credit Crunch was a shock to the studious Brown and more of a shock was the fact our economy was far more exposed than he thought despite the obvious warning signs. With all thoughts of economic policy, prudence and regimentation out of the window, Britain has mortgaged itself heavily based on our future tax as part of the £4.5 trillion global bail out of the finance system.

Historical Parallels

There is a bit of the ‘Cool Labour’ in the image and talk of Obama. He is fit, young, good looking and he talks the way people want to hear, bringing out over 90% of the voters to make their feelings known. He is inspirational, enigmatic and has joined all parts of society and the world into his vision of the issues we face and the problems he needs to solve.

US foreign policy has gone up a dark alley and its spectre stalks the streets of international badlands with a large stick talking menacingly to anyone they periodically don’t like. They underestimated peoples and countries, they made terrorism a religious thing by having Christian zeal guide their thoughts just as in Britain and have chased laughing shadows and wrestled vicious, slippery eels in their quest to fight a war which they won’t know if they have won should they do so and have no vision or strategy for the world after as well.

Obama has changed that thinking already. He has posed the BIG questions about foreign policy. Britain of all countries knows that in order to fight terrorism you must eventually take away the reason for the fight as the fighters themselves will never be defeated – surely Blair, who nodded in John Major’s tentative cross and scored the winning goal in Ireland, knows that ultimately you have to swallow your pride and talk to the people you don’t like. It was Blair’s only legacy of note.

Don’t Miss the Opportunity

Bush had his chance and blew it. Maybe he was as dumb as people parodied him for all his Harvard education. Obama does not have that apparent failing – he did not have the burden of dynastic destiny. Two years ago, he was a political nobody who had the audacity to hope and in the face of a shoe-in Democratic nomination in Hilary Clinton, he changed the view of an entire nation and the world too.

The clear view is that the United States has sobered up after a bout of heavy drinking at the trough of world greed and power and having staggered through the world muttering aggressively and causing fights, it’s back, looking clean, fit and lucid and has a new sense of self-worth and purpose.

The world is jubilant and expectant. In the face of global recession, terrorism, instability, imbalance and self-interest, Barack Obama represents the hope of a new world order. Let’s hope he doesn’t do a Rumsfeld and believe the war is won after the ‘Shock and Awe’ of a sweeping Election win because, to use that analogy, the war has yet to begin.

But here is to hoping – Way to Go Obama.