22 March 2016
by Nicholas Stuart

The Big Picture Looks Grim For Australia

Since 2008 the economy's been going nowhere.

When I first became a foreign correspondent, I was an ingenue. Still wet behind the ears, I had absolutely no idea how to take the "mood" of a society. This left a massive hole in my reporting because I had no way of knowing what the average person on the street thought.

My friend, a far more experienced colleague, shook his head slowly. "Come on mate", he said, "you pay, and I'll show you how to find out what's going on". It seemed like a good deal, so I followed him out of the hotel, through the cold street, and into the nearest bar. Once ensconced with a couple of expensive drinks my mate turned to the barman. "Hey", he shouted, "what's going on?"

"Sorry, no speak English," he replied, looking away.

My friend pounced. He exclaimed, "Wow; amazing! This bloke's too terrified even to tell us what he's thinking. Fear stalks the land ... and so do the secret police. That's your headline", he announced, drowning his beer. By the time I read his report the next day our truncated exchange had been blown up into an evocative report about a chilly night of terror; furtive conversations quickly broken off; and eyes darting from side to side.

It sounds amusing, but the real irony is my friend caught an essential truth. His descriptive phrases summed up something raw, intense and elemental – and even if the things he wrote weren't strictly true, perhaps they should have been. He'd found a way of describing exactly the sort of thing one suspects detailed qualitative research would have borne out. The trouble is, because pollsters are handicapped by an unwillingness to simply make things up, they can never jump ahead of the crowd. That's a limitation columnists can slip around.

So, bearing in mind that the following observations are absolutely unscientific and completely biased, let me tell you about what's happening in the West, from a pleasant conversation in a quiet restaurant in Celle (Germany) to a shouted exchange in a working-class pub in Kingussie (Scotland) to a long chat with people from a diner in Boston (USA).

A very real, albeit inchoate, anger (indeed, rage) is lying just below the polite surface of society. People are angry. Get them talking about their worries and it quickly comes to zero in on the discontinuities: disliked politicians; "foreigners" they don't want; and frustrations of daily life. But dig deeper and a more complex picture quickly becomes apparent.

The angst is born of twin concerns. Firstly, since 2008 the economy's been going nowhere. Run through the statistics. GDP growth in most economies is sputtering along. There's the occasional cough and jerk forwards, and because our growth is currently rising by 3 per cent, things aren't too bad in Australia. But it's not enough.

Personal debt is increasing (we owe more, proportionally, than any other country in the world) and the government debt is exploding (with no indication that Malcolm Turnbull's prepared to impose any taxes to balance this for fear it will lose him votes). Job creation appears to have stalled and yet we're still embracing immigrants. And nor is there any sign this is about to turn around. Both government and opposition have attempted to throw money at the problem in the vain hope that something will "click" and the country will start moving forward again. It won't.

Something decisive is happening to the global economy. The tricks of yesterday aren't helping. Look at Japan. Stimulus after stimulus have been launched: all to no avail. Now we're attempting to do exactly the same thing.

The big picture's looking grim and we can adjust to that. But what's exacerbated the gulf between rhetoric and reality is the increasing disproportion between the well-off and everyone else. Baubles have shifted from encouraging people to work to being a focal point of anger.

House prices are continuing to move faster than normal salaries, which is a problem. Do a young family borrow from their family, and, if not, how can they ever save for a house with their deposit shrinking each year?

Yet compare this predicament with those of politicians. Nothing stops their pay rises, because they're not linked with the "real world". Their pay is set in relation to other high-earning individuals, making the entire spectacle a farce and this is the other issue sparking anger. While the average person is going backwards financially, some are doing very nicely.

There's no excuse for increasing inequality: it rips the core out of our society, never more so than when the rewards for some seem to be awarded arbitrarily while others barely have a chance to escape the fragile shanty towns on the edge of our civilisation.

This is why Donald Trump is not an aberration. He simply represents the irritation and annoyance of ordinary people personified. Nor is the movement to tow Britain out of Europe some kind of anomaly. It is, rather, an incoherent frustration that's coalescing around a symbol. And the very fact that Germans have turned the name of their Chancellor, Angela Merkel, into a derisive verb meaning "to do nothing" (merkeln) doesn't represent a new low in politics. It's a symptom of rage born from frustration.

Finding an answer will require a fundamental rethink of the sort of society we wish to be. This is a project that can't be left to so-called "market forces", and the reason's obvious. Travel anywhere and you'll soon experience the spreading disillusion. The problem is the old model; the growth model; has finally stopped working. That's why people are angry with the politicians. They're carrying on as if nothing's changed. They're still stoking the economic fire the old way before standing back to wonder why nothing's working. The trouble today is that we're running out of time, as well as money.