Mr Brightside: “The Times They Are A-Changin’” 

 

“For he that gets hurt 
Will be he who has stalled” 

 

Back in 1964, when Bob Dylan released this song I doubt he ever envisaged them being used in the context of this article!

 

 

In my previous article, “The Blank Generation” I focused on Gen Z and the general lack of opportunity they experienced, with particular reference to graduates and the gig economy.  

In truth, Gen Z seems demoralised, 20% say their preference is for a strong leaders, and no elections. Clearly, they feel that democracy is, or has, failed them. 

And, this isn’t unique to the UK. A study by Cambridge researchers in 2020 covering 160 countries, found that younger generations “have become steadily more disillusioned with democracy”. And according to the Pew Research Center, nearly two-thirds of citizens in 12 high-income nations were dissatisfied with democracy in 2024, up from just under half in 2017. In France, C.30%of young people say they have lost faith in democracy.      

 

‘younger generations “have become steadily more disillusioned with democracy”’

 

Churchill, in 1947, described democracy thus: “Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time.…”   

The Cambridge study concluded that economic disappointment was a major reason for Gen Z’s discontentment. Russia provides an interesting case study. In 1990, the new Russian president, Boris Yeltsin, said: “We can ensure that the people’s living standards do not fall, and in fact they should rise in time.”  Four years later the real incomes of Russians halved, with 32-million Russians driven into poverty thanks to shock-therapy policies. By 2021, just 16% of Russians endorsed “the western model of democracy”. The fact that free-market capitalism was delivered under the banner of democracy, produced a sense of disillusionment that Putin was able to exploit. 

There are similarities in the UK, with how Farage was quick to exploit those left behind by the GFC and, as inequality worsened, led to vote leave triumphing in 2016. Today, after 15-yrs of failed Tory government and, more recently, Labour, Farage is reaping the benefit of voter discontent with mainstream politicians. 

The seeds of the disillusionment go back well before 2008. Thatcherism promised freedom but delivered insecurity. Secure jobs have evaporated, rents have escalated, wages have fallen, youth services have been decimated and graduates face increasing university debt. In many cases Gen Z didn’t vote for any of this.  

As I have written so many times before, the failed experiments that was neoliberalism is a prime cause of this discontent.    

 

‘Secure jobs have evaporated, rents have escalated, wages have fallen, youth services have been decimated and graduates face increasing university debt’

 

When Dylan wrote ‘The times they are a changin” it was in a decade that saw a different type of economic crisis, all manner of social upheaval and war in Viet Nam. There was plenty of civil unrest in the US and Europe, especially in 1968. 

Then, the young and workers combined, were looking to the left, socialism and communism to solve their problems. Their pin-up’s where Mao, Che Guevara and Ho Chi Minh. 

Today, whilst Hitler and Mussolini might not be their pinup’s, people are turning to the right.  

Perhaps, socialism and communism are seen as failed experiments? Perhaps, as WW2 in the 1960-70s was still in people’s memories, fascism was seen as a dangerous failed experiments. 

I don’t see democracy as the problem per se, it’s only a form of government not the government itself. The faults lie with the people in government and their policies. 

Taking the people, the politicians , first. With the exception of Johnson, the past 15-yrs has given us a dull, incompetent, and generally useless bunch. Today’s front benches of both government and opposition genuinely plumbs the depths. 

 

‘With the exception of Johnson, the past 15-yrs has given us a dull, incompetent, and generally useless bunch’

 

There was Cameron, Tim, nice but dim, didn’t know what work was. May, an awfully nice lady – say’s it all. Johnson, I will come back to. Truss, dazzled by her own brilliance, a pound-shop tribute act. Sunak and Starmer, dull as ditchwater technocrats, who couldn’t inspire a drunk in a pub. 

Johnson, ahh yes, Boris. A good speaker, confident and optimistic. Not overly acquainted with the truth, and believed rules were for everyone else. 

Gone is the gravitas, charisma, and decisiveness of Churchill and Thatcher.        

Turning to policy, one of the most often criticised is globalisation. Whilst this can mean many things, the main economic issue for developed economies was that emerging countries could produce goods cheaper, leading to job losses on top of the deindustrialisation of the 1980s. 

Allied to this, and covered by the term globalisation, is immigration. The basic issue is that migrants from emerging economies will work for less than the indigenous workforce, thus driving down wages and increasing unemployment. 

Interestingly, as the graph below highlights, unemployment is relatively low in the UK when compared to the last 50 years.

 

 

 

I think this is misleading. As I highlighted in “The Blank Generation”, C.4m people work in the gig economy, zero-hour contracts. This is disguised unemployment. 

The perceived “failings” of globalisation such as immigration and the so-called “liberal elites” who championed it, has channelled resentments in deindustrialised regions, where both jobs and a sense of identity were lost as capital and investment moved elsewhere. In turn, those left behind, have turned to parties of the far right as their trust in mainstream politicians has collapsed. 

Social democratic parties that had been dominant have been slow “to hold mobile and rootless capital to account”. As a result, their traditional voter base has become resentful of the professional politicians who have failed to defend their interests, leaving, as I wrote earlier, a situation ripe for exploitation by right-wing populists, with promises to restore lost jobs and economic power. 

Perhaps, centre-left politicians haven’t misunderstood, or missed this analyses but they have been  failed to significantly challenge the economic status quo. The levying of global wealth taxes on multinational corporations and individuals remains a discussion point. Domestically, we are told its implementation would lead to capital leaving the country, as has been the fear since the lifting of controls kickstarted the neoliberal era in the 1980s. 

In effect, the lackadaisical approach of successive centre-left governments has led to their own downfall. With hard-right politicians quick to take advantage and scapegoat immigrants to satisfy the anger of those left behind by events. 

They are doing so out of desperation, and the need for hope of a better future, the future that their parents had. Unfortunately, hope is not a strategy. 

The real enemy in all of this is inequality. 

The Democrats suffered a heavy defeat in Novembers election, and were criticised for the failings of Biden’s economic policies.  

 

‘The real enemy in all of this is inequality’

 

In actual fact, Biden did rather well. He is the first president in history to have posted consecutive job gains in every single month. The economy grew by 13% during his presidency, outperforming every other developed nation. 

The S&P500, is up 50% since Jan 20th 2021, and house prices have risen almost twice as fast in the last 4 years as they did under Trump. 

Everything was great, but only the few benefitted. There was no trickledown, it all stayed at the top end. 

In 1982 the richest American was Daniel Ludwig with £2bn; in 1999 it was Bill Gates with $85bn, in 2019 (pre-Covid) it was Jeff Bezos with $114bn, today it is Elon Musk with $416bn. 

Since 2000, the total net worth of Forbes US-400 has gone from $450bn to $2,300bn. 

Research by the Federal Reserve Bank of Missouri in October 2024, found that: 

• The top 10% of households by wealth had $6.9 million on average, and held 67% of total household wealth. 

• The bottom 50% of households by wealth had $51,000 on average, and held only 2.5% of total household wealth.  

So, how will populism benefit the disappointed? 

Immigration will either be reduced or stopped completely. Tax cuts for businesses and individuals will be funded by shrinking the state, and, in the US tariffs will be levied on imports. 

Typically, “shrinking the state”, refers to the reduction of government spending and size. A report by the UN Governance and Sustainable Human Development, found that this has a negative impact on poverty, economic and social inequality, health, the environment and public education. 

Argentina serves as a current example of populist economics in action, and, their president, Javier Milei, has been cited by a number of populist politicians. 

When he  took office in October 2023 monthly inflation was C.8%,. After his victory, monthly inflation soared to 25% before dropping back to under 3% in November.  

Milei is a devotee of Milton Friedman, he of the Chicago school that created neoliberalism, and will likely claim that his public sector cuts were painful but necessary. From what I read, this isn’t the case; Milei devalued the peso, triggering a spike in domestic prices while using currency controls to keep a lid on further inflationary pressures.  

Mr Milei’s policies have inflicted significant pain and little gain.  

There has been a very high social cost attached to this austerity programme of slashing services and jobs. Falling real wages have left many unable to afford health insurance, further straining underfunded public hospitals. Violent protests against these measures rocked Buenos Aires this summer. The economy is tentatively recovering from Mr Milei’s shock therapy. But more unrest is likely if living conditions don’t improve. 

Consumer prices rose by 160% in his first year in office – roughly the same increase recorded during the final year of the previous government. Rather than representing a break with the past, Milei’s agenda echoes those of earlier right-wing administrations, whose members now sit in his cabinet. Such policies might enrich a select few in Argentina – or Trumpian America – but for the majority, they lead to greater hardship and inequality.  

The moral of this story is simple. Populists mean more neoliberalism, which can work as long as you accept rising inequality as part of the solution. 

The point is that rising inequality is a large part of the problem. 

 

‘Populists mean more neoliberalism, which can work as long as you accept rising inequality as part of the solution’

 

Governments have failed the electorate because they have been too timid to deal with it, and have been dazzled by the influence and wealth of neoliberalism beneficiaries. 

We need better leaders with the courage to tackle vested interest rather than pandering to them, and telling the majority they would like to do more but…… 

Labour should ignore the media and  opposition and prioritise fair income distribution, rising living standards, balanced trade and a green transition, rather than, as Chancellor Reeves orthodoxy of championing the financial sector, deregulation and public service cuts.  

These are the policies of yesteryear, they are why the NHS is hiring “corridor care” nurses. It is why the poorest people in Britain are leading shorter lives. This agenda has failed for 14 years; why would it, even in milder form, work now? 

The chancellor remains overcautious and deferential to Treasury orthodoxy. Her cut to pensioners’ winter fuel payments – a long-rejected Treasury proposal – exemplifies this. Yes, in her last budget, the chancellor did deliver an increase in spending in 2024/25 and 2025/26. But this was a one-off. Otherwise, unprotected spending outside health, education, defence, aid and childcare will fall in real terms by 1.3% annually. 

 

‘We need better leaders with the courage to tackle vested interest rather than pandering to them, and telling the majority they would like to do more but……’ 

 

There appears to be a correlation between our stagnant GDP and government spending. Fiscal austerity has forced the private sector to take on unsustainable debt to maintain growth. Labour must break this cycle by raising real wages and reducing inequality. None of this will be achieved by giving the City free-rein to cause chaos. 

A Labour government should be about encouraging real-world solutions over market fantasies. To achieve this we need optimism, bold, alternative thinking, and an ability to make the case for such changes.  

 

 

 

“You choose your leaders and place your trust 
As their lies wash you down and their promises rust” 

 

‘Readers must be getting bored of reading a variation on a theme each week. But, at the same time, there is a need to understand the situation.

It should come as no surprise that voters are becoming increasingly disenchanted with mainstream politicians, and their constant failure to deliver.

It’s the word “failure” that is the key. The US and Joe Biden are a case-in-point. His economic policies delivered jobs and growth but only a few benefitted. This is where neoliberalism, free-markets have failed the majority.

Neoliberalism is the economic policy of the right. But the political world has been moving  steadily in that direction since 1980. This direction of travel has meant that the “political centre” has shifted to the right, as a result we see parties such as Labour occupying what would have been traditional Tory ground.  

Today, both Labour and Tory almost osmose into one, especially in the eyes of the electorate who simply feel let down, and ignored. Into this gap come the hard-right, blaming liberal elites, the establishment, globalisation, and immigration, and promising to right all those wrongs.

Trump is a prime example, but his solution is more application of neoliberalism supported by tariffs. The latter will likely lead to more persistent inflation and higher interest rates, and the winners will be rentiers, the top-1%.

The tech barons, who dominate the uber-rich list love this; burn regulations, slash taxes, get richer still and wield even more influence.

Biden understands this. In his farewell speech he said: “Today, an oligarchy is taking shape in America of extreme wealth, power and influence that literally threatens our entire democracy, our basic rights and freedoms, and a fair shot for everyone to get ahead.”

He went on to outline concerns, such as a “crumbling” free press, the outsized influence of the military-industrial complex, rising disinformation, and the need to remove dark money from politics.

The same is true of Reform. Farage loves being seen with rich people, his newly appointed treasurer is billionaire, albeit it a modest one by US standards.

Unfortunately, the disappointed will only continue to be disappointed.

Lyrically, we start with Bob Dylan, and finish with a more up-to-date protest song, “Going Underground” by the Jam.

Enjoy!

Philip. 

 

@coldwarsteve

 

 

 

 

Philip Gilbert is a city-based corporate financier, and former investment banker.

Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s

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