Since 2008, fear and uncertainty has gripped our global markets. The American-born debt crisis has left investors reeling, unemployment skyrocketing and economic growth dwindling. During this time, leaders have tried, in vein, to reassure their citizens that recovery was coming. The simple truth is, these situations don’t mend themselves quickly. Economists know this. Business leaders know this. Politicians know this. Yet, the economic ambiguity facing many countries has offered a political goldmine for any parties in opposition, and they are promising near miracles in order to gain power.
The GOP Presidential candidates all share the same, core argument in their campaigns: that President Obama has systematically failed in his attempts to revive the economy. Some, like Bachmann, proclaim that job creation and domestic energy reliance hold the answers. Others, like Perry, argue that foreign aid budgets need to “start at zero”. These blanket claims are easy to make on a stage among fellow conservatives, but why is it that no one is talking about the elephant in the room? The fact that it was a two term Republican President in Bush that failed to recognize or act on the impending economic doom. The GOP candidates are banking on Americans not remembering past 2008, and, if polls are any indication, they could be right. The President’s approval rating is at an all-time low, undoubtedly due to the state of the American economy. If you believe the candidates, the Republicans hold all the answers to solve Obama’s many failings.
The Tories (British Conservative Party) used the state of the British economy, among other issues, to grasp power in 2010. Cameron communicated a message that, it would seem, got through. That message was that years of Labour government had left Britain too exposed to the effects of the Global Financial Crisis (GFC) and that change was needed in order to regain control of the budget and spending. Now, many economists would debate the actual fragility of the British economy, many even rejecting the picture the Tories painted, however, what we saw was that the British listened, and entrusted a conservative party to steer them through the gloomy economic outlook.
In Australia, we see a conservative opposition whose attacks over economic policy are both vicious and unrelenting. Despite Australia’s unemployment and debt rates being among the lowest in the developed world, the conservative leader, Tony Abbott, continues to talk down the economy and the sitting government’s policies that oversaw Australia avoid recession. Consistent polling in Australia tells us that these messages, like in Britain and US, are getting through. Even in a nation whose financial situation is envied around the world, Australians too seem to be listening to the conservative message. Australia’s next election is to be held in 2013, and many predict that the result will be the same as we are seeing globally, a right-wing conservative win.
The message from all of this is not that conservative parties are unable to manage their respective economies. It is rather that voters must ere caution when hearing promises made by candidates. In matters of economics, there are no quick fixes. The vast monetary monster that is a nation’s economy cannot be tinkered with in a way that will see dramatic changes in an instant. There is no band-aid solution. So as governments fall around the world on the back of campaigns built around debt, deficit and jobs, there is a simple lesson. Don’t expect the miracles promised on the election trail. These potential conservative candidates, if in office, may very well fall on the same sword they used to slay their opponent.