New Social Compact: Deregulation and Universal Basic Income

Two people shake hands
Two people shake hands (Pixabay)

I believe that to shrink the culture gap in Western democracies — between generally well-educated “globalists” and those who feel left behind — we need a new social compact.

The twentieth century’s was built on strong trade unions, lifetime employment and health and pension benefits tied to salaried jobs. The economy, and people’s expectations, have changed in such a way that this is no longer sustainable. But we haven’t come up with a replacement yet.

The American Enterprise Institute’s Dalibor Rohac may be onto something. He calls for a “grand bargain”: serious deregulation coupled with the introduction of a universal basic income. Read more

Merkel’s Answer to Populist Challenge: Shift to the Left

German chancellor Angela Merkel delivers a news conference in Brussels, March 15, 2016
German chancellor Angela Merkel delivers a news conference in Brussels, March 15, 2016 (Bundesregierung/Guido Bergmann)

Angela Merkel’s answer to the defection of right-wing voters is — counterintuitively — to shift further to the left.

Der Spiegel reports that the German chancellor recently told members of her Christian Democratic party (CDU) they need to do better on pay, pensions and housing.

They were expecting a harder line on immigration, which is the issue that galvanized the Alternative for Germany’s voters.

This new far-right party placed third in last month’s election with nearly 13 percent support.

Merkel’s Christian Democrats still won, but with only 33 percent support — their lowest vote share in over half a century. Read more

Conservatives Need to Make Capitalism Work for Everyone: Davidson

Scottish Conservative Party leader Ruth Davidson
Scottish Conservative Party leader Ruth Davidson (Scottish Conservatives)

It is not inequality that bothers Brits, argues Ruth Davidson, the Scottish Conservative Party leader, in the new online magazine UnHerd. It’s injustice.

People expect that the CEO of a corporation will be the highest paid person on the payroll. What they don’t accept is that FTSE 100 bosses are paid 174 times the average worker’s wage in this decade — compared to 13 to 44 times in 1980.

Especially when many of their companies have received either big fraud-related fines or bailouts from the state.

The distinction matters, because it goes to a broader point. Read more

Smart Policies, Wrong Vision from Germany’s Social Democrats

German Social Democratic Party leader Martin Schulz, then president of the European Parliament, watches as Chancellor Angela Merkel signs a guestbook, November 7, 2012
German Social Democratic Party leader Martin Schulz, then president of the European Parliament, watches as Chancellor Angela Merkel signs a guestbook, November 7, 2012 (European Parliament)

Germany’s Social Democrats have unveiled a platform of sensible policies that should appeal to the broad middle of the country’s electorate.

The trouble is the proposals lack a convincing theme and could easily be supported by Angela Merkel’s Christian Democrats as well. Read more

Middle-Income Suburbanites Decided the Election — Again

A Donald Trump yard sign in Taylorville, Illinois, June 18
A Donald Trump yard sign in Taylorville, Illinois, June 18 (Jason Matthews)

On election night, when it was starting to become clear Donald Trump would win, I wrote it had been a mistake to think Hillary Clinton could make up for losing white working-class voters in the “Rust Belt” by drawing more minority and young voters to the polls, particularly in the “Sun Belt” states.

Clinton didn’t win Florida. She didn’t win North Carolina. She didn’t make Arizona and Texas more competitive for Democrats. And she was so unpopular with white voters, especially those without a college degree, that one-time Democratic strongholds in the Northeast — Michigan and Pennsylvania — changed sides.

Looking more closely at what happened on Tuesday, though, I’m not sure this is what doomed her. Read more

Obama Gets Economic Challenge Right, Regulations Wrong

American president Barack Obama takes questions from student reporters at the White House in Washington DC, April 28
American president Barack Obama takes questions from student reporters at the White House in Washington DC, April 28 (White House/Amanda Lucidon)

Reading Bloomberg Businessweek‘s interview with Barack Obama, I get the sense the president understands the big economic and social challenges of our time but still underestimates the impact of regulation on businesses. Read more

Middle England Finds Itself Between Blue-Red Divide

Bourton-on-the-Hill, a village in Gloucestershire, England, October 31, 2010
Bourton-on-the-Hill, a village in Gloucestershire, England, October 31, 2010 (Tejvan Pettinger)

Britain’s European Union referendum is turning into the perfect demonstration of two of the theories I’ve been promoting here about European politics: one, that there is a “blue-red” culture war going on over modernity; and two, that it are reasonable, middle-class voters who hold the balance of power. Read more