This last month I wrote my most widely read post in this blog’s nearly three years existence. Over 20,000 read this on Scottish independence. Yet I wrote that post with some regret, because I was acting as the typical economist killjoy. I had a lot of sympathy behind much of the support for the Yes campaign, which was to avoid being governed by a fairly extreme right wing party. I hope no one ever writes that the No vote was a victory for David Cameron’s Conservatives, because that would be a truly Orwellian distortion of reality. One of the most telling contrasts for me was Gordon Brown’s impassioned speech for the union compared to Cameron’s opportunistic attempt to appease his own MPs the morning after the result.
A post I have no regrets writing is this about Theresa May’s one time concern about the Conservative party being seen as the ‘nasty party’. Everything in the months since I wrote it, including the current party conference, confirms that this image no longer worries the leadership. The puzzle I raised in that post is why as late as 2010 Cameron was still keen to foster the idea of a more compassionate conservatism. What has changed so completely in just four years?
One answer is UKIP. Yet trying to prevent losses to another party of the right should not alter the traditional logic that a party needs to occupy the centre to win an election. Another answer is the recession, which has perhaps led to a hardening of attitudes among the electorate as a whole. The hypothesis is that in a recession people are more inclined to believe those on welfare are scroungers, and that immigrants steal their jobs. This hardening should reverse as the economy recovers, but we also know that real wages are still likely to be lower in 2015 compared to 2010.
That was where I ended that previous post. I wrote “although nastiness might accord with voter sentiments today, at some point in the future voters in more generous times will have no problem forgetting this, and just remembering the Conservatives as the nasty party.” But in writing this I might have been both unfair to the British electorate and to the strategy of the Conservative party.
To see why, take a temporary detour from welfare to macro. Chris Dillow rightly questioned the “groupthink bubble” that sees George Osborne’s stewardship of the economy as the Conservative’s strongest card. Yet those in the bubble could respond that they were simply reflecting what the public appear to be saying in the polls. The problem here is establishing cause and effect. What I call mediamacro believes that the last Labour government seriously mismanaged the public finances, when in reality its sins were relatively minor. Mediamacro thinks that the deficit somehow helped cause the recession, whereas in reality the causality goes the other way. Mediamacro thinks that the deficit is the most important problem of today, and largely ignores the stagnation of productivity. Mediamacro celebrates the 2013 recovery as vindicating austerity, which is an argument only the most politically committed academic economist would endorse.
So why do those answering polls think the Conservatives are more competent at managing the economy? It can hardly be because of their own experience, with real wages falling since 2010 compared to steady increases before then. While they might think that Labour allowed excessive leverage by UK banks which helped cause the recession, they are unlikely to also believe that the Conservatives were urging much greater caution at the time! Or could it be that their answers about competence are influenced by what mediamacro itself believes?
If there is this huge disconnect between reality and media portrayal for the macroeconomy, could the same thing be happening with attitudes to welfare? There is no doubt that the representation of disability in the print media has changed substantially over the last decade or so. Television has, after a lag, followed this trend. There is scant evidence that this reflects any significant change in the degree of benefit fraud. It could reflect a ‘hardening of attitudes’ as a result of the recession, but causality could also run the other way. Do people vastly overestimate the amount of benefit fraud because they want to do so, or because of the information they get through the media? Is this overestimation a reflection of a recession induced hardening of attitudes, or a cause of it?
This is crucial to answering the question posed in the title to this post. If squeezing the poor and disabled is a policy that reflects a recession induced change in public attitudes, then the party that follows this change may be vulnerable when the recession ends (although perhaps not before 2015). If it reflects misinformation provided by the media, then the relevant question is whether this misinformation might continue well beyond the economic recovery. If it does, the Conservative party may have a much more durable election strategy.