American investors fear divided government

Debt ceiling struggle raised concerns.

Suzy Khimm, of the Washington Post's WonkBlog, reports on a new Gallup poll of American investors, which asks them what they fear the most:

More than unemployment, oil prices, the housing market, tight credit, or the euro zone crisis, investors believe that a politically divided federal government could hurt the US investment climate, according to a new Gallup poll that surveyed American adults with “investable assets of $10,000 or more”:

Gallup poll

The second most common fear is the federal budget deficit. Altogether, this suggests that investors believe the recent political gridlock over the debt-ceiling and budget has been extremely harmful to the U.S. business climate. Presumably, they’re concerned that this could continue should President Obama be re-elected along with a GOP Congress, or vice versa.

Before the election, the Conservative line on coalition governments was much the same as the one these investors seem to hold: political divisions hamper the ability to make crucial economic decisions, which, especially in a depression, can lead to an inability to competently handle crisis. Two years on, those fears have been comprehensively put to bed. Far from coalition resulting in legislative gridlock, as divided government has in the US, this government has been the most radical in a decade.

The European debt crisis would obviously rank higher in a British version of this poll, but the interesting ones to see would be the relative positions of the budget deficit and unemployment rate. In both, the UK is now worse off than the US (when the deficit is expressed as a percentage of GDP, that is), but the narrative seems to be different on both sides of the Atlantic. Whereas the US has experienced its "jobless recovery", now transitioning to a "growthless recovery", the failure of the UK to experience the same levels of growth means that the unemployment rate often blends into the general gloomy economic background.

Obama signs the budget control act, raising the debt ceiling. Credit: Getty

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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How Labour risks becoming a party without a country

Without establishing the role of Labour in modern Britain, the party is unlikely ever to govern again.

“In my time of dying, want nobody to mourn

All I want for you to do is take my body home”

- Blind Willie Johnson

The Conservative Party is preparing itself for a bloody civil war. Conservative MPs will tell anyone who wants to know (Labour MPs and journalists included) that there are 100 Conservative MPs sitting on letters calling for a leadership contest. When? Whenever they want to. This impending war has many reasons: ancient feuds, bad blood, personal spite and enmity, thwarted ambition, and of course, the European Union.

Fundamentally, at the heart of the Tory war over the European Union is the vexed question of ‘What is Britain’s place in the World?’ That this question remains unanswered a quarter of a century after it first decimated the Conservative Party is not a sign that the Party is incapable of answering the question, but that it has no settled view on what the correct answer should be.

The war persists because the truth is that there is no compromise solution. The two competing answers are binary opposites: internationalist or insular nationalist, co-habitation is an impossibility.

The Tories, in any event, are prepared to keep on asking this question, seemingly to the point of destruction. For the most part, Labour has answered this question: Britain will succeed as an outward looking, internationalist state. The equally important question facing the Labour Party is ‘What is the place of the Labour Party in modern Britain?’ Without answering this question, Labour is unlikely to govern ever again and in contrast to the Tories, Labour has so far refused to acknowledge that such a question is being asked of it by the people it was founded to serve. At its heart, this is a question about England and the rapidly changing nature of the United Kingdom.

In the wake of the 2016 elections, the approach that Labour needs to take with regard to the ‘English question’ is more important than ever before. With Scotland out of reach for at least a generation (assuming it remains within the United Kingdom) and with Labour’s share of the vote falling back in Wales in the face of strong challenges from Plaid Cymru and UKIP, Labour will need to rely upon winning vast swathes of England if we are to form a government in 2020.

In a new book published this week, Labour’s Identity Crisis, Tristram Hunt has brought together Labour MPs, activists and parliamentary candidates from the 2015 general election to explore the challenges facing Labour in England and how the party should address these, not purely as an electoral device, but as a matter of principle.

My contribution to the book was inspired by Led Zeppelin’s Physical Graffiti. The track list reads like the score for a musical tragedy based upon the Labour Party from 2010 onwards: In My Time of Dying, Trampled Underfoot, Sick Again, Ten Years Gone. 

Continued Labour introspection is increasingly tiresome for the political commentariat – even boring – and Labour’s Identity Crisis is a genuinely exciting attempt to swinge through this inertia. As well as exploring our most recent failure, the book attempts to chart the course towards the next Labour victory: political cartography at its most urgent.

This collection of essays represents an overdue effort to answer the question that the Party has sought to sidestep for too long.  In the run up to 2020, as the United Kingdom continues to atomise, the Labour Party must have an ambitious, compelling vision for England, or else risks becoming a party without a country.

Jamie Reed is Labour MP for Copeland.