Workers against Wall Street

President Obama’s “shock and awe” statism is failing. On the eve of the midterm elections, the US ec

Gary, Indiana

We're hurtling through downtown Gary at about 75 miles an hour but Officer Lilley, at the wheel of our car, remains relaxed. He's telling me languid stories about the AK-47s that the local teenagers carry, about the gangs, the drugs, the overtime. Then the city's "shot spotter" pings an alert on to his laptop, which is wedged right next to the handbrake.

He mutters a call for assistance into his radio and swings the police car on to the forecourt of a gas station where about 30 people are running, pointing, strung out, screaming recriminations. There's been a fight, but the fighters are gone, as is the kid who decided to let off his pistol. Nobody is dead. Everybody is shouting into the face of Officer Lilley, a black cop in a black crowd, who simply drawls soothing phrases back at them.

Eventually seven police cars arrive and the cops fan out to disperse the crowd of onlookers, many of whom they seem to know by name. Two years ago there were times when the city could field only five cars in total on a night shift, but federal dollars have paid for 96 new vehicles and allowed Gary Police to re-employ 11 laid-off officers. This short, sharp exercise in armed social work is possible only because of the fiscal stimulus.

Gary is a city where 84 per cent of the population is black and one-third of the people live in poverty. It is one of the most obvious places on earth where an influx of taxpayer dollars might do some good. It has 3,000 abandoned homes and a decaying infrastructure, and its public finances stand two years away from bankruptcy. Yet what is obvious, amid these wrecked streets and impoverished lives, is how little the stimulus has achieved.

Gary's urban texture - grass and ivy over broken concrete - is testimony to what happens when an economic model fails. In its deserted downtown district, the churches, the concert hall, the theatre, the ballet studio, the Gothic apartments from whose windows steel magnates once surveyed the city's pulsating wealth, stand ruined, unsecured against intruders.

Though atypical of America, Gary's broken landscape is spectacularly typical of what has gone wrong in the country at large. Its meagre progress, two years into the Obama administration, signals the president's failure to solve America's most basic problems and to deliver to the very people whose votes put him in the White House.

The problem for America today is that another economic model has failed: one based on globalisation, cheap credit, home ownership and mass consumption. Six million Americans have fallen below the poverty line since December 2007. The median income has fallen by 4.7 per cent. In the same period, more than 2.5 million homes have been repossessed. And that only compounds the long-term problems America hid beneath the financial euphoria of the boom years - but average real wages have stagnated since the 1990s; the number without health insurance has grown by ten million in a decade and stands at 50 million.

The most basic problem is this: in a system based on credit, the credit system is not functioning. It's easy to spot the malfunction in a city like Gary: I saw one home for sale at $7,900 cash, the scrawled street-corner placard adding, by way of explanation, the word "Foreclosure". The only part of the credit system that does function is the destructive part; the "payday loans" store on Gary's main street is the only thing left with working neon signs. Most of the other shops are closed for good.

With a swollen mass of people unable to borrow, save or spend, the great dynamo of the world economy - American consumption - is sputtering. And the stimulus has not yet managed to restart it.

Eighteen months ago, the mayor of Gary, Rudy Clay, told me that all the city needed was $400m. With that, said the dapper veteran of the civil rights movement, Gary would "fly like an eagle and once again make America proud". In the event, the city was given just $266m - most of that earmarked for education - and for spending not on current costs, but on reorganisation.

Of the $24m Clay applied for to knock down derelict homes, $2m was delivered - and most of the buildings are still standing. It took 18 months for the money to pay for new streetlights to filter through the system. And, with $266m, Gary has managed to create the grand total of 327 jobs. That is more than $800,000 per job.

“We were last in line," Clay complains. "We keep pressing the State of Indiana for more money - to fix our roads, for example - but the problem is they spent all the money. They probably thought, 'Well, Gary voted in large numbers for the president, so the president can take care of them.'" A glance at the city's finances reveals a more complex picture. Its financial controls are archaic, its debts to other agencies high; and its tax base is heavily dependent on one source - a property tax that brings in 80 per cent of Gary's revenue.

In 2008 the Republican-controlled state government of Indiana brought in tax-capping measures that will, by 2012, halve the amount of property tax Gary can collect. While richer, whiter counties surrounding Gary have their own local income taxes, Gary does not - for the simple reason that there is very little income to tax. Within this system, redistribution is impossible unless the state and federal governments make it happen.

But that is where Gary's problems run into the culture war that has gripped America.The governor of Indiana is Mitch Daniels, a fiscal conservative who has made his reputation by balancing the state's books, privatising Indiana's major roads system in the process. Daniels - unlike some other Republican governors - agreed to accept the fiscal stimulus money, but on condition that the state retained control. He then decreed that the stimulus could not be used to fix the balance sheets of near-bankrupt city governments like Gary. Only major, one-off projects would receive federal dollars.

So, in the midst of the largest fiscal stimulus since the Second World War, one of America's poorest cities is being forced to cut taxes and cut spending. By 2012 its entire tax take will not be enough to cover the police, fire and ambulance services. Officer Lilley and his colleagues know that all the problems that fuel the crime - drugs, truancy, poor housing, unemployment - will remain unaddressed.

President Obama's stimulus was formulated with high hopes: two-thirds of the $787bn spent would be delivered not through the Bush-era mechanism of tax cuts, but through the overtly Keynesian channel of public spending. Jared Bernstein and Christina Romer, economists on Obama's transition team, predicted in January 2009 that the stimulus money would "create three to four million jobs" by the end of 2010, 90 per cent of them in the private sector. They projected that unemployment would peak at just 8 per cent in 2009.

The Romer/Bernstein forecast, like much of the Obama stimulus plan, was a triumph of optimism. Unemployment reached 10 per cent a year ago and has not been below 9.5 per cent since, even with the stimulus. Private-sector employment has shrunk. The money has been spent, but the jobs and growth did not follow.

The paucity of achievement is all the more remarkable given that, two months after the Romer/Bernstein report was published, the Federal Reserve was forced to launch its own, much bigger monetary stimulus package, known as quantitative easing (QE). By printing money and using it to buy a mixture of bank and government debt, the Fed pumped $1.75trn into the US economy.

Yet the combined results are poor. Growth is slowing. The threat of deflation is so clear that the Federal Reserve will, on the morrow of the midterm elections, be forced to throw several hundred billions more into QE.

In the housing market, there is already a double dip. Even with mortgage interest rates cut to their lowest ever, the sheer volume of un-sold properties - 1.5 million empty and a further five million trapped in a "shadow" market - has begun to push house prices down again. The banking sector has begun to shudder in turn at the prospect of another round of mortgage losses.

It is this tangible failure of economic strategy that is sapping the energy and credibility of the Obama administration. It has provided the American right with a convincing narrative to unite the plebeian conservative and "coastal elite" strands of Republicanism.

Governor Daniels, a mainstream Republican who is being tipped as the man to run against Obama in 2012, calls Obama's policy "shock and awe statism". But the real shock is how little has been achieved. Statewide, the whole of Indiana has managed to spend $4bn of stimulus money to create 10,000 jobs.

“It's not enough," the governor says, "and I would caution you that while I know the $4bn is real, I cannot say the same about the 10,000 jobs. We just don't know. They [the federal government] don't know."

Nationally, he says, "We've had this perverse outcome in which the private sector has continued to shrink and the public sector has gotten bigger. Frankly, it looks more like a way to take care of favoured constituencies than an economic policy."

So, for the mainstream American right, what explains the failure of the Obama stimulus is "crowding out": it is the size of the state that has prevented the private sector from responding to the crisis with fresh hiring and company start-ups. In addition, consistently large majorities polled by the Pew Research Centre believe that state intervention has benefited the banks and large corporations only - leaving the middle class, the poor and small businesses to rot. Finally, there is a growing fear that the size of the budget deficit will drag the United States into penury. Daniels tells me that the country faces a "survival-level threat".

It is in this context that the narrative of the Tea Party movement has emerged. And you have only to travel a hundred kilometres east of Gary, along the patched-up private motorways of Indiana, to hear it in full voice.

The hall is swaying to the tune of "God Bless the USA" - a song for which everyone except the journalists stands up, many clenching fists against chests. The crowd is 99 per cent white and 100 per cent Christian. Of those to whom I speak during the interval, several believe that the president is neither American nor Christian. One is selling a set of playing cards depicting Obama as a "Kenyan-born, lying, arrogant Muslim communist that hates America".

What the Tea Party objects to is the president's policies of state intervention. What it adds to conventional fiscal conservatism is the idea that all state intervention into economic life is immoral, un-Christian and unconstitutional. The plebeian right is convinced that a city like Gary neither deserves stimulus money nor can use it to any good effect.

Jackie Walorski, a Republican who sits in the Indiana legislature and is standing for the US House of Representatives on 2 November, tells me: "We are watching a freight train of spending in this country. Americans don't live that way. We're the land of capitalism; we're not the land of taking people's public tax money and throwing it into a concept that isn't proven, that has not produced jobs."

Does she begrudge the money spent in Gary? Would she have blocked the cash for schools, more police and police vehicles?

“It's not a question of begrudging," says Wal­orski, a 47-year-old former TV journalist. "Just because it's gone to education, police and fire doesn't mean the money has done anything in those areas. That's not what the key is in this country. You can continue to write cheques but recovery comes from private-sector jobs and holding a line on spending."

What is sapping the energy of Democratic Party supporters, even in a place like Gary, is that if you strip Walorski's words of all the rhetoric, economically they ring true. America's governance system, lacking the basic capacity, and in some places the will, to spend the money, looks ill suited to delivering maximum bang for 787 billion bucks.

But the rhetoric itself has material impact, and way beyond the worried Christian faces assembled to hear it. It is a rhetoric that - intentionally or otherwise - identifies the recipients of state spending as the enemies of the American constitution. From Indiana to the Gulf of Mexico, that means the public sector, migrants and the African-American poor.

When Walorski takes the stage at a Tea Party rally in the small rural town of Angola, Indiana as warm-up act for the Fox News commentator Glenn Beck, she points to a giant US flag behind her and whips the audience to its feet with the warning that they have just days "to fight for who we are in America".

She continues: "If we don't fight for freedom, liberty, individual destiny, they are redefining this country out from underneath us. The battle we're facing is to defend this flag on our turf, our soil. When our soldiers came out of the boats in Normandy they literally walked over the bodies of other soldiers to fight for our freedom. The battle we face today, the ideological war that we're fighting, is for standing up for a constitution. The land of the free and the home of the brave is under assault today."

It is worth unpacking this statement. In the literal text, Obama and the Democrat-voting Congress are the "they" Walorski refers to. But America's airwaves are alive with the angry voices of enraged white Christians, channelled towards coherence by the right-wing commentators. No one on the stage in Indiana needs to assert that Obama is "a racist" with “a deep-seated hatred for white people or the white culture" - because Beck already said so on TV, on 28 July 2009.

Back in Gary, for the black community activists trying to hold things together, it feels as if the word "they" has another meaning.

“When you turn on the TV and hear all this anger, all this vitriol," says Ben Clement, who helps run a community theatre group for teenagers, "well, it's culture-based, race-based, and it's frightening. And it shows that there's a disconnect - it's almost like we're living on two separate planets."

Clement, like many Obama-supporting black professionals, rues the complacency of a generation that has drifted out of activism. "Our parents went through the civil rights movement, but for our generation it's been a time of rest, where we didn't think those were going to be issues. Now, when I see Obama vilified, my stomach tightens up, because he is the best of us, the best of what we have to offer. If they feel like that about him - how would they treat me?"

This is the real culture war - an artillery battle of words in which the two sides never meet.

It has blindsided America's political commentators. The polling organisations record no perceptible increase in the numbers of extreme right- and left-wing views. But distrust and fear are tangible once you get where the American media dare not venture - into the honest and considered thoughts of ordinary people.

So, where does the battle go after 2 November? Economists on the Keynesian left of the Democratic Party are now clamouring for a further fiscal stimulus as they frantically try to recover ground in the ideological war they have essentially lost. Judging by the polling on all possible outcomes, the Congressional arithmetic makes another fiscal stimulus impossible. And even if it were possible, it is difficult to see how a second stimulus could overcome the institutional problems that Gary typifies.

Over at the Federal Reserve, the chairman, Ben Bernanke, is inching towards a further round of quantitative easing. In September, he conceded that even if the Fed did opt for a second round of quantitative easing, the impact of this might be softened: though central bankers have no way of knowing how much increased demand they get from QE, they suspect it works best as an anti-panic measure, not as an additional boost. Once "QE2" is begun, the Fed has in effect fired the last bullet in the clip. It may signal the start of a unique period of policy stasis in which all conventional options have been used up.

One route out would be through a trade war and dollar devaluation - a route as popular among the Democratic grass roots as it is among the Tea Party activists.

Back in Indiana, Walorski swaps insults with the Democratic incumbent, Representative Joe Donnelly, whose support for the stimulus, she claims, has "exported jobs to China". Meanwhile, in the union hall of Local 1066, which represents employees of US Steel Corp in Gary, workers are calling for the government to impose tough trade sanctions against Chinese steel imports.

But, for now, the Obama administration is sticking to the economic doctrines that formed the shared belief set of both parties since the 1990s: globalisation and a strong dollar. Even as Bernanke's promise of further QE caused the dollar to slide against other currencies, the treasury secretary, Timothy Geithner, took to the airwaves to promote keeping the dollar strong. "It is very important," he said, "for people to understand that the United States of America and no country around the world can devalue its way to prosperity . . . It is not a viable, feasible strategy and we will not engage in it."

Another route out is the one offered by Governor Daniels: a new, national, one-year fiscal stimulus of between $400bn and $800bn, including suspension of payroll taxes, in return for equivalent cuts in state spending and a bonfire of business regulations. Though fiscally neutral, a tax cut on this scale could put money where neither state spending nor money printing has yet managed to put it - into the pockets of American consumers.

Yet the problem remains: without restarting the credit market, nothing can sustain growth. There needs to be some kind of defibrillating shock. The American patient, with all its problems of obesity and fast food, has to have its heart restarted before the rehab and the statins can get to work.

For two years, America's political cycle and its economic crisis have been parallel stories, the one played out on brash television shouting shows, the other handled by the super-brained east coast policy elite in the privacy of summits and retreats. After the midterm elections, the two cycles will collide. Either the Obama administration will find a new kind of circuit breaker for the economy, or America will face stagnant growth, deflation and the possibility of a further banking crisis.

In Gary, the people know what they want the president to do: to break with Wall Street, ditch the doctrine of free trade, end foreclosures and deliver jobs. There is, despite the political chasm between the union guys and the Tea Party activists, a parallel desire for politicians to break with the lobbying industry and speak for the people. "He [Obama] has to drive the agenda," says Steve Dunn, a steelworker. "If you ever listen to a speech by Franklin Delano Roosevelt, it's basically you against me; it's the working class against Wall Street. And that's the way things are today - but I don't hear that from President Obama."

The irony of American politics, on the eve of the midterms, is that if anybody owns the narrative of "workers against Wall Street", it is the ultra-conservative, free-market right.

Paul Mason is the economics editor of BBC Newsnight. His reports from the US can be seen at bbc.co.uk/paulmason. A revised edition of his book "Meltdown: the End of the Age of Greed" (Verso, £8.99) is out now.

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Divided Britain: how the EU referendum exposed Britain’s new culture war

The EU referendum exposed a gaping fault line in our society – and it’s not between left and right.

There are streets in Hampstead, the wealthy northern suburb of London, where the pro-EU posters outnumber cars. A red “Vote Remain” in one. A “Green Yes” in another. The red, white and blue flag of the official campaign sits happily next to a poster from the left-wing campaign Another Europe Is Possible proclaiming that the world already has too many borders.

If you were looking for an equivalent street in Hull, in the north of England, you would look for a long time. In the city centre when I visited one recent morning, the only outward evidence that there was a referendum going on was the special edition of Wetherspoon News plastered on the walls of the William Wilberforce pub in Trinity Wharf. Most of the customers agreed with the message from the chain’s founder, Tim Martin: Britain was better off outside the European Union.

“Far too much Hampstead and not enough Hull” – that was the accusation levelled at the Remain campaign by Andy Burnham in the final weeks of the campaign. He wasn’t talking about geography; Remain’s voice is persuasive to residents of Newland Avenue in Hull, where I drank a latte as I eavesdropped on a couple who were fretting that “racists” would vote to take Britain out of the EU.

Rather, Burnham was talking about an idea, the “Hampstead” that occupies a special place in right-wing demonology as a haven of wealthy liberals who have the temerity to vote in the interests of the poor. The playwright and novelist Michael Frayn, in his 1963 essay on the Festival of Britain, called them “the Herbivores”:

“. . . the radical middle classes, the do-gooders; the readers of the News Chronicle, the Guardian, and the Observer; the signers of petitions; the backbone of the BBC . . . who look out from the lush pastures which are their natural station in life with eyes full of sorrow for less fortunate creatures, guiltily conscious of their advantages, though not usually ceasing to eat the grass.”

For Hampstead then, read swaths of Islington, Hackney, Brighton, Bristol, Cambridge, Edinburgh and Oxford today – all areas that were most strongly in favour of Remain and where Jeremy Corbyn is popular. But Remain never found a tone that won over the other half of Labour England; the campaign struck as duff a note among the diminishing band of pensioners on Hampstead’s remaining council estates as it did on Hull’s Orchard Park Estate.

The rift between “Hampstead and Hull”, in the sense that Andy Burnham meant it, is one that has stealthily divided Britain for years, but it has been brought into sharp focus by the debate over Europe.

Academics use various kinds of shorthand for it: the beer drinkers v the wine drinkers, or the cosmopolitans v the “left behind”. “It’s not just that [Britain] is div­ided between people who buy organic and people who buy own-brand,” says Philip Cowley, a professor of politics at Queen Mary University of London, “but between people who wouldn’t understand how anyone could buy own-brand and people who wouldn’t buy organic if you put a gun to their head.” Equating political preferences with shopping habits might sound flippant, but on 21 June the retail research company Verdict estimated that “half of Waitrose shoppers backed a Remain vote, against just over a third of Morrisons customers”.

The referendum has shown that there is another chasm in British politics, beyond left and right, beyond social conservatism v liberalism, and beyond arguments about the size of the state. The new culture war is about class, and income, and education, but also about culture, race, nationalism and optimism about the future (or lack of it). This divide explains why Ukip’s message has been seductive to former Labour voters and to Tories, and why Boris Johnson, an Old Etonian, led a campaign that purported to despise “elites” and “experts” and spoke of “wanting our country back”.

***

At the start of the campaign, the question that most accurately predicted whether you would back Remain or Leave was consistently: “Are you a graduate?” (Those who answered yes were much more likely to vote in favour of staying in the EU.) Stronger In never found a way to change that and win over those who left education at 18 or earlier. Pollsters also suggested that the much-vaunted Euroscepticism of older voters reflects generations where only one in ten people went to university.

This fissure has been growing for the best part of a decade and a half, but Britain’s first-past-the-post system, which deters newcomers and maintains entrenched parties, has provided a degree of insulation to Labour that its European cousins have lacked. Yet even here in the UK the mid-Noughties brought the brief rise of the British National Party, powered by voter defections from Labour in its strongholds in east London and Yorkshire, as well as the election of the Greens’ first MP on the back of progressive disillusionment with the governments of Tony Blair and Gordon Brown.

In office, both Blair and Brown calculated, wrongly, that Labour’s core vote had “nowhere else to go”. In opposition under Ed Miliband, the party calculated, again wrongly, that discontent with immigration, and the rise of Ukip powered by that discontent, was a problem for the Conservative Party alone.

In a 2014 pamphlet for the Fabian Society, ­Revolt on the Left, the activist Marcus Roberts, the academic Rob Ford and the analyst Ian Warren warned that Labour had “few reasons to cheer about the Ukip insurgency and plenty to worry about”. When the votes were cast in the general election the following year, that prediction turned out to be dispiritingly accurate. Defections from Labour to Ukip led to Labour losing seats to the Conservatives in Gower, Southampton Itchen, Telford and Plymouth Moor View.

For the most part, however, first-past-the-post papered over the cracks in Labour’s broad coalition: cracks that, in the harsh light of the EU referendum, have become obvious. The divide isn’t simply one of class, or income. The social profile and culture of voters in Cumbria are no different from that of voters on the other side of the border – but Scots in the Borders backed a Remain vote while their English peers in the border areas opted for Brexit. Inhospitality towards Brexit proved a stronger indication of city status than a mere cathedral: Vote Leave generally found Britain’s great cities more difficult terrain than the surrounding towns and countryside.

The problem of the fracturing vote is particularly acute for the Labour Party, which for much of the 20th century was able to rely on the Herbivores. In concert with Frayn’s “less fortunate creatures”, they have been enough to guarantee Labour close to 250 seats in the House of Commons and roughly one-third of the popular vote, even in difficult years. But Britain’s EU referendum placed Hampstead and Hull on opposing sides for the first time in modern British political history.

It was Tony Blair who, in his final speech to the Trades Union Congress as Labour leader in September 2006, said that the new debate in politics was not left against right, but “open v closed” – openness to immigration, to diversity, to the idea of Europe. Driven by their commitment to openness, Blair’s outriders dreamed of reshaping Labour as a mirror of the US Democrats – though, ironically, it was Ed Miliband, who repudiated much of Blair’s approach and politics, who achieved this.

At the 2015 election Labour’s coalition was drawn from the young, ethnic minorities and the well educated: the groups that powered Barack Obama’s two election wins in 2008 and 2012. The party was repudiated in the Midlands, went backwards in Wales and was all but wiped out in the east of England. (Scotland was another matter altogether.) Its best results came in Britain’s big cities and university towns.

The Remain campaign gave Labour a glimpse of how Miliband’s manifesto might have fared without the reassuring imprimatur of a red rosette. Britain Stronger In Europe has been rejected in the Midlands and struggled in the east of England. But it also failed to inspire passion in Sunderland, Oldham and Hull – all areas that, for now, return Labour MPs.

***

In appearance, Hull’s city centre is built on blood and sandstone, dotted with memorials to a lost empire and postwar replacements for bombed buildings, all ringed by suburban housing built by the private sector in the 1930s and the state in the 1950s and 1960s. It could be Bristol without the excessive hills, or a smaller Glasgow with a different accent. Unlike in Glasgow or Bristol, however, the residents of Hull are largely hostile to the European Union. Unlike Glasgow and Bristol, Hull is a post-imperial city that has yet to experience a post-colonial second act.

The William Wilberforce is named after a native son who helped destroy the British slave trade, the engine of Hull’s prosperity in the 18th century. The destruction of another local industry – fishing – drives resentment among the pub’s ageing clientele, who were there for breakfast and a bit of company when I visited. They blame its demise squarely on the EU.

Although the Labour Party now has only one MP in Scotland, the back rooms of the labour movement host an outsized Scottish contingent. For that reason – and the continuing threat that the loss of Labour’s seats in Scotland poses to the party’s chances of winning a majority at Westminster – the Scottish independence referendum of 2014 loomed large for Labour throughout the EU campaign.

From the outset, Britain Stronger In struggled to replicate the success of the Scottish No campaign, in part because the price of victory was one that Labour regarded as too high to pay a second time. In Glasgow, in the week before the Scottish referendum, everyone knew where Labour stood on independence – consequently, many voters were already planning to take revenge. The proprietor of one café told me that Labour was “finished in this city, for ever”.

Predictions of this sort were thin on the ground in Hull. Alan Johnson, the head of Labour’s EU campaign, is one of the three Labour MPs whom Hull sent to Westminster in 2015. But even late in the campaign, in his own constituency, I found uncertainty about the party’s official position on the referendum. For that reason, if nothing else, it didn’t have the feeling of a city preparing to break with a half-century-plus of Labour rule, as Glasgow did in 2014. In Scotland, most people I spoke to believed that they were on the brink of independence, which made the eventual result a big blow.

Only among Hull’s pro-European minority could I find any conviction that Britain might actually leave the EU. In September 2014 Kenneth Clarke remarked that Ukip’s supporters were “largely . . . the disappointed elderly, the grumpy old men, people who’ve had a bit of a hard time in life”. To listen to Hull’s Leave voters is to hear tales of the same frustrated potential: they feel that politicians of all stripes have lives entirely removed from theirs. In their defence, they are right – just 4 per cent of MPs in 2010 were from working-class backgrounds.

As for Ken Clarke, he has carved out a second career as every left-winger’s favourite Tory, but that tone of indifference towards the “disappointed lives” of globalisation’s casualties recalls his younger days as a rising star of Margaret Thatcher’s government.

Hull’s residents have been dismissed, first as the regrettable but inevitable consequence of Thatcherite economics, and now as small-minded opponents of social progress and racial diversity. Unsurprisingly, people who feel that their wishes have been ignored and in some cases actively squashed by successive governments of left and right did not expect to wake up on the morning of 24 June to discover that this time, their votes really had changed something.

Equally unsurprisingly, the Remain campaign’s warnings of economic collapse lacked force for people for whom the world’s end had been and gone.

In Glasgow in 2014 Scottish independence was a question of identity in itself, whereas in Hull, hostility towards Europe is the by-product of other identities that feel beleaguered or under threat: fishing, Englishness and whiteness, for the most part.

In Hampstead, a vote for Remain feels more like a statement about the world as you see it. One woman, who walks off before I can probe further, tells me: “Of course I’m voting to stay In. I buy Fairtrade.”

***

Immigration, not the European Union, is the issue that moves voters in Hull. “Britain is full” was the most frequent explanation they gave for an Out vote. Knowing that immigration, rather than the abstract question of sovereignty, would be crucial to winning the contest, Vote Leave tried from the beginning to make it a referendum on border control. Leave’s main theme: the threat of Turkey joining the European Union and, with it, the prospect of all 75 million Turks gaining the right to live and work in Britain.

Although Turkey’s chances of joining the EU are somewhere only just north of its hopes of launching a manned mission to Mars, the tactic worked: according to an ­Ipsos MORI poll released on the morning of 16 June, 45 per cent of Britons believed that Turkey will be fast-tracked into the Union.

That same morning, Nigel Farage posed in front of a poster showing refugees – mostly from Syria and most of them non-white – on the border between Croatia and Slovenia, with a slogan warning that uncontrolled immigration was leaving Britain at “breaking point”. But the row over the poster came to an unpleasant halt just a few hours later as news began to break that Jo Cox, the Labour MP for Batley and Spen, had been shot and stabbed on her way out of a constituency surgery. She died of her injuries a little over an hour later. On 19 June Thomas Mair, who was arrested in connection with the killing, gave his name at Westminster Magistrates’ Court as “Death to traitors, freedom for Britain”.

The circumstances of the killing felt familiar. A little after midnight on 5 June 1968, Robert Kennedy was returning to the Ambassador Hotel in Los Angeles in high spirits. He had just won a crucial victory in the California primary and was well placed to secure the Democratic nomination to run in that year’s presidential election. Going through the kitchen in order to avoid cheering crowds and get straight to his press conference, he was ambushed by a man called Sirhan Sirhan, who fired six shots from a revolver. Kennedy was rushed to hospital, where he died early the following morning.

Five months later Richard Nixon was elected president. The American right held on to the White House for 20 years out of the next 25. Jo Cox’s killing, amid the nativist howling from Farage et al, felt like the beginning of a similar chapter of right-wing advance in the UK.

Labour’s problem, and that of its social-democratic cousins throughout Europe, is the same as the American left’s was in the 1960s. Its founding coalition – of trade unions, the socially concerned middle classes and minorities, ethnic and cultural – is united (barely) on economic issues but irrevocably split on questions of identity. Outside crisis-stricken Greece and Spain, the left looks trapped in permanent opposition, with no politician able to reconsolidate its old base and take power again.

***

When I arrive in Hull, preparations are under way for a vigil in Jo Cox’s honour, but it is the nation of Turkey that is weighing on the minds of undecided voters. On Park Street, residents are divided. Those who have exercised their right to buy and are concerned about their mortgages are flirting with an Out vote but are terrified about negative equity. Those who remain in social housing or the private rented sector are untouched by stories of soaring mortgages. To many residents, the Treasury’s dire warnings seem to be the concerns of people from a different planet, not merely another part of the country. As Rachel, a woman in her mid-fifties who lives alone, puts it: “They say I’d lose four grand a month. I don’t know who they think is earning four grand a month but it certainly isn’t me.”

As Vote Leave knew, the promise that an Out vote will allow people to “take control” always had a particular appeal for those with precious little control – of their rent, of next week’s shift, of whether or not they will be able to afford to turn the heating on next week. Never mind that the control envisaged by Vote Leave would be exercised by the conservative right: the campaign found a message that was able to resonate across class and region, at least to an extent that could yet create a force to be reckoned with under first-past-the-post in Britain.

Four grand a month isn’t a bad salary, even in leafy Hampstead, but in that prosperous corner of north London fears of an Out vote, and what will come after, gained a tight purchase. The worry was coupled with resentment, too, over what would come, should the Outers triumph.

The great risk for the left is that herbivorous resentment is already curdling into contempt towards the people of Hull and the other bastions of Brexitism. That contempt threatens the commodity on which Labour has always relied to get Hull and Hampstead to vote and work together – solidarity. The referendum leaves the Conservatives divided at Westminster. That will give little comfort to Labour if the long-term outcome of the vote is to leave its own ranks divided outside it.

 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics. 

This article first appeared in the 23 June 2016 issue of the New Statesman, Divided Britain