The US stock market is having its worst December since the Great Depression of the 1930s. Donald Trump has fired the last remaining adult in the White House and is reported to be thinking about sacking the head of the Federal Reserve. The US government is on its third partial shutdown of the year with the president promising a prolonged battle with Congress unless he gets funding for his Mexican wall. If Jerome Powell, chairman of the Federal Reserve, does get the boot, financial market reaction will, I would guess, be orders of magnitude worse than anything we have seen in recent weeks.
Trump has often suggested that the Dow Jones index is the ultimate barometer of his presidency: the stock market hasn’t figured too much in his tweets over the past couple of months, for obvious reasons. Trump doesn’t like the Fed because it has raised interest rates – and more hikes are promised for 2019. It’s hard to know what Trump thinks removing the Fed chairman would achieve other than another collapse in the stock market.
The list of things to worry about is not restricted to the US. It’s not possible to have a discussion about China, now the world’s largest economy on some measures, without someone arguing that a debt implosion is just a matter of time. In addition, the internet is, apparently, in the process of being taken over by the Chinese government or Huawei, depending on which conspiracy theory we prefer to believe.
Global economic growth has slowed markedly: nobody knows whether it is the start of a recession or merely a soft patch.
And then there is Brexit. The collective nervous breakdown being experienced by our nearest neighbours defies rational analysis so is now attracting the interest of psychologists and other behavioural scientists. Game theorists are dissecting Theresa May’s current tactics: pressure is now building on British MPs to choose, in mid-January, between May’s deal or no deal. The idea is that as the consequences of a no-deal are laid bare, more MPs will change their mind and vote for May’s withdrawal agreement. This is, to say the least, a risky if not fundamentally misconceived, strategy.
Experts in game theory think that incentives are building that will push the UK over the cliff edge. Brexiteers and much of the Labour Party now explicitly want a no-deal: Tory ultras have their fantasies about 1950s Britain; the Labour left wants to cause an economic implosion that will lead them to power.
The problem is that most of the people not in either of these two (large) groups behave as if it is somebody else’s problem to solve. All of the incentives appear to push centrist politicians toward either of the two extremes. The draft UK immigration proposals published this week saw a cabinet minister suggest rules which, if implemented, could have prevented his own parents from immigrating into the UK.
Those immigration proposals laid claim to “levelling the playing field” between the EU and the rest of the world. The BBC – and other commentators who should have known better – immediately swallowed this superficially plausible idea. It ignored the fact that the UK has been able to level that immigration playing field while a member of the EU. Brexit is irrelevant to policy choices already made by successive British governments.
There is much to worry about. Much remains outside our control
It is the time of year for optimism and goodwill. While everything mentioned so far is real, there are reasons to be cheerful. Acknowledging all of the threats that Brexit poses, especially for Ireland, is important. But the time has come to look to build bridges and look for opportunity, no matter how small.
Many people are depressed in the UK about the impending loss of free movement around the EU. The oft-repeated lament is that 65 million British citizens are about to lose the right “to live, love and work in Europe”. More prosaically, they will be charged seven quid for an EU travel visa.
Ireland, of course, will be in a unique position: the only EU country where mutual travel and other citizen’s rights will be unaffected by Brexit. That will, potentially, offer a powerful marketing message for Ireland. I hope the IDA and tourism chiefs are preparing the welcome mat for the British, post Brexit.
Safe haven from populism
More generally, Ireland can lay credible claim to offer a haven from the populist plague that has infected so many other countries. That will also offer potential marketing material for anyone thinking about trying to attract visitors, inward investment and immigrants. The way Ireland has reacted so differently, so positively, to high levels of immigration is something to be celebrated.
Immigration is the single biggest driver of populism on both sides of the Atlantic. It is unfairly blamed for problems it never causes and it rarely gets the credit it deserves for the economic benefits it brings. Immigration doesn’t have the negative impacts on wages and unemployment that populists would have us believe. Most immigrants are not benefit tourists; they don’t unfairly consume scarce healthcare or education resources.
There is much to worry about. Much remains outside our control. But we do some things well. A lot more to be done, for sure. We should, without complacency, reflect, particularly at this time of year, on that success.