international analysis and commentary

David Cameron, From Boom to Bust?


In 2008 the financial crisis “tsunami” struck not only the world’s financial markets and economies, but its effects have been widely felt throughout its epicenter’s political landscape both in the US and the UK. Economic gloom, however, has brought different outcomes for each country’s opposition party. As the financial crisis was hitting Wall Street and Main Street in the US, Barack Obama, in real Hawaiian style, took the cusp of this tidal wave and rode it all the way to the White House. David Cameron has instead been hit hard by the currents, somewhat drowning under them. This may not only be because Cameron grew up in Berkshire, rather than Honolulu as the neo-elected American president did. Indeed, to be fair, the comparison between Mr. Obama and Mr. Cameron, as much as the Tories have tried to make one in the past months, is far fetched as their personal stories, backgrounds, party affiliation and political environment diverge immensely. Yet in the wake of the world’s financial melt down, Obama’s rise and Cameron’s, thus far, demise nevertheless leaves the wondering spectator puzzled.

From Boom to Bust
David Cameron’s approval ratings were booming before the financial crisis. Were the Brits given a chance to vote in the summer of 2008, Mr. Cameron and the conservative party would have won by a landslide. Gordon Brown was plainly an old stuffy relict from the past, and David Cameron was obviously the future of British politics. A “plan for change” boasted the Conservative’s conference in early October 2008, somewhat mimicking events on the opposite shores of the Atlantic. However, as the financial crisis unfolded, Mr. Cameron’s double digit advantage in the polls over Prime Minister Brown started eroding dramatically. Along with each Bank of England’s interest rate cut (on January 8th the Bank of England announced a further reduction from 2% to 1.5%, the lowest since it was founded in 1694) Conservative’s lead over Labour has dwindled from a 15 points lead to just 5. Even more striking, given that Labour has been in government as the crisis was in the making, is Mr. Brown’s lead of 11 points in the polls over Mr. Cameron as the person most likely to get the economy back on track. How did it happen that along with the economy, also David Cameron’s ratings have gone from boom to bust?

David Cameron’s novelty (and inexperience) turned out to be a liability rather than an asset as panicking Brits looked for reassurance and to whoever seemed to be “doing something”. Like a phoenix rising out of its own ashes, Gordon Brown, the former Chancellor of the Exchequer and current Prime Minister, was the natural candidate to take control of the situation. Mr. Brown was quick to react as the financial system was collapsing and promptly unveiled in October 2008 a series of bold measures to save Britain’s banks, which received worldwide praise and were swiftly copied elsewhere. Economic Nobel laureates applauded him and in a verbal slippage during a parliamentary debate, Mr. Brown even declared to have “saved the world”. While at first patriotically standing by the prime minister, Mr. Cameron soon turned sour in the face of his political rival’s grand standing, as well as his own free fall in the polls. Frustration has been so palpable in his attacks towards Gordon Brown, that even serious commentators have suggested the only thing Mr. Cameron actually needs to do to restore his standing is simply to smile more.

Smiles, however, will not be enough. With Prime Minister Brown weekly unveiling new plans to save the economy, some with dubious effect such as a proposed 2.5% temporary V.A.T cut which has only increased government debt without really stimulating consumption, Tories have appeared to be “doing nothing” beyond criticizing the government. Even though David Cameron has worked hard, and successfully, to build a new image and a modern message for the conservatives, the perception of an angry party insensitive to people’s needs and worries has brought back to mind all the negative stereotypes associated with the Tories of the past decades. Mr. Cameron is trying to fight back the so-called “Brown bounce” as best as he can. Building on British’s eurosceptic sentiments, in a statement given this January 12, he fired at the easy EU target vowing to scrap the Lisbon treaty if elected. An obvious tactical (and Tory) move to shore up his credentials in the run-up to the European elections which will take place in June 2009.

The underlining issue though is David Cameron’s approach to the economy. His policy recommendations have appeared out of touch with the current reality. Lashing out at Britain’s growing public debt accumulated under Labour, Mr. Cameron has advocated for fiscal restraint, policies to encourage savings and monetary discipline. As such, Tories’ economic strategy not only appears counter intuitive in a moment when the economy needs fiscal stimulus and liquidity more than ever, but also reinforces their image as tied to classic old-school economics. As an English colleague recently told me, “how can the leader of the Conservative party represent change?”, that’s an obvious contradiction in terms, he went on to conclude. David Cameron’s case for change thus runs hollow as the conservatives are increasingly perceived to evocate a forgone and not missed Thatcher era.

Change the Tories can Believe In.
The truth is that David Cameron does not have the personal history and charisma of Barack Obama, nor does he embody change as the newly elected American president does. Britain today is also not the US, a disoriented and divided country trying to find a new direction out of the Bush years. Given his free fall in the polls, David Cameron nevertheless maintains a 5 point lead over Gordon Brown. While playing the anti-European card may even work in the short run, the general elections are still far, scheduled for 2010. As the financial storm passes, it will probably leave in its wake an economy in tatters and a dangerously burgeoning public deficit. What may sound cacophonic at the moment, Mr. Cameron’s old style fiscal conservatism, may turn to be prophetic in the future. At that point in time, rather than from a nostalgic past, David Cameron’s standing will appear to be principled, far sighted and forward looking. Having spent most of his time since he was elected party leader in 2005 making Tories electable again, he may be in a good position to reap the benefits. Even though Mr. Cameron is not the transformative figure of British politics as he and his party would like to think, he still represents change the Tories can believe in.