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|It´s not fair but voters can be terribly unfair|
The Times - January 9th 2012
Hands up all those against fairness? No, I thought not, and plainly David Cameron thinks not too, or he wouldn´t have launched the new year by emphasising that attractive word, in a bid to wrestle it out of the grip of Ed Miliband. Yet as both parties´ choice of executive pay as a main arena for the fairness agenda will show, it is a much easier word to say than to put into practice. Which is why it also exposes politicians to one of the biggest dangers of all: being seen as insincere and hypocritical.
This is not to say that Mr Cameron is wrong. Inequality has long been widely predicted to be about to retake centre political stage on both sides of the
Now, as Barack Obama contemplates a race for re-election in November in which current polls suggest that his Republican opponent will be a wealthy former businessman, Mitt Romney, he too will be tempted to make inequality his mantra. Certainly, inequality of both income and wealth have continued to widen, to record post-war levels, in
Yet before choosing his line, President Obama should reflect more deeply about his own first term in office, and about the real meaning of that slogan. His flagship domestic-policy achievement, so far, has been one that he had in 2008 placed at the heart of the inequality agenda: making health-care coverage universal. But it has not won him popularity, even among his natural supporters.
In part, that is because the fragile economy and high (if now falling) unemployment overshadows everything. Also, however, the health plan increased state interference and loaded extra burdens on people, neither of which made them happy, even in the cause of equality. The price of that equality was too high, it seems, and it is being paid by the majority, not by some ultra-rich minority.
Moreover, the most successful new political movement in
This column is not the place to argue that toss. Yet that view fits also with the failure, so far during this economic slump, of the traditional left to find a real, coherent voice. Most European democracies have moved to the right, and in
That means different things in different places: a Wall Street and Big Oil oligarchy in
The question is, how to respond to this politically. This year, I expect this column to have to return to this topic repeatedly, looking at different countries. In a time of vast public debts, using taxes and spending to redistribute money is hard to do, though in
It is a just target, in that top pay really has reached eye-wateringly anomalous levels, and is proving more immune to hard times than other pay, especially public-sector wages and pensions. But how to handle this effectively and fairly? The government says shareholders should be "empowered" by making votes on pay binding on companies; Labour says more "transparency" is needed.
Both are desirable, but both risk missing the point. There is already plenty of transparency, which is why we are able to get hot and bothered about particular bosses´ pay. The first question is what to do with the information. The second is who should care about it and do it. Shareholders generally don´t care, at least not much, unless high pay hurts profits and dividends, and most pension funds and insurance companies—which are the bulk of big-company "owners"—prefer to keep their distance from individual companies. Unless the law changes to force them to act like owners, they will stay that way.
The likely outcome is pretty obvious. Efforts to control most people´s pay, through wage freezes, pension changes and tax rises, will be real and painfully effective. Efforts to control executive pay will be abstract and ineffective. Result: having drawn attention to fairness, Mr Cameron will be associated with an unfair outcome, and look insincere. Well, who said politics was fair?