UK’s political elite lost touch with public

FOR a while, the world’s leading central bank governors orchestrated the shape not only of global markets, but the health of its economy in the aftermath of the financial crisis, their answer in the main being stimulus.

In their defence, this always came with a terse reminder that true and longer-term solutions to resuscitating global growth lay not in monetary policy, but in fiscal and structural adjustments, or, plainly, in the hands of politicians.

But as long as central bank potions had markets spellbound, it was a reminder that could be largely ignored.

Politics being politics, we all knew that the longer-term fixes would be one for brave men and women, something in rather short supply.

But stimulus always had an expiry date. When the US Federal Reserve first warned that the sugar portions were going to be reduced in May three years ago, emerging markets started to wobble.

In dollar terms, the JSE is more than 20% weaker since the “taper tantrum”. The rand has weakened close to 56%, the Brazilian real more than 63% and the Turkish lira over 57%.

An inflationary dragon has been released on the back of the currency weakness. Politics deteriorated in the countries I’ve listed, sapping the confidence of their people as well as domestic and international investors.

None have covered themselves in glory as corruption scandal after scandal has been revealed.

In contrast to the woes of President Jacob Zuma and his peers, the developed world — in particular the US and the UK — has been in a much better position in recent years as prospects improved.

A Barack Obama presidency has been assured of more glowing historical tributes. David Cameron, buoyed by Britain’s economic recovery set against the backdrop of a punishing austerity focus, comfortably won re-election.

And after winning a referendum that ensured Scotland stayed in the UK, Cameron would have been relatively confident that this week’s vote on whether to stay or leave the EU would turn out positively. But a referendum is democracy at work, perhaps in its best and clearly its most uncomfortable form. The answers do not necessarily match up with the best synopsis of the smartest political minds.

Now from serving a UK with better prospects than even Germany, by some accounts, Cameron is no more. And with him, those great prospects that have been championed over recent years are no more.

It seems the political elite in the UK have made the cardinal sin of talking only to the interests of London, and not saying why those interests also serve middle England or Wales.

Something similar played itself out in our political theatre this week, with the parachuting in of an unwanted Tshwane mayoral candidate. And it was

Something similar played itself out in our political theatre

rather symbolic that Thoko Didiza was introduced to the media at Saxonwold, in Johannesburg, more than 50km from the burning tyres in Atteridgeville. But I digress. The results of this week’s referendum just go to show in what uncertain territory the global economy is when politics is the guiding light.

In the UK, the central tenets of its politics are fears over immigration and continued domination by Brussels. It’s a similar tale that has brought the US and the world the prospect of a Donald Trump presidency.

There’s nothing to paper over the cracks that this political noise will only further expose. No miracle that a central banker can inspire. No great economic story such as China.

Politics, bloody hell . . .