It is not just America that is mired in stupidity

In Britain, the obsession with austerity and inequality is leaving us unable to move forward

It’s an embarrassment to be an American these days, Jamie Dimon, chief executive of JP Morgan Chase, said the other day, in what even by his own outspoken standards was an epic rant. The occasion was the announcement of the mega-bank’s first quarter results, but Mr Dimon seemed not to want to discuss those at all. “Who cares about fixed-income trading in the last two weeks of June? I mean, seriously,” he said when asked about the sogginess in bond market profits by an unsuspecting financial journalist. Instead, he wanted to talk about bad policy, political paralysis, and how it was “holding back and hurting the average American”. He was sick of “travelling around the world and listening to the stupid s--- Americans have to deal with in this country”.

I can’t speak for Americans, but Mr Dimon’s remarks neatly encapsulate an almost universal sense of exasperation, malaise, stagnation and inability to confront the future across virtually all advanced, Western economies. We seem stuck in a world of increasingly consensual, constrained and compromised public policy in which we obsess about trivial or irrelevant matters that will do nothing for long term prosperity or the real ills in our societies. At the same time, we seem incapable of dealing with myriad and manifest failings in productivity, education, healthcare, infrastructure, investment and much else besides. The radicalism and economic reform of the Thatcher years would be impossible amid the stupefication of today’s politics.

Whether one approves of Trumpism or not scarcely seems relevant any longer; beyond the gesture politics of withdrawal from the Paris Accord on climate change, Mr Trump is struggling to get anything done at all. Even without the Russian connection, he would be a lame duck president. Six months into his term of office, both the Mexican border wall and the promise to scrap Obamacare are pretty much dead in the water. Meaningful tax reform and increased infrastructure spending have similarly run into the sand. In voting for Trump, the US hoped for renewal, but beyond the tweets it has seemingly got no more than debilitating continuity. Americans deserve better.

Similarly in Britain, where political debate is ever more locked in bleeding-heart obsession with two of the most overused – and misused – words in the English language; austerity and inequality. Like a household that demands it should no longer be forced to live within its means, voters are said to have tired of austerity and want relief. It is as if higher living standards are a human right, rather than a privilege that must be earned. That 10 years after the financial crisis, the Government will still spend £60 billion more than it collects in tax this financial year scarcely gets a mention in the clamour for more.

Even before her humiliation at the polls, Theresa May had similarly begun dancing to Jeremy Corbyn’s tune on inequality, where it now seems to be taken as read that only the interventions of the state can tackle this supposedly growing social evil. Yet as it happens, it is not growing. A report by the Institute for Fiscal Studies and Joseph Rowntree Foundation this week found that thanks to the higher national minimum wage, improved in-work benefits and increased labour market participation, income inequality has been falling since the financial crisis. Those at the bottom of the pile have been getting more, while those at the very top have been earning less, largely because of reduced pay in the City.

This might be taken as good news, except that it isn’t. If the rich are earning less, they also pay less tax and there is less money for easing back on our supposed state of austerity. A bigger cake, Mrs Thatcher was fond of saying, means a bigger slice for everyone. But first you have to create the wealth that makes the cake bigger. Instead, we seem intent only on reducing everyone to the same penury, levelling down rather than up. Not many people would think making the nation poorer a price worth paying for a more equal society, but this seems to be the kind of politics we are back to.

The UK Budget this autumn should be wholly focused on preparing Britain for a post-brexit economy; it should be entirely devoted to addressing Britain’s savings and investment deficits, on correcting our still shameful standards of literacy and numeracy, and to measures that might actually make some difference to real wages through enhanced productivity.

Depressingly, it is much more likely to do nothing at all of substance. Even if he wanted to, the Chancellor, Philip Hammond, is confined as if by political straitjacket, unable to move backwards, forwards or sideways for fear of upsetting one interest group or another. The way things are going, even Brexit will end up compromised down to mere tokenism.

If he’s ashamed to be an American, Mr Dimon should try being British, where the “stupid s---”, as he vividly put it, is even deeper.