Tuesday, October 15, 2013

Political Lessons from The Netherlands for the U.S.

"As the clock ticked down, talks over a budget deal were deadlocked. A government lacking a majority in one house of the legislature faced unprecedented resistance, with the opposition employing obstructionary measures that had previously been considered off-limits. Approval ratings for all the parties suffered, the government risked lame-duck status, political uncertainty threatened to kill off the green shoots in the economy and fears grew of the rise of a populist rightwing faction.........." Does this describe the situation in the U.S.? No, this is from an article, Dutch budget deal offers lessons to the U.S. in The Financial Times by Matt Steinglass, where he described the political situation last week in the Netherlands. The Netherlands, too, is experiencing a difficult economic situation with a recession going on and austerity measures demanded by the European Union. At the same time the political situation isn't stable either, where a centre-right Liberal and left-wing Labor government coalition has a majority in the so-called Second Chamber of parliament, but a minority in the First Chamber (or Senate.)  The article continues:

"Normally that would not matter; the Senate is a traditionally weak body, rejecting legislation only if it is unconstitutional or impossible to carry out. But just as Republicans in the US have recently used filibusters and the debt ceiling in unprecedented ways, Dutch opposition parties under pressure of popular anger have this year begun voting down legislation in the Senate. That forced prime minister Mr Rutte and his Labour finance minister, Jeroen Dijsselbloem, into negotiations with centrist opposition parties.....................

"In the end, the government struck a deal with the left-liberal D66 party, the centre-left Christian Union and the tiny rightwing Christian SGP party....................The deal rests on old-fashioned horse-trading: D66 will get extra education spending while Christian parties will get fewer cuts in childcare subsidies. The concessions will be made up with some tax rises (on car ownership, among others). That will let the government meet its €6bn austerity target but will probably anger some Liberal voters. Labour market flexibility will also be hastened, which could further weaken Labour, as the country's largest worker federation said on Friday it opposed the deal.

But if the three opposition parties that backed the deal must now share popular anger at austerity, they will benefit from a glow of public approval for having reached a compromise that allows government to proceed. To judge by the reaction so far, Dutch voters are still prepared to reward parties for taking responsibility for difficult but necessary compromises, even if they dislike the content of those compromises. If there is a lesson here for the US, that would be it."

Compromise between political parties has been one of the hallmarks of the Dutch political landscape throughout its modern history, so that is nothing new for the Dutch, but it would be something novel for the current U.S. stalemate.

Are there other lessons from the Dutch that apply to the U.S.? Yes, there are other developments going on in the Netherlands, which resemble those in the U.S.: a rising disconnect between the traditional parties and the voters, a subsequent rise of populism, and as a consequence of these trends an increased unstable situation in parliament whereby no party is safe from losing big in the next election. Although polling numbers after the budget agreement was announced, show that the Dutch supporting opposition parties would win seats, the government parties still face huge losses if elections would be held today, only reinforcing the unstable nature of current Dutch politics. 

Clearly, the U.S. too is facing increased discontent from its voters for politics. It started  a few years ago with the rise of Occupy Wall Street and the Tea party. Now approval for Congress is currently at an all time low.  This discontent, however, does not translate into increased instability in Congress, basically due to its electoral system making it sheer impossible for third parties to win seats, or for the other party to unseat incumbent politicians. Whether this "artificial" stability is sustainable is another question. To a large extent this will depend on the economy, but also on some of the other political cultural issues. Case in point is the rise of populism in the form of  the Tea party.  They forced the Republican leadership to accept a U.S. shutdown, and their inflammatory language towards President Obama and his policies speak volumes.

In this sense the remarks of the Italian prime minster Letta  in an interview in the New York Times are telling when he said what he considered the biggest problems facing Europe:

"..if I see a problem at the European level today, after the governance problem I stressed at the beginning, is the rise of populism. And the rise of populism is today the main European social and political issue. We have to fight against populism, and to fight against populism in my view is a mission today, in Italy and in the other countries."

I agree with the Financial Times that one lesson from Dutch politics is to practice compromise, even or especially with your adversaries, but I think the other lesson is as the Italian prime minister said that if the current political establishment, whether in Italy, Holland or the U.S. continue to ignore the populist movement, we all could be in for a rougher ride than anyone can now expect.


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