The Right and the Recession considers the ways in which conservative activists, groupings, parties and interests in the US and Britain responded to the financial crisis and the “Great Recession” that followed in its wake. The book looks at the tensions and stresses between different ideas, interests and institutions and the ways in which they shaped the character of political outcomes. In Britain, these processes opened the way for leading Conservatives to redefine their commitment to fiscal retrenchment and austerity. Whereas public expenditure reductions had been portrayed as a necessary response to earlier “overspending” they were increasingly represented as a way of securing a permanently “leaner” state. The book assesses the character of this shift in thinking as well as the viability of these efforts to shrink the state and the parallel attempts in the US to cut federal government spending through mechanisms such as the budget sequester.

6 Britain, retrenchment and the ‘Big Society’ The chapter considers events and processes in Britain during the recession years. It looks at the Conservative Party (as well as the exigencies of coalition politics) and the fortunes of UKIP, the different core constituencies to which the Right was tied, economic logics and the character of the institutional structures within which British policymaking was undertaken. In particular, the chapter surveys two ideational shifts. First, the Conservative leadership committed itself to radical and sustained fiscal

in The Right and the recession

4 The advent of crisis and the building of narratives This chapter looks at the impact of the 2008 financial crisis and its aftermath on the Right. It charts the period of initial uncertainty as the crisis first broke and the construction of a narrative around ‘big government’ at the end of 2008 and beginning of 2009. It looks, in particular, at the ways in which representations of the New Deal and the 1930s were used to change the terms of debate. Both the beginnings of the ‘Great Recession’ and the courses of action that were pursued as events unfolded have

in The Right and the recession

Introduction: Charting the Right The phrase ‘Great Recession’ and references to crisis conditions eventually gave way to talk of recovery. In the United States (US), Gross Domestic Product (GDP) had, when adjusted for inflation, at least recovered sufficiently to surpass its 2007 total by 2011. British national output took longer to recover but finally matched its pre-recession figure in mid-2014. Nonetheless, despite this and rising prices in some property markets, most of the references to recovery remained cautious and tentative. The financial crisis that

in The Right and the recession

sciences suggest or at least imply that there are institutional complementarities holding together the elements within an economy, a society and political order, intercurrence and APD rest upon the proposition that there is for the most part a lack of ‘fit’ between different institutional and ideational orders. This is because such orders emerge in different settings, amidst different political configurations and for different purposes. While there may at times be fits, these arise for the most part 150 The Right and the recession from contingency or the skills of

in The Right and the recession

underpinned thinking by both policymakers and the 32 The Right and the recession economics profession during the post-war decades, had depicted unemployment and inflation as opposites (so that reductions in unemployment necessarily created upward pressure on inflation rates), it was now argued with growing intellectual self-confidence that price stability was an essential prerequisite for securing growth and employment insofar as such stability brought forth investment. In other words, for the new Right, inflation and unemployment were not opposites but were instead

in The Right and the recession

not lose if perceptions change (Whiteley et al., 2014). The Right and the recession 172 In the US, efforts to create a leaner state also faced difficulties. The federal government budget sequester, which came into effect from March 2013 onwards, imposed expenditure cuts. However, although the impact upon service provision should not be underestimated (see below), and despite the seemingly ‘automatic’ character of the sequestration process, departments and agencies engaged in processes of adaptation. Despite the severity of the cuts, the government found ways, at

in The Right and the recession

change’ (Orren and Skowronek, 2004:  78). Recent accounts within APD have perhaps placed rather more emphasis upon the processes of interaction between institutions and politics. Indeed, by privileging some constituencies while weakening others, policy and policy regimes not only create politics but through feedback effects forge a politics that in turn remakes those institutions. Thus, as Andrea Campbell has recorded, Social Security and the provision of Medicare improved the material The Right and the recession 22 circumstances of senior citizens but also drew

in The Right and the recession

of political activity quickly shifted to other terrain. The beginnings of the Tea Party movement are usually dated to the period just after the American Recovery and Reinvestment Act (ARRA) was signed into law by President Obama. This was when Rick Santelli’s live and celebrated outburst on CNBC took place. From the time of the ‘Santelli rant’ onwards, references to ‘Tea Parties’ or the ‘Tea Party movement’ became increasingly commonplace. Certainly, for Tea Party activists, the ‘rant’ quickly 98 The Right and the recession secured a defining place in the

in The Right and the recession

and the recession be mobilized around the need for deficit reduction and there would, it was said, be popular backing for drastic expenditure cuts that would in turn substantially reduce the scope and reach of the state. In July 1978, Alan Greenspan, who had been Chairman of the Council of Economic Advisers under President Gerald Ford, put forward an early version of ‘starve the beast’ in testimony before the Senate Finance Committee: Let us remember that the basic purpose of any tax cut program in today’s environment is to reduce the momentum of expenditure growth

in The Right and the recession