WHILE the new campaign slogan of the Liberal Party is “The best is yet to come,” the reality is, what we should be saying is, “The worst may yet come.”
The political cycle of 2016 has claimed another government. Austria’s far-right Freedom Party candidate has come at the top in the first round of presidential elections. The significant factor is that this is the first time since World War II that candidates from Austria’s two main parties did not make it to the runoff. The Freedom Party took 36 percent of the votes; the Social Democrats and the center-right People’s Party each took about 11 percent of the vote.
The pattern of the political cycle is that an economic decline becomes great enough that the public’s confidence in government falters to the extent that the existing political establishment and elite come under intense pressure. If the economic decline becomes more pronounced, the politics becomes more fragile, leading to more economic decline.
Like it or not, economies need political stability. However, right now, this idea of “continuity” is not what the people are looking for.
The reason for this political shift is that the global middle class is getting killed no matter where you look. The share of wealth owned by the middle class declined in every part of the world on a relative basis since 2000. Globally, it has gone from 38 percent to 32 percent. In Europe we have a drop from 47 percent to 41 percent. The Asia-Pacific region has experienced the largest fall, from 50 percent to 42 percent. Even poverty-bound Africa has seen its middle- class wealth go from 37 percent to 32 percent.
While former Interior Secretary Manuel A. Roxas II can say to the members of the Makati Business Club, “Look at your bank accounts,” these men and women are not the ones from whom political
change happens.
The middle class in the Philippines is not estimated by wealth but by income, and the income estimate is suspect, ranging from P330,000 to P4 million per year. That group, though, comprises about 25 percent of Filipino families.
The government likes to highlight poverty reduction, but it is not the “poor” that are rising up. All economies, including the Philippines, are fragile right now. “Heroes” can turn to “zeros” very quickly, as we have seen with Brazil. Too much government debt, which we have not had a problem with in the past 10 years, or government underspending, which we have struggled with since 2010, can turn the economy ugly before you know it.
If the people “rise up” due to economic problems, it will not be the “peasants” carrying the torches and pitchforks. It will be the middle class coming from their condos and houses and driving cars trying to protect their wealth.
The candidates talk in broad strokes about the economy and only talk specifics about the government’s programs for the lower economic classes. If the economy performs below expectations through 2016, they are going to wish they had addressed the concerns of the middle class.
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