The Bear’s Lair: The search for a well-run country

When I moved from Britain to the United States in 1995, a significant motivator was my search for good government. The British government’s quality had sharply declined after the departure of Margaret Thatcher and seemed likely to get still worse after Tony Blair’s inevitable arrival. Conversely, the Bill Clinton/Newt Gingrich tandem was distinctly hopeful for the U.S. The picture today is globally grim for those seeking a replica of the capable, intelligent government of Lord Liverpool. If one were similarly seeking a new home today, one would need to search globally to find the brighter spots amid the general gloom.

The United States is clearly not the best available alternative, even in the naughty world in which we now live. U.S. governance has gone steadily downhill since I moved here in 1995. The first step was the extremely dubious Republican coup that removed Newt Gingrich at the end of 1998, after which he was replaced with a child molesting wrestling coach. Whereas Gingrich had consistently lopped about $25 billion off each Clinton White House Budget as it passed through the tortuous House appropriations process, under Dennis Hastert $25 billion was added to each Budget as it passed through the process, whether its originator was the Clinton Democrats or the George W. Bush Republicans. The result was that the blessed if modest budget surplus that had appeared under Clinton/Gingrich was turned into rapidly increasing deficits, made worse by the Bush administration’s horrid habit of starting wars in countries most Americans could not find on a map.

Matters became worse after Bush left. In 2008, a thoughtful voter was reduced to actuarial calculations about whether John McCain would survive two terms or whether Sarah Palin had a chance of becoming President. Palin represented a new force, a populist Republicanism that had no hope of balancing the budget but might prove more intelligent in foreign policy. After eight dreary years of Barack Obama, that is what we got, although President Trump, being a real estate developer, was unsound on monetary as well as fiscal policy. Still his second term seemed likely to be better than his first, as he grew more savvy about the ways of Washington; alas, we did not get it, and returned to gloomy decline.

Britain is no better. Tony Blair was as bad as I had feared; worse to the extent that he lasted longer, because it took him over a decade to wreck Thatcher’s economy. His constitutional meddling has had permanent ill effects, reducing Britain’s quality of government and legal system for evermore. Then David Cameron spent his time fighting against the few remaining capable elements of the Conservative party and when the British electorate brilliantly and unexpectedly voted for Brexit, resigned in disgust.

Unhappily, the electorate’s genius was not matched by any glimmers of intelligence from the politicians. Three years under Theresa May were spent trying to undo the Brexit vote and now Boris Johnson, instead of taking advantage of Brexit’s new opportunities, is wrecking the economy with climate change fantasies and absurd unscientific regulations such as that banning fracking. Not only is Britain today fairly poorly governed (for example, missing the opportunity to negotiate a new trade deal with the U.S. while President Trump was in office) but the overwhelming likelihood is that it will get worse.

Outside the English-speaking nations, the position is little better. France has been badly governed since Georges Pompidou, and Germany since Konrad Adenauer, with Angela Merkel’s interminable tenure of office a particular black spot. In France’s ongoing election, Emanuel Macron is utterly hopeless; Marine le Pen would probably be a considerable improvement, but still appears unlikely to win.

Sometimes, one can improve matters by looking at authoritarian societies, but not at the moment. Xi Jinping has completely lost the plot economically, as is becoming increasingly clear. Vladimir Putin, remarkably sensible economically except for a tendency to steal everything, has backed Russia into a fearsome cul-de-sac by his terrible decision to invade Ukraine, a decision partially justified by inept and deceitful Western policy over three decades, but never likely to lead anywhere worthwhile for Russia or for Putin himself. The competence of other authoritarians is lower than these two; generally one must concur in wishing that an authoritarian-ruled world is not in our future.

Then we come to the East Asian societies – Japan, Taiwan, Singapore and South Korea, who in 1985 I would unhesitatingly have identified as the world’s best run countries, even though back then there was a lot of competition from the West. Today, all of them have run into problems, with Singapore converging downwards on the West, South Korea having just endured several years of leftist government and Japan about to experience Weimar-style inflation (see last week’s column). Taiwan is quite well run, but I have a nasty feeling that won’t be the case for long.

To them we can add India, appallingly mired in socialism in 1985, but now one of the better run countries in the Third World, with its corrupt Permit Raj bureaucracy cut back and its anti-capitalist instincts curbed. India is improving, no question, but still does not qualify as well-run.

Latin America also had some decently run countries in the 1990s – Chile, Peru, Brazil and Argentina were all models of sensible policy, having learned from their follies of previous decades. Today Chile, Peru and Argentina have all elected leftist ideologues, who are in various stages of wrecking their economies. Brazil has not done so yet, and Jair Bolsonaro gets points from me for a good effort to pull the country back from two decades of excess – but next October’s election is likely to change that, although one can hope otherwise, with the loathsome and corrupt Luis Inacio (Lula) da Silva leading in the polls.

There is however one modest corner of the world where some governments remain competent: Eastern Europe. This should not be surprising; the region had more than 40 years of Soviet-imposed truly abominable government after 1945, but unlike in Russia and the Soviet Union’s successor states, that period was still short enough that older people remembered the previous regimes.

In that respect, it resembled Britain’s emergence from one-party Whig rule in 1760, where for example the 78-year-old Lord Bathurst had been a rising young politician under Queen Anne, one of the 12 Tory peers created in 1712 to pass the Treaty of Utrecht and was to live long enough to receive an Earldom from Lord North in 1770 (and to see his son become Lord Chancellor). In Bulgaria, my late wife’s uncle, who had been a youth leader in democratic parties in the 1940s, was a re-founder of the Bulgarian Democrat party in 1990-91, though unlike Bathurst he did not live long enough to create a post-freedom political career. In any case, with those memories, there were always elements in East European post-Soviet politics that had a good idea of what a sound government should look like.

There are currently three governments in Central and Eastern Europe that are distinctly better than any elsewhere. One is Poland, where by a happy chance the 2005 election eliminated the Socialists from serious contention, creating two center-right parties, one internationalist, led by Donald Tusk, who later became President of the European Commission, and the other conservative nationalist, currently led by Mateusz Morawiecki as prime minister. Poland is currently following the Western consensus on Ukraine, which it borders, but has for the last decade had an admirable record of pursuing an independent line politically and economically, defying the European Commission, a position essential for any government wishing to keep its people free.

A second is Slovenia, where the current prime minister Janez Janša as Minister of Defense led the successful Slovenian resistance to the Serbian invasion of 1991, then spent decades in opposition to various “socialist” governments, who from time to time imprisoned him as had their Communist predecessors, then in March 2020 emerged at the head of a weak coalition just as Covid hit. Janša has done a truly admirable job, both with Covid and with the Slovenian economy, as well as reducing the considerable corruption that had remained there, and is up for re-election next month. Fingers crossed!

Finally, we come to the winner of this World’s Least Bad Government competition: Hungary’s Viktor Orban, just triumphantly re-elected with a landslide majority. It was obvious when I was in Croatia in 1999 that Hungary’s new government was something special; when NATO was bombing the neighborhood in pursuit of its Kosovo fantasy and I was trying to sell Croatian hotels, Orban’s first Hungarian government was most helpful, recognizing Franjo Tudjman’s Croatia as a reformist ally.

Since his return to power in 2010, Orban has pursued an admirably low-tax, low-regulation economy, has defended Hungarian borders against the hordes of immigrants mandated by Angela Merkel and the EU, and has pursued a sound anti-woke social policy, with tax incentives to produce more young Hungarians. He has also defined his rule as “illiberal democracy” which since liberalism has unfailingly degenerated into “woke” socialism over the last 30 years, looks a pretty good objective to aim for. No government is perfect, but in today’s badly governed world, Orban’s Hungary is an admirable exception to the chaos.

Let us hope that in a few years’ time, Orban’s example will have been followed by some larger countries, including ideally the one in which I am living!

(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)