5 first insights to understand why populism is not on the way out in the Netherlands

Hello all foreign readers,

It seems as if our supertiny country has attracted quite some attention these days as all eyes were focused towards the main question: will a wave of populism change Europe? And although on the surface the answer seems a clear NO, there is more to the results than meets the eye.

In my humble opinion, the current results of the Dutch exit-poll show how populism and clientelism have become more prominent here, as in all other countries around the world. So mind you: in the Netherlands we're still moving to less democracy and more populism.

This will be clear after the reading the insights below. But do note that these are based on the exit-polls and not the final vote.

Insight # 1: Dutch voters have learnt their lesson, punished government and no longer voted strategic
What we can see is that both VVD (-10) and PvdA (-20) have been punished for their role in the preceding government. During the last elections, many citizens voted strategically and shifted their votes from their original parties to either VVD (right) or PvdA (left) to avoid the other party to become the biggest.

Yet through a strange turn of events and due to the anxious hunger for power, VVD and PvdA decided to work together. They compromised on fundamental party principles in order to be in power. As such they both disappointed the strategic voters and their party fanatics who assumed that it was unlikely that these two would work together with the enemy, even without additional parties.

PvdA and VVD formed an alliance that was based on very limited support and did not have a majority in the Senate. When started it was clear that they would focus on one thing only: surviving as a government out of fear that in-between elections would lead to a massive victory for PVV.

The first lesson in todays outcome in the Netherlands is that strategic voters have learnt that strategic voting does not pay. In addition, die hard party fans of both PvdA and VVD did not accept the fact that their party was sleeping with the enemy. So first and foremost, both parties are punished for quickly seeking power with the dark side. And the strategic voters have decided not to do this again but vote for their principles.

Insight #2: Dutch are more populist than before, but they come in different clothing
Whereas it looks as if the regular party VVD (31 seats) is the biggest with runners up CDA (19), D66 (19) and PVV (19), we should note that the only non-populist party in this row is D66. Both VVD and CDA made a sharp right turn by taking PVV-like positions on immigration and such.

With this in mind, I think it would be fair to say that effectively we had at least three rightish populist parties on the scene, who together assembled 69 out of 150 seats. This used to be 56 seats (for VVD and PVV) in the previous elections.

On top of that we can see that, even though parties all declared that right-wing PVV would not be invited for government roles (given their unreliable stance some years ago), the parties has won some 4 seats.

Right now, this election evening, most people and foreign media are misstaking the wood for the trees by concluding that the low amount of seats for PVV is a signal that the battle agains populism has been won in the Netherlands. It is with much regret that I need to conclude otherwise: the existing parties have adopted the populism and it is more widespread than before.

Insight #3: Fact free politics are also on the rise in the Netherlands
All over the world we are witnessing new 'leaders' or political activists who don't care about truth but focus on convincing the public by playing on their emotion. They don't provide solutions to real life problems, but are able to amass considerable support, either from within existing parties or as a new political party.

It's the same here. We have narcistic old and new players with a lot of noise, but no true consistent content coming into play from different angles. Among these are the party for elderly, forum for democracy, THINK and PVV. From a number of 15 seats in 2012, these are now expected to gain 28 seats.

Insight #4: Turkish incident helped both VVD and DENK with some extra seats
This weekend, just before the elections, the Dutch and Turkish government ended up in a diplomatic row over unwanted visitors to the Netherlands. This allowed prime minister Rutte (VVD) to pose as a leader, thus winning some seats, while DENK (representing Turkish interests in the Netherlands) avoided to enter the debate. Their existence did allow the irritated Turkish/Dutch citizens to voice their anger on the discrimination that they experience in the Netherlands.

One could compare this to the situation with Eurosongfestivals, where the immigrant population in the Netherlands and Germany have a big vote/say in influencing the Dutch end result.

Insight #5: Better economy allows for a more positive stance
With the economy starting to gear up slowly, there is more room for a positive outlook and progressive choices. Both GL (Greenleft) and D66 (liberals) spreaded a positive message and succeeded in regaining their strategic voters from the PvdA while adding some new ones. Therefore their results improved from 4 to 16 (GreenLeft) and from 12 to 19 (D66).

So did we stop populism and clientelism here in the Netherlands?
While many here in the Netherlands are strongly hoping that our election message to Europe and the world is that populism has been put on hold here, I am afraid that conclusion is not justified. Some of the mainstream parties have adopted the populist positions of PVV, including some measures that are in conflict with treaties and basic human rights. Meanwhile the PVV has still grown and some smaller parties popped up that are more in the personal interest of the party leaders themselves than for the public.

My conclusion is therefore that populism and clientelism is still with us, even stronger than before. Due to its absorption in main stream politics and the specific Dutch electoral landscape outsiders, may be less able to identify this. But I would not be surprised if in other jurisdictions, with other electoral constellations, the trend of populisms and clientelism (Fillon) remains the main trend, just as it is here.

So, the Netherlands may have appeared to have stopped populism, but mind you, we didn't!

Dutch lessons for all American friends that are struggling with the Trump-phenomen

Although this blog is intended to be about the amazing stuff happening in Dutch society and politics, it's now time to publish a feature for our friends in the United States of America.

The Trump turn of events is not unique
In the last year, you Americans have seen something happen that you wouldn't think possible. A strange guy, with strange hairdo and outspoken, politically incorrect behaviour, is appealing to the masses and making a run for Presidency. While at first you all thought this was extremely unlikely to ever lead to that guy being the Republican nominee, this did happen after all.

And while you think this is a unique turn of events, you may rest assured that it is not. What you are witnessing now is something we've seen happening here in the Netherlands already for quite some time now.

Even today we still have a blond loudmouth claiming to bring back the true Netherlands and true Freedom. And the guy ranks dangerously high in our polls. He even made it to become part of a condoning coalition but then ran away from this position of power, being afraid to be criticised by his followers.

Will you end up there as well in the US?

Well, it's up to you, and in order for you to get your bearings, let me provide some further background

The mechanics of narcist-populist leader
A Dutch scholar by the name of L D'Anjou has written a very solid piece of work about narcistic leaders and politicians. You can read it here and the summary is
In modern societies narcissists regularly enter the political arena to make their dreams of success and power come true. The dynamics of narcissism tend to propel these politicians into extreme behavior and radicalism - a process that is further intensified by the way the media operate. Moreover, a kind of ‘natural’ affinity exists between political narcissism and populism. 

Narcissistic politicians, therefore, try to organise electoral support with a populist platform and seek support in populist movements. As the latter are invariably radical, this strengthens those politicians’ radicalism even further. The article analyzes the dynamics of political narcissism, its relation to populism and the conditions that determine the success or failure of narcissistic politicians.

As the article is in Dutch I would recommend you to learn Dutch and read it. Or else, you''ll have to do with this brief summary and reflection by yours truly. 

Trump walks a clear narcist-populist walk 
In essence the article outlines that the modern society -with all media around- provides a great stage for narcistic personalities and politicians to florish. In general, the media will reinforce the performance of narcist leaders, but first they must gain political ground.

D'Anjou states that this may be easier in open societies as the Dutch (with low barriers for new parties to be founded). For that reason our two main political narcists, Fortuyn and Wilders, have understandably come from a background where they founded their own party, rather than affiliated with an existing one.

While D'Anjou thought it unlikely for a narcist to pass through the hurdles of political parties, the interesting thing is that in the US, our blond loudmouth property-developing and loss-making cowboy did do so. This can be the result of the fact that rather than achieve media-exposure via the political party, the candidate had drummed up his own media-exposure.

Next up on the list of conditions is that other players in the political market provide the opportunity for the narcist to gain grounds. In general this can be easier in times of fast change and turmoil, as the narcist can play an opportunistic game against current politicians. So the narcist will combine his outlier position with a populist approach and plays on emotions like ('things were better in the past'). The use of the 'make America great again' slogan is therefore in line with this theory.

Most important success factor for these politicians is formed by the functioning of media. The media, with their great need for news, deviations, rows, incidents will jump on the narcists behaviour to provide him with a forum for his views. And quite interestingly, we can now also see US media, recognising this dynamic and reversing course. This would be a nice lesson for the Dutch media (who tend to still amplify the vision of our local loudmouth with little fact-checking to debunk his untruths).

Whereto next?
The author D'Anjou states, at the end of the article, that our societies effectively have to learn to live with these narcist-populist players in the political game. So that means we best learn and adapt from the experiences all over the world.

Here in the Netherlands we now have some more than 10 years experience with that and all along Europe other countries are also experiencing this fact. We can see a populist bang a simplistic drum and attract a lot of followers. Putting their words to consistent political action will however not be as easy, as our local history showed.

But even so, for us in the Netherlands the jury is still out. Next years elections may even see - despite all our experience in dealing with narcist politicians) our local loudmouth become the biggest party (which of course has only one member, chief, secretary and treasurer: the loudmouth himself).

What appears to be happening in the US now, is that the essential traits of the narcist (inability to lose, to be left alone) lead to an increase of his erratic behaviour. In combination with the media that take their responsibility to not just amplify the voice, but also check it, this may finally lead to a choice for capabilities rather than pomposity.

Still, it will be very interesting to see how, in the US, as an example of a democracy with a lot of checks and balances, the elections play out. So in determining your vote, I wish you all the wisdom you need.

Dutch government deeply involved in illusionary budgets and politics (just like the bankers)

In my previous post, one year ago, I outlined that it would be possible that with the PvdA at the helm, the Dutch politics would enter a time of less populist talk and more stability. Boy, was I wrong about that. What happened here in the Netherlands is that the elections turned into a shoot-out between right wing VVD and left wing PvdA. All votes sucked into a battle where right wing voters chose VVD to prevent the PvdA from becoming too big and vice versa.

The end result was that PvdA and VVD both became very big and have a majority in the House of Representatives (Tweede Kamer) but not in the Senate (Eerste Kamer). Rather than seeking a bigger coalition, the two leaders: Rutte (VVD) and Samsom (PvdA) chose to develop a government policy plan within a brief period of time, with very few consultations. This didn't work well for a number of reasons.

It turned out that VVD and PvdA had compromised on important positions by using some simple cards. The result was that the VVD agreed to a very strong income adjustment whereby high income earners would significantly pay more tax than before. This was a PvdA desire that was one bridge too far. After a lot of hassle, the plan was revoked. But it showed the core of the problem: the agreed package of compromises between PvdA and VVD hadn't been thought through sufficiently. This was enough for me to coin their policies: Illusion policies.

Where are we now?
Right now, we are almost one year underway and it seems that the prime Minister has taken aboard some of the criticism that all the government plans were made without sufficient backing in society. As a result he is now setting up deals on healthcare, prison-policy and so on. The number of deals ('akkoorden') is immense and each changes a bit in the start policy of the government. One of the involved social partners at some point in time said: 'I'm getting a bit of tired from al these deals'.

But there is a bigger problem here in the Netherlands. In an effort to fullfil the EU criteria, our government is trying hard to cut expenses. It does so however, without making fundamental choices. It tries to avoid some of the hot issues, such as deductibility of mortgage interest. The reason for this is that ever since the death of Fortuyn, our politicians are scared to lose their votes to the populistic players that promise a lot but cannot deliver a consistent policy (see my previous post).

Meanwhile the public is smart enough to recognize that things aren't going well and they revert to an old Dutch quality and habit: save money, stop spending. Because in this political climate it is quite likely that even if you don't expect it, some sort of measure may affect your personal budget. Until revoked or replaced by an adapted plan or deal.

Much of the macro economic debate focuses on the housing and mortgage market as politicians believe that in this area the solution of the crisis can be found. The paradox here is that polls show that the Dutch public assumes the interest deductibility to disappear and understands that that is necessary. But this government doesn't want to do that and reverts to additional measures to fix the market (a government guaranteed mortgage fund being the latest plan). While in itself useful it keeps consumers in uncertainty as to when the deductibility will be abolished.

Illusionary cuts and budget
We should also note that significant part of the budget cuts of this government only exist on paper. The idea that it is possible to delegate central government task to municipalities while reducing the expenditure with many billions is unreal. It allows the government to book a reduction while municipalities will be blamed afterwards for not achieving their targets.

A similar illusionist trick is done with the government financial assistance (for childcare, raising kids, housing). By reorganising the existing range of reglementations and procedures into 1, it is expected to save us some other billions.  Quite unlikely given the bad track record of the government and tax department in automation and procedural change.

Essentially we have thus sent a paper tiger to Brussels stating that we achieve our budget goals, but we will undoubtedly be in for some surprises. Our government is living on borrowed time, hoping that the other countries pull us out of the mud (which might work as we are an open community, earning in the slipstream of Germany). And it would be a wrong idea to see a role for the ECB here. The ECB can't of course solve the deficiencies and absence of our political statesmanship with monetary instruments.

What do the Dutch think of all this?
In my view, those of us who suffer from the budget cuts do tend to align with the populist parties at the left and right side of the spectrum. Other than that we maybe more mature than the politicians assume. Mortgages are being repaid and there is an understanding that we all need to pay our fair share. But the problem is that the political debate is not about fair shares but about finding easy and quick wins in order not to lose votes. There is a longing for stability and trustworthiness which our politicians are unable to provide.

In analogy with the banking sector: the incentive structure for politicians is skewed towards the short term just as heavily as it was in the banking domain. While in the bank domain this is now being corrected, the politicians lack the self-reflection to apply similar lessons to themselves. The result is that the general trust in politicians is getting steadily lower.

Meanwhile the Dutch draw their own conclusions: stop spending, start saving until the outlook improves and becomes more predictable. Unlocking this spending stop will not just require certainty on the mortgage market. It requires more stability and fairness from politicians, but they are too busy going for votes, to notice that.

In sum: we had our opportunity for a Dutch spring here in the Netherlands, but as in other countries, we let the momentum slip away.

Eurozone troubles.... all originate in a wish to get back to normal?

In the recent days I've read a book by J. Beyen called: 'het spel en de knikkers'. It's a Dutch autobiography describing the life and career of a banker, central banker, former President of the BIS, Executive Director at the IMF, Minister of Foreign Affairs and so on. Beyen was for example one of the important Dutch delegates at the Bretton Woods conference. And his book - in particular the episode on the golden standard - is fascinating.

Golden Standard as the solution or the problem?

Until the First World War, the golden standard had become the de facto monetary norm for governments/countries. It consisted of a set of fixed exchange rates, which meant that local economies sometimes had to suffer, as devaluation was impossible. On the other hand, it allowed for a lot of international trade and stability and was thus praised and adopted. Until the First World War changed a lot and the golden standard was abandoned.

In his book, Beyen describes the major sentiment of policy makers after the First World War. And he calls it the desire to go 'back to normal'. A central theme in this desire was the re-establishment of the Golden Standard. Beyen also describes that monetary thinking at that time wasn't as advanced as in 1968 (when he wrote the book) He sketches that the system of fixed exchange rates in itself burdened the European economies, but policy makers weren't able to see this at the time: obsessed with getting back to normal.

Current flaws in Euroland thinking: still seeking a back to normal?
The musings and discussions all around Europe these days, in particular the new plans on a banking union, fascinate me enormously. The singlemindedness with which politicians now move forward into more Europe, more joint policy, more deposit guarantee may be variations on a similar desire: back to normal. Back to the Europe from before the crisis, using the same policy tools and concepts that we used before the financial and sovereign crisis broke out.

As a result, we are now witnessing policy makers, fully caught up in their goal to save Europe by designing futher institutions and policies.  But, essentially, our politicians and civil servants fail to recognize that the European car doesn't respond any more to twists of the steering wheel. The only thing that has helped (only temporarily) is throwing money at the problem.

Are we missing something here?
While our monetary thinking may evolved quite a bit since the 1930s, our knowledge of policy and strategy making is not as widely and heavily discussed and modeled. In theory we could all be aware of mechanisms such as groupthink, tunnel vision, decision complexity, resource complexity etcetera. But in practice we fail to properly recognize and address the fundamental errors in policy making.

Having read the autobiography of Beyen, I tend to believe that we are now learning new lessons in the Eurozone. And the lessons are not so much related to monetary theories but to international policy making under stress. I therefore hereby propose the concept of policy illusion to be better recognized in the future. It is the understandable tendency of policy makers to continue doing what you were doing all the time, even when the world fundamentally required a different way of looking.

And so we can now see our policy makers making policy by looking so intensely at the rear-view mirror that they will miss the fork in the road ahead.

Wilders stops his support for minority-government of the Netherlands...

The breaking news here in the Netherlands is that Geert Wilders has left the building. And 'the building' is the so-called Catshuis, the seat of our prime-Minister. It is here that, during the past 7 weeks, the VVD (liberals) and CDA (christian-democrats) have negotiated with the PVV (Freedom Party) to agree on further austerity measures. And our prime-Minister Mark Rutte has just explained to the public that the Freedom Party has stopped the negotiations and was no longer willing to take its responsibility for the measures. CDA-delegate Verhagen has mirrored this remark so we can see that the blame-game has now started.

It is interesting to note that this step of Wilders occured only 12 hours after the group was provided with the data of the Dutch Planning Agency that had calculated the impact of the jointly agreed draft austerity-measures. And our foreign readers should also note that Wilders is increasingly losing momentum. Hero Brinkman has left the PVV, a couple of weeks ago. And the quite unelegant bashing of the Queen as well as Turkish official Gül last week, didn't win him a lot of supporters either (he immediately lost 2 seats in the polls).

So now we find ourselves in a tricky situation in the Netherlands: we need austerity measures and we need our government to act. But the support-construction with the Freedom Party have turned the past 2 years into a standstill with no serious economic reforms and lots of symbolic regulatory measures to please the public (and the PVV-voter).  So while everyone in the Netherlands understands the need to reform, it is also clear that it is now time for new elections. The experiment with PVV has failed to work.

Our Prime Minister has of course phoned the Queen but has not resigned yet. He stated that the situation is so serious that he wants to discuss further steps with Parliament. And he leaves open the possibility that there will first be an agreement on government finances and afterwards elections. While some parties will want to follow this pragmatic route, it remains to be seen if the big opposition parties such as the left wing Socialistische Partij and the Partij van de Arbeid are willing to cooperate.

Geert Wilders has also given a press conference, just now, and he specifically blames Europe. He had outlined that he has stepped away, that he no longer supports the minority-government. And he stated that especially the cuts for elderly pensioners formed a serious issue for him.In the press-talk afterwards he repeatedly outlined that he did not wish to comply with the 3% rule of Brussel. So he started blaming Brussels and he started the election game.

It is clear to me that for Wilders, the duration of his cooperation with the minority-government was long enough to gain creditibility as a true states-man. And as he is losing support among the public, as his party starts to crumble, he must have decided that if ever, now is the time to capitalize on his popularity and to try his jump to become the biggest party in the Netherlands. In doing so he demonstrates once more that his major quality does not pertain to leading a party or a state, but is one of walking away from the debate and challenges that are really relevant to the nation.

Greece: we Europeans need to bypass politicians and support the Greek people

The Greek parliament is facing a tough call with respect to future measures to reaarange their financial household book. And at present we are seeing the economists do the calculating, the politicians do the talking/negotiating and the banks may mildly be supportive. Yet all the talk and public debate seems to be in terms of black and white, of division, rather than in terms of connection. That surprises me.

At pressing times like these, it may be time for the citizens themselves to speak out and connect to Greece and its people. The euro has a very positive cost-benefit ratio as it shielded Europe from uncanny complicated situation when the financial crisis hit in 2007. Without it we would have had highly fragmented local financial disasters all over Europe. Politicians are forgetting this too quickly and choosing for populistic lines of reasoning to satisfy what, in their view, is the peoples wish/opinion.

On both a political and human level, there is no other way than supporting the Greek. But we shouldn't let only the politicians and bankers do the work. It is now time for European labour unions, companies, families, sports clubs, stamp collectors and what have you, to reach out to the Greek counterparts that they have been in touch with over the last years.

The message to them could be one of human and moral support, outlining that both the Greek people and the European people are stuck with politicians that sometimes don't do their job right. In Greece they frauded a bit too much and in Europe they are just too populist and lack the leadership to stand up for the euro now. But if we look underneath it all, there is only one thing to do: support the Greek, sympathize with their situation and encourage/support them to make the best of it.

Dutch coalition has to lean on PVV and SGP for support of government...

Today was the day that the Dutch Members of the Provinces voted for the Members of the First (Upper) Chamber of Parliament. Traditionally this is called the 'reflection' Chamber, because it is not so much a political arena as the Second Chamber. It's role is, traditionally, to ensure quality of rules, rule-making and check the fundamentals of law. Only on occasion do the discussions in the First Chamber lead to parliamentary crises.

Well, as you can read here, it turned out that the current minority-coalition of VVD and CDA has failed to win an outright majority of seats in the upper house of parliament, or senate, according to the latest prognosis from Nos television. Even when combined with the PVV, the result is a mere 37 seats, which means that the coalition alliance (VVD, CDA and PVV) is still one seat short as the Chamber has 75-seat Members.The SGP has publicly stated however, that it will tend to support the coalition. And their support was of course much helped by the withdrawal of support (by VVD) for legislation which lifts the ban on blasphemy.

As a result, Prime Minister Mark Rutte is now facing the most serious balancing act since a long time. Rutte needs the support of PVV in the Second Chamber (Lower House) and needs the PVV for that.  Meaning he has to side with a party with strong anti-islam sentiments, that wishes Greece to step out of the euro and so on. And in the First Chamber (Upper House) he sides with the SGP, that has the political position that women should not be active in politics (and should focus on their maternal tasks primarily). And this is quite a combination... leading us in the Netherlands into ad-hocracy territory, due to the minority character of our governing coalition. And we haven't had situations before in which each government issue/thema had to be battled for independently in the Chambers. So we're up for some Realpolitik here in the Netherlands.

We should note however that this outcome is essentially doing proper justice to the outcome of the elections for the Upper and Lower House here. The Dutch were strongly divided, which resulted in a situation where it was no longer clear how to form a majority-coalition. So the voters have condemned the politicians to cooperation, despite their strong differences of opinion (and sometimes unagreeable manners or political views on other subjects). And it remains to be seen if this will be accompanied with proper conduct in the Houses of Parliament or whether we will see more name-calling and pub-talk. So the end result is that the voters have gotten what they represented: a divided caretaker government that will steer on a day-to-day basis, and will be unable to steer on long-term policy goals or to achieve fundamental changes.

I am curious to see if our Prime Minister, Mark Rutte, will succeed in his balancing act. Time will tell.

Bernanke still uncertain as to economy.... US will not be the first wagon of economic recovery

Breaking news: Bernanke remains quite careful when talking about the US economy, de US Treasuries immediately slide en we'll have to see what equities will do and the dollar. I think it will be a hot summer, certainly now that the Obama legal package will ensure some further regulation for the banking sector (which cannot lend as much due to necessary buffers, leading to lower economic growth). The only upshot of his talk was that Bernanke found the risks in the banking system to be not as large as they used to be.

Meanwhile, the Dutch political parties are hesitating and discussing the best way to act after the elections. I may hope that with former Prime Minister Lubbers, things will start rolling, because the economic developments aren't waiting for us until we are done determining our new coalition here.