Role-modelling for a would-be role model

The first “new economy” was the Dutch “tulip mania” in 1637. There was joint stock company madness in London a century later, investor obsession with rickety railway ventures in the mid-nineteenth and an assembly line revolution in the 1920s. Crash, crash, crash, crash.

It is too early to say whether the 1990s “new economy” bubble is bursting or just subsiding and thus what economic effect will follow. But the weekend’s turmoil is a reminder of our vulnerability to overseas events.

United States consumers will some day stop spending more than they earn. If they do that abruptly and in fear, the impact here could be nasty. Translated into politics, a downswing in 2001 would set up a gloomy election year – the very opposite of the rosiness ministers have been anticipating.

What can a Prime Minister do about this? At best neutralise it with a bravura performance.

Today in London Ms Clark meets the modern master of the bravura, Tony Blair, next week the most successful political leader of the past 40 years, Lee Kuan Yew, Singapore’s benign despot. In between she will in Ankara push human rights to the Turkish oppressors of the Kurds and, on Gallipoli on Anzac Day, commemorate the ghastly defining defeat of this nation’s formative years.

Mr Blair and Mr Lee are in a sense role models for an able new Prime Minister aiming to fashion smart new centrist, nation-building politics. Mr Lee mingled an open market with pinpoint-accurate state intervention, a feat Ms Clark would like to emulate, adjusted for time and place. Mr Blair, whose social democracy is the art of “talking right but acting left” – a phrase repeatedly used to me in London last June – has been trying to fashion “Cool Britannia”, echoing the lost imperial world of “Rule Britannia”.

In short, Ms Clark will be using this triple-header mission to act the truly national leader. The more she can generate such an above-the-fray image, as Mr Blair and Mr Lee have, the longer she will be Prime Minister.

Neither role model is quite what it seems, however. “Cool Britannia” echoes, besides faded grandeur, the swinging sixties skit, “Fool Britannia”, and is much criticised. Moreover, while Mr Blair is doing well at his aim of holding “the Daily Mail reader” – middle Britain – his party rank and file dislikes his brand of social democracy as either vacuous or not just talking but acting right. Singapore these days agonises whether the government still can intervene usefully as it attempts the transition to the cyber-economy.

Moreover, Ms Clark’s departure leaves behind a disquieting Institute of Economic Research quarterly survey of business opinion. Historically an accurate indicator of future economic growth, the survey has now recorded two quarters of falling confidence.

This is partly the result of natural causes, rising labour costs because of skills scarcities and re-emerging inflation, with interest rates in tow. But it also reflects discomfort with the government’s tax rise, ACC and labour market re-regulation and other regulatory initiatives – all adding to business costs. A vague promise of lower compliance costs cannot counter that.

Ms Clark and her economic ministers protest they are simply bringing policy settings nearer those of Europe and after this year’s repositioning will run a fiscally conservative, no-shocks line providing certainty for business.

True. But business is focusing on policy direction, not the endpoint. Europe, Mr Blair’s Britain included, is moving in the opposite direction: lower tax, deregulation, flexible labour markets, tariff cuts – in short, lower business costs. And Europe has Europe at its doorstep; New Zealand has only Australia.

No matter. Ms Clark has oodles of political capital to draw on. Polls this week continue to accord her record-breaking popularity, even if peaking. That popularity is partly due to good times but it is much more than that. It has been thoroughly earned by keeping promises, looking and sounding on top of every subject she addresses, authoritative command of her government and convincing photo-opportunities.

And she is smart and doesn’t fool herself. Her most useful role model might turn out to be herself.