Listen Up, John Boehner!

02.28.13

The United States Can’t Insulate Itself From Euro Politics

There are things to laugh at in the Italian election. But the outcome could hurt that country, Europe, the United States, and the world.

It was the Twitter election—in more ways than one. In their presidential vote this week, Italians demonstrated all too well how social media can both capture and paralyze democracy—even as it measures trends perhaps more accurately than traditional tools like polling.

But first, let’s deal with the rise of a dysfunctional democracy, stunningly confirmed by the final election results.

The country that once ruled the world can’t seem to govern itself. The Italian election was a farrago of farce and consequence that reaches far beyond the Alps and the Apennines.

Months ago, the center left, complacently assuming its ascendancy, chose the comfort of a party warhorse picked in a blatantly rigged primary as the coalition’s candidate for prime minister. The 38-year-old mayor of Florence, Matteo Renzi, a Blair-Brown-Clinton-like figure, was blocked as a modernizer-too-far who threatened the old order of patronage and preferment; he almost certainly would have won a governing majority. Instead the center left squeaked into control of the lower house of Parliament, but no party or likely alliance of parties commands a majority in the Senate. So Italy faces a plague of maneuver, of futile deals, endemic deadlock, and, sooner rather than later, a new round of elections.

Now for the farce. The voters rehabilitated a politician who has become a clown, an orange pancake-faced caricature of a demagogue. Former prime minister Silvio Berlusconi is a septuagenarian billionaire who reveled in “bunga bunga” parties with very young women and who fiddled the books while Rome and Italy slid toward a fiscal abyss. Simultaneously, a disillusioned electorate elevated an actual clown who has become a politician: comedian Beppe Grillo’s forces now hold approximately 100 seats in the Chamber of Deputies and the balance of power in the Senate. They say they will “listen to the Web,” which was the central arena of their nihilistic campaign, “and decide what to do.”

The consequences registered immediately in shaken world stock markets, the decline of the euro, and the specter of the new euro-zone crisis. Even as the dollar strengthened, U.S. investors understood the potential fallout from such a crisis, countered at least for now by the Federal Reserve’s relentless monetary stimulus.

This is not the only danger—or lesson—for America. As Nobel laureate Paul Krugman argued before the election’s outcome, the austerity policies imposed on Italy—deep cuts now rather than pro-growth policies followed by deficit reduction—have left the economy in a shambles of steady contraction and soaring unemployment, especially among the young. The grim reality, which drove the tsunami of protest voting and a resigned reversion to a politically resurrected Berlusconi, hasn’t convinced the austerity ideologues that they’re wrong. Rather they are “sounding increasingly petulant and delusional.”

Boehner should glance at the perilous state of Britain, Italy, and more and more the whole of the European Union.

The German overlords of the euro zone are insisting that Italy stay the course the Italians have just repudiated. And in Britain, teetering on the edge of a triple-dip recession, the Conservative government has vowed to stick to or ratchet up its draconian cuts as the only path to reducing the deficit; ironically that path so far has led to higher debt and a historic downgrade in Britain’s credit rating. An economy coming out of the 2008–09 recession sooner and faster than most others has descended into harder times ever since a newly elected Conservative government imposed the discredited orthodoxy of countering falling or fragile demand by slashing demand.

That is what faces America on the eve of sequestration—which would devastate hundreds of thousands of jobs and ultimately perhaps millions as automatic spending cuts roll across the economy. House Speaker John Boehner adamantly refuses to compromise, confessing, “I do not know how many jobs will be lost.” (He could consult the Congressional Budget Office.) Then he offers the preposterous economic fantasy that austerity to “solve the spending problem” will save “tens of millions of jobs in the future.” Maybe reading John Maynard Keynes is too hard for him, but he could glance at the perilous state of Britain, Italy, and more and more the whole of the European Union.

The GOP appears to calculate, or hope against hope, that sequestration will be blamed on the White House and the Democrats—with an assist from The Washington Post’s Bob Woodward, who has moved the goal posts of his own reporting to suggest, inaccurately, that the president agreed that any deal to resolve the mess would include no tax increases.

In any event, this is Beltway twaddle. Poll after poll shows the president in a far stronger position. And of course, we’ve had a trial run of Republicans’ intransigence when they shut down the government in 1995 and got politically flayed as a result. Maybe history and insanity will repeat themselves here, but the GOP should not expect a different result.

Even if we stumble to the right place in Washington—and we may; after all, John Boehner has, in effect, just surrendered on the Violence Against Women Act—we can’t ultimately insulate ourselves from a globalized order where economics doesn’t stop at the water’s edge. This week, or next, or next month, we could be held hostage to one of Beppe Grillo’s one-liners. And more generally, our growth and jobs depend on the fate of the euro zone, where Germany’s hegemonic demand for austerity inevitably and increasingly clashes with the workings of democracy from France to Spain to Italy. Their banks and ours are intertwined—and we know what that can mean. Their downturn depresses our sales of goods and services—and the creation of American jobs.

Berlusconi may have risen from a well-deserved political sepulcher, and Grillo arrived at the center of Italian politics from the punch-line stage. But the latter’s emergence is no joke; it is a harbinger of the public square to come. Grillo disdained conventional tools like advertising. He is a self-proclaimed manifestation of the power of social media—the Internet, Facebook, Twitter, and all the rest. The times in Italy were ripe for that; the disillusion was deep; the cynical, economically scourged electorate was ready to strike back. I suspect we ain’t seen nothing yet—there or in other democracies.

Finally, Twitter played another role in Italy that will spread elsewhere—as a substitute for polling. The Milan-based Voices From the Blogs conducted a test during the Obama-Romney race, monitoring more than 40 million tweets in the United States during the final month of the campaign, accounting for their positive and negative character. Voices From the Blogs predicted an Obama victory by 3.5 percent nationally—very close to the final margin—and while missing Colorado and Pennsylvania, the Twitter-informed analysis awarded the president the key swing states of Florida, Ohio, and Virginia.

The model was then applied to the Italian campaign, where, as the site’s Luigi Curini observes, all “surveys tended to overestimate the center left,” but “social media day after day seemed to represent the deep Italian soul.” Voices From the Blogs didn’t hit the mark as closely as in the U.S. last November, but clearly outperformed the exit polls.

Here too I think we’re only at the beginning of applying social media to campaign metrics. For the moment, the primary utility of the Twitter technique is to measure the state of the horse race. Candidates and news organizations will still rely on traditional surveys to judge the impact of themes, issues, and attacks, but don’t discount the capacity of the Twitter mavens to refine their systems to yield comparable insights. And if the approach becomes widespread and public—in Italy there is a two-week blackout on releasing polling data before Election Day, even though everybody but the public knows what is happening—look for campaigns to assign legions of volunteers to tweet and influence the numbers. Presumably, the efforts will offset each other—or the stronger campaign will do better, which is only natural.

There are things to laugh at in the Italian election—except that the outcome could hurt too much there, in Europe and the United States, and around the world. There are also social-media models that will be replicated and made more sophisticated—breaching settled boundaries of politics, propelling new movements, advancing alternatives to long-established survey research. And remember, the next tweet you send during a campaign probably won’t be just your own.

Who knows? FiveThirtyEight could soon turn out to be FiveTweetyEight.