The ‘Reagan question’ is infallible ... even in Ireland

It was in October 1980, while debating against the incumbent Jimmy Carter during the US presidential election campaign, that Republican challenger Ronald Reagan posed what was simultaneously the simplest but also the most profound question ever asked of voters by a candidate.

“Are you better off today than you were four years ago?” he inquired. The old charmer had nailed it. Carter, who had been staging something of a comeback, duly tanked and Reagan won in a landslide — a margin of nearly 10 percentage points in the popular vote and an Electoral College victory of 489 to 49.

There is a whole industry devoted to the question of why people vote how they do: psephology, data analysis, opinion polling, demographics. It is all hugely entertaining (I am an addict, cannot get enough of it), but no one should labor under the delusion that it is anything other than entertainment.

Even strategist James Carville’s famous sign on the wall of Bill Clinton’s 1992 campaign office — “The economy, stupid” — was an overcomplication. The general state of a country’s “economy” is a complex resolution of statistics involving employment, productivity, import/export, output of goods and services, investment and company profits, best left to professionals. It often bears no relation to whether voters feel financially comfortable: ask Kamala Harris. When laypeople speak of “the economy,” what they mean is “my economy” — in other words, the Reagan question.

When laypeople speak of ‘the economy,’ what they mean is ‘my economy’ — in other words, the Reagan question

Ross Anderson

Never has this been better illustrated than this year, when there have been or will be elections in more than 100 countries, with about 4 billion people, or roughly half the world’s population, eligible to vote. The results so far, particularly in developed Western countries — the US, the UK, France, Portugal, Belgium, the Netherlands — have not been good news for incumbents, and Reagan could tell you why: everyone is broke.

There are two principal reasons for that. First, the COVID pandemic required governments worldwide to pump billions of dollars into their economies to keep them afloat while business and commercial productivity went through the floor. That has to be paid for, which in most Western countries means increased personal and corporate taxation. Second, Russia’s invasion of Ukraine sent domestic and commercial energy costs soaring, particularly in Western Europe, and these bills have to be paid too. As a result, the answer to the Reagan question is very much in the negative.

However, despite all the above, could it be that we are about to witness an exception? Voters in the Republic of Ireland go to the polls on Friday in the first parliamentary election since 2020. The main issues in the campaign (surprise, surprise) have been the cost of living, the affordability of housing and economic stability. Unaccountably, however, it appears that the incumbent coalition government may survive, and comfortably so.

Ireland has always been a special case. I once lived and worked in Dublin and was puzzled that the policies of the two main political parties, Fianna Fail and Fine Gael, seemed indistinguishable. I asked a colleague to explain how people decided which way to vote. “Ah, well now,” he replied, “it depends which side your grandpa was on in the civil war.”

Like all good gags, this contained a kernel of truth. The Irish Civil War was fought between June 1922 and May 1923 between, in a uniquely Irish way, two groups of nationalists who wanted essentially the same thing — a republic independent of the UK. One group supported the 1921 Anglo-Irish Treaty that ended a two-year war for independence and established the Irish Free State, separate from Britain but still part of the British Empire. The other group viewed the treaty as a betrayal of the 1916 Easter Rebellion and of those who fought in the war and believed it would never deliver genuine independence.

The pro-treaty group won and, from them, Fine Gael emerged as a political party. Fianna Fail was formed from the anti-treaty republicans. Both are parties of the center-right and, 100 years later, outsiders may have difficulty in telling them apart.

For this reason, the “rival” parties have had little difficulty in forming an effective coalition government for the past four years, their leaders taking it in turns to be taoiseach, or prime minister (I know, don’t even try to pronounce it unless you’re Irish: the deputy prime minister, or tanaiste, is another tongue twister). What is surprising is that on Friday voters seem likely to reward the coalition with a mandate to continue in office.

The Irish government finds itself in the unique position among Western democracies of having more money than it knows what to do with

Ross Anderson

How has this come about? The short answer is, the Reagan question. The longer answer is that, owing to a peculiarly Irish combination of circumstances, the government in Dublin finds itself in the unique position among Western democracies of having more money than it knows what to do with.

The roots go back to 1980, when the Irish government of the time had a wizard wheeze: it encouraged companies to set up regional HQs in Ireland, in return for the promise of zero corporation tax. The first to take advantage was Apple, which established a base for its non-US operations in the beautiful city of Cork.

It was a win-win-win. Apple’s non-US profits in 2022-2023 amounted to just south of $70 billion, all funneled through Cork and on which it paid little to no tax; Ireland’s exchequer relinquished only revenue that it would not have had anyway without Apple; and the tech campus in Cork created about 6,000 skilled and rewarding jobs for Ireland’s extremely well-educated young graduates.

Inevitably, however, there were gripes elsewhere. The European Commission in Brussels began a series of investigations, in which it accused Ireland of “leprechaun economics” and described it as the world’s largest tax haven. Predictably, the whole dispute ended up in court.

The mills of the European Court of Justice grind slowly, yet they grind exceedingly fine. In September, the court finally ordered Apple to pay about $15 billion in back tax, whether it wanted to or not: and it ordered the Irish government to trouser the cash, whether it wanted it or not.

This colossal windfall amounts to more than $3,000 for every man, woman and child in the country and ministers have wasted no time in hurling it in the general direction of voters. In the annual budget presented to parliament in October, the government increased the minimum wage, augmented a whole raft of welfare payments, including doubling child benefit in the month before Christmas, and gave away €250 ($264) in energy credits to every household.

Wherever he is, Reagan must be chuckling.

• Ross Anderson is associate editor of Arab News.