Establishment Politicians are in Retreat

Insights and Market Perspectives

ESTABLISHMENT POLITICIANS are in retreat, from Ottawa to London to California, as a populist uprising threatens to spin out of control over vaccine and mask mandates that will have to end soon.

IRONICALLY, POLITICIANS were about to lift mandates throughout the U.S. this month as Covid cases diminish rapidly, but now a perception will grow that angry protests have succeeded. What’s next? An uprising over inflation?

AT THE CENTER of this rebellion are tone-deaf politicians, many of whom were photographed in the past week without masks — in states where their own mandates required them. Among the hypocrites: Democrat Stacey Abrams, maskless in Georgia, Mayor Eric Adams, maskless in NYC, and the maskless Californians — Los Angeles Mayor Eric Garcetti (D), San Francisco Mayor London Breed (D) and Gov. Gavin Newsom (D), a repeat offender.

WITH NEW COVID CASES DOWN BY 42% in the past week, several states — Connecticut, Delaware, New Jersey and Oregon — on Monday announced plans to drop mask mandates. Other states are expected to allow school districts to make decisions; the new mantra is “we have to live with it.”

THE NEW HOT-SPOT is the charming city of Ottawa, where government authorities will either have to crack down or capitulate. We’d guess that a final agreement between protestors and the flailing Trudeau administration will include a timetable for easing mask and vaccine mandates.

WITH MANDATES LIKELY TO DISAPPEAR as a dominant issue by early spring, what’s next? We think there will be a growing backlash against gasoline, food and other prices because wages are not rising as fast as inflation.

ON INFLATION ALSO, THERE’S A DISCONNECT between the establishment and workers. A candidate for the Tone-Deaf Hall of Fame is Bank of England Gov. Andrew Bailey, who says British workers should not ask for a pay raise this year. Bailey earns about £575,000 ($777,115) — 18 times the U.K. average for a full-time employee.

AN IMPORTANT DISTINCTION: The anti-mandate protesters have succeeded (see: Glenn Youngkin in Virginia) but anger over inflation probably won’t change any specific policies. Instead, there may be a gradual return to work by millions who have dropped out of the labor market but have now depleted their savings and federal benefits, which aren’t keeping pace with inflation.

THE ANTI-MANDATE movement has been loud, and the intense anger may not be shared by the majority of voters. But politicians from Joe Biden to Boris Johnson to Justin Trudeau have to worry that “Something is happening, and you don’t know what it is,” as Bob Dylan warned in the early ’60s.

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