The Dead Cat Strategy - A Good Way to Overcome Poor Performance

Nadeem F Paracha in The Dawn

On January 27, 2022, former prime minister Imran Khan alleged that the co-chairperson of the Pakistan Peoples Party (PPP), Asif Ali Zardari, had hired assassins to kill him.

Outside Khan’s hardcore group of followers, very few treated the allegation with any seriousness, even though, understandably, the PPP was not amused. Ever since his ouster in April last year, Khan has been churning out one bizarre claim after another in his daily addresses and press talks.

Of course, being a classic populist in the mould of Donald Trump and Brazil’s Jair Bolsonaro, Khan hardly ever provides any compelling evidence to back his allegations. Like his populist contemporaries, he too is more interested in remaining in the news and in Twitter trends. The other reason is to deflect the media’s attention away from the plethora of scandals involving his immediate family, his party personnel and himself.

These scandals have begun to engulf him, now that he doesn’t have the kind of protection that he once enjoyed from the military establishment and the judiciary when he was PM. The scandals have dented his self-styled image of being ‘incorruptible’.

By delivering speeches almost on a daily basis that are studded with sensationalist claims and allegations, Khan is using what has come to be known as the ‘dead cat strategy’ or ‘deadcatting’. Both these terms were first floated in 2013. They are derived from a theory of a political strategist who has a history of working for right-wing parties. This is also the reason why deadcatting is often seen as a strategy that has mostly been applied by right-wing politicians and contemporary populists.
 
Both the terms are associated with the Australian political strategist Lynton Crosby. Crosby strategised the British populist Boris Johnson’s campaign for the 2008 London mayoral election that Johnson won. Crosby was first appointed by Johnson’s Conservative Party (CP) during the 2005 parliamentary elections, which the party lost.

But after working successfully with Johnson during the 2008 mayoral election, Crosby became the CP’s central strategist. In a 2013 article for the Daily Telegraph, Johnson excitedly explained Crosby’s strategy. He wrote that one of Crosby’s tactics included, (figuratively speaking) throwing a dead cat on a dining table on which people sat talking about an issue that was detrimental to the interests of a politician. So, once they see the dead cat, their attention is drawn away from the issue and towards the dead cat. Now the dead cat becomes the issue.

‘Dead cat issues’ are thus sensationalist, formed to draw the people’s and the media’s attention away from the issues that have become increasingly problematic for a politician. Johnson continued to apply this strategy when he was appointed PM in 2019. As PM, he went on deploying dead cat issues to divert the media’s attention away from the many holes that he kept digging and falling into.

But deadcatting has its limits. There are but so many dead cats one can throw on the dining table. In 2022, becoming increasingly controversial, Johnson was forced to step down as PM by his own party. The media had stopped talking about dead cats.

In 2019, the populist president of Mexico Andrés Manuel López held a press conference to announce that he had written letters to the Pope and the Spanish government, demanding that they should apologise for invading Mexico… 500 years ago. This out-of-the-blue declaration surprised many. Why was a president who had vowed to resolve Mexico’s many problems, now suddenly talking about a 500-year-old invasion?

According to the British political journalist and author Andrew Scott, López had made a sizeable number of promises, which included introducing widespread land reforms, poverty alleviation and the elimination of Mexico’s deadly drug mafias. Failing to deliver on any of the promises, López deployed the dead cat strategy. The ploy was absurd, but it did catch the media’s attention.

However, not everyone was impressed by the president’s ‘bold’ initiative to get the Pope and the Spanish government to deliver an apology for a centuries-old invasion of Mexico, whose main victims were the country’s indigenous Indian communities. The famous Peruvian novelist Mario Vargas Llosa suggested that the letters should have been delivered to López himself, because he had done absolutely nothing to better the conditions of the impoverished Indian communities, except churn out populist slogans and display meaningless stunts.

In the early 1980s, when India’s Bhartiya Janta Party (BJP) was largely a fringe far-right Hindu nationalist outfit that had no mentionable economic programme, it started to encourage groups who had begun to plan building a temple on the site of a 16th century mosque in Ayodhya. The BJP turned the mosque into a ‘national issue’.

This was BJP’s dead cat that provided it mainstream traction. And so are the claims by the current BJP government, which uses these to keep the media’s attention focused on the so-called existentialist ‘threat’ to India from Pakistan and by India’s Muslims.

Imran Khan has been deadcatting ever since his government started to unravel from 2020 onwards. Some of the favourite dead cats of Pakistani politicians are ‘issues’ of morality and faith. As a PM who was struggling to deliver the grandiose promises that he had made, and facing increasing criticism, Khan decided to declare himself as the leading crusader against Islamophobia.

He started to write letters to the United Nations and other leaders of the ‘Muslim ummah’, urging them to facilitate his idea of formulating a blasphemy law which could be applied internationally. His ministers jumped in, claiming that he was fighting an international ‘jihad’ against Islamophobes and should be hailed for this.

When this dead cat could not distract the media enough, Khan threw in a bigger dead feline, by claiming that the US was conspiring to oust him from power. After being shown the door by a no-confidence-motion in the parliament, he’s been tossing dead cats with increasing frequency.

Recently, one also saw the current finance minister, Ishaq Dar, deploy the dead cat strategy after being castigated by the media for failing to stabilise the economy. He had been brought in as a miracle worker, but his performance has been rather dismal.

Being a Pakistani, he of course began to tweet verses from Islam’s holy scriptures, indirectly suggesting that the failing economy was due to the mysterious ways of cosmic forces. Ironically, rather than diverting attention, this dead cat ended up magnifying his failings.

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How to fix the British economy

 Tim Harford in The FT

I recently argued that the UK’s economic performance has been disastrous for 15 years. The consequences are plain to see: people are struggling to make ends meet; taxes are high, yet public services are overloaded; fights over a shrinking economic pie are leading to widespread strikes. All this is taking place at a time of low unemployment, so we cannot simply wait for the business cycle to rescue us. 

If we could somehow improve the UK’s productivity growth rate, all of these problems would become easier to solve, and we could return to the business-as-usual of each generation being able to earn more than their parents, while working less and enjoying better conditions. 

But how? 

Start with a diagnosis of what ails the UK economy. The view from the right is that the UK is suffering from excessive taxes and red tape. This seems implausible. Taxes are certainly high by historical standards, but they have only recently spiked, yet productivity and growth have been disappointing since 2007. And there are plenty of richer economies with higher taxes. 

Nor is red tape to blame. According to the OECD, UK product market regulations are among the most competitive. 

The critique from the left focuses on inequality, but this is an old and mostly separate problem. Like any mixed-market economy, the UK is an unequal society, but income inequality in the UK is slightly lower now than at the time of the financial crisis and has barely changed over the past 20 years. A more relevant manifestation of inequality is the one between global titan London and regional capitals such as Manchester, which remain far behind in terms of value added per worker. 

Then there’s the centrist critique: blame Brexit. Now I am as prone to highlight the idiocies of Brexit as anyone, but unless Nigel Farage has discovered a time machine, a referendum decision in 2016 cannot be blamed for poor productivity performance starting around 2007. Brexit has solved nothing, and by creating barriers to trade with our most important trading partners, along with endless uncertainty, it is demonstrably making the situation worse. But the UK’s economic problems became apparent long before the referendum. 

The slightly tedious truth is that taxes, regulation, inequality and Brexit can all take a little bit of blame, alongside a gaggle of other culprits. (Professor Diane Coyle of Cambridge university has memorably likened the case to an Agatha Christie mystery: everybody did it.) 

To pick a few of these culprits at random, the quality of management in British companies is the worst in the G7, according to research by economists Nick Bloom, Raffaella Sadun and John Van Reenen. The country skimps on investment; total investment was the lowest in the G7 over the four decades preceding the pandemic. As a result, energy and transport infrastructure is run down. The Transpennine railway project is a case in point: a decade of dithering, nearly £200mn wasted and a project which was supposed to have opened in 2019 still exists largely in the imagination. Why? Politicians were more interested in announcing plans than in planning. 

Low investment from the private sector is now a more acute problem than in the public sector. Is this managerial incompetence? A lack of business finance from a too-concentrated retail banking sector? A logical response to the chronic political uncertainties of the past 15 years? 

Then there is the education system. It works well at the top, where British universities are still magnets for talent, but schooling is patchy and many young people, especially from deprived backgrounds, are poorly served. 

Kate Bingham, who chaired the UK’s Covid vaccine development programme, recently wrote in the FT that “short-term pressures are crowding out long-term solutions”. She was pleading the case for the UK’s life-science industry, but she could easily have been describing the British condition. Short-termism is now ubiquitous. For such a venerable polity, we have developed a shocking inability to think beyond the next few weeks. 

The few examples of policy excellence in the past 15 years have been times where our politicians or civil servants have risen to the challenge in a moment of crisis: I would suggest the Brown-Darling plan to prevent the banking system collapsing in 2008, the Johnson administration’s vaccine task force in 2020 and Johnson’s full-throated early support for Ukraine in 2022. Even when the UK government excels, it is not thanks to patient long-term reform and investment. 

It is easy to produce a list of sensible ways forward: modernise taxes to raise more revenue with fewer distortions; improve relations with the EU and streamline UK-EU trade, especially in services; liberalise planning rules to create jobs and cheaper, better homes. But all policy wonks and most politicians know this; nothing ever happens. 

It is sobering to re-read the LSE’s Growth Commission report of 2017. Many of its proposals were not policy proposals, but institutional reforms to keep the politicians away from policy proposals: Bank of England independence, but for everything. Contemplate the recent accomplishments of Whitehall and Westminster, and you see where the Growth Commission was coming from. 

While researching this column, I found a video of the commission’s co-chair, John Van Reenen, in which he described “what we need to do over the next 50 years”. It seemed an impossibly daunting timescale. Then I realised the video had been posted almost exactly 10 years ago. We could have started then. We didn’t, and we’ve gone backwards. We could at least start now.

The world lacks an effective global system to deal with debt

Rebeca Grynspan in The FT

There is an alarming tendency among the international community to regard debts in the developing world as sustainable because they can, after some sacrifice, be paid off. 

But this is like saying a poor family will stay afloat because they always repay their loan sharks. To take this view is to overlook the skipped meals, the foregone investment in education and the lack of health spending that forcibly make room for interest payments. This sort of debt trap is a social catastrophe in the making. Ten years from now, the debt may be repaid, but the family will be ruined. 

This is the dilemma facing many developing countries, both big and small. The pandemic, cost of living crisis and rising interest rates have brought them to a point where they can only pay their debts by way of austerity or foregone investment in the sustainable development goals (SDGs). Their debts are sustainable in that they can be repaid, but unsustainable in every other way. 

Furthermore, this full-blown development crisis with debt distress at its core also threatens a new lost decade for much of the world economy. 

The repeat of a 1980s-style debt crisis that could in turn threaten global financial stability is perceived to be marginal. But the public debt of developing countries, excluding China, reached $11.5tn in 2021. By some accounts, serious debt problems are largely confined to a small share of this figure, owed by highly vulnerable low-income countries such as Chad, Zambia or Ethiopia. 

But the situation is deteriorating rapidly. During the pandemic, government debt ballooned by almost $2tn in more than 100 developing countries (excluding China), as social spending went up while incomes froze due to lockdowns. Now, central banks are raising interest rates, which exacerbates the problem. Rising rates have meant capital flight and currency depreciation in developing economies, as well as increasing borrowing costs. These factors have pushed countries such as Ghana or Sri Lanka into debt distress. 

In 2021, developing countries paid $400bn in debt service, more than twice the amount they received in official development aid. Meanwhile, their international reserves declined by over $600bn last year, almost three times what they received in emergency support through the IMF Special Drawing Rights allocation. 

Foreign debts are therefore eating an ever-larger piece of an ever-shrinking national resources pie. As inflation rises, natural disasters become more frequent and food and energy imports rise in price, countries need more, not less, contingency planning assistance. 

A much bolder approach is needed. Recent efforts by the international community to agree on large-scale emergency debt measures have faltered. This is despite important efforts at the G20 through the now-discontinued Debt Service Suspension Initiative, and the Common Framework for Debt Treatments, which is in need of crucial improvements, such as suspending payments during negotiations and an extension to middle-income countries in debt distress. 

The failure of these efforts has revealed the complexity of existing procedures, characterised by creditors who refuse to engage in restructuring with extraordinary powers of sabotage. Crisis resolutions are often too little, too late. The world lacks an effective system to deal with debt. 

An independent sovereign debt authority that engages with creditor and debtor interests, both institutional and private, is urgently needed. At a minimum, such an authority should provide coherent guidelines for suspending debt payments in disaster situations, ensuring SDGs are considered in debt sustainability assessments, and providing expert advice to governments in need. 

Furthermore, a public debt registry for developing countries would allow both lenders and borrowers to access debt data. This would go a long way in boosting debt transparency, strengthening debt management, reducing the risk of debt distress and improving access to financing. Progress on both these fronts could begin with an independent review of the G20 debt agenda: India’s presidency may bring a historic opportunity to succeed where others have faltered. 

Tackling the current global debt crisis is not only a moral imperative. In a context of growing climate and geopolitical distress, it is one the biggest threats to global peace and security and financial stability. Without supporting countries to become sustainable, their debts will never be realistically repayable.

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