An Inauguration Day Special

I’ve included what I think are the best articles on the election outcome, its causes both short and long term, and the implications for the American and global economy.

Did Globalization Hand Trump the Election?

Jared Bernstein provides a nice summary on the “trade vs. technology” argument as to what has displaced workers.  He makes the case that it is a false dichotomy, but also agrees that worker displacement and inequality were major, unaddressed issues by the Davosteriat.

Similar points about how the benefits of trade were oversold and how globalization also meant increased immigration, factors that played into Trump’s politics of resentment are found here

To get a sense of the size of the US foreign sector and how it compares to other countries, see this graph by the World Bank

New thinking about globalization and national politics are discussed in these articles:

https://medium.com/the-wtf-economy/the-retreat-from-hyper-globalization-680c0c529649#.pc7xf37mv

https://www.project-syndicate.org/commentary/trumpism-future-of-liberalism-by-robert-skidelsky-2016-11

Mergers and Antitrust

One factor not discussed in the election was the impact of mergers and the lack of antitrust enforcement over the past three decades.  Increased business concentration may have reduced both entrepreneurial opportunity and worker power, but surprisingly Democrats have rarely made this an issue.

One factor that Trump voters referred to was the sense of being stuck, with no future and no way out of their dismal economic circumstances. When they said they wanted the old America back again, were they referring to an imagined world of high social mobility?  If so, there is evidence that they were not totally wrong, as social and geographical mobility (a way out of declining communities) have both been decreasing.

Racism, Sexism and Class

A big, ongoing debate is over the place of race and class respectively among motivated Trump voters.  This poll points to racial panic.

But a number of others emphasis either the importance of class and economic conditions or the ways that racial animosity and class fears and resentments went hand in hand.  Likewise sexism alone cannot explain the outcome.

Another way to look at the issue is by education level, with the strong correlation between white voters for Trump and the non-college educated population.  Trump as also stronger where the economy was weaker.

A number of other articles make this or related points.  Here is a good summary.

Other economic factors in play that either in the long or short term contributed to the economic conditions paving the way for Trump’s victor and Republican political dominance include the decline of unions and the stagnation of wages in the face of growing productivity.

Voters and the Election

One of the most interesting conclusions so far is that Trump won not so much because voters switched from Democrat to Republican but because of turnout.

Despite the vaunted Clinton ground game (of which I was a part I might add), Democratic voters, including traditionally stalwart African American and Hispanic voters, were underwhelmed by Clinton’s lack of a clear economic message and her overemphasis on Trump’s indiscretions.

These findings also undercut some of the race v. class debate.  Claims that voters who had no trouble with Obama rejected Clinton have been used as evidence that race could not have mattered.  But now it seems that there was little switching.  On the other hand many white conservative voters who had stayed away from the polls when Obama was running were energized by Trump, either for his economic message, his racial message, or both.

Trump’s populist rhetoric had many elements of racial resentment, exclusivity and xenophobia, as this author notes, though this may still underplay the importance of economic resentment.  Indeed, the divisions of American society, Thomas Piketty argues, show not one nation but two nations, one that benefitted from growth, trade, and globalization and one that has suffered.  Inequality is an important part of how political identities were constructed in the election.

This divide is also a rural/urban one.  And despite Democrats’ belief that the future lay with them and their non-white, urban voters, it seems that white rural America still has a lot of latent political power.

Then there are the contingent and short term reasons behind Trump’s victory, notably the Clinton emails and Comey’s last minute intervention

The Longer Term

Historians look at short term, contingent factors like the events of the election itself, and medium term, conjunctural factors like race, populism, and economic conditions.  But they also consider the longer term context.  Perhaps the most interesting long term analysis of the conditions that led to Trumpism comes from a critique of technocracy and the replacement of citizen politics with putative expert leaders.

Another deep cause might be the world wide commitment of major capitalist nations to the economics of austerity, which seems to have disabled them from responding to economic crises.  Austerity is the noose around capitalists’ neck, which rope apparently the capitalists themselves sold.

For all the talk about opportunity and education and investment in human capital, the United States has decreased spending on policies that would increase educational opportunity.  This has been particularly true as the student population, at both the secondary and university level, has grown more and more nonwhite.

When education was largely “for whites only” states and the federal government spent money on it; as education has become more diverse, suddenly the desire to tax and spend waned as well.  Likewise so have the sort of protections the middle class once demanded and enjoyed against employer and corporate exploitation.

These issues are discussed in  Devin Fergus, forthcoming book, The Land of the Fee: Hidden Costs and the Decline of the American Middle Class .

Conclusion

When looked at over the longer term and with some international perspective, it seems clear that there is a global populist surge going one.  It can be found in the Britex vote and recent determination of Theresa May to leave the EU entirely.  It can be seen in the growth of “illiberal democracy” throughout Eastern Europe, in the rise of racist and nativist parties to strong parliamentary positions Western Europe.

Overconfidence in monetary macroeconomics, market liberalization and globalization, with almost no attention to the losers from these arrangements has provoked a powerful backlash.  Indeed, it is not even clear that the technocrats can deliver the economic goods, with their blind refusal to relinquish their death grip on aggregate demand, exactly the sort of thinking that drove much of the world into the hands of fascists and right wing extremists in the Great Depression of the 1930s.

However deep the racial animosity of white America and it runs far deeper than I imagined the sort of racist, xenophobic, religious and nativist anger and hatred that motivates some voters still needs economic anxiety and insecurity to be fully activated.

Surprisingly, then, the whole Trumpian house of cards could easily be toppled by his likely failure to deliver the economic goods to his supporters, and likewise by some serious attention to the working and lower middle class (white and non-white) economic insecurity by the other party.  But will the Davoscrats ever see the light?

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