The American economy has been front-and-center in the 2016 campaign. In many ways, the rhetoric over economic policy fits a familiar mold I have written about repeatedly in these pages. Although foreign policy has featured prominently in this campaign, foreign policy seldom wins American elections. This contest is turning out to be no different. As former House Speaker Tip O'Neil famously quipped, "All Politics is Local."
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| Steve Benson, Arizona Republic, February 28, 2016 |
Yet, I sense something different in this cycle where economic policy is concerned. Popular angst about the institutions, leadership, and decision-making that have underwritten America's postwar prosperity is fueling insurgent candidacies that have spread like wildfire through both political parties—yes both political parties. For much of the past year, “expert” commentary has struggled to understand the candidacies of Bernie Sanders and Donald Trump. Everyone needs to eat some humble pie. It’s no exaggeration to say we all missed it.
In recent months, there has been a lot of discussion of voter “anger,”
“frustration,” or “disillusionment” as the fuel behind Trump’s support. Sure.
However, I think both the diagnosis of what is happening and the prescriptions
for solving the problems behind them are far more complex than most have been
willing to acknowledge. With this post, I’d like to explore the ways in which
the perceived unravelling of the American Dream is playing out on the campaign
trail. For generations of Americans, the mythology of the American dream acted
as a mollifying, stabilizing concept in American life. The 2016 presidential
campaign is hardly the first cycle in which the American Dream has been
declared dead or on the ropes. I think it’s too early to tell exactly where
much of what I outline below is headed. Yet, it’s noxious and potent enough
that it could have profound effects on America’s political economy (and the
world’s) well into the future.Economic Angst and the “American Dream”
As I have discovered in doing a little homework for this piece, the "American Dream" is a bit of an ambiguous concept. For some, it's connected to a set of national values such as freedom, equality, and opportunity. For others, it's about being able to pursue the "good life" (itself ambiguous). However, when we hear the "American Dream" tossed around in the public discourse, my mind goes to a few basic elements:
1) the pursuit of material wealth.
2) the ability to do so regardless of social class.
3) The ability to move between social classes, not just within one.
The "Dream" has been one of the more powerful mythologies in American political and economic culture (more on that in Part II), but it's one that seems frustratingly elusive for more and more people. Yet, the power of the American Dream and the United States as a beacon of opportunity endures. To date, few commentators have drawn explicit linkages between the candidacies of Bernie Sanders and Donald Trump. There are vast differences between them that I won't dwell on here, but where economic policy is concerned the differences are more rhetorical than substantive.
What strikes me is the resonance of their economic messages with voters. As I have written about repeatedly in these pages, the intellectual case in favour of trade liberalization is powerful. Yet, it is only the bravest, or most foolish, of our political leaders that ever tries to make the case. Instead, even the best of our political leadership, people who in fact know better, descend into a poisonous mix of xenophobic, self-defeating, economic populism. As George Packer writes in the New Yorker, American populism into which Donald Trump fits very well. Strip away Trump’s bombast and veiled racism and, on economic policy at least, you have Bernie Sanders.
In 2016, even seasoned election-year protectionists like Hillary Clinton or Ted Cruz have struggled against them. Two long-shot outsiders are wreaking havoc within their respective parties with populist economic messages about renewal at home. Neither Sanders nor Trump have a lot to say about foreign policy—frankly, what they do say is troubling—but the voters don’t care. “All politics is local.” Something bigger may be afoot.
Sanders
Sanders has been packin ‘em in. The challenge to Hillary Clinton posed by Sanders has been less bombastic than Donald Trump on the GOP side, but no less serious and rooted in voter anxieties about their economic futures. This is especially true of the large numbers of so-called Millennials supporting Sanders, many of whom are engaging the political process for the first time. Sanders’ brand of economic populism combines the appeal of things like free tuition, universal healthcare, and campaign finance reform with blistering criticism of the financial sector and the growing share of national wealth being accumulated by the upper 1% of Americans.
It’s true that part of Sanders’ message is about free tuition at the nation’s public colleges (when has free stuff not been attractive to college students). However, there is a more serious message in that part of Sanders’ platform related to the millennials' job prospects, the scale of student debt, and the negative long-term impact of that debt on everything from their prospects for marriage, their ability to live independently, and their long-term standard of living.
The math is obvious and doesn’t work in favour of the young. As more people retire, there will be fewer and fewer people of working age contributing to the solvency of the system through taxes. There are solutions, most of which entail some trade off of raising taxes, curbing benefits, delaying them, or making them means-tested. Since older voters outnumber the young, and tend to actually vote, these challenges are rarely mentioned on the campaign trail. Indeed, entitlement programs like Social Security are often referred to as the “third rail of American politics” for a reason; you touch it at your peril. As an example, France proposed hiking the retirement age from 65 to 67 in 2010 to deal with their demographic time-bomb. The result was a series of national strikes that fall that virtually paralyzed the country.
Moreover, among Sanders’ core messages is that the political class has entered into a corrupt pact with Wall Street to rig the entire system against the average American. High finance enriches only a small subset of the population, free trade has hollowed out American manufacturing, and destroyed millions of middle- and working-class jobs. Moreover, the refusal by political and economic elites to deal with climate change will impose long-term costs on millions of ordinary Americans that will undermine their standard of living.
In short, many Sanders supporters have lost faith in the American economy to generate prosperity, in institutions that used to support that prosperity and, most importantly, in the nation's political and economic leadership to do anything about it.
Trump
The appeal of Donald Trump has-- until very recently-- baffled just about everyone since he announced his improbable run last summer.... everyone except the 11 million+ voters who have cast ballots for him. Trump is poised to win more votes than any GOP primary candidate in history!!! A big piece of that puzzle is broad spike in voter turn out, but the fact that Trump has emerged victorious has many pundits discombobulated. Trump has, in part, exploited the political potency of anti-trade populism that date to the earliest forms human exchange. As with Trump's predecessors, it is a brand of bombastic anti-trade, isolationist, xenophobia should be deeply worrying to students of the interwar years (1918-1936).
On economic issues, Trump supporters are in many ways just an older and angrier, and less-educated version of those supporting Bernie Sanders. Many of Trump's core supporters feel as though America has abandoned them. A generation ago, many of these workers could reliably count on the American economy to supply them with a middle-class living without having to invest in an expensive education.
Globalization has changed all of this, and put tremendous economic pressure on those parts of the labor force that either lack the capacity to adapt their skill sets to what is now a global labor force. Basic manufacturing can now be done almost anywhere in the world. Part of this story is the impact of automation on low-skill labor. These same pressures have placed tremendous competitive pressures on firms to trim costs-- often by reducing their wage bills and relocating overseas. Earlier this year, Carrier Air Conditioner announced it was moving from Indianapolis to Monterrey, Mexico. After the video went viral, Trump pounced on it as the latest example of what's wrong with American leadership.
Political and Social Echo Chambers
Connected to all of this anxiety is what seems to be a growing sense of isolation of different groups of Americans from one another. Most students of the United States are familiar with the legacy of slavery and the struggles of the civil rights movement following desegregation. However, there is also a degree to which other forms of segregation have seemingly become more entrenched in American society. Many of us now live in gated communities complete with roaming security guards, standards for mowing your lawn, and the sort of like-minded self-selection that generates a bit of an echo chamber where our politics are concerned. A similar phenomenon has invaded 24-hour cable news whereby channels have differentiated themselves to suit specialized parts of the political spectrum. It's become such an echo-chamber that CNN, the originator of 24-hour cable news, has struggled against competitors like MSNBC and Fox News Channel, in part, because of the network's relative ideological neutrality. The news is now a predictable stew of talking-head partisans preaching to the converted and fueling distrust of those who disagree.
Yet, what's going on seems bigger than something that can be explained by any ideological divide. It's certainly political, but as the recent PBS interview the American Enterprise Institute's Charles Murray describes, some of the built-up contempt that divides Americans also has deep cultural and socioeconomic roots.
In short, the political class didn't see this revolt coming. They lost touch with, and no longer seem to understand, the "fly-over territory" between the two coasts. I'm not the biggest fan of country music (sorry), but this one captures some of that sentiment.
Cultural, political, and economic cleavages between urban and rural voters are nothing new. But the 3D depiction of the stark contrast between how America's major metropolitan population centers are voting relative to the rest of the country is fairly stark. In 2012, nearly every urban setting in the country voted heavily for Democrats.
This presents the United States with a contemporary political stew the country has not faced for some time. It helps us understand why Donald Trump has steam-rolled his way through 16 more experienced GOP contenders. Some of have suggested that we are in the midst of a party re-alignment (more on that in Part II), similar to several others in American history. The GOP, in particular, has become an incoherent collection of voices that no candidate can hope to singularly represent. Perhaps, except that I see some of the same taking place within the Democratic Party as well.
What I fear is that a more fundamental shift is afoot, something traditional policy prescriptions will be unable to address; a shift in the nation's concept of what the American Dream represents and whether or not it's any longer attainable.
For that, see my next post, POTUS 2016 and the American Dream, Part II.
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