Economics and the Election

Noah Smith points out that economists are not very well-liked:

This week, there have been not one, but two open letters by some of the most eminent economists in the U.S., urging the American public not to vote for Donald Trump. One letter, published in the Wall Street Journal, was signed by 370 economists, including eight Nobel prize winners. It slams Trump for questioning the accuracy of economic data, for attacking free trade and immigration, for getting facts wrong and for having misguided policy proposals on a variety of fronts. The second letter is by Nobel laureates only — 19 of them. They write:

“Donald Trump…offers an incoherent economic agenda. His reckless threats to start trade wars with several of our largest trading partners, his plan to deport millions of immigrants, his trillions of dollars of unfunded tax cuts, his casual suggestion that the United States could threaten default on its debt in order to renegotiate with our creditors as if Treasuries were a junk bond—each of these proposals could jeopardize the foundations of American prosperity and the global economy.”

This is all true. However, I’m going to go out on a limb and make a bold prediction: Essentially no American voters will listen to these economists.

The reason? Despite spending much of their time thinking about public policy, economists don’t have much success when it comes to actually persuading the public of anything. ..Part of the problem is that economists don’t think about politics very much. After years of interacting with the general public, I’ve concluded that there’s another factor — economists are adored by U.S. business and political elites, but held in contempt by much of the rest of the country.

370 economists wrote a letter to the Wall Street Journal telling us not to vote for Trump? I’ve got to be honest here, when I heard that, even I considered voting for the guy.

Economists are held in contempt in much of the country. Do you want to know why? I’ll tell you exactly why. It’s because economists have not only presided over the transformation of much of the United States into an immiserated third-world shithole, but actively cheered it on every step of the way!

They berated us as spoiled crybabies when the good-paying manufacturing jobs went abroad, and when that didn’t work, they told us that the deterioration we were witnessing around us with our own two eyes in the Rust Belt simply wasn’t happening at all! Wages were up, household sizes were down, food was cheap, even the poor had indoor plumbing, we had Google and the Facebook at our fingertips; we literally never had it better! They had an answer for everything. Who are you going to believe, me or your own lying eyes? They told us we were better off than ever before thanks to the cheap, shoddy goods littering the aisles Wal-Mart and the ever-expanding size of our TV screens (and waistlines), despite that fact most of us were now in debt up to our eyeballs and one personal emergency away from bankruptcy. When that didn’t work, they told us it was our own fault for not getting the “skills” required to “compete” in the new high-tech global economy, which we had to pay for out of our own pockets, naturally.

Economists told us that there was no jobs crisis, and browbeat us with statistics whenever we said there was despite the fact that these statistics were highly manipulated and intentionally misleading. We’re at full employment! Never mind that if you ever managed to dig deeper into the data you would find that most of the jobs created in this country are low-wage McJobs with no benefits, inadequate hours, demeaning working conditions, and scant opportunity for advancement. Yet to economists in their ivory towers, human beings are just undifferentiated widgets to be plugged in wherever “the economy” needs them. They are just numbers on a spreadsheet. America’s largest employers used to be places like General Motors, Boeing and General Electric, now they’re Walmart and McDonald’s, and economists don’t see any problem with that at all. They told us that regulating big business would take away their “freedom” even as we workers were told we now had to pee in a cup as a condition of employment. Flexibility and efficiency would lead to a paradise for all of us in the wonderful new “service” economy, they told us.

Regular readers will be familiar with the landscape of the Rust Belt that I invoke so many times here on this site. The shuttered and abandoned factories rusting in the rain. The potholed streets that never seem to get fixed. The boarded-up storefronts, abandoned strip malls, and mom-and-pop stores that have withered away and been replaced with fast-food joints, dollar stores, and payday loan outfits. The panhandlers whose cars always seem to be just a dollar short of the gas they need to get somewhere. The odd-smelling bus passengers carrying on conversations with themselves. The perennially shrinking public services alongside rising property taxes. The people toting cardboard signs at every freeway off ramp. The people rummaging through the trash for tin cans who roll around all their worldly possessions in a shopping cart. The visible rebar and concrete spalling off the crumbling railroad bridges and freeway overpasses. The empty and abandoned weedlots where houses used to stand. The formerly middle-class bungalows stripped of copper wiring and the trailer homes converted into meth labs. The people waddling through the aisles at Walmart at two in the morning with the thousand-yard-state of a grizzled combat veteran. The diabetic 40-year-olds riding around in motorized scooters. The people spending half their income on the pills they need to keep them alive another month. The bloated and distended bodies resulting from a lifetime of processed food consumption. The choice between buying food or paying the heating bill. The broken water mains. The rusty pick-up trucks with the mufflers held on by a coat hanger. The local food banks overwhelmed with demand from needy families during the holidays. The foreclosure down the street. The ghettos where nature is slowly taking back the built environment and wild dogs roam the streets. The vast swaths of the city that now resemble the bombed-out Bantustans of Third World nations where no white person besides a policeman has set foot since 1984.

This is America. For most of us in the Rust Belt, this is the reality we live with every day.

And what did the economists say while all this was happening? Nothing to be done – it is just inevitable like the changing of the seasons or the phases of the moon. Government intervention in the “Free Market” would just make us all worse off, don’t you know. Comparative advantage and all that.

It didn’t used to be this way. Milwaukee was once known as the German Athens. It was a beacon of hope for the Central European peasants who flocked here by the boatload to live a life that was denied to them in the old Austro-Hungarian Empire or the Kaiser’s Germany. We had Socialist mayors for the first half of the twentieth century. Our infrastructure was the envy of the world thanks to the “Sewer Socialists,” and beautiful Beaux-Arts civic monuments adorned the city thanks to the City Beautiful movement. There were public parks, zoos, fountains, libraries, that were the equal of anywhere on earth. Milwaukee was the very international emblem of 1950’s middle class American prosperity thanks to Richie, Potsie, Ralph, Fonzie, and the rest of the gang from Arnold’s Drive-In. Working-class neighborhoods featured people living next to one another with German, Polish, Irish, Serbian, Italian, and other surnames while Europe was tearing itself apart along ethnic lines. On the weekends people would meet at the corner tavern or bowling alley to socialize and kids played in the sandlots; no one had to work late in those days.

Manufacturing continued to define the identity of Milwaukee long after it withered elsewhere. Everywhere one turns one is confronted with the ghosts of Harnischfeger, Caterpillar, Tower Automotive, Ladish, Patrick Cudahy, Allis Chalmers, Allen-Bradley, Harley Davidson, Miller Brewing, and hundreds of other now-defunct small manufacturing shops. Their names still adorn buildings and institutions all over the city. The vestigial remains of the industrial era dot the landscape, some of them now converted into “high end luxury” condos that only the wealthy can afford to live in. Everyone’s dad was a machinist, schools still had shop class, and fixing things with your own two hands was considered to be the true mark of manly competence well into the 1970’s.

All of the above changes unfolded without a hint of resistance. It was like we lost a war or something without a shot fired. It was like something just happened to us, and nobody knew quite what, or why, or whom to blame. There’s a concept in psychology called “learned helplessness,” and it seems to be appropriate here. But it’s not only that. Even as it was happening all around us, economists told that it either wasn’t really happening, or that it was all for the greater good in the long run.

The Heartland is still a fairly traditional “family values” type of place and everybody here still remembers a time when one income was enough to support a family in a modest lifestyle and mom could stay home and take care of the kids. When children could do better than their parents even without an expensive diploma and six-figure debt. When you didn’t have to work from cradle to grave with nothing to show for it and nothing to leave your heirs. They remember a time when you could get a decent job with just a high school diploma. Sure, you might have a better job with a fancy degree, but you didn’t need one just to survive. And you didn’t have to worry whether or not what you studied was lucrative enough to pay for the staggering costs of getting that degree at all.

This wasn’t ancient history. This was within the lifetimes of many of the people living today! By contrast, here’s what life looks like in this country if you haven’t been lucky enough to pick the right parents at birth:

1.) You’ve got to go tens of thousands into debt just to have a shot at any job at all, and then you’re just supposed to “compete” with people who have virtually unlimited resources to acquire all the education, gongs, and social connections for the shrinking pool of “skilled” jobs that pay more than minimum wage.

2.) If you don’t get a degree, or god help you, if you get the wrong degree, expect to have to go through a gauntlet just to get any job at all (online personality surveys, drug tests, dozens of demeaning interviews), and have your shitty pay and lousy benefits be chalked up to a lack of “skills.” The low-wage “fallback” jobs are now all occupied by recent third-world immigrants, so if you have a degree, good luck getting those if you wind up unemployed. Instead, you will wind up in “job purgatory” – too educated for the low-paying jobs, not educated enough for the high-paying ones.

3.) Even if you do manage to be “lucky” enough land a high-paying prestigious job, get ready to be ridden hard and put away wet. Long hours, no raises, no vacations, high stress, impossible deadlines, Machiavellian office politics, burned out co-workers, threadbare benefits…but hey, it beats working at McDonald’s, amirite?

4.) You’ve basically got to own a car to have a job, and you must bear 100% of the costs of that car on your own back – gasoline, maintenance, insurance, registration fees that go up ten bucks a year like clockwork to fund a new sports stadium, tickets issued by overzealous cops trying to raise money to cover budget shortfalls, etc. Even though I’m a white male, I’ve been pulled over numerous times in wealthy suburbs because I was driving a car not expensive enough to be seen there. And if you get into an accident, expect to have the remainder of your car loan rolled onto your next car loan, and your insurance rates jacked up, assuring that you be a debt donkey for pretty much the rest of your life (I speak from personal experience here).

5.) Anyone who thinks we’re at full employment clearly hasn’t had to look for a job recently. I suppose if you’re an economist making $91,301 right out of school, the world looks pretty good to you, right? It seems like more and more economist jobs are passed down generation to generation in wealthy families, just like most other professional jobs nowadays.

6.) “Just move to where the jobs are.” Except that because local and rural economies have been decimated all over the nation, much of the of the nation’s economic activity has been confined to a fairly small number of major cities, meaning that the housing and rent costs are unaffordable to almost everyone who isn’t already rich. Even people already living in these places are having to move away because they simply can’t afford it anymore. The jobs simply don’t pay enough to live there (see point #1), and now they have to commute from way out in the middle of nowhere just to get to work (see point #4).

7.) And if you’re dumb enough to have a kid, what chance does he or she have without getting the “proper” education and having the right connections? Your lot in life is pretty much determined by at birth thanks to the Balkanization of neighborhoods along income/class lines, the local funding of schools where ZIP code determines educational quality, the astronomical costs of higher education, and the defunding of public universities to fund tax cuts for the wealthy. You had better hope that your kid is either a precocious math genius or a super athlete. And God help him/her if they are late bloomer.

Does anyone believe the above conditions would be the case if we really were at full employment, like the economists and politicians in the media constantly tell us we are?

As middle-class jobs were streaming out of this country, and immigrants from third-world countries were streaming in, economists simply told us that any government intervention was bad, that globalization was as inevitable, and that nothing could be done. Anyone who didn’t like it was living in a fantasy world that was never coming back, so suck it up! Just retrain (on your own dime) for the jobs of the future, no matter if you were a fifty-year-old machinist or a forty-year old carpenter.

And then we’re told that the social fallout from this economic devastation is actually the cause of it. That the reason the middle class is struggling is all down to bad behavior! Talk about chutzpah!

Let’s face it, economists are simply whores for the powerful masquerading as scientists. And it turns out shilling for the rich also pays quite well:

Economists’ pay is another sign of the special respect that they command among the American elite. A study found that in 2014-15, the average starting salary for an econ professor at a four-year school was $91,301. For rough comparison, another survey in 2012 found that a starting physics professor made an average of only $56,483. Economists, in other words, make more than many academics with greater average levels of mathematical skill. And that doesn’t count the lucrative fees that many econ professors make from side jobs in consulting — yet another a sign of how highly their analyses and pronouncements are regarded among business elites.

But among the general public, it’s a different story. A 2014 paper by Christopher Johnston and Andrew Ballard looked at how people’s opinions on policy issues changed when they were told what economists think. They found that while the public generally trusts economists on highly technical issues, on politically sensitive issues such as trade and immigration, they basically have no faith in the academics. Anecdotally, I can report that among large swaths of the public, “economist” is a word that often evokes either distrust, derision or incomprehension.

No One Cares What Economists Say About Trump (Bloomberg)

Gee, I can’t imagine why economists have lost all credibility, can you?

Why is this? One favorite answer, especially among left-leaning writers, is that economists are politicized — basically, that they’re in the pocket of the rich and shill for free-market policies that hurt the masses. That’s not actually true…

Er, sorry Noah, but it is actually true, and in fact might be the truest thing you’ve ever written. Economists have been cheerleaders for Market fundamentalism and Neoliberalism (even if they studiously avoided using that term) since the 1970’s. They knew full-well what they result would be. They just didn’t care. They had their meal ticket. Their pay was dependent on telling the rich what they wanted to hear, and justifying it to the masses.

Here’s another good laundry list of what’s wrong: Why You Should Blame The Economics Discipline For Today’s Problems (Evonomics)

  1. Economists write to impress each other in a language only they can understand.
  2. As an economist, you are encouraged to think outside the box–except don’t!
  3. Mainstream economists have next to no knowledge of the schools of thought that did the best job of forecasting the Financial Crisis.
  4. Academic inbreeding has led to dysfunctional theories.
  5. There’s no incentive to fix those dysfunctional theories

It is my contention (and that of many of my colleagues) that the fault lies not with the rich, not with corporations, not with China, not with the Illuminati, not with Al Qaeda, but with the economics discipline. Bad ideas have done at least as much damage to our world as anyone’s bad intentions. Decades of misguided policy from both political parties and in other nations has critically weakened the core of our economy and left us in a situation where, despite our tremendous level of technological achievement, we seem to be regressing. Just as in the Great Depression, we have the ability to solve these problems practically over night. What we lack is sound theory to guide our actions.

People are right not to listen to mainstream economists. The results of the last forty-plus years have utterly discredited them. They are nothing but propagandists and whores.

And the mainstream media is cut from the same cloth. They have lost all credibility too, which is why their dire “warnings” about Trump also went unheeded among the hurting classes. Mainstream media has peddled the lies of economists and their political handmaidens for decades. Just like with economists, the more outlets like The New York Times, the Washington Post, and numerable online outfits abandoned ethical journalism to shill for the failing two-party Neoliberal consensus, the more people reasoned that if these media outlets were afraid of Trump, there might be something in his policies that might actually help out them after all.

Economists and the media have lost all credibility. And with good reason.

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In the wake of the Trump victory on Tuesday, the Washington Post published an article entitled “A New Theory for Why Trump Voters are so Angry that Actually makes Sense.” Apparently a University of Wisconsin Academic went out and, you know, actually talked to rural voters here in Wisconsin to find out what they think and believe. I’m reminded of this passage in an article I read last week:

Journalists love mocking Trump supporters. We insult their appearances. We dismiss them as racists and sexists. We emote on Twitter about how this or that comment or policy makes us feel one way or the other, and yet we reject their feelings as invalid. It’s a profound failure of empathy in the service of endless posturing. There’s been some sympathy from the press, sure: the dispatches from “heroin country” that read like reports from colonial administrators checking in on the natives. But much of that starts from the assumption that Trump voters are backward, and that it’s our duty to catalogue and ultimately reverse that backwardness…

The unbearable smugness of the press (CBS News)

“Reports from colonial administrators checking in on the natives.” That made me chuckle. The analogy between the modern U.S. government as an occupying power ruling over angry natives is an apt one. It’s the reason why “shrinking government” is such a perennial winner among folks far from the centers of the “occupying government” in Manhattan, Washington D.C. and Silicon Valley – our real life versions of Panem from the Hunger Games. It’s all due to placeless, faceless, Neoliberal globalism. I wrote about this a while back. From the article by Mike Lofgren quoted in that post:

Our plutocracy now lives like the British in colonial India: in the place and ruling it, but not of it. If one can afford private security, public safety is of no concern; if one owns a Gulfstream jet, crumbling bridges cause less apprehension—and viable public transportation doesn’t even show up on the radar screen. With private doctors on call and a chartered plane to get to the Mayo Clinic, why worry about Medicare? In both world wars, even a Harvard man or a New York socialite might know the weight of an army pack. Now the military is for suckers from the laboring classes whose subprime mortgages you just sliced into CDOs and sold to gullible investors in order to buy your second Bentley or rustle up the cash to get Rod Stewart to perform at your birthday party. The sentiment among the super-rich towards the rest of America is often one of contempt rather than noblesse.

The objective of the predatory super-rich and their political handmaidens is to discredit and destroy the traditional nation state and auction its resources to themselves. Those super-rich, in turn, aim to create a “tollbooth” economy, whereby more and more of our highways, bridges, libraries, parks, and beaches are possessed by private oligarchs who will extract a toll from the rest of us. Was this the vision of the Founders? Was this why they believed governments were instituted among men—that the very sinews of the state should be possessed by the wealthy in the same manner that kingdoms of the Old World were the personal property of the monarch?

And what I wrote:

Taken together, these…articles paint a grim but accurate picture of the world at the dawn of the twenty-first century: the global elite of wealthy capitalist billionaires and their mandarins and factotums are essentially an occupying force over the entire globe, controlling governments and using the military and police forces against the citizens of their own country who are essentially colonized populations just like in the era of international colonialism. This is the true state of the world, not “democracy,” which is just a fiction to placate the masses. Neither you nor I as Americans, nor the citizens of Greece or Spain or Ireland, nor the citizens of China or Japan or Korea have any more of a real say in how our country is run that the average Indian or South American or African under British, Spanish or French rule. We are an occupied people, all of us, with no say in how our countries are run. The difference is, we are not controlled from a country outside our own borders, but by a global international elite and their political handmaidens. This elite has no loyalty to any particular country. Hence the increasing use of military and police forces against the citizens of their own country, and wars for control of resources most citizens will never benefit from. Hence the dismantling of nation state outside of the police and military forces, which just serves as an unnecessary and inconvenient check on the rapacity of those elites. This is what is meant by Neofeudalism.

Back to the article. So what did they tell her?

That feeling is primarily composed of three things. First, people felt that they were not getting their fair share of decision-making power. For example, people would say: All the decisions are made in Madison and Milwaukee and nobody’s listening to us. Nobody’s paying attention, nobody’s coming out here and asking us what we think. Decisions are made in the cities, and we have to abide by them.

Second, people would complain that they weren’t getting their fair share of stuff, that they weren’t getting their fair share of public resources. That often came up in perceptions of taxation. People had this sense that all the money is sucked in by Madison, but never spent on places like theirs.

And third, people felt that they weren’t getting respect. They would say: The real kicker is that people in the city don’t understand us. They don’t understand what rural life is like, what’s important to us and what challenges that we’re facing. They think we’re a bunch of redneck racists.

So it’s all three of these things — the power, the money, the respect. People are feeling like they’re not getting their fair share of any of that.

Form the article, I came away with the following narrative:

1.) That at the core of these people’s belief system is that “hard work” is the only valid, moral way to make a lot of money. Three things stem from this:

a) That urban elites don’t get their money by “working hard” but rather through special privileges and connections available only to a select few:

When people are talking about those people in the city getting an “unfair share,” there’s certainly a racial component to that. But they’re also talking about people like me [a white, female professor]. They’re asking questions like, how often do I teach, what am I doing driving around the state Wisconsin when I’m supposed to be working full time in Madison, like, what kind of a job is that, right?

b) That urban minorities don’t “work hard” but instead rely on government handouts:

We know that when people think about their support for policies, a lot of the time what they’re doing is thinking about whether the recipients of these policies are deserving. Those calculations are often intertwined with notions of hard work, because in the American political culture, we tend to equate hard work with deservingness.

And a lot of racial stereotypes carry this notion of laziness, so when people are making these judgments about who’s working hard, oftentimes people of color don’t fare well in those judgments. But it’s not just people of color. People are like: Are you sitting behind a desk all day? Well that’s not hard work. Hard work is someone like me — I’m a logger, I get up at 4:30 and break my back. For my entire life that’s what I’m doing. I’m wearing my body out in the process of earning a living.

It’s absolutely racist to think that black people don’t work as hard as white people. So what? We write off a huge chunk of the population as racist and therefore their concerns aren’t worth attending to?

Thus both “lazy” inner-city blacks and “pointy-headed liberal elites” are valid targets for resentment and anger by rural voters. Wealthy businesspeople are not considered evil, however, because the perception is that they “work harder” than everyone else, and that is why they’re rich. That is, “deserve” their millions of dollars by virtue of “hard work.” That was true of Wall Street too until 2008, when people saw the government bailing out the elites by essentially printing up money and giving it to them. Suddenly, the scam was laid bare for all to see, leading to widespread disillusionment.

c) That people who are genuinely “working hard” are getting less and less than what they used to:

Part of where that comes from is just the overarching story that we tell ourselves in the U.S. One of the key stories in our political culture has been the American Dream — the sense that if you work hard, you will get ahead.

Well, holy cow, the people I encountered seem to me to be working extremely hard. I’m with them when they’re getting their coffee before they start their workday at 5:30 a.m. I can see the fatigue in their eyes. And I think the notion that they are not getting what they deserve, it comes from them feeling like they’re struggling. They feel like they’re doing what they were told they needed to do to get ahead. And somehow it’s not enough.

Oftentimes in some of these smaller communities, people are in the occupations their parents were in, they’re farmers and loggers. They say, it used to be the case that my dad could do this job and retire at a relatively decent age, and make a decent wage. We had a pretty good quality of life, the community was thriving. Now I’m doing what he did, but my life is really much more difficult.

d) That elites are looking down and them and laughing at them. See the paragraph above from CBS News for confirmation of that.

Another takeaway is that perception has a great deal to do with it:

The other really important element here is people’s perceptions. Surveys show that it may not actually be the case that Trump supporters themselves are doing less well — but they live in places where it’s reasonable for them to conclude that people like them are struggling.

Support for Trump is rooted in reality in some respects — in people’s actual economic struggles, and the actual increases in mortality. But it’s the perceptions that people have about their reality are the key driving force here. That’s been a really important lesson from this election.

There’s just more and more of a recognition that politics for people is not — and this is going to sound awful, but — it’s not about facts and policies. It’s so much about identities, people forming ideas about the kind of person they are and the kind of people others are. Who am I for, and who am I against?

Policy is part of that, but policy is not the driver of these judgments. There are assessments of, is this someone like me? Is this someone who gets someone like me?

Indeed, much of the above comes down to perception. For example, the notion that Milwaukee is getting all this money made me shake my head. Go back and reread what life is like here in the paragraph I wrote above and you’ll see that wherever they money is going, it sure as hell ain’t here! In fact, we’ve been “tightening our belts” for my entire lifetime. Much of our public services have been radically curtailed or are on life support. Any number of studies have demonstrated that rural areas actually receive disproportionately more government money than they pay in, and that most economic activity is generated in cities, rather than in suburbs or in rural areas (which is a problem in itself). Most of the rural economy is kept on life support by eds and meds, both essentially government-funded “socialized” industries, even though it’s unacknowledged.

No, I think the resentment against cities has more to do with the kinds of people who live there more than anything else. Since Civil rights, rioting and Busing, whites hopped on the freeway and fled to the lily-white segregated suburbs of the WOW counties (Waukesha, Ozaukee, Washington), where they nursed a deep, abiding grudge against government in all its forms. Now anything “urban” is inextricably bound up with various minorities. Here in Milwaukee, the local joke is that the 27th street viaduct is the world’s longest bridge, because it spans from Africa to Mexico.

I’m struck by this question put to the UW professor in the article: “One of the really interesting parts of your book is where you discuss how rural people seem to hate government and want to shrink it, even though government provides them with a lot of benefits. It raises the Thomas Frank question — on some level, are people just being fooled or deluded?” She tiptoes around the question, not really giving a good answer, but I’m not afraid to say it, yes they are. being fooled and deluded.

I think the bottom line is this: for decades Americans have been told that unrestrained capitalism is good, and that the only reason it wasn’t working for them was “Big Government”. They bought into this message because 1.) The right-wing mighty Wurlitzer fired up and tailored its message especially for them, and 2.) The failed social engineering experiments of the 1960’s and 1970’s turned Americans permanently against their own government.

So Americans got the “unrestrained” capitalism they thought they bargained for, and it did exactly what their forefathers knew it would do: crush labor into oblivion in the name of profit. Under globalized capitalism, labor is simply a commodity to be bought and sold in a marketplace, like any other commodity, but selling your labor today is like selling buggy whips in the 1940’s: it simply isn’t needed anymore. Yet people can’t blame capitalism itself because they have been propagandized from birth that it cannot fail, it can only be failed. And they have internalized that message.

So whom do they blame? Outsourcing and immigration, two results of unrestrained capitalism. Traditionally in America, anyone facing hardship has been angrily told to just go out and “get a job.” But what do you do when there are less and less jobs on offer? What’s your answer to hardship then? It leads to painful cognitive dissonance: capitalism is a perfect system that rewards people exactly in proportion to their hard work according to the belief system of rural America as described in the interview with the professor. But when people are working harder then ever before and still not getting by, how do you reconcile those contradictory observations?

And coupled with the capitalist propaganda, they have been told that socialism is merely “free stuff” for the lazy and undeserving, paid for by higher taxes on people like them. That it is “big government handouts” So any answer that would make their lives better through government spending is a non-starter. They have also been told that social insurance is unaffordable and that the debt is out of control. They have internalized those messages too. So what can be done to help them? The only thing is: bring the jobs back, and that’s exactly what Trump promised them he’d do. But it’s a lie, as this Reddit commenter points out:

Trade is not the big culprit taking away jobs. It is automation.

Trump is a shrewd businessman. He knows real estate. He knows how to negotiate deals. He knows how to work his base. But, he does not know manufacturing, or technology.

He promised to bring jobs back. He won’t be able to deliver, not on any scale that matters. Nor would Hilary, or anyone else. Any profit seeking organization will automate away their labor cost, that is just what they do, and the technology of automation is only becoming more impressive at an exponential rate. Jobs are automated faster than they are replaced today. I wonder what his base will think in a few years when he hasn’t worked his magic?

Let’s face it, these people are never going to understand what Neoliberalism is. They’re never going to understand what the true nature of the problem is, or who is really to blame for their ruined lives and crushed communities. They’re never going to look at capitalism with a critical eye. Instead, they’re going to look for simple answers and bumper-sticker bromides. They’ll turn to false messiahs and con artists. This is going to sound elitist as hell, but I’ll say it anyway: most people in Middle America are simpletons. A Marxist would say they are a lumpenproletariat that lacks “class consciousness;” that is, they are too busy fighting each other to realize their common enemy. Divide and rule is alive and well.

But they’re still angry and they need someone to blame. Watch out colonial administrators, the natives are restless.

Lori Ayers, 47, works in the gas station. She was blunt when I asked her about her life. “Clarington is a shithole. Jobs all left. There is nothing here anymore. When Ormet Aluminum factory closed, jobs all disappeared.” She is also blunt about the pain in her life. “I have five kids and two have addictions. There is nothing else for kids to do here but drugs. No jobs. No place to play.”

These communities are dealing with lost and changing jobs, which are no longer a sources of pride, but simply about getting by. Life for many has become a constant anxiety over upcoming bills. They are also dealing with social problems that always follow economic loss, such as families broken apart, children struggling with little support, eroded institutions, and substance abuse – a quick salve to either forget or numb the pain.

Compounding the anxiety, and helping to morph it into humiliation, is the false national narrative that the US is a meritocracy where anyone can advance with the right education, and hence failure is because of being dumb or lazy.

But in communities I visit, the right education is often beyond most people. Many residents often fail to go beyond high school, and if they do, it is an education cobbled together by night classes and community colleges, together with a concoction of loans, programs and overwhelming debt.

All of this is humiliating and painful, and has made the perfect setting for populist politics built on blaming minorities and immigrants. And that is what Trump has exploited. He has has come into these communities with white identity politics, a message that is both simple and loud: He will make America great again.

What I learned after 100,000 miles on the road talking to Trump supporters (Guardian)

11 thoughts on “Economics and the Election

  1. I wonder, Chad, if you could write something on why the whole destruction of American industries everywhere. The industries that supplied our needs. What is behind it, exactly? Did the elites decide to ruin their country, and shaped policies so that communities would be decimated? I don’t understand it clearly, but it seems that a disaster of these proportions must have been pushed to happen. We’ve been told that jobs had to go elsewhere because the overhead was cheaper in Mexico, or China. But often you find that buildings and equipment trashed, small towns trashed… so much waste. It just boggles the mind. I keep thinking that there was an intentional skewing of incentives. Right, wrong?

    • I think this is an excellent question. Personally I think that the people doing this honestly believe they are doing it in the service of a higher purpose.

    • “The sentiment among the super-rich towards the rest of America is often one of contempt rather than noblesse.”

      I believe that the vicious class war that has been raging these past forty years is at least partly a generational thing.

      Each succeeding generation of ultra-rich, ultra-entitled, ivy-league-educated brat grows up ever more disconnected from the problems of the regular citizen. It’s as though each new generation is born a dozen floors higher up on the rich guy tower, until at some point the clouds totally obscure the “little people” scurrying far below.

      This leads inevitably to a form of sociopathy, or lack of empathy, for the ants (granddad still thought of them as people, how quaint) who do all of the grunt work of society.

      This complete lack of empathy is still guided by the ancient family drive to make money while at the same time keeping a watchful eye on the servants, lest they steal the silver.

      I don’t know if a study has been done to nail down how many generations of rich it takes before a desperate revolution, complete with torches and guillotines, force a reset of society along more egalitarian lines.

      My guess is that it takes three generations to breed indifferent a-holes that will happily eviscerate a nation. But while it may only take three generations per family, it might take another generation or two to get them all up to speed and coordinated.

      Or perhaps it used to take five to ten generations and it’s happening faster these days because of all of the “secret societies” (Bilderbergers and whatnot) that provide more structure to it all.

    • Great question. I do wonder if part of the answer lies in the cultural belief that so-called market efficiencies always are the highest and best good. Those with the means to move the industries thought they were following the dictates of their high priestess, called markets. Never mind that those dictates may just be voices in their head. These true believers are fully bought into the invisible hand and their perception of “The Market” speaking to them is what they must follow. Just an idea about this situation that came to me upon reading your question.

  2. Nicely written polemic! And now I understand why Occupy achieved so little: those in power must have been laughing their heads off, for of course they are the real occupiers and we are the Occupied. What irony!

  3. Just a thought: what happens when an economically fundamentalist state decides that a segment of its population is a net drain on the economy?

  4. I was rather struck by Cramer’s smug comment about race in this statement:
    “It’s absolutely racist to think that black people don’t work as hard as white people. So what? We write off a huge chunk of the population as racist and therefore their concerns aren’t worth attending to?”

    It seems to me that every Election season the white working class’ concerns are always attended to. Politicians are always talking trips to ‘the heartland’ to try to get their vote and the media is always talking about the white working class’ concerns. I can’t understand why suddenly people act as if it’s this particular population whose concerns are not being listened to. Why do people think that it’s just the white working class that has been screwed over? The middle class, regardless of race, is also being screwed over. And forget about the poor, urban and rural, who no one seems to care about! The drinking water situation in Detroit is a good example to be sure. Native American reservations are also good examples of people who are forgotten, as Pine Ridge is a place where alcoholism is high and the mortality rate for men is in the early forties-second lowest in the western hemisphere only to Haiti.

    Maybe the white working class is struggling, but they are certainly not being ignored, Ms. Cramer!

    Since racism is an integral part of the United States, I doubt that the white working class is being ‘written off’ because of these attitudes, since many people in power and the intellectual class have the same attitudes towards ‘those people.”

  5. I knew this was another great analysis when I kept wanting to skip to the end so I could comment before my current thought was replaced by another. First, about poeple’s distrust of economist, I was thinking about what Milton Friedman, Thomas Friedman, Adam Davidson, and Joel Olsteen have in common. They each, within their own field justify wealth inequality. I suspect that a sort of natural selection occurs such that opinions which leave the rich and powerful feeling better about themselves tends to be well supported.

  6. ” You’ve got to go tens of thousands into debt just to have a shot at any job at all, ” I think this especially important. It is still possible to become rich or atleast upwardly mobile, however, it requires luck and hard work. Hard work alone is never enough. Pick the hot major, then get HB1’ed into poverty. Pick a career in medical, and you will quickly realize that there are several layers of bottlenecks to protect physicians from the danger of oversupply. If you make any mistake anywhere along the way then you are fucked. If you have an unplanned pregnancy along the way or commit even a minor crime it is game over unless you have the right connections and financial support (eg. the right parents). If you are lucky and/or pedigreed enough to make it, then then there will be economist, preachers, economist and politians ready to pat you on the back and congratulate you for having greater merit then all those losers.

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