President Obama has a lengthy commentary in the Economist, which that magazine-that-calls-itself-a-newspaper says is an “open letter to his successor. The Economist also describes the essay as “centrist,” as it criticizes Bernie Sanders’ leftism as much as, if not more than it criticized Trump.
But the article isn’t really centrist. Instead, Obama is defending the liberal (in a classical sense of the term) consensus in favor of free trade, relatively open borders, and mostly free markets. That is what liberals believed in during the nineteenth century, and it is what both the liberal and conservative elites believe today, which is why neither Bill Clinton nor George Bush questioned these ideas.
This election year, in fact, is the first time in many decades–perhaps more than a century–that a candidate who challenged these ideas won a major party nomination for president. While Trump openly challenged the open borders ideas, Sanders gained a lot of votes by challenging the free-market ideas. Brexit and similar votes in Europe show this isn’t unique to the United States: many people are feeling disenchanted with the liberal consensus.
Obama shows that he really doesn’t understand these challenges. While he presents data to show that low- and middle-income families are economically healthy, his main thesis is that the system isn’t rigged, as both Sanders and Trump claim. While I strongly support the liberal consensus, I have to disagree with the president: the system is rigged, though it won’t get fixed by building a wall or shutting down Wall Street.
The most obvious sign that the system is rigged is the education gap, in which middle-class (i.e., college-educated) voters tend to be satisfied with the system while working-class voters are distressed. The reality of that distress is revealed by the large number of working-age people who are out of work but not looking for jobs, and thus aren’t counted as “unemployed.” Another is the fact that, after adjusting for inflation, working-class incomes have declined in the last two decades while middle-class incomes have increased.
The Antiplanner has previously discussed ways in which the middle class has rigged the system by creating barriers to keep the working class from rising. These include but are not limited to:
- The education barrier, which begins in high school if not in grade school, as schools in wealthy neighborhoods continue to be better than schools in poor neighborhoods;
- The higher education barrier created by high tuitions, which reduce the ability of children of working-class families to break into the middle class;
- The housing barrier, in which elite cities like San Francisco and Seattle have made housing artificially expensive to keep the working class confined to certain neighborhoods or even out of those cities entirely;
- The occupational licensing barrier, which makes it difficult for working-class people to start small businesses;
- Finally, while not as obvious a barrier, the size of the national debt slows economic growth and limits opportunities for everyone.
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These barriers affect low-income people regardless of race. If Trump loses, it will be because he focused his campaign on white anger when he should have focused it on working-class anger, including blacks and Latinos among his supporters. These issues won’t go away, and the next challenger to the liberal consensus may correct that mistake.
On the other hand, if Clinton loses, it will be because she doesn’t understand that all of the comfortable barriers the middle class has erected harm many young people, even those form middle-class families. High tuitions and housing costs have led Millennials to question the liberal consensus as well.
An unbeatable candidate will be one who can bring all of these disaffected people together. The question is whether that candidate, whenever they win, will be able to understand the real problems and not just the symptoms. They could do more harm than good by fighting free trade (as a Trump might do) or free markets (as a Sanders might do), but if they break down the barriers to economic mobility, they could do a great deal of good.
Until I read Hillsdale’s Imprimis issue on it (https://imprimis.hillsdale.edu/) I had never heard the term “economic mobility”. While I have always been taught about America as a Classless society and how anyone could work hard and become successful, I’d never really heard that term before. Definitely an issue, but with the amazing rise of banal amusements in our society I do wonder how much plain old laziness has to do with it!
I agree with the Antiplanner. To this discussion could be added that there is to much emphasis on college and not enough on the skilled trades, such as welding, machinist, etc. Apparently in the unfortunately named “rust belt” there is a shortage of welders, machinists, etc. This type of career pays well and lends it to training for those not as interested in sitting through college classes. German speaking countries have done much better in keeping these skilled trades upgraded relevant to the blue collar population and have low unemployment and excellent manufacturing capabilities.
Another problem is that from 1945 to the mid 1970s everyone benefited from more trade and automation. From about the mid 1970s to now mostly the top 1% have benefited. This may well be because of the decline in unionization in the workforce. For all the problems of unreasonable unionization, unions did keep wages for traditional “blue collar” employment higher than they have been in the last 40 years.
I do support capitalism but a government’s role should be to prevent capitalism’s natural tendency to form monopolies and consolidation of power. Unions can also be a check on this. However unions can also become monopolistic and ruin a business. However there should be a place for both capitalism and unions.
On a separate issue, for those of us who are fiscally responsible, Donald Trump’s promises of more spending and tax cuts would result in a huge increase in the deficit. Under Reagan and George W Bush tax cuts were tried with the promise that they would result eventually in a balanced budget. Instead government spending actually increased and the deficit increased dramatically. At least Reagan had the sense to increase taxes again in 1986 when he realized his policy was not working. There is no evidence that Trump would follow this policy. If a government wants to cut taxes then it has to cut spending. In this election it is amazing for those of us who used to be Republicans to see a Republican presidential candidate promising to out spend the Democratic candidate, while increasing the deficit. No wonder that so many of us have left the Republican party, as has George Will.
These increased deficits will only hurt the working class more in the long run.
“I do support capitalism but a government’s role should be to prevent capitalism’s natural tendency to form monopolies and consolidation of power.”
Monopolies don’t form naturally; that’s a myth. Monopolies are granted by the state. Consider: school, cable TV, Ma Bell, etc.
There is no real “power” absent state coercion; without the state and its use of force to protect certain industries from competition, monopolies would not exist, and companies have to compete to earn consumer’s business.
“The higher education barrier created by high tuitions, which reduce the ability of children of working-class families to break into the middle class”
Higher tuition is a product of credit expansion in the higher education sector, which has been enabled by government loans. It used to be that one could pay for a year of tuition with wages earned during a summer job. Once government became involved, tuition skyrocketed.
1945 – 1970 was a fluke. The manufacturing facilities of the entire world except the US had been bombed resulting in a monopoly on manufactured goods for US companies. During the period US manufacturers had nice fat margins which allowed them to keep their union workforce fat and happy. Competition from Europe in the 60s and Japan in the 70s ended that monopoly, along with US blue collar workers’ high pay and expensive benefits.
Globalization has resulted in the rich and well connected getting richer but in the US the growth of the federal government and the influence of well connected people on politicians to steer regulations their way is a major factor too. Both major candidates participated in this graft, Hillary from the politician’s side and Trump from the crony capitalist side.
Trump’s and Sanders’ populist rhetoric appeal to the majority of the voters because they feel shafted from both an economic and justice perspective. Almost certainly that old-time queen of graft Clinton will win. And if you think Trump or Sanders is bad, just wait until the next populist comes around. S/he’ll make those guys look reasonable.