The slogan for Bill Clinton’s campaign in 1992 was “the economy, stupid”. In 2016, the Clintons, Obama, Republicans, Democrats, Anderson Cooper, Brianna Keilar, Chris Wallace, Megyn Kelly and I missed the trees in the forest. This time it wasn’t whether we could see the forest for the trees, but a case when the economic glut hid the individual rot.
Not in a long time has an election in the USA caused so much anxiety outside the USA as the presidential election this fall. In most elections, anywhere in democracies around the globe, the character of Donald J. Trump would have made the candidate unelectable.
There are two key elements to Trump’s victory:
- The economic situation
- A winnable strategy on how to profit on the situation
In this blog post, the economic situation is scrutinized.
The economic situation in the USA is the essential factor in the race for the presidency. It is very black and white. In 2016, the situation made even a candidate such as Trump electable. The economic situation, or the distribution of wealth, and some psychological aspects surrounding it, created a political Big Bang on November 8th. The result of the US presidential election in 2016 pivoted on four points.
The four trees that tumbled the forest:
- The greatness of the USA makes its leaders blind
- The American Dream is not attainable for too many Americans
- Free International trade has loopholes too favoring for an elite business clique
- The communist ghost of the Soviet Union stifles American economic policy discussion
In order to analyze today one has to go back in time. The state of today is the result of events in the past, and the Trump campaign slogan “Make America Great Again” points back in time.
Overall, “Make America Great Again” is a somewhat strange slogan. After all, the USA is the only superpower in the world.
- Trump has been talking about a making the US military strong again. According to Vladimir Putin, the US military budget is ten times bigger than the Russian. Maybe Putin is not the most revered source; however, the fighting ability of the USA is without question the strongest by far.
- American multi-national corporations (MNC) are dominating world business.
- American culture is spread to the tiniest corners of the world.
How much greater can America be?
“The American Dream” is for many Americans as attainable as landing Apollo on star Sirius
Regretfully, for many Americans, the country is not great. “The American Dream” is for many Americans as attainable as landing Apollo on star Sirius. To these constituents, the USA is not the place to be, if you want to progress in life, if you want to triumph economically, or achieve anything great. For too many Americans it has become a mission impossible to break out of the trashy mold.
These people look back on their parents or grandparents America, an American that prospered. After World War II, the USA was firmly established as a superpower. The 1950s rock’n’rolled into the Camelot of the 1960s. One step of Armstrong became a leap for mankind on the Moon. The USA stepped into its decade of bicentennial celebration in the 1970s as an untouchable beacon of the free world. It was the run-in on the ideological battle between the second superpower, communist Soviet, and capitalist USA in the 1980s.
I was a student at Indiana University when Gorbachev called it the day in 1991 for communist Soviet. The ideological battle was won, socialism doesn’t work, and free markets do work. The campus attitude was: Now Russia will do it the American way.
George H. Bush approval rating went through the roof after Desert Storm and General Norman Schwarzkopf blew the Iraqis out of Kuwait in 1991. The first war televised live. Only a year later, Reaganomics was firmly discarded as the economic policy for the USA in the post-Cold War era. Too much less tax and less government hadn’t proved to be the best policy.
The yuppie era had shown that the invisible hand of free markets does not see or solve all economic issues for the common good. Especially, when it can be argued that the invisible hand does not have the society’s best in mind in the first place. There are too many invisible hands exploiting and creating loopholes for individualistic petty purposes at the expense of the general public.
The end of Reaganomics did not end yuppie actions. Bill Clinton’s deregulation of the financial markets arguably led to the financial meltdown in 2007-08. Repealing a stabilizing and conservative law such as the Glass-Steagall Act, amongst others, made it possible to be more creative and reckless in the finance industry. The paper instruments representing core assets of the common people could by consultants be played with in order to amass money on Wall Street at the expense of the peripheral man.
The decade of the 1990s towards the new millennium was a prosperous one with a minor dent. Although, the Soviet Union as an ideological adversary was gone, Japan had become an economic adversary. Japan was even challenging the USA on the most American industry of them all, the automobile industry.
In the post-Cold War era all men were pumping the non-military industries. The computer technology became a household industrial efficiency booster, and new markets more accessible through International trade agreements. The North American Free Trade Agreement of 1994 and the European Union of 1993 the most famous examples.
The idea of international trade arrangements like these is to create a free flow of goods and services:
- To make production more efficient
- Improve living standards for all people
- Perhaps most importantly, use trade as a peace making tool among nations
In 2008, Toyota of Japan surpassed General Motors of the USA as the largest automobile manufacturer in the world. GM filed for bankruptcy protection a year later and was bailed out of the crises by a large chunk of government money. How could this happen? The Japanese rise to economic prowess is a study in itself. GM slipped because they got sloppy. They didn’t pay attention to the shifting world demand for automobiles. Instead of putting up a fight on merit and industrial handicraft, they would focus attention on peddling with the government and lure the authorities to set up trade obstacles for the Japanese.
Already in the early 1990s you could experience the devastating decline of the secondary industry in the USA:
- The call for short sighted trade protection against the Japanese that in the long run makes you less competitive
- The disgruntled out-of-work industrial worker
- Corporations fending for their stockholders pockets at any means
The international trade agreements have one big flaw. It hands most of the value decisions to a shrinking number of wealthy business men. Whereas corporations have to deal with common sense regulatory measurements domestically, reciprocal international regulation where the stakes and rewards are higher are not in place. The system favors horizontal integration of goods and services. The free international market place is piling big corporations who can exercise more industrial and tilted power. The common man feels, rightly so, that the system is rigged for the ones that are already doing great.
Whereas corporations have to deal with common sense regulatory measurements domestically, reciprocal international regulation where the stakes and rewards are higher are not in place
So, instead of creating wealth for all, MNC can use the free playground to their own benefit. An American manufacturer of “Make America Great Again” caps can produce them in the country where they can enforce a better deal. One could argue that this is growing pains of a “free of obstacles» international trade. But, this is difficult to explain to lay off workers in democracies and elsewhere.
The number one cause of detrimental societal instability is inequality of wealth. That man is not valued equal vocationally, economically, nor vocally. It is okay that the boss makes more than the worker, but there is a limit on how big this gap can be. It has been proven throughout time, when a small number of people get more and more, and a larger number of people get less and less, the system will burst. Not only economically, but also politically.
In 2016, a huge percentage of the American voters are hurting economically. In a country, where you are supposed to be able to work yourself up, there is no way up. A large number of Americans have not had a ladder to climb for decades. When you work two or three jobs in an abundantly rich country as the USA and cannot send your kids to college something is very wrong.
It is the false “American Dream” nerve Donald Trump has not only detected but also acted upon
The illusion of “The American Dream” has now become a scam to dull people into trashy mediocrity. As if, when you don’t believe in “The American Dream” you may be regarded as unpatriotic. People have been hurting, but haven’t been able to voice it because of the illusory greatness of the USA for too many Americans.
It is the illusory American greatness that has kept the politicians blind to the misery of a too big portion of the constituency. Let alone take appropriate measures to alleviate the frustration. It is the false “American Dream” nerve Donald Trump has not only detected but also acted upon.
And this is where the collapse of the Soviet Union enters the equation: The idea that socialistic solutions or “welfare” do not work, period. The Democratic primaries signaled a paradigm shift in US political debate. For the first time, more sophisticated socialistic solutions were presented to the American people without being ignored. Bernie Sanders introduced an ideological debate to American politics that has been lacking for decades. But “socialism” is still not alternative ideological political thoughts because of the communist Soviet legacy. Investments in the American people are still not as important as any other government investment. Nevertheless, welfare is also investments.
Welfare is also investments
The strength of the American psyche is the belief that you can do it, do it on your own, and be self-sufficient. When the last financial crises hit the world economy almost a decade ago, Norwegians sought the governmental agencies for help. Either have the government help them get a new job, or provide governmental aid. In the US, even out-of-work managers stood in long lines outside business premises to get a job as down-ladder as a cleaner.
This reflexive behavior is part of what makes America great, the micro “solve it on your own” attitude. However, when the problem is macro, people must be open for macro solutions. Statistics shows that small developed countries such as Sweden and the Netherlands, more dependent upon export and trade, have more safety nets for people. They have more social welfare systems. You need this to offset the instability of an export economy.
There is no other business that is more lucrative to a nation than to invest in its people
These countries have realized that investments also mean investing in its most crucial asset, the people. If you spend 12 years on educating kids, you may as well invest two – three years of unemployment benefits or expensive medical treatment. Then the government will cash in later by receiving tax revenue for another 20 years of that person’s payroll activity. And, all people whether they are retired, disabled, or working add value to the society. Basically, there is no other business that is more lucrative to a nation than to invest in its people.
The USA has both an entrepreneurial spirit and very large domestic economy. The USA is less dependent upon export than perhaps any other country. People investment hasn’t been as necessary in America. The free trade movement, accelerated by Ronald Reagan and his followers in the Oval Office, has had the undesired side effect that US based MNCs have taken their production outside the USA, leaving many Americans out of work.
It is illuminating that the first industrial country, the United Kingdom, just voted to leave the sphere of European free trade. UK has been the first great champion of free enterprise. With the election of Trump, it may seem that United Kingdom’s follower as a Superpower and an even greater advocate for free enterprise, the USA, may be the next to abolish free international trade.
It is ironic. These two countries became world economic super powers, in part, because of trade rigged to their benefit. They were first, and in numerous ways had a “de facto” protected status against other competitors. This is a benefit that undeveloped countries do not have in a free market today. Undeveloped countries must very often create production against already existing lines of production. Production lines developed with support mechanism not possible today. Due to international free trade agreements, lesser developed countries are not able to use “unfair” trade practices that could balance the battle field. This rigs the system to the benefit of MNCs even more.
The selfish actions of corporations have left an enormous large number of Americans stuck in a battle they cannot get out off. And without the ability to seek people investment solutions they have been left as trash.
When Hillary Clinton called Trump voters for deplorable, she truly exposed the establishment’s obliviousness
The failure of both the Democratic Party and a normal empathetic Republican Party to win the 2016 election in the USA can in large part be attributed to the lack of understanding that the “American Dream” is not America anymore for a belt of voters. When Hillary Clinton called Trump voters for deplorable, she truly exposed the establishment’s obliviousness.
And it was the subsequent and unavoidable failure to not realize that the unelectable Trump could win on this opportunity.
Blogginnlegg er ikke er ment til å være noe annet enn ytringer i en samfunnsdebatt. Og representerer ikke en holdning eller noe annet for verken meddommere eller noen annen samfunnsgruppe.