Dec 13th 2016

The Lessons of America’s Election

by Michael J. Boskin

Michael Boskin, Professor of Economics at Stanford University and Senior Fellow at the Hoover Institution, was Chairman of George H. W. Bush’s Council of Economic Advisers from 1989 to 1993.

STANFORD – Donald Trump’s surprise election as the 45th president of the United States has spawned a cottage industry of election post-mortems and predictions, in America and abroad. Some correlate Trump’s victory with a broader trend toward populism in the West, and, in particular, in Europe, exemplified in the United Kingdom’s vote in June to leave the European Union. Others focus on Trump’s appeal as an outsider, capable of disrupting the political system in a way that his opponent, former Secretary of State Hillary Clinton – a consummate insider – never could. There may be something to these explanations, particularly the latter. But there is more to the story.

In the months preceding the election, the mainstream media, pundits, and pollsters kept repeating that Trump had an extremely narrow path to victory. What they failed to recognize was the extent of economic anxiety felt by working-class families in key states, owing to the dislocations caused by technology and globalization.

But, as I highlighted two months before the election, those frustrations were far-reaching, as was the sense of being ignored and left behind – and it was Trump who finally made that group feel seen. That is why I recognized the possibility of a Trump upset, despite Clinton’s significant lead in the polls (five points, just before the election).

And an upset is what happened. Trump narrowly won states that Republicans had not won in decades (Wisconsin, Michigan, and Pennsylvania), and won big in usually closely contested Ohio.

In fact, Republicans secured a broad victory. The party retained control of the Senate, even though more than twice as many Republican seats were up for reelection than Democratic seats, and it lost just a handful of House seats, far fewer than the 20 predicted. Moreover, the Republicans now control 33 governorships, compared to 16 for the Democrats, and have expanded their already-large majorities in state legislatures. Now, talk has turned from the impending implosion of the Republican Party to the repudiation, disarray, and bleak future prospects of the Democrats.

Since the election, Trump has moved quickly to assert himself. Republicans, even those who opposed Trump during the campaign, have coalesced behind him. Meanwhile, the Democrats in government – most notably President Barack Obama – have largely echoed Clinton’s gracious concession-speech injunction that Trump should be given an opportunity to lead.

The US election’s unexpected outcome holds four key lessons, applicable to all advanced democracies.

First, growth beats redistribution. Clinton’s barely discussed economic plan was to expand Obama’s left-leaning agenda, so that it looked more like the socialism of her opponent in the Democratic primary, Vermont Senator Bernie Sanders. Higher taxes for the wealthy, together with more “free” (taxpayer-paid) services, was, she argued, the best route to combating inequality.

Trump, by contrast, hammered home messages about jobs and incomes. Though the media almost exclusively covered his most hyperbolic and controversial statements, it was largely his economic message that won him support. People want hope for a better future – and that comes from rising incomes, not from an extra government-issued slice of the pie.

The second lesson concerns the risk of dismissing, let alone condescending to, voters. From the start, Clinton was not broadly liked. Revelations during the campaign – for example, that, in a 2015 speech, she had said that “deep-seated cultural codes, religious beliefs, and structural biases have to be changed” to secure women’s reproductive and other rights – reinforced fears that she would push too progressive a social agenda.

Recognizing these shortcomings, Clinton tried to win the election by making Trump unacceptable. But her remarks that half of Trump’s supporters belonged to a “basket of deplorables” – that they were racist, sexist, homophobic, xenophobic, Islamophobic – reinforced the impression that she and her party looked down on Trump voters as morally contemptible and even stupid. Such statements could well have pushed some undecided voters to decide against Clinton.

The third lesson is that a society’s capacity to absorb rapid change is limited. When technological progress and globalization, not to mention social and cultural change, outpace people’s ability to adapt, they become too jarring, disruptive, and overwhelming. Many voters – not just in America – also fret over terrorism and immigration, especially in combination with these rapid changes.

Add to that concerns about America’s growing opioid epidemic and a tedious and intolerant form of political correctness, and, for many, change did not look like progress. If democratic political systems do not find ways to ease transitions, provide shock absorbers, and accept heterodox attitudes and values without condemnation, voters will push back.

The final lesson relates to the danger of the ideological echo chamber. The repeated claim by shocked Clinton voters that no one they knew voted for Trump reveals the extent to which too many people – Republicans as well as Democrats – live in social, economic, informational, cultural, and communication bubbles.

Declining trust in national media, combined with a proliferation of Internet communication, has created a world where the news people read is often created with the goal of “going viral,” not informing the public; the result can barely be called news at all. Moreover, the information people see is often filtered, so that they are exposed only to ideas that reflect or reinforce their own. (The corollary with this online world is that, as Trump and Clinton discovered, we are all just one hack away from YouTube or WikiLeaks, cable news or talk radio, fame or infamy.)

These developments undermine people’s capacity to engage in informed, rational discussions, let alone debates, with those who have different perspectives, values, or economic interests. Even universities, which are supposed to foster knowledge-sharing and spirited debate, are now suppressing it, for example by spinelessly rescinding speaking invitations to almost anyone that some group or another considers objectionable. When we fail to engage in such debates – when people choose “safe spaces” over tough discussions – we lose our best chance of building consensus on how to solve at least some of our societies’ pressing problems.


Michael J. Boskin, Professor of Economics at Stanford University and Senior Fellow at the Hoover Institution, was Chairman of George H. W. Bush’s Council of Economic Advisers from 1989 to 1993.


Copyright: Project Syndicate, 2016.
www.project-syndicate.org

 


This article is brought to you by Project Syndicate that is a not for profit organization.

Project Syndicate brings original, engaging, and thought-provoking commentaries by esteemed leaders and thinkers from around the world to readers everywhere. By offering incisive perspectives on our changing world from those who are shaping its economics, politics, science, and culture, Project Syndicate has created an unrivalled venue for informed public debate. Please see: www.project-syndicate.org.

Should you want to support Project Syndicate you can do it by using the PayPal icon below. Your donation is paid to Project Syndicate in full after PayPal has deducted its transaction fee. Facts & Arts neither receives information about your donation nor a commission.

 

 

Browse articles by author

More Current Affairs

Mar 18th 2024
EXTRACT: "....the UK’s current economic woes – falling exports, slowing growth, low productivity, high taxes, and strained public finances – underscore the urgency of confronting Brexit’s catastrophic consequences."
Mar 18th 2024
EXTRACTS: Most significant of all, Russia’s Black Sea fleet has suffered significant losses over the past two years. As a result of these Ukrainian successes, the Kremlin decided to relocate the Black Sea fleet from Sevastopol to Novorossiysk on the Russian mainland. Compare that with the situation prior to the annexation of Crimea in 2014 when Russia had a secure lease on the naval base of Sevastopol until 2042." --- "Ukrainian efforts have clearly demonstrated, however, that the Kremlin’s, and Putin’s personal, commitment may not be enough to secure Russia’s hold forever. Kyiv’s western partners would do well to remember that among the spreading gloom over the trajectory of the war."
Mar 8th 2024
EXTRACT: "As the saying goes, 'It’s the economy, stupid.' Trump’s proposed economic-policy agenda is now the greatest threat to economies and markets around the world."
Mar 8th 2024
EXTRACT: "Russia, of course, brought all these problems on itself. It most certainly is not winning the war, either militarily or on the economic front. Ukraine is recovering from the initial shock, and if robust foreign assistance continues, it will have an upper hand in the war of attrition."
Mar 8th 2024
EXTRACT: "...... with good timing and good luck, enabled Trump to defeat [in 2016] political icon Hillary Clinton in a race that appeared tailor-made for her. But contrary to what Trump might claim, his victory was extremely narrow. In fact, he lost the popular vote by 2.8 million votes – a larger margin than any other US president in history. Since then, Trump has proved toxic at the ballot box. " -----"The old wisdom that 'demographics is destiny' – coined by the French philosopher Auguste Comte – may well be more relevant to the outcome than it has been to any previous presidential election. "----- "Between the 2016 and 2024 elections, some 20 million older voters will have died, and about 32 million younger Americans will have reached voting age. Many young voters disdain both parties, and Republicans are actively recruiting (mostly white men) on college campuses. But the issues that are dearest to Gen Z’s heart – such as reproductive rights, democracy, and the environment – will keep most of them voting Democratic."
Mar 8th 2024
EXTRACTS: "How can America’s fundamentalist Christians be so enthusiastic about so thoroughly un-Christian a politician?" ---- "If you see and think outside the hermeneutic code of Christian fundamentalism, you might be forgiven for viewing Trump as a ruthless, wholly self-interested man intent on maximizing power, wealth, and carnal pleasure. What your spiritual blindness prevents you from seeing is how the Holy Spirit uses him – channeling the 'secret power of lawlessness,' as the Book of 2 Thessalonians describes it – to restrain the advent of ultimate evil, or to produce something immeasurably greater: the eschaton (end of history), when the messiah comes again."
Mar 1st 2024
EXTRACT: "The lesson is that laws and regulatory structures are critical to state activities that produce local-level benefits. If citizens are to push for reforms and interventions that increase efficiency, promote inclusion, and enable entrepreneurship, innovation, and long-term growth, they need to recognize this. The kind of effective civil society Nilekani envisions thus requires civic engagement, empowerment, and education, including an understanding of the rights and responsibilities implied by citizenship."
Feb 9th 2024
EXTRACT: "Despite the widespread belief that the global economy is headed for a soft landing, recent trends offer little cause for optimism."
Feb 9th 2024
EXTRACT: " Consider, for example, the ongoing revolution in robotics and automation, which will soon lead to the development of robots with human-like features that can learn and multitask the way we do. Or consider what AI will do for biotech, medicine, and ultimately human health and lifespans. No less intriguing are the developments in quantum computing, which will eventually merge with AI to produce advanced cryptography and cybersecurity applications."
Feb 9th 2024
EXTRACTS: "The implication is clear. If Hamas is toppled, and there is no legitimate Palestinian political authority capable of filling the vacuum it leaves behind, Israel will probably find itself in a new kind of hell." ----- "As long as the PLO fails to co-opt Hamas into the political process, it will be impossible to establish a legitimate Palestinian government in post-conflict Gaza, let alone achieve the dream of Palestinian statehood. This is bad news for both Israelis and Palestinians. But it serves Netanyahu and his coalition of extremists just fine."
Jan 28th 2024
EXTRACTS: "According to estimates by the United Nations, China’s working-age population peaked in 2015 and will decline by nearly 220 million by 2049. Basic economics tells us that maintaining steady GDP growth with fewer workers requires extracting more value-added from each one, meaning that productivity growth is vital. But with China now drawing more support from low-productivity state-owned enterprises, and with the higher-productivity private sector remaining under intense regulatory pressure, the prospects for an acceleration of productivity growth appear dim."
Jan 28th 2024
EXTRACT: "When Chamberlain negotiated the notorious Munich agreement with Hitler in September 1938, The Times did not oppose the transfer of the Sudetenland to Germany without Czech consent. Instead, Britain’s most prestigious establishment broadsheet declared that: “The volume of applause for Mr Chamberlain, which continues to grow throughout the globe, registers a popular judgement that neither politicians nor historians are likely to reverse.” "
Jan 4th 2024
EXTRACTS: "Another Trump presidency, however, represents the greatest threat to global stability, because the fate of liberal democracy would be entrusted to a leader who attacks its fundamental principles." ------"While European countries have relied too heavily on US security guarantees, America has been the greatest beneficiary of the post-war political and economic order. By persuading much of the world to embrace the principles of liberal democracy (at least rhetorically), the US expanded its global influence and established itself as the world’s “shining city on a hill.” Given China and Russia’s growing assertiveness, it is not an exaggeration to say that the rules-based international order might not survive a second Trump term."
Dec 28th 2023
EXTRACT: "For the most vulnerable countries, we must create conditions that enable them to finance their climate-change mitigation" ........ "The results are already there: in two years, following the initiative we took in Paris in the spring of 2021, we have released over $100 billion in special drawing rights (SDRs, the International Monetary Fund’s reserve asset) for vulnerable countries.By activating this “dormant asset,” we are extending 20-year loans at near-zero interest rates to finance climate action and pandemic preparedness in the poorest countries. We have begun to change debt rules to suspend payments for such countries, should a climate shock occur. And we have changed the mandate of multilateral development banks, such as the World Bank, so that they take more risks and mobilize more private money."
Dec 27th 2023
EXTRACT: "....if AI causes truly catastrophic increases in inequality – say, if the top 1% were to receive all pretax income – there might be limits to what tax reforms could accomplish. Consider a country where the top 1% earns 20% of pretax income – roughly the current world average. If, owing to AI, this group eventually received all pretax income, it would need to be taxed at a rate of 80%, with the revenue redistributed as tax credits to the 99%, just to achieve today’s pretax income distribution; funding the government and achieving today’s post-tax income distribution would require an even higher rate. Given that such high rates could discourage work, we would likely have to settle for partial inequality insurance, analogous to having a deductible on a conventional insurance policy to reduce moral hazard."
Dec 21st 2023
EXTRACT: "Shocks are here to stay, and our task is not to predict the next one – although someone always does – but to sharpen our focus on resilience. Staying the course of politically mandated policies while minimizing the inevitable dislocations is easier said than done. But that is no excuse to fall for the myth of being victimized by the unprecedented."
Dec 21st 2023
EXTRACTS: "A new world is indeed emerging. It will be characterized not only by more interdependencies, but also by more insecurity, danger, and war. Stability in international relations will become a foreign concept from a bygone age – one that we did not fully appreciate until it was gone."
Dec 14th 2023
EXTRACT: "Yet one must never forget that Putin is first and foremost an intelligence officer whose dominant trait is suspicion."
Dec 2nd 2023
EXTRACTS: "In a recent commentary for the Financial Times, Martin Wolf trots out the specter of a 'public-debt disaster,' that recurrent staple of bond-market chatter. The essence of his argument is that since debt-to-GDP ratios are high, and eminent authorities are alarmed, 'fiscal crises' in the form of debt defaults or inflation “loom. And that means something must be done.' ----- "If, as Wolf fears, 'real interest rates might be permanently higher than they used to be,' the culprit is monetary policy, and the real risk is not rich-country public-debt defaults or inflation. It is recession, bankruptcies, and unemployment, along with inflation." ---- "Wolf surely knows that the proper remedy is for rich-country central banks to bring interest rates back down. Yet he doesn’t want to say it. He seems to be caught up, possibly against his better judgment, in bond vigilantes’ evergreen campaign against the remnants of the welfare state."
Nov 27th 2023
EXTRACT: "The first Russia, comprising those living in Russia’s two biggest cities, Moscow and Saint Petersburg, can pretend there is no war at all." ---- "Then there is the other Russia, the one you find in small towns and villages scattered across the country’s massive territory. Here, the Ukraine war is a source of patriotic pride,"