The Left, Brexit, Trump and the Future of Political Economy

Outside of Canada, the last year has not really been kind to progressive politics and ... even in Canada ... there are signs of worry. No one is going to defend -- or, no one who thinks of themselves as a progressive individual (see earlier blogs for what this might mean) -- can or should defend the British Conservative Party nor the current incarnation of American Republicanism. Both have become more stridently extreme. Both have stripped away the veneer of respectability in politics to pander to very base ideas. And, if left in power very long, both will wind up causing just tonnes of problems.

This said, one might ask: what can we learn from these developments? There are, I want to contend, important lessons for progressive (or, leftist) thinkers in these developments because the success of more extreme right wing politics is, simultaneously, the failure of progressive politics.  Most commentary -- at least the stuff I have read -- has focused on explaining why Trump or Brexit occurred. The general conclusion -- for good or ill -- involves a combination of factors that amount to strategic miscalculations one the part of party establishments or moderates or the general public. I strongly suspect that large sections of the US and UK population will, very shortly, have a serious case of buyer's remorse but in the meantime learning only this lesson is detrimental to progressive politics because it is about how to win elections. And, again for good or ill, progressive movements have been not bad at this. I know ... I know ... progressives have not gotten all they wanted. But, they managed to elect Obama to two terms despite intense reactive racism in the US; they got rid of Harper; kept the Labour Party in power in Britain for years. The record, overall, is not all that bad.

The problem progressives have is that they often don't know what to do with power when they get it. (Now, to be honest, it seems the British Conservative Party has the same problem.  They didn't like Labour governments but once they had settled in ... well ... what came next never seemed very clear. There is a standard script -- cut taxes, talk about people getting soft, say environmentalism has "gone too far" -- but, we have all heard that a bunch of time and ... seriously ... how much lower you gonna cut taxes on the wealthy? How much less can they pay? How much less environmental protection can one actually have?) And, this is where the left can learn from Trump and Brexit.

One of the odd things about the election of Trump and about Brexit is that the left was left (ha ha) holding the bad of the old right. The left never supported neo-liberalism and campaigned long and hard against it. Organized labour railed against free trade, said that the working class would pay the price for multinational corporation super profits, indicated that mobile capital created a race to the bottom in terms of environmental protection, etc. Said differently, progressives were always the ones who said that government needed to rethink (or, renegotiate) NAFTA and who said that there was nothing wrong with protecting domestic markets to ensure high employment rates, and that one did not need to embrace globalization (in the form of the EU or of NAFTA or the TPP) in order to have a vibrant economy. So ... how did progressives end up fighting a rearguard action in favour of the very policies they opposed while right-wing populists scooped up victories adopting leftist ideas about putting big business in its place?

I recognize that this right-wing populism was mixed with a lot of racism. Said differently, right-wing populists were able to mobilize a racist language about (in the US) Mexican "stealing jobs" (when in reality it was American corporations in their quest for super profits who were creating the rust belt) but ... you see the point. One need not embrace racism to be concerned about the fate of working people and to raise questions about neo-liberalism. Indeed, most progressives I know raised precisely these questions and were vibrantly anti-racist. And, here is the thing, in theory, progressive thinkers raise concerns about neo-liberalism all the time. In practice, in government, running the show, they tend to make their peace with it. This is the lesson that progressives need to learn. Why make peace with the very thing that you oppose? Is this a case of "only Nixon could go to China"?

Maybe. Right-wing populists can talk tough to big business in a way that progressives no longer can (and, in the US, maybe have not since the days of Kennedy) because they know that the right-wing media will not mobilize against them, in the US Tea Party activists will stay silent, Fox News hosts will have nothing to say, and that the moderate mainstream media won't do a very good job reporting this and so will do one of their standard "some people say this; some people say that" reports. Progressive politicians, in other words, have been worried about a bad media, about protest, and about business reaction. If Obama or a Labour PM had raised questions about NAFTA or the EU, the right would have been all over them. Fox would have predicated a  disastrous recession; would have talked about  "government over-reach", would have explained the price consumers would pay for "special interests." I recall FTA reporting of US Democrats who raised questions about free trade. One right-wing journalist calmly explained that if Democrats had been in charge of lightbulbs, we would still be using candles to protect unionized candle makers. Nothing of this sort has gone on in opposition to British Conservatives and American Republicans raising similar types of concerns.

But, there is more than biased, two standards media spin going on here. For a variety of complicated reasons progressive, moderate, reformist, and leftwing thinkers embraced internationalism and globalization but in the process became heavily confused about it. They embraced it because they wanted to win elections and felt that they wouldn't without it, but they embraced it because they really were committed to internationalism and, on one level, you can see why.  Progressive internationalism involved evening out standards of living (improving economic development) in marginalized economies; diversity at home, respect for difference and acceptance of refugees, among other things, including finding ways to address common international problems (human rights, climate change, e.g.). Said differently, moderate (Democrat) and progressive (Labour) leaders confused neo-liberal globalization (bringing down barriers to business) with a different form of globalization that approached issues from a humanistic and ecological perspective. Defending the latter became defending the former but ... it actually ain't really so. And, in the process, in the wake of this confusion, centrist and left-wing politicians were left holding the bag for policies about which they were -- or, should have been -- deeply suspicious.

Let me give you an example: Hilary Clinton  was, more or less, silent on the issue of NAFTA. Instead, she focused on another job-creation strategy. This strategy might have made sense. I don't actually know because I didn't investigate it. She could have maintained this strategy but she also should have taken aim at NAFTA and, I think, she could have done so in a way that did not "scapegoat" Mexicans. I think a lot of Bernie Saunders' popularity arose from the fact that he did precisely this.  The Democrats could, for instance, have pointed out that Mexicans did not "steal" jobs, rich people elected to move companies south of the border. They could have argued that this is a reason to strengthen the labour and environmental side agreements to NAFTA. They could have argued that this is a reason to better regulate business. Said differently, instead of keeping (more or less) silent on the issue while taking about the importance of international openness (which is a good but vague thing), Clinton and other Democrats could have pointed out that it is the very weakness of these agreements that harms both Mexican and American workers. Strengthening them would allow for higher wage rates and better environmental protection. Regulating business -- say, the mobility of plant and capital -- would allow for public good assessments of relocation and whether or not they are actually needed. It would have allowed and open and needed discussion on this issue: how much profit is enough? After all, if a company is leaving Ohio or Michigan or Missouri to make *more* money elsewhere ... should one not discuss exactly how much money one should be making? Surely, in a day and age of widening income gaps such a question is of some importance?

Said differently, the new right (let's call them that) has caught moderate, progressive, leftist politicians by surprise. The new right is deeply unpopular with some sections of the old right but that does not matter too much. Perhaps, in fact, moderates and leftists made too much of the dislike of, say, Republicans for Trump or British Tories for Brexit. The success of this new right, however, highlighted a problem with the political centre and left. Instead of demanding changes to international trade agreements, they missed an opportunity to shape discourse and, in the process, it took on nasty racist tones. As Labour and the Democratic Party rethink their politics, they would do well to bear these points in mind.

The Bloom and the Rose II: The Culture of Trump's Economics

Some time ago -- before I got distracted by religious schooling and free tuition -- one of the things about which I was writing was Donald Trump. I don't mean my comments as a critique of Trump.  There are a goodly number of those already and I don't really have much to add to them. This video is actually rather good and if you are interested in a thoughtful critique, I'd recommend that you start here.

In my last post on Trump, I tried to make two points.  The first point I tried to make was that what is interesting about Donald Trump is not Donald Trump. Some people are enthused by what he says; others frustrated, upset, or worried about it. In this blog I am suggesting that we see it as political theatre that provides a window into an evolving dynamic of American culture. Trump is important for what he says, and I will get to that in this blog at some point in time. To say things are political theatre is not to minimize their importance. They are important, but I'll address that in a future blog. What I mean is that Trump is not the author of his own "success." Instead, he represents the culmination of a series of historical and cultural trends. One of those trends, I tried to argue, (and this is the second point) is a certain syncretism that marks an evolution of American Christianity. I went into that in detail in my last blog and so won't repeat it here. What it means, in short, however, is that Trump does not have to win the support of evangelical leaders in the US (as some news stories have suggested) because he already has that support. A high profile conservative evangelical or two might object to Trump but large numbers of "rank and file" do not. They are not concerned about his lifestyle, his approach to marriage, his lack of knowledge of scripture, and a mea culpa or two on his supposed support for women's right to choose will be all that is needed on that front. Why? Because Trump's ideology may indeed be inconsistent with Christianity (for instance ... loving your neighbour, caring for the poor, loving money, being slow to anger, etc.) but it is not inconsistent with the syncretic religion that calls itself Christianity in contemporary America.

(Proviso that can be skipped: I hasten to add, that I am not criticizing this religion. I support freedom of religion and I'm Canadian so the degree to which I should intervene in American public life is limited. After all, Canadians don't appreciate it when Americans tell them what to do with their government  and I don't want to flip that over and start  telling Americans what there business should be. I am, instead, analyzing American public life using Trump as a prism to try to understand where it now stands.)

What I would like to do in this blog is shift ground and look at Trump's economics. My goal here is not to review economic theory or debates in economics but, again, to conduct a cultural analysis that points to its appeal among a certain section of the US population. What is that appeal? It is,  I think, encapsulated in Trump's assertion that he can cut a deal with the US's creditors to lower the debt and hence free up money to do things with. Now, on the one hand, this is an interesting idea. It hasn't worked well for Greece but ... its not a new idea: international debt restructuring. Its merits aside, however, why does this appeal to people?  It seems to me that there are a couple of reasons.

First, it appeals because most people -- perhaps including Trump -- don't understand the US debt. Debt is often incredibly poorly understood because it is put out there either as (a) a boogeyman to be avoided at all costs or (b) not a problem. It is, in fact, neither. The US debt, in my view, is too high and the US should do something about it, provided that is done in a fair and just way. But, this is precisely the course of action that the US has not taken. As US debt has skyrocketed, in fact, the US has done the opposite of what it should so. It continued to outpace the rest of the world (almost combined, I think) in military spending. Its cut taxes, particularly on the rich, refused to regulate the very capital markets that caused the latest economic downturn, and its tried to find ways of squeezing surplus revenue out of those who can least afford to have that surplus revenue squeezed out of them: poor people, sick people, unemployed people.

Donald Trump has, of course, been a master of this and, in this regard, he represents -- which is why I am talking about him -- precisely that trend in US economic. He has substituted real things (businesses that make things) for businesses that don't (get rich quick schemes like Trump U) or "reality" TV shows that substitute an artificial voyeuristic culture peeping in on the rich and famous for real life. I'm not at all surprised that Trump made a good showing for the US Republican nomination precisely because he represents this cultural trend so well because he is part of it (although, I am surprised, but not in retrospect -- which I'll get to -- that he won). His economics, in this sense, are the economics of easy answers: of take this course and get rich or win a contest and get rich. They are the stuff of dreams and I think this is important because we need to ask whose dream and why?

None of Trump economics, however, have much to do with actual debt and actual work or even actual economics. Watching an apprentice get fired on a reality TV show is not the same as being an actual apprentice or losing one's job. Likewise, taking a get-rich-quick course (and late night TV used to be littered with these but with Trump U they went mainstream) is not the same as getting rich. In fact, get-rich-quick schemes may impede security in wealth. Why?

Ask yourself this: what do get-rich-quick schemes sell? They don't actually sell you wealth. They take your wealth and sell you a promise that if you do X, Y, and Z, you will become wealthy or at least have security. They do so, often, in a very simplistic way: everyone can do this is usually one of the tag lines (or, what the rich don't want you to know). They are often also littered with cliche-ed expressions like "dream big" "take risks" "dare to be successful.," as if the problems with income security were a lack of dreams.  This stuff, of course, works because the person taking the course or buying the scheme thinks ... I can dream; I can dare. But -- and this is the punchline -- how does the person selling the get-rich-quick scheme actually make their money?  They make their money whether you -- the person buying the scheme -- gets rich or not because they are not selling you wealth. They are selling you the scheme. And, that is what they make their money on. Does the scheme work? To the buyer, this is -- or, should be -- an important question. To the seller, it is technically irrelevant. The person selling you (or, me) the get-rich-quick scheme might want you to get rich but it is not necessary because they have made their money off you already.

Why is this important to Trump economics? It is important because it highlights one of the problems that is associated with the cultural perspectives on economics that bring us to Trump: a confusion of fantasy for reality. The idea that wealth is just out there, somewhere around the corner, if you just have the will to go after it, animates those who bought into Trump U and the economics that Trump highlights. In what passes for economics in his speeches, he talks about cutting deals and being tough and forcing others -- bending them, perhaps -- to one's will. He knows how to do it, you just have to trust him ... as thousands of Americans every year trust get-rich-quick schemes.

The second thing to note that follows from the first -- the confusion of fantasy and reality and the drastic simplification of economic issues -- is the idea that a get-rich-quick scheme can save the US. All that is needed, say with regard to national debt, is the right deal. In effect, this line of argument says "we all know what the problem is. We just need the right deal to make it happen." But, that line of argument actually confuses the problem and builds on xenophobia. For one reason or another, Americans have become preoccupied with China and their debt and Chinese business interests do own a good chunk of the American debt but ... not that much. The figure is likely somewhere around 10%. The vast, vast majority of the US debt is owned by ... Americans.  It is convenient to fault the Chinese -- an international rival against whom there are long-standing prejudices in American culture -- for the problems that beset the US economy but it would not be true. Somewhere between 2/3rds and 70% of the US debt is owned by Americans. Cutting a deal with China, in other words (or, in Trump's language forcing them to accept a deal) would only deal with about 10 cents on the dollar. The only debt holder of US debt large enough to make a real difference for the US economy is Americans. So, the truth of the matter is that a deal has to be cut with Americans, something that is conveniently not discussed in discussions of the US debt.

But, for the sake of argument, let's say that Trump is right, and there is a deal to be made with American creditors, what would happen? Imagine that Trump decided -- allowing he was US President -- to pay back only a percentage of the US debt, say 85%, which is the figure I think he mentioned. What that means is that Chinese business (or, perhaps even the state) interests would take a 15% hit on their investment, but ... so would a lot of Americans. Retirement funds, education savings, health care funds, life savings ... my guess is that we'd find a great deal of these things are actually invested in US debt. (For instance, if you or a member of your family ever bought a Canada savings bond -- they are sold through my workplace -- you own a chunk of the Canadian debt. Same in the US.) What happens then? The average middle class person who works 9 to 5 suddenly discovers that their retirement is worth 15% less; their children's educational funds are worth 15% less; they have 15% less in the rainy day investment and in the money they set aside in case they were ill. Said differently, the medicine might be worse than the disease. The only people Trump's economic policy stands to hurt is the very people who seem to be, oddly, lining up to vote for him.

What is my take-away point? Several. Trump's economics make sense because they hit a particular set of cultural values in the US. They confuse fantasy with reality, suggest that there are really simple answers "out there," blame foreigners, and potentially harm the very people supporting him. Its an odd set of cultural and political processes that is predicated, ultimately, by a serious lack of knowledge that relates to economics.