First, a brief theory of the history how we got here.
After World War 2, the United States had the only functional industrial base. It set up a global free trade framework, including the World Bank and the IMF. The basket of goods for the American worker (in particular, 40 hour work weeks, health care, and pensions) were established in this period. Free trade and capitalism were quickly embroiled in the Cold War, and so went the next fifty years.
If you have capital, however, you can improve profits by moving production to areas that are cheaper (read: lack benefits for workers). And so, after the post-war economic glow, the slow growth of other countries and the erosion of worker benefits and stability in the United States. For more reading on this topic, I would suggest the excellent The Big Squeeze by Steven Greenhouse.
The natural inclination of Americans to individualism and a fear of government programs (communism! socialism!) exacerbated this erosion. The dream of most Americans is not a good government job, it’s to run a business.
From Reagan on, globalism and free trade have been the hallmarks of both major parties in the United States.
Most significantly, both parties have effectively told workers in the United States that the erosion in power is effectively their fault, and told them to “fix themselves.”
Skills out of date? Go to college. Can’t afford college? Take out a loan. Oh, wait, $1.48 trillion in debt across 44 million borrowers?
Work if you want healthcare. Can’t work? Well… if you are poor, we’ll help out. If you are rich, you can afford it. If you are middle-class, well… get a job. We’ll fine you for not having health care.
The final straw for both parties and globalism was the feeling that the government was not only not helping workers in the United States, but rather actively helping to transfer work overseas — or bring in immigrants. The model for immigrants effectively boiled down to, “well, we’ll let you come here illegally. You can pay taxes, but you won’t get benefits. You can compete with locals for jobs (we don’t care about that), but we will deport you if you get out of line.” Either go home and starve, or stay here as a sort of indentured servant, constantly in fear of deportation.
That took too long. Sorry about that… but it’s a framework for starting to approach things.
Trump lied, repeated, about fixing all of this. As of this writing, the main thing that has passed is a massive, deficit-financed tax cut, a ban on immigration from a few countries, and what can only be described as a terror campaign on Mexicans.
So… what do to about this? The broad framework of globalism and international trade has (and does) bring about wealth on an unprecedented scale. But untrammeled globalism and free trade bears in it the seeds of destruction — cheaper goods don’t matter if you, personally, can’t pay for shelter, food, healthcare, and a family.
…cheaper goods don’t matter if you, personally, can’t pay for shelter, food, healthcare, and a family.
In the Great Depression, FDR championed (and passed) a variety of social programs, with a fundamental goal of moderating the worst pains of capitalism to save it.
To save globalism, there has to be a new deal for workers. Here are some ideas:
- Tariffs on countries that do not meet minimum standards for human rights, including health care and pensions.
- Employer-based fines for hiring illegal workers.
- Universal health care for all US citizens.
- Radical investment in renewables in the United States, combined with a massive set of tariffs on foreign petroleum products. Due to the vagaries of the global market, it’s almost impossible to ban or put tariffs just on the bad actors.
- Ponder a tax on capital, not on income. At a minimum, cut income taxes to nothing higher than capital gains. If you care about long-term inequality, capital is the relevant issue, not annual income. Figuring out something that is generally regarded as fair is the hard part.
- Broad, universal programs are the way to go. The more targeted the program, the more “efficient,” but the less political appeal. Basic income is going to be a big part of this conversation.
“Like now, but with a few new narrow programs targeted at a certain group of people” is not a recipe for political success in 2018 or 2020.
This idea — big changes and moving away from unfettered globalism — is what led to the seemingly bizarre “I’ll vote for Trump or Bernie, but not Hillary” voters.
Trump promised the moon — healthcare reform, entitlements, and more — but is a bit… hazy… on execution of anything that’s not either a) tearing things apart or b) a cruel, brutal take on immigration.
A candidate that can promise real protection from the brutal aspects of globalization, has the focus to actually deliver, and isn’t racist?
That’s a winner.