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The Paradox in President Trump's Attacks on Big Government and
Globalization
Cal Clark, Auburn University
Evelyn A. Clark, SUNY Oswego
Paper prepared for presentation at the 2017 Conference of the Public Administration Theory Network, University of Wyoming, June 1-4.
1
Donald Trump ran for President on a platform that included
strong denunciations both of big government and of globalization.
The former was a traditional position of Republicans. The
latter, however, challenged the normal stance of business, a
primary Republican constituency, and indeed many, if not most,
Republican leaders. Rather, Mr. Trump actively directed his
appeal to the white working class who blamed their deteriorating
conditions on the forces of globalization which had destroyed
much of America’s manufacturing base; and this group played a key
role in his presidential victory (Cillizza, 2016; Edsall, 2017;
Jones, 2017; Long 2017a, 2017b). Trump was, in fact, the only
presidential candidate who has promised “good jobs” to the less
educated and less skilled who have lost out to the processes of
globalization over the last four decades. This paper analyzes
the Trump initiative to revitalize America’s working class. We
argue that we must first understand the economic changes that
globalization has brought to America. When we do so, the
conclusion seems inescapable that President Trump’s current
attack on big government (Berg, 2017) will almost inevitably
undercut his goal of bringing prosperity back to the working
class. The first section, hence, develops a model for
conceptualizing how globalization has affected the U.S. economy;
and the second examines the Trump program.
2
Globalization’s Impact on America
The 1980s witnessed a revolution in developmental economics
that represented the convergence of two distinct trends. The
first was the growing globalization of the world economy brought
about the tremendous drop in transportation and communications
costs, which allowed the movement of standardized production to
the developing world to take advantage of low labor costs. The
second was the increasing popularity of the tenets of
neoliberalism, which argued that laissez-faire policies were
necessary to promote development through “the magic of the
market.” While the importance of globalization or the economic
and social linkages binding the world together has been widely
acknowledged, scholars and policy-makers disagree vehemently
about whether globalization is inevitable; whether it is, on
balance, positive or negative; who, if anyone, controls the
processes; who are the winners and losers in the fundamental
transformations being wrought by globalization; and what policies
should be adopted in the face of globalization. There does seem
to be a consensus among most of both the advocates and critics of
globalization that globalization and neoliberalism are tightly
intertwined (Dicken, 2007; Harvey, 2005; Mirowski and Plehwe,
2009; Steger, 2003; Steger and Roy, 2010), although recent
3
analyses indicate a much more complex reality (Clark and Clark,
2016).
Globalization -- that is, the substantial growth of
interlinkages among nations and societies -- is generally
considered a process of the postwar era that took off in the
early 1980s, although important aspects of it can be dated back
to at least the 1960s. The predominant connotation of the term
refers to growing economic interdependence (i.e., trade and
capital flows, multinational corporations, transnational
corporate alliances, and even international networks in the
making of specific products) across national borders that
developed during the late twentieth century. Two important
causes for globalization should be distinguished. First, the
transportation and communications revolutions of the second half
of the century have made it possible to ship goods, funds, and
information around the world cheaply and quickly (Greider, 1997;
Thurow, 1992). By themselves, though, these technological
changes would not have created an integrated global economy.
Consequently, a second revolution was vital as well. This is
that national borders have become much more porous to economic
transactions as part of the U.S.-led efforts at creating a
neoliberal or free-trade global economy (Dicken, 2007; Gilpin,
1987; Harvey, 2003, 2010).
4
Globalization, furthermore, has become increasingly central
to economic development in both the developing and developed
worlds. For the last several centuries, development has been
generally associated with industrialization. The nature of
industrialization as depicted in Figure 1, of course, changed
dramatically over the 19th and 20th centuries in terms of what
industry was the most advanced or technological driver: first
textiles, then iron and steel, then automobiles, and most
recently high tech and advanced electronics. In traditional
economies, productivity increases are relatively small, but
productivity and, consequently, GDP growth “take off” (Rostow,
1960) once industrialization starts. In addition, the late 20th
century witnessed the emergence of what Alvin and Heidi Toffler
(1980, 1995) have called the “Third Wave” of massive economic
change. Following the first two waves of economic transformation
in human history (the development of agriculture and the
Industrial Revolution), the Third Wave encompasses a
technological revolution which is creating an information-age
society (Drucker, 1989; Reich, 1991; Thurow, 1992, 1996).
Figure 1 here
The theory of the “international product cycle” explains how
each of various industries in turn spread like a wave through the
global economy. In essence, the international product cycle
refers to the life cycle of a particular good or product.
5
Generally, new products are developed and produced in the most
advanced industrial nations because they involve the latest (and
most expensive) technologies, are produced by very capital-
intensive processes, and require highly skilled production
workers. Over time, however, the production of an item becomes
more standardized and labor-intensive. Consequently, as an
industry (e.g., textiles and apparel) “matures” so that
production becomes highly standardized and labor-intensive, the
product cycle works to diffuse its production to countries that
are not so technologically advanced but which have lower labor
costs and standards of living (Gilpin, 1987; Vernon, 1966).
The impact of globalization upon the economic fortunes of
the United States changed fundamentally during the postwar era.
For approximately a quarter of a century from the late 1940s
until the early 1970s, it clearly promoted economic growth whose
benefits were spread widely throughout American society. During
the 1970s and 1980s, in contrast, globalization began to have
decidedly mixed effects upon America as the country’s basic
industries increasingly moved off shore under the push of the
international product cycle. Renewed growth during the second
half of the 1990s temporarily raised hopes that the emerging
information-age society would lead to greater prosperity.
However, the bursting of the high tech bubble at the beginning of
the new century, the ensuing stagnation in wages and salaries,
6
and the collapse of the Great Recession that commenced in 2008
brought home the fact that the U.S. economy faced serious
problems.
Figure 2 summarizes American’s economic position in the
early postwar era. The top part of the figure shows the dynamic
resulting from America’s being the only industrial economy that
was not destroyed during World War II. This left the U.S. as the
world’s sole economic superpower. In the late 1940s, for
example, the U.S. accounted to 40% to 50% of global GDP. This
dominant position gave America a vested interest in an open
international economic system to promote its exports and the
activities of its multinational corporations and financial
institutions. Consequently, the United States used its economic
power to create laissez-faire international trade and, to a
lesser extent, financial systems, which promoted the growing
globalization of the international economy (Gilpin, 1987;
Huntington, 1988).
Figure 2 here
America’s dominant economic position at the midpoint of the
20th century, of course, reflected its previous “developmental
success.” The bottom part of Figure 2, thus, models the dynamics
of its economic growth from the late 19th century to 1950. The
lower right side of the figure indicates two important
innovations which played a key role in America’s
7
industrialization. First, the United States took a huge head
start over the rest of the world in providing mass public
education. This both created human capital for the rapidly
expanding industrial workforce and hastened the advent of middle
class society (Garfinkle, 2006; Reich, 2010; Thurow, 1992).
Second, Henry Ford’s combination of standard parts and assembly-
line mass production represented an organizational revolution
that transformed America’s (and later the world’s) economy and
society. The tremendous increase in productivity simply swamped
more craft-oriented techniques that utilized skilled workmen.
Within the corporation, the scale of production multiplied; and
corporate entities became huge with the development of
professional management, horizontal and vertical integration, and
the other advantages that large organizations can garner from
applying economies of scale (Chandler, 1977; Piore and Sabel,
1984; Reich, 1991; Womack, Jones, and Roos, 1990). Mass
production revolutionized society as well. The low costs of mass
production also meant that many goods became affordable for broad
segments of the population. Together, rising wages and lower
prices created an increasingly middle class society whose
consumption demands drove industrialization further. Finally,
mass production also fit well with two other aspects of America’s
economy. An extremely rich natural resource base reduced
industrial costs; and a continental market created a huge demand
8
for industrial products. The top half of Figure 3 sketches these
positive dynamics.
Figure 3 here
As summarized in the bottom half of Figure 3, however,
globalization put America’s system of mass production came under
increasing pressure by the last quarter of the 20th century. The
first problems appeared in standardized and labor-intensive
production, which increasingly began to move off-shore to
countries with cheaper labor, starting in the 1960s and
accelerating in the 1980s. In addition, other countries, such as
Japan (Okimoto, 1989) and Germany (Streeck, 2009), had developed
alternatives to mass production that gave them an advantage in
high-quality manufactured products, which America’s middle class
was increasingly demanding. Unfortunately for the United States,
its previously successful reliance on mass production resulted in
a lack of interest and emphasis in creating a highly skilled
workforce, which hindered a strategy of industrial upgrading.
More fundamentally, economic change began to threaten America’s
success in creating a broad middle class. High-paying
manufacturing jobs were increasingly replaced by low-paying
service ones; and the lack of retraining or other kinds of
adjustment policies resulted in downward mobility for a
substantial number of Americans (Greider, 1997; Reich, 1991;
Rifkin, 1995; Thurow, 1996).
9
It is not surprising, therefore, that America has seen many
more challenges than triumphs in the economic sphere lately as
outlined in Figure 4. The workings of the international product
cycle and technological innovations continued to erode the
manufacturing sector. This was exacerbated by the hopes
surrounding America’s ongoing transformation to an information-
age in the 1990s being crushed in the early 21st century. First,
the bursting of the high tech bubble in 2001 struck a major blow
to the sector. Second, the new technologies that had aided the
growing value of knowledge workers turned on them by allowing the
outsourcing of many jobs to much cheaper foreign employees,
leading to the displacement of highly skilled computer scientists
and radiologists, as well as low-skill occupations like customer
service representatives. This made Jeremy Rifkin (1995) appear
prophetic in his argument that the information revolution would
augment the industrial revolution to make productivity so high
that many fewer workers and employees would be needed.
Figure 4 here
10
Trumponomics and the Problems of the Working Class
Overall, the push of globalization has created growing
economic problems for the United States, in particular the loss
of well paying jobs for those without a college education, such
as factory and low-skill service workers and rural residents, who
are now considered the working class in the United States.
Furthermore, as Figure 5 shows, globalization is only one of the
factors that have been squeezing the working and middle classes
in contemporary America. Rapid technological change has replaced
workers with robots and other devices; and improvements in
communications have escalated the out-sourcing of jobs in such
diverse professions as computer programmers and radiologists
(Dicken, 2007; Gillespie, 2017; Smith, 2012; Thurow, 1996). Two
noneconomic factors are important as well. First, business
became much more aggressive and assertive in dealing with labor
and government starting in the 1970s (Reich, 2015; Smith, 2012;
Vogel, 1989, 1996). Second, perhaps in response to business
lobbying, the government has adopted a series of policies that
exacerbated the long-term trends of decreasing the social-welfare
net and of growing income and wealth inequality in the U.S.
(Bartels, 2008; Hacker, 2006; Phillips, 1990; Pierson and Hacker,
2010; Smith, 2012). Taken together, these forces produced a
11
“perfect storm” that devastated much of the working class
(Kallenberg, 2011; Murray, 2012).
Figure 5 here
The growing economic stress on the working class in the Rust
Belt and rural areas has certainly created a serious challenge
for the United States. Table 1, therefore, lists 13 economic
challenges affecting the working class and President Trump’s
responses to them, at least as far as can be ascertained so early
in his term. The first challenge is that globalization and
neoliberalism are promoting the economic changes that have
increasingly marginalized the working class. Here, President
Trump strongly rejects neoliberalism’s advocacy of free trade and
capital flows throughout the global economy. Instead, he views
international economics as a competition among nations, whose
outcomes are shaped by the “deals” that they make with each other
and promises that he will use the U.S.’s economic and political
power to force concessions from other countries. Indeed, he has
roundly been criticized by many economists for this position
(Douma, 2017).
Table 1 here
While President Trump may not be an orthodox neoliberal in
his strategy of using state power to wring concessions from
America’s trade partners, he might well represent the “crony
capitalism” of exchanging corporate donations for favorable
12
government policies (Lewis, 2013). In fact, during the campaign
he argued that his past participation in such practices gave him
the inside knowledge to crack down on them. So far, his actions
as President have sent some mixed signals in this regard. On the
on hand, he has jaw-boned CEOs of major corporations to provide
more jobs, which does not sound like crony capitalism. However,
a variety of other actions are just what would be expected of a
crony capitalist. These include an ambiguous view of conflict of
interest issues, Chinese approval of the Trump trademark,
appointing a large number of rich businesspeople to his
administration, holding a series of meetings with CEOs, and
pushing a series of business-friendly policies including
deregulation, tax cuts, and anti-union policies (Barria, 2017;
Berman, 2017; Frum, 2017; Hakim and Wee, 2017; Johnson and Mui,
2017; Mullen, Isidore, and Todd, 2017; Venook, 2017). There is
little evidence, hence, that President Trump sees crony
capitalism as a problem in the United States.
Likewise, he has not discussed several other potential
economic problems. One is the possibility that America’s
overemphasis on finance may hurt productive activities as
occurred in 20th century Britain (Gilpin, 1987). In America, for
example, the financial sector almost doubled in size from 5% to
9% of GDP between 1980 and 2010. This expansion was partly
stimulated by the deregulation of banking by both the Republican
13
Reagan administration in the 1980s and the Democratic Clinton
administration in the 1990s. This resulted ultimately in the
financial collapse of 2008 that caused massive dislocations both
in the U.S. and globally. America’s large financial institutions
(Wall Street) reached the brink of ruin over the first decade of
the 21st century by engaging in increasingly speculative
activities that, while enormously profitable in the short run,
became increasingly risky and almost sure to fail over the longer
term. One was the increasing use of “derivatives” (securities
based on some other security). A second practice was that
“subprime” housing loans to people who ordinarily would not
qualify for them assumed an unimaginably central role in the
financial system (McLean and Nocera, 2010; Philippon, 2012;
Reich, 2015; Sorkin, 2009; Smith, 2012; Stiglitz, 2010). Trump
has promised to reduce the regulation of the finance industry;
and the deteriorating position of his Chief Strategist Steven
Bannon, the leading populist in the administration, in mid-April
made it more likely that the financial industry will be given
freer rein (Hohmann, 2017; Zeleny and Murray, 2017). Two other
problems do not seem to have made it to the President’s radar
either. First, popularity of the business “low road” strategy
of stressing cost minimization especially in salaries as the best
method of increasing profits has clearly hurt the working class
(Clark and Clark, 2011; Harrison, 1994); and, second,
14
technological advancement has played a substantial role in
American job losses during the early 21st century (Editorial
Board, 2017; Gillespie, 2017; Krause, 2017).
Candidate Trump stridently denounced what he saw as the
faltering economy in the United States, which he blamed on the
policies of incumbent President Barack Obama. As indicated in
the middle part of Table 1, he proposed six policies to stimulate
economic growth and job creation. One was a plan to spend $1
trillion on restoring America’s infrastructure (Campbell, 2017;
Zanona, 2017). The second was a border tax of 20% that would
raise the price of imported items substantially, thereby creating
a strong incentive for domestic production. Third, he actively
jawboned individual corporations to keep their U.S. production
facilities in operation to open new factories and facilities in
America (Graham, 2016). Two other policies were more indirect in
their operations. A massive tax cut for business and the wealthy
would produce more resources for savings and investment in what
is called “supply-side economics” (Nunns, Burman, Rohaly, and
Rosenburg, 2016; Rozsa, 2017); and deregulation would free
business to operate more efficiently and, in particular, create
more jobs in energy sectors, such as coal (Horsley, 2017; Johnson
and Mui, 2017; Pisani, 2017). Finally, the sharp immigration
crackdown promised by Trump would free more jobs for U.S.
citizens, although it was primarily justified by national
15
security considerations (Ainsley, 2017; Graham, 2016; McCarthy,
2017).
Another source of stress on the working and middle classes
is the Great Risk Shift (Hacker, 2006) that has increasingly
placed the burden for health and retirement security on the
individual as the government and business have reduced their
previous support. Here, President Trump has shown some sympathy
to the problem as he has expressed support for Medicare and
Social Security despite the plans of Congressional Republicans to
move toward their privatization. Still, his strong commitment to
repeal and replace the Affordable Care Act or Obamacare (Bade,
2017; Pear, 2017) may well exacerbate the financial problems
facing the working class. A second problem in this area is that
the major reductions in domestic spending included in the first
Trump budget will have a major impact on working-class citizens
(Alcindor, 2017; Brownstein, 2017; Flegenheimer, 2017; Goldstein,
2017; Liptak, 2017; Nunns, Burman, Rohaly, and Rosenburg, 2016;
Shapiro, Trisi, and Chaudhry, 2017; Shear, 2017).
President Trump’s plan to revive American industry is
perhaps unique. Several countries, such as Germany and Japan,
have successfully extended their industrial production by
focusing upon high quality products that require advanced capital
goods and highly skilled labor (Okimoto, 1989; Streeck, 2009).
Trump’s strategy instead is to create good jobs for the less
16
skilled and less educated working class. The Trump strategy,
hence, offers hope to those without a college education who have
especially suffered in the emerging information-age economy.
This raises the question of how effective the Trump model will
be. This is rather uncertain at the moment because of the two
distinct reasons listed in the bottom two rows of Table 1.
First, the efficacy of these policies is questionable in several
respects; and, second, many of these policies are quite
controversial and even have stimulated conflict among a variety
of Trump and Republican constituencies.
Table 2, therefore, lists three prominent Trump policies and
the possible counterproductive effects that they may exert on his
proclaimed goal of generating a large number of good jobs for the
working class. The first policy initiative is to use the border
tax and trade protections to reduce competition to domestic
manufacturers. One potential negative consequence is that
America’s trade partners would almost certainly retaliate. This
would, of course, significantly reduce U.S. exports and might
even include capital restrictions that would hurt the large U.S.
financial industry. Second, a 20% border tax would inevitably be
passed along to consumers, which would hurt the poor and working
class the most. Finally, although less recognized, many domestic
manufacturers import parts and components, even in the key
manufacturing sector of automobiles; so that their viability
17
could be challenged by a large border tax (Confessore and
Rappeport, 2017; Douma, 2017; Gabriel, 2017).
Table 2 here
A second and related Trump initiate is to stimulate the
development or expansion of new industries through a combination
of trade protection, tax cuts for business and the wealthy, and
deregulation. The middle part of Table 2, however, implies that
the success of this endeavor may be limited by four factors.
Manufacturing has become much more skill- and technology-
intensive over the past several decades, thereby reducing the
total number of jobs and disqualifying many working class
Americans for them (Gillespie, 2017; Long, 2017b; Petroff, 2017;
Skoczek, 2017). In another area, Trump’s harsh immigration
crackdown may push some relocation of the high tech industry to
Canada, which would reduce the number of good jobs in America.
Moreover, the sharp cut in environmental protection might not
bring a surge of energy jobs for two reasons. Technology is
reducing the demand for labor in energy extraction; and the
resurgence of coal predicted by the President will be hampered by
the higher cost of coal compared to natural gas and some
renewables (Gillespie, 2017; Isidore, 2017; Krause, 2017).
Finally, business’s “low road” strategy, about which the
President has expressed little concern, continues to reduce, not
improve wages. For example, corporations are contracting out a
18
significant number of functions to temp firms with very low wages
(Porter, 2017).
The final policy included in Table 2 is Trump’s approach to
education, which emphasizes expanding private and charter schools
(Elder, 2017). This may not help the working class much for
several reasons. First, the effectiveness of charter schools
remains controversial (Buckley and Schneider, 2007; Ravitch,
2010). Second, regardless of the quality of the new private
schools that may develop under Trump’s program, most working
class children will remain in public schools. Thus, despite the
fact that high-paying jobs are linked to advanced skills and
expertise, the Trump administration has yet to have any interest
or plan for helping working-class citizens become equipped for
better jobs.
A second obstacle to Trump’s success in promoting the
interests of working-class Americans is that many are quite
controversial; so that their adoption and implementation are not
foregone conclusions. Many of Trump’s policies evoke the normal
cleavage between Republicans and Democrats, being loved by
conservatives and hated by liberals (Abramowitz, 2011; Brewer and
Stonecash, 2006; Brownstein, 2008; Campbell, 2016; Doherty,
Killey, Tyson, and Johnson, 2016). Consequently, they face
strident resistance of Democrats in Congress and opponents in the
general public (Ball, 2017). How effective this will be is
19
debatable, however. The Democrats could block Republican
legislation in the Senate with filibusters which, in effect,
require 60, not 51, votes to pass legislation, but Republics are
already threatening the “nuclear option” to circumvent
filibusters on legislation, as they did on President Trump’s
first nomination for the Supreme Court (Silver, 2017).
Furthermore, at least so far, the Republican leadership appears
disdainful toward the anti-Trump popular movement (LiBianco, Fox,
and Killough, 2017); and President Trump is using threats,
unsuccessful thus far, to pressure Democrats to support the
repeal and replacement of Obamacare (Pear, 2017).
More importantly, perhaps, Trump’s Republican supporters do
not constitute a consistent and unified whole, as a variety of
constituencies or groups exist within the party (Abramowitz,
2011; Baron, 2017; Brewer and Stonecash, 2006; Brownstein, 2008;
Campbell, 2016; Confessore and Rappeport, 2017; Coppins, 2017;
Doherty, Killey, Tyson, and Johnson, 2016; Paletta, 2017; Wong,
2017). Table 3 lists nine such constituencies. Five --
business, religious and social conservatives, deficit hawks,
foreign policy hawks, and the elderly -- have been widely
recognized. Four other Republican groups can also be identified,
although they have been fairly marginal in the party’s policy
discussions until recently. Three of them -- the alienated white
working class, isolationists, and “Alt Right” white nationalists
20
-- along with religious and social conservatives formed the core
the Trump coalition. In addition, neoliberal libertarians, who
often clashed with businesses that wanted governmental support
and favors, became more prominent in the second decade of the
21st century.
Table 3 here
Donald Trump’s ability to mobilize previously marginal
Republican constituencies provided an important part of the
explanation for his victory but also increased the likelihood for
intraparty conflict considerably. Table 4 lists ten important
economic issues with which the Trump administration is dealing.
On only one of them, deregulation which is almost universally
supported by Republicans, is there little, if any, conflict or
potential conflict within the party. The second issue of Trump’s
infrastructure plan faces a strange situation. It clearly would
create a large number of working-class jobs; and it is strongly
supported by both business and the white working class. Yet, it
is now seen as endangered by the opposition of deficit hawks and
many congressional Republicans (Campbell, 2017). For five of the
other issues, there are clear factional divisions among
Republicans. Business and the white working class support
Trump’s managed trade approach, while neoliberals oppose it.
Business actually splits over the idea of a border tax, as
producers like the idea, while retailers do not; and, in
21
addition, the white working class and the Alt Right support and
neoliberals oppose this initiative. Trump’s immigration policies
produce a different alignment that is opposed by business and
supported by the white working class, social conservatives, and
the Alt Right. The relationship between Trumponomics and the
class division is exactly the opposite for Crony Capitalism,
which is loved by business and loathed by labor.
Philosophically, neoliberals should oppose a tight relationship
between business and government, but their pro-business
orientation might make them more tolerant. On the sixth divisive
issue of tax cuts, which are almost universally loved by
Republicans, there is a little split between the conventional
Republican strategy of giving most of the benefits to business
and the wealthy and Trump’s plan to provide more tax breaks to
the middle and working classes. Finally, the last three issues
-- the business “low road model,” anti-union policies, and
cutting domestic spending -- are generally backed by most
Republicans, especially businesspeople and neoliberals. Yet,
there is also the possibility that they could face growing
opposition from the working class if it sees significant losses
from these policies, which is now seen as increasingly likely for
Republican budget cuts (Liptak, 2017) and for Trum’s “delicate
dance” with labor unions (Alemany, 2017).
Table 4 here
22
The Paradox of Trumponomics’ Clashing Goals
Donald Trump, in sum, won the presidency to a considerable
extent because of his promise to bring good jobs for the working
class (i.e., those without a college education) back to the
United States. As the last section sketched, this involved a
combination of trade protection, infrastructure spending, tax
cuts for “job creators” (i.e., business and the wealthy),
deregulation especially in the area of environmental protection,
and a harsh crackdown on immigration. The data in Tables 2 and 4
above, however, suggest that the effectiveness of these policies
remain unclear. Some may well set off counterproductive effects
on working class employment; some may be defeated by political
conflict, both between Democrats and Republicans and with the
Republican Party; and President Trump does not appear to
recognize how good working-class jobs are suppressed by such
factors as business’s “low road” strategy and the lack of
advanced skills and expertise among the working class.
Furthermore, there is, we argue, a more fundamental factor
which undercuts Trump’s goal of improving that status of
America’s working class. This is his seemingly unwavering
23
assumption that he can “make America great again” only by tearing
down the current national governmental structures or in Steve
Bannon’s pithy phrase “deconstructing the administrative state”
(Posner, 2017; Rucker and Costa, 2017). Trump’s commitment to
attack “Big Government,” therefore, explains his selection of
policies and his implicit conclusion that some issues are
irrelevant to helping the working class. This leads Greg Sargent
(2017) to predict that “Trump will likely sell out his working-
class white base.” There is a paradox, in sum, between President
Trump’s attacks on Big Government and Globalization, which will
probably be resolved to the detriment of the working class in the
United States.
24
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Figure 1
CHANGES IN LEADING ECONOMIC ACTIVITYAND THE "S-CURVE" OF PRODUCTIVITY AND GNP GROWTH*
POSTINDUSTRIAL Services SOCIETY harder to increase productivity; greater wage inequality)
High Tech (Flexible Production)
Automobiles (Mass Production & Consumption)
INDUSTRIAL Iron & REVOLUTION Steel
Textiles
TRADITIONAL ECONOMY Commerce, Handicrafts
Agriculture
*The steeper the curve, the higher the rate of growth
36
Figure 2
THE EMERGENCE OF POSTWAR GLOBALIZATION
DEVASTATION U.S. LONE ECONOMIC U.S. PUSH FOR BEGINNING OF POSTWAROF WW II SUPERPOWER IN OPEN WORLD GLOBALIZATION (freer POSTWAR WORLD ECONOMY trade & capital flows)
PREVIOUS DEVELOPMENTSUCCESS
PLENTIFUL CONTINENTAL NATURAL MARKETMASS RESOURCESEDUCATION GREATLY RAPID EMERGENCE OF INCREASED GROWTH MIDDLE CLASS SOCIETY PRODUCTIVITY MASS PRODUCTION INCREASED CONSUMER SPENDING
37
Figure 3
GLOBALIZATION GIVES TO AND THEN STARTS TO TAKE AWAY FROM THE U.S.
U.S WORLD FINANCIAL CENTER
GLOBALIZATION GROWING MARKETS GREAT PROFITS; IN 1950s & 1960s FOR U.S. EXPORTS RISING WAGES; (both manufactures MORE SOCIAL & primary products) WELFARE PROGRAMS BEGINNING OF DE-INDUSTRIALIZATION 1970s & 1980s INCREASED ACTIVITIES OF U.S. MNCs 1970s & 1980s
INCREASED COMPETITION FROM DEVELOPED WORLD
GROWING PERCEPTIONS THAT U.S. USING ECONOMIC HEGEMONY TO EXTRACT MONOPOLY RENTS
U.S. CORPORATIONS BEGIN TO MOVE LABOR-INTENSIVE PRODUCTION OFF SHORE
38
Figure 4
GROWING CHALLENGES IN THE EARLY 21st CENTURY
TECHNOLOGY REPLACES LABOR
LOSS OF MANUFACTURING CONTINUES
GLOBALIZATION TECH BUBBLE BURSTS
ECONOMIC PERFORMANCE, WHILE GOOD OUTSOURCING OF FOR A DEVELOPED NATION, CREATES MANY TECH JOBS INCREASING STRESS AND INSECURITY FOR MANY TRANSITION TOINFORMATION-AGE RISING POWER OFECONOMY FINANCIAL(new technologies) SECTOR
FINANCIAL COLLAPSE OF 2008
39
Figure 5
Factors Squeezing America’s Working Class
Push of Globalization
Technology Advances Escalating Stress
On Working ClassMore Aggressive Business Stance
Public Policies Favoring Business and Cutting Social Welfare Net
40
Table 1
Trumponomics and the Stresses on the Working Class
Economic Challenge Trump ResponseNeoliberalism and Globalization promoting adverse economic change
Rejects neoliberalism and advocates economic nationalism and mercantilism to revive U.S.
Crony Capitalism Doesn’t see as a problem, may well make worse
Finance prioritized over Production
Doesn’t see as a problem, very responsive to financial sector
Business’s “low road” model Doesn’t see as problem, anti-union policies may well hurt workers
Technological unemployment Doesn’t see as a problemStimulate Economy #1 Huge infrastructure programStimulate Economy #2 Border tax to discourage
imports Stimulate Economy #3 Jawboning business to produce
domesticallyStimulate Economy #4 Massive reduction of taxes on
business & wealthy to increase investment
Stimulate Economy #5 Deregulation to reduce burdens on business and promote energy burdens
Stimulate Economy #6 Harsh crackdown on immigration to create more jobs for U.S. citizens
Great Risk Shift #1 Unlike many Republicans, wants to protect Medicare and Social Security, but repeal of Affordable Health Care Act will probably make problem worse
Great Risk Shift #2 Sharp cuts in domestic spending will almost certainly hurt working class
Effectiveness of pro-manufacturing policies Unclear #1
Efficacy of policies uncertain
Effectiveness of pro-manufacturing policies Unclear #2
Political opposition, especially conflicting interests of Trump constituencies
41
Table 2
Counterproductive Possibilities of Trump Policies
Policy Possible Counterproductive Effects
Border Tax and Trade Protectionism
Trade partners retaliate, hurting exports and perhaps financeBorder tax hurts consumersBorder tax hurts component importers
Stimulate New Industries, Even If Successful
Manufacturing now more skill- and technology-intensiveImmigration crackdown may drive some high tech to CanadaTechnology limits job creation in energy extraction, especially coal “Low road” business practices bring more low-wage jobs
Emphasis on Expanding Charter Schools in Education
Effectiveness controversial
Many, if not most, working-class students will remain in public schoolsHigh paying jobs tied to skills and expertiseNo plan to make working class equipped for better jobs
42
Table 3
Republican and Trump Constituencies
Previously Seen as Key ConstituenciesBusinessSocial & religious conservativesDeficit hawksMilitary hawksElderly
Previously Seen as More MarginalNeoliberal libertariansAlienated white working classIsolationists“Alt Right” white nationalists
43
Table 4
Republican Divisions Over Trump’s Economic Policies
Issue Pro-Trump Anti-TrumpDeregulation Business
NeoliberalsMost Republicans
No Republican Constituency
Infrastructure BusinessWorking Class
Deficit HawksMany Conventional
RepublicansManaged Trade Business
White Working ClassNeoliberals
Border Tax ProducersWhite Working ClassAlt Right
RetailersConsumersNeoliberals
ImmigrationCrack Down
White Working ClassSocial ConservativesAlt Right
Business
Crony Capitalism BusinessNeoliberals???
White Working Class
Huge Tax Cuts,Primarily for Business & Wealthy
BusinessNeoliberalsMost Republicans
Trump wants more tax breaks for middle and working classes
Business “Low Road”Strategy (cut wages & costs)
BusinessNeoliberalsMost Republicans
No Republican Constituency now but bad effects could mobilize White Working Class later
Anti-Union BusinessNeoliberalsMost Republicans
No Republican Constituency now but bad effects could mobilize White Working Class later
Cut Government Services
BusinessDeficit HawksNeoliberalsMost Republicans
No Republican Constituency now but bad effects could mobilize White Working Class later
44
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