A Trump Presidency begins

There has been much concern, both inside and outside America, at the result of the American election – but it is now a fact that has to be lived with.  It is time to look forward.  Many people were taken by surprise, but there were warning signs in the depth of feeling expressed by angry American voters and in Hillary Clinton’s failure to connect with them.  Donald Trump’s success came despite a campaign focus on personalities.  Both candidates were unpopular.

Donald Trump’s victory came from his handling of three key themes: anxiety over the loss of jobs to globalisation, resentment against a neoliberal political class that has placed the interests of rich people above those of everyone else, and latent racism in the so-called ‘alt-right’.  The election of a non-politician is a slap in the face for the political establishment.  Donald Trump presented his candidacy as self-financed and he was clearly distanced from the Republican Party (although he was its nominee).

He now needs a chance to deliver on some of the economic promises he made during the campaign.  His commitment to spend $500 billion on infrastructure would create jobs, but he might find that his ideas on protectionism would result in retaliation, inflation and ultimately a loss of jobs.

He needs to avoid some of the obvious dangers inherent in the racist passions that he awakened.  It is to be hoped that the very real risk of fascism can be averted.

Donald Trump cannot reform the political establishment, which needs to reform itself to regain legitimacy and support.  Congress is tainted by its dependence on wealthy donors, who have used their influence to become even richer – as described in Richard Hasen’s book, Plutocrats United.  If politicians want to recover their credibility, they need to reduce their dependence on political donations; they should completely change the rules on campaign financing.  And both political parties need to regenerate themselves and define policies which will be acceptable to the electorate.

Naomi Klein has articulated her vision for reforming the Democratic Party.   Her antipathy to neoliberalism – the unqualified supremacy of commercial interests – would gain the approval of those who have been damaged by it.  Mariana Mazzucato’s essay, on “why it’s time for progressives to rethink capitalism”, also has ideas on what can be done.  The party needs to recover the support of working people.

Republicans also need to find a way of recreating their badly-fragmented party, whilst improving the position of the poor.  For example, Milton Friedman’s libertarian vision of a flat tax combined with a ‘negative income tax’ would guarantee benefits for the poor whilst preserving an incentive to work; it would close many tax loopholes for the rich, would be transparently fair, and could be compatible with Trump’s promise to reduce corporation tax.  With a Republican Congress, Trump has a golden opportunity to transform America’s broken tax system.

The two parties cannot afford to ignore their loss of support.  They would naturally come up with different policies, but they should nevertheless be able to reach agreement on some necessary measures; American Presidents of both parties have historically increased the minimum wage, for example.  American voter anger must be addressed, to avoid a descent into chaos.

Hillary isn’t reaching people

Politicians ought to be better informed than the average person on the issues of the day, but that does not give them the right to despise the people they are elected to serve.  Many politicians are comparatively rich, well-educated and clever – but that puts them at risk of failing to understand how a lot of people think and how they live their lives.  No one can take good decisions on behalf of the population without having some degree of empathy towards it, and ordinary people understand that; they vote for politicians who seem to sympathise with them.  Hillary Clinton is in deep trouble by not seeming to relate to people and their problems, particularly after her unfortunate outburst that described many Americans as ‘a basket of deplorables’.

Nigel Farage understands this.  In an interview on the Fox Business Network, he drew the parallels between the American presidential election and Britain’s recent EU referendum.  Farage had been successful in persuading the British people to vote to leave the EU – a ‘Brexit’ – despite an enormous amount of authoritative advice to the contrary.  That advice had been given in a tone that seemed remote and unsympathetic, whereas he regularly appeared with a pint of beer in his hand and said things which resonated with many people.  The criticism he received from the mainstream media, for his attitude to immigration, seemed to prove that he understood the issues and that most politicians didn’t.

The similarities between Nigel Farage and Donald Trump are obvious, and the two men support each other.  Both are populists and are successful practitioners of what has been termed “post-truth politics”: reaching people’s emotions and reinforcing deep-seated prejudices.  Farage claimed that Hillary is “in for a big shock in this American campaign” – and he’s very probably right.  Hillary’s criticism of Donald Trump and his supporters was a big mistake; it just reinforced the impression that she was a member of the political elite who doesn’t understand how most people feel.

Hillary Clinton has a serious image problem.  As Farage said, “people are tired of being sneered at by out-of-touch political elites”.  Her only way of connecting with people at an emotional level is to appear statesmanlike and experienced; it is a big mistake to descend to the level of the Trump campaign and try to trade insults with him.  She should draw on Bernie Sanders’s success, acknowledging his influence so that she attracts his supporters, and propose measures that clearly address the concerns of angry American voters – as previously described on this website.

Angry American Voters

The 2016 American primary elections have revealed considerable popular discontent and resentment towards the political class.  Both Bernie Sanders and Donald Trump got lots of support from angry anti-establishment voters.  Despite significant economic growth in the last few decades, many people suffer hardship whilst others prosper grotesquely.  There is a growing realisation that politicians, in seeking political donations, have aligned themselves to the interests of the wealthy – so many people blame the political establishment for their problems.  Others blame their problems on immigrants and globalisation.

Trump hasn’t been part of the political establishment.  He seems to be offering solutions to people’s problems: he has pledged to build a wall against Mexican immigrants and he has advocated protectionism as a way to defend jobs from foreign competition.  In reality, anti-immigrant rhetoric could result in hostility towards the millions of Hispanics and Muslims who are already well settled in America; this would lead to a rise in hate crimes – which rose 57% in Britain following the similar rhetoric used in the recent campaign to leave the EU.  And protectionism destroys jobs, as it did with America’s tariffs on Chinese steel.  Trump’s ‘solutions’ are unworkable and would not benefit people.

In a representative democracy people elect politicians to understand complex issues, to speak for them and to govern.   Populist politicians with siren voices, though, can lure people to follow paths to disaster – ignoring complex realities to seek apparently easy solutions.  Donald Trump is now in a strong position to win the American presidency, being seen as a strong and successful individual who financed his own election campaign and who offers to magically solve people’s problems.  The condemnation of senior politicians merely adds to his credibility as a champion of ordinary people.  Since Hillary Clinton is seen as part of the political establishment, supporters of Bernie Sanders might vote for Trump rather than for her.

The presidential election is now largely a contest between Trump and Clinton.  Neither candidate is hugely popular.  Trump has antagonised many voters with some of his more outlandish statements, but his anti-establishment stance and populist pledges might yet succeed in winning him the presidency.  Fortunately, though, the American political system was designed with checks and balances, so Congress could prevent some of the damage he might otherwise do – but he might not address any of the real problems either.

Since criticising Donald Trump just strengthens him in the current political climate, Hillary Clinton would do better to ignore him and focus instead on concrete measures to address people’s concerns.  Carefully-constructed arguments alone are not going to persuade people to support responsible politicians; positive messages need to be delivered with passion and emotional appeal. She might then win the Presidency, which would be the best outcome for America.

Even if she wins, though, her hands would be tied if Congress opposed every initiative.  What is also needed is for the politicians in Congress – whether Republican, Democrat or Independent – to be elected on more moderate and responsible platforms.  The recent political posturing, trying to score points off the other party, needs to be put aside.  The country needs politicians of all stripes to work together to fix some of the problems which have caused the popular discontent.  Otherwise there is a risk of American politics sinking into yet further disrepute.  Politicians need to tackle several issues:

At a minimum, they need to pledge to overhaul campaign financing to reduce the influence of money in politics – so that they are accountable to the population as a whole, rather than favouring wealthy donors.

They need to overhaul the tax code, so that the rich pay at least the same percentage tax as the middle classes.  The Active Financing Exception, which allows wealth to be hidden overseas to avoid paying tax, needs to be quashed.

Improved productivity is better than protectionism as a route to full employment, so wealthy people need to be incentivised to invest in real industries rather than hiding their money or speculating.

People need to be reminded of the benefits of free trade.  Protectionism increases consumer prices and costs jobs in the rest of the economy.

America is a nation of immigrants.  Immigration needs to be better managed, to streamline the legal way of entering the country; there would then be less incentive for people to try to enter illegally in future.  Border security needs to be tightened, but an amnesty is needed for some of those who came in illegally but who have contributed to American society for several years.

Poverty can be reduced with an increased minimum wage and some income support.

None of the measures suggested above is inherently exclusive to either Republican or Democrat values, although the two parties would place different emphases on them.  The American Constitution envisaged negotiation between the members of Congress to develop solutions for the benefit of the population as a whole.  Whoever becomes President, Congress should aim to constructively serve the American people and give them less cause for resentment.

Populism

Widespread public discontent is seen as an opportunity by populist politicians; they can amplify people’s concerns and promise change as a means of gaining support (and the power that goes with it in democracies).  Dissatisfied people can be tempted to follow anyone who offers change, but the tragedy of hopeful voters is that they can be led in directions that seriously damage their future prospects.  There is a real risk of this happening in both Britain and America this year.

In Britain, the EU referendum has allowed some politicians to capitalise on public concerns about immigration and low wages.  Those who advocate Britain leaving the EU, a ‘Brexit’, are offering a utopian vision of a proudly independent Britain somehow doing better than it does now.  The government, though, has described the four possible ways for Britain to trade with the EU if it were no longer a member, showing how each is inferior to current arrangements.  Iain Duncan Smith has airily dismissed this as a “dodgy dossier”; he asserted that Britain would develop new trade relationships that would transcend all existing ones.  He didn’t say how this could be done.

The British people need to be reminded how well they have done since they joined the EU.  Rather than running away, Britain should try to work more closely with its European neighbours for their mutual advantage.

In America, where there is public concern about jobs, Mexican immigration and Islamic terrorism, Donald Trump has become very popular; he advocates economic protectionism, which is the disastrous policy that led to the Great Depression in the 1930s; he has said that he would build a wall to keep out Mexicans, which sends a nasty message to anyone of Hispanic descent; and he is mobilising public opinion against all Muslims (not just ISIS), so he risks stirring up communal violence with America’s Muslim population.  Hopefully he would be soundly beaten when it comes to the presidential election, but that would not be the end of America’s problem.  If large swathes of the population are disaffected, other politicians may try to emulate his populist tactics and a hostile Congress could prevent the next President from doing anything constructive.

Populist politicians may truly believe that merely by seizing power they can benefit the people.  A Brexit, though, would do irreversible damage to Britain’s prospects and the American people would not be well served by another four years of political stalemate.

The US and Cuba

Both Americans and Cubans would benefit from a better relationship between their two countries – but Congress will probably prevent this, to judge by Republican reactions to Tuesday’s handshake between Presidents Obama and Raul Castro at Nelson Mandela’s memorial service.  Yet again, politicians are not working in the interests of ordinary Americans.

John McCain criticised the handshake, making the wholly inappropriate remark that “Neville Chamberlain shook hands with Hitler”.  He was attention-seeking and posturing.  Cuba does not represent a security threat to either America or its neighbours, and it is against America’s interests to needlessly antagonise Raul Castro by comparing him to Hitler.

From an economic perspective, both countries would benefit from an end to American sanctions.  They are hurting the lives of ordinary Cubans, and estimates of the sanctions’ annual cost to the US economy “range from $1.2 to $3.6 billion”.  Neighbouring countries should be prime export markets for each other.

Politicians impose sanctions to make themselves look right-minded and decisive.  In practice these sanctions strengthen Raul Castro’s grip on power by enabling him to blame America for the state of Cuba’s economy and giving him the political legitimacy of a leader who is struggling against an external enemy (6.3.6).

If American politicians were really trying to serve the interests of ordinary Americans they would stop posturing and start to negotiate with Cuba:

    • America’s security would be better served by using soft power‘ within the context of normal diplomatic relations.
    • Americans are indignant about the imprisonment of the American aid-worker Alan Gross, who was arrested in 2009.  The most likely way of freeing him is through diplomatic negotiation.
    • Cuba has rightly been criticised for its human rights record, but the best way of applying pressure would be through negotiation – perhaps offering the loosening of sanctions as an inducement.

Instead of criticising President Obama for shaking hands with Raul Castro, Americans should be applauding any sign of a long-overdue improvement in relations between the two countries.

Reducing Inequality

The Pope’s Exhortation (pp. 44-51) has highlighted the immorality of the growing inequality in today’s society.  The content of his message should resonate with all Christians, not just Catholics, and with many other people who care about their fellow beings.

Political pressure groups, such as the Occupy Movement, and religious leaders like the Pope can influence public opinion and create a surge of popular support for a reduction in inequality.  For any change to happen, though, it has to be possible for people to vote for it – which means having politicians standing for election on a platform of commitment to a programme of specific actions to reduce inequality.

Several approaches have been suggested to reduce inequality:

  • It would be helpful to ensure that wealthy individuals pay their fair share in tax.  Mitt Romney, for example, paid 14.1% tax on an income of $13.7 million whereas many people in employment pay a higher percentage of tax on their (much lower) incomes.  This means fixing the tax code.
  • Concerted action is needed to make corporations apportion their profits according to their sales in each country; it is currently too easy for them to avoid tax by manipulating where profits are declared.
  • Tax alone, though, does not solve the problem because it polarises society between a small group who pay a substantial amount in tax and a large group who pay little or no tax – either because their earnings are low or because they are unable to work.  The currently fashionable theory of ‘trickle-down’ economics has led to an enormous gap between rich and poor and mutual resentment.  The Pope quite rightly criticised this now-discredited theory and called for change.  A new narrative is needed, which does not so obviously benefit the wealthy and which more clearly benefits the nation as a whole.
  • Everybody (including corporations) would be better off with ‘middle-out’ economic growth, where a better-paid middle class creates stable economic demand as it spends its money (in contrast to the wealthy, who gamble their excess money on the financial markets and create instability).  Such a bottom-up engine of economic growth will only develop if the proceeds of wealth creation are more equitably divided between ordinary workers, directors and shareholders.  Changes in corporate governance are required (3.5.6).

Change will not come about, though, while big money exerts such an influence over politicians and while election results are affected by huge advertising budgets.  The US Supreme Court’s Citizens United decision needs to be reversed, so that politicians can no longer be bought with huge sums of money.  Until this happens, both Democrats and Republicans will be beholden to those who make big financial donations – so neither party will dare to make the necessary changes and the plutocracy will steadily strengthen its power over the rest of society.

Even if one of the political parties doesn’t make a wholehearted commitment to reducing inequality, it should be possible for individual political candidates to stand for either party, or as independents, in support of a fairer deal for middle-class Americans.  What is important is that there should be candidates who offer themselves on the basis of a declared programme of action, so that voters can choose change.  That is how democracy is meant to work.