Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

06 May 2016

Trump: Theft of a Generational Fraud


By the dozen, clueless Republicans are trying to ken the “Trump phenomenon.” How did a vulgar, crass and brassy showman with zero experience in political office steal their party and their voters from right under their noses? And how did he do it in a single, albeit prolonged, campaign season?

The conventional wisdom is far too shallow and glib. Sure, it’s a good season for “outsiders.” Bernie is one, too. At least he is if you define him as an “independent” and a “Democratic socialist.” But Bernie is nothing like Trump. He’s a seasoned, experienced pol, with eight years as mayor of Burlington, sixteen in the House, and nine in the Senate. That’s 33 years in elected public office. Trump? He has zero, zip, nada.

Sure, “we, the people” are angry. Even those of us who survived the Crash of 2008 and its aftermath unscathed know in our bones that our nation is not what it used to be. Nor are the personal prospects of ordinary Americans. So there’s a lot of anger and angst out there. “Make America great again!” is exactly what most of us want to do, whether on the left or the right. But how?

How did a man with an empty resume steal the mantle of one our two great political parties and win nomination for the hardest and most important job in the world? How did a man whose “solution” to our massive job drain is high tariffs suddenly become a plausible leader? “Outsider” is a pretty lame explanation for that.

No. To understand the “Trump phenomenon,” you have to understand how the GOP has managed to remain a competitive political party nationally for the last two generations. With the aid of the most powerful propaganda machine in human history (Fox), it has perpetrated a massive, persistent and spectacular fraud on the American people.

Unfortunately for the GOP, once you leave truth behind, belief and trust become malleable and fickle. Trump has merely stolen the fraud, shifting it in a new direction. And if the truth be told, the GOP’s massive fraud was already getting a bit long in the tooth. Trump has given it new life, with a scapegoating twist reminiscent of Adolf Hitler and a decided lurch toward Southern culture.

But we’ll get to that later. First let’s see how the GOP fraud worked.

Once the GOP was a practical, problem-solving party, just like today’s Dems. After demagoguing “Red” China his entire career, Richard Nixon went to Beijing and initiated today’s most important bilateral relationship. Nixon also established the Environmental Protection Agency and raised taxes. He even tried wage and price controls as an experiment, albeit unsuccessfully. Reagan, Ford and Daddy Bush also raised taxes. A generation ago, the GOP did what had to be done to make things better, albeit differently and with different priorities than Dems.

But ever since Reagan inaugurated selfishness as a national value, the GOP has become the party of the rich and powerful. Its driving policies became three: lower taxes, less regulation, and smaller government. Everything else became subordinate to these three, regardless of circumstances and exigencies.

These three goals were the only constant things in the GOP’s hall of smoke and mirrors. The rest was all social-culture agitation—abortion, gay marriage, and the alleged “abuse” of the Christian religion—about which the rich and powerful cared nothing. They were just means to an end: getting ordinary people to vote against their own economic interests and in favor of the interests of the rich and powerful.

Of course the GOP needed a theoretical basis—an ideology—for this drastic shift in the pragmatic, problem-solving approach that both parties had taken well into the postwar period. So called “intellectuals” supplied it. Lowering taxes, gutting regulation, and reducing government, they said, would produce more “freedom.” We could all go back to a state of nature, in which the strong ruled the weak and the alpha male ruled all.

The GOP even had its sage and myth maker. Ayn Rand, a half-deranged refugee from Eastern European Communism, went Marx and Engels one better. All three were just creative writers, shocked by the social and economic conditions that they had observed around them and had endured. None was anything like the scientific economists of later years, let alone a “quant.” None could have written, let alone solved, a differential equation if his or her life had depended on doing so.

But Rand was smarter than Marx and Engels in one respect. If you’re going to analyze complex systems without data, logic or numbers—if you’re going to write “creatively” about serious, complex subjects—it’s best to do so in fiction, so more people will read and can ken your musings. So Rand wrote novels, not weighty, “serious” tomes like Marx and Engels. Her novels caught the popular imagination, teaching that übermenschen could improve all of our lives if only left alone, unregulated and untaxed, to work their magic. She wasn’t so much a doyenne of American culture as a channeler of Nietzsche.

The crowning glory of this massive fraud involved American history. The so-called “Federalist Society,” which propagated this patent nonsense, became the so-called “conservatives’” social club. They forgot that, during our foundational period, the Federalists had argued for centralized government while the Democrats, mostly Southerners, had pushed for distributed, weaker power.

Nothing about this massive fraud made any sense, except that it consistently advanced the interests of the rich and powerful. If it prevailed, they could return to the nineteenth century, before the income tax and before industrial regulation. They might even return to the “Golden Age” of labor exploitation, before unions and regulation of working hours and child labor. So situated, clever, ruthless men could “earn” enormous fortunes in a mere few years, without regard to the consequences to others. And then they would, and did, donate massive campaign contributions to the GOP as “tithes” to keep their money coming in.

It was a self-sustaining delusional system, at least for a while. It did succeed spectacularly in making the rich richer and exploding economic inequality. But the fraud has had serious consequences for the rest of us, and for our national politics. The most telling were three.

The first and most important was distorting “free trade.” The steady elimination of tariffs and other trade barriers, on which both parties agreed, had been intended to serve two purposes. It let foreigners sell their products in our country, the more so if they could do so more efficiently than we. It also let us sell our products abroad more easily.

The first point reduced the impetus for war, for example, of the Smoot-Hawley tariffs on Japan. But the latter point was far more important to us. It allowed us to get rich and improve our manufacturing by selling our products abroad, if we could do so more efficiently than foreigners. We thought we could do so, and for a long time we were right. The more efficient manufacturers waxed rich and successful, and, for the most part, they were us.

But slowly things changed. As the new economic order enriched ordinary Americans, wages and working conditions here improved tremendously. So did the costs of workers’ pay and benefits. As a result, the bosses began dreaming of using American technology and capital with foreign labor. In just the past generation alone, they exported some 60,000 US factories abroad.

There were beneficiaries of this massive shift in industrial power. But they were not Americans. Foreigners, mostly in Asia, enjoyed the greatest transfer of wealth, know-how and technology in human history. The bosses who arranged, managed and profited from this transfer became enormously wealthy and powerful. They are today’s 0.1%.

But American workers and American industrial infrastructure suffered horribly and eventually languished. The country that once had led the world in manufacturing became a manufacturer of cars, specialty and “high-end” products. Millions of ordinary workers lost skilled, well-paying and self-respecting jobs.

All this, the GOP savants told us, was natural and proper. We were, they said, entering a “post-industrial” economy, in which services predominate over goods.

Indeed, today we are told that some 70% of our economy involves services. Evidently, we Americans are supposed to restore our former greatness by giving each other haircuts, legal advice, psychological help, and financial services, such as exploding student debt. Maybe we’ll pick ourselves up by our bootstraps by suing each other. At least the lawyers who help us do that will wax rich.

But to anyone who knows our industrial history this is absolute nonsense. We Yanks, for a time, were supreme in peace and war because we out-invented and out-produced everyone else. Our economic heroes were innovators like Andrew Carnegie, Thomas Edison, Henry Ford, Andy Grove, Steve Jobs, and Elon Musk. They created whole new industries with their imagination, scientific and technical know-how, and risk-taking.

Today, we have no dearth of prospects for similar innovative industries. We have electric cars, smart grids, nanotechnology, personalized medicine, private space travel, and so-called “designer genes.” But if we send these new industries abroad as soon as our visionaries create them, what will our ordinary people do: go back to farming or turn to crime? Can the 0.1% populate and run an entire nation?

The second consequence of the GOP’s pander-to-the-powerful ideology was equally devastating. With American manufacturing languishing and moving abroad, how could the bosses make big money quickly? Only in finance. So we had an explosion of “innovative” financial instruments, including derivatives and their derivatives, plus an explosion of fees and high interest rates that drained consumers. The result was the Crash of 2008, which threw millions out of work and out of their homes, and for which no boss has even yet lost substantial money, let alone gone to jail.

The third consequence of the GOP’s low-taxes, no-regulation, and no-government ideology was a bit bizarre. It was the Tea Party. Unanticipated by GOP ideologues, the newer drown-government-in-a-bathtub ideology dovetailed nicely with Nixon’s Southern strategy to produce an undisciplined, uncontrollable rump group within the GOP’s own party.

Here’s how it worked. Immediately after signing his historic 1960s civil rights laws, Lyndon Johnson predicted that the Dems would lose the South for two generations. The reason was racism, pure and simple. A century after the Civil War, the South still could not stomach treating African-Americans with anything less than a clone of South-African Apartheid. Johnson knew that his civil rights laws would move the South to flock to the GOP, and it did.

From Nixon and Reagan onward to today, GOP leaders have encouraged the process with code words and dog whistles. They did so not out of personal racism, but because they saw a clear and easy political advantage in doing so. It wasn’t the first time that cynical pols exploited tribalism to gain power, and it won’t be the last.

But a funny thing happened when the GOP also abandoned its pragmatic, problem-solving side for a “scriptural” ideology of low taxes, no regulation, and smaller government, regardless of consequences. The GOP inadvertently stumbled right into the second big feature of Southern culture: bossism. The difecta of racism and bossism, and GOP pandering to them, let the GOP own the South politically. But it also let the South own the GOP ideologically. The two—South and GOP—became Siamese twins by cosmetic surgery.

The result was bizarre but predictable. Southern states, which by and large had the most people without health insurance, became adamant opponents to Obamacare. Their traditional suspicion of outsiders and centralized government—fanned to white heat by GOP propagandists—ultimately made them rebel against Washington and their own leaders in it. Thus arose the Tea Party, its rebellion against the GOP establishment, and the bizarre flash in the pan that has been Ted Cruz—a man hated by everyone he ever met but one, yet coming close to a major-party nomination.

As I have analyzed previously, the Tea Party is entirely a Southern and rural phenomenon. Its name is a just another part of the massive GOP fraud. It tries to evoke the Boston Tea Party and our Founding, with which neither the Tea Party nor its protagonists have anything to do.

So what does all of this have to do with Donald Trump’s bizarre and unpredicted rise? Just about everything. Trump has stolen every aspect of the massive GOP fraud and has raised it a notch. He has raised racism (with its cousins misogyny, Hispanophobia and Islamophobia) and bossism to an art form. And—master showman that he is—he has been brilliantly successful in doing so.

After the success of Daddy Bush’s “Willie Horton” ad and the fictional (black) “welfare queen,” racism against blacks is finally failing as a political strategy. It’s failing because most people, even in the South, are getting used to having black neighbors and co-workers, plus seeing African-Americans in positive roles on TV. It’s failing because the recent epidemic of police killings of unarmed African-Americans has evoked enormous sympathy from all but the most intransigent racists. And most of all, it’s failing because of a President who was twice elected by clear popular majorities (the first time since Ike) and who has (among many other things) saved our economy, wound down two utterly gratuitous wars, and helped forge a global consensus to fight global warming.

But tribalism is a powerful force, with biological-evolutionary roots. And Trump has exploited it brilliantly. He has done so by “moving on” from blacks to Hispanic immigrants and Muslims, and targeting African-Americans only by implication (and because none of them is likely to vote for him anyway). Trump targets Hispanics, especially Mexicans, because they and their “foreign” language evoke widespread cultural unease and fear of job losses. Muslims are a particularly juicy target for Trump because they are a tiny minority of voters but, with the help of effective demagoguery, they can evoke fear vastly out of proportion to their numbers and any danger they create. Trump also evokes cheers from his bigoted supporters by bringing his tribalism out into the open and making it explicit—something that has become culturally unacceptable, even in the South, with regard to African-Americans.

But Hitleresque scapegoating of helpless minorities is not The Donald’s trump card. It’s bossism. His entire pitch is based on bossism. He says, in effect: “I’m the boss. I’m smarter and tougher than you and those Washington wusses. I’m a business genius. I can get things done.”

Of course his stated “solutions” are ludicrous. Build a wall and get Mexico to pay for it? Wasn’t the first part what we’ve been trying to do for a decade? And doesn’t every Mexican leader back three cycles laugh at the second? As for 35% tariffs on Chinese imports, wasn’t that kind of thing what led the Japanese to bomb Pearl Harbor? And wouldn’t 35% higher prices in Wal Mart, which gets most of its hard goods from China, spark massive inflation and savage our lower middle class and poor?

No one with the slightest ability to see cause and effect can credit The Donald’s “solutions.” They’re just a theft of the massive and continuing fraud that policies designed to enrich the rich and powerful (so-called “trickle down”) will help the rest of us. Is it so startling that Trump’s equally ridiculous “solutions” meet equal and even better success among those who’ve swallowed the GOP fraud enthusiastically so far? Trump has studied well what suckers will swallow and has covered his fraudulent morsels with an even sweeter and simpler sauce.

The problem for Trump and the GOP is that the South is only one-third of the nation. And the targets of Trump’s tribalism—especially African-Americans and Hispanics—are strong and growing stronger everywhere, even there. None of them is going to vote for Trump or his down-ballot accomplices, at least not if attack ads like this one keep coming. Even New Yorkers will recognize that “New York values” are those of Michael Bloomberg (former Republican mayor) and Bill de Blasio (current Democratic mayor), not the racist, bossist, loose-cannon Trump.

So the GOP’s two-generation massive fraud on the American people appears to be coming to an end. The likely result is an historic GOP defeat at the polls this year, and the party’s split-up or dissolution.

GOP so-called “leaders” and “pundits” should not blame this all on Trump, who merely stole their perhaps-more-sophisticated fraud. They should blame it on themselves. After all, they have supported and inflamed racism and bossism for two generations, under the guise of a false and transparently nonsensical ideology at odds with America’s traditional, pragmatic, problem-solving culture. All Trump did is steal their “trickle down” fraud and make it sound even better to folks whose capacity to reason is stuck in grammar school.

As for Hillary, she has an historic opportunity not just to become our first female president, but to preside over a rare sea change in American politics. But in order to do so, she must drop her penchant for compromise and triangulation and become a real leader. She must refuse to compromise with fraud, racism and bossism. She must blaze a new trail, much closer to Bernie’s than to Ted Cruz’, in full knowledge that the GOP’s having moved the goal posts ever-rightward for the past two generations has been based on a massive fraud, which is now failing.

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