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

17 December 2016

Trump’s Four Tribes

A friend whose husband has a special fellowship at Harvard’s Kennedy School of Government told me an interesting story. After every presidential election, the Kennedy School traditionally holds a big party for its many Cambridge MA constituencies. This year, it canceled the party and hired grief counselors.

My first reaction was empathy. Trump’s unexpected victory shocked me, too. I, too, am fearful of the consequences for my country. But my second reaction, hard on the heels of the first, was an impulse to laugh uproariously. I barely suppressed it.

Unbeknownst to most Americans, a tiny geographic sliver rules this nation. I call it the “Cambridge-Manhattan-D.C. Axis,” or just the “Axis.”

I use the word “rule” deliberately. It’s not just about government. It’s about economics, banking, finance, commerce, trade and the news. Two of our three national newspapers—the New York Times and the Wall Street Journal—are based in Manhattan. The other (the Washington Post) is based in D.C., where it covers mostly politics and government. Even the PBS News Hour broadcasts from Manhattan or D.C. Almost everything newsworthy that we read or see comes out of one those two places, while some longer-term research, coming out of Cambridge, gets reported there.

Although a Westerner by birth, domicile, and preference, I’m no stranger to the Axis. I lived and worked in it during several key phases of my life. I enjoyed its intellectual delights: the high level of culture, the fluent and accurate articulation, the quick repartee, and, yes, the pervasive sense of dominance and superiority.

When I graduated from Harvard Law School and the Harvard Law Review, I told my friends that I thought I would at least be governor of a small principality. Instead, I joined a big San Francisco law firm where my prestigious education was respected, but nothing special. I soon came back to earth and to reality.

Now, whenever I contemplate the Crash of 2008, those memories flood my mind. When I was growing up, in the fifties and sixties, the banks of Wall Street were paragons of integrity, prudence and caution. They were the gold standard in honesty, as solid as the Rocky Mountains that separate my West from the Great Plains and our ruling Axis beyond.

So what happened? How did these paragons of smart but honest business end up in a culture of pathological greed and stupidity not seen since California’s Gold Rush? Why did nobody notice as it grew and metastasized over a decade or more? Why did the Manhattan-based news media never publish an investigative exposé with anything like the comprehensiveness, perseverance, and fierceness that Woodward and Bernstein brought to the Watergate scandal, toppling a sitting president and ending an era of terrible abuse of power?

Now I think I know. Manhattan is a very small place. Everything in it—the marvelous museums and art galleries, the diverse, fine restaurants, the globe-leading theater (including the musical “Hamilton”), and the astronomically priced apartments that allow every emigrant from Manhattan to buy a castle anywhere else—all of it flows from the enormous sums of money that pour into and out of Wall Street every day. The rest of Manhattan’s denizens—the lawyers, accountants, personal bankers, stock brokers, restauranteurs, performers, producers, advertisers, and, yes, even the artists—are but barnacles on this big ship.

Willy nilly, no one wanted to rock the boat. No one wanted to bite the hands that fed, and still feed, the whole Island and its sick but maybe convalescing culture. And so, nearly a decade later, no one who caused the debacle has gone to jail, and no one has even lost much money. To add insult to injury, one of our major parties still peddles the lie that the cops asleep on their beat (our government) were at fault, and not the perps themselves.

Yet there’s more. Unlike modern Germans apologizing for their former Nazi psychosis, Wall Street has never apologized. It has never even admitted it did anything wrong. There are still hundreds of trillions in face value of financial derivatives out there, waiting to blow the whole system up again. And we are supposed to believe this is all for the good of the commonwealth, and not to enrich the guys (they are all men!) who have houses in the Hapmptons, London and Shanghai, take limousines to work instead of the subway, and fly the globe on their own private jets. We are told, in the infamous words of Goldman Sachs’ CEO LLoyd Blankfein, that this is all “God’s work.”

The anger burns yet in me, a comfortable middle-class retiree who managed to game the system enough to profit from the Crash. Imagine how much more corrosively it burns in the families who lost homes, jobs, self-respect and marriages!

For all his narcissism, inexperience and inconsistency, Donald Trump managed to turn this anger into electoral gold. His new political coalition consists of four tribes: (1) the racists and other tribal malcontents; (2) the tens of millions of skilled workers who lost good jobs and want them back; (3) the vast majority of this nation that resents the hell out of Wall Street for trashing our economy and getting away with it; and (4) a much more amorphous geographic tribe that feels left out of and betrayed by the Axis and wants not just better recognition but more heft and maybe even revenge.

So far, the Axis media have focused only on the first two tribes, with emphasis on the first. But this is stupidity at best, misdirection and deceit at worst. However much the Trump campaign may have lent them undeserved credibility, our white supremacists and white nationalists are a tiny, insignificant minority of our people.

By and large, we Yanks are not racists, xenophobes or misogynists. We Yanks do not live to hate; we live to work in good jobs and enjoy their fruits.

Even the fringe players themselves seem to recognize this point. Emboldened by their new notoriety, are they marching in the streets? Are the brandishing their many weapons? Not at all. They are trying to “go mainstream,” toning down their language and their websites. They are trying to dismiss and disguise their Nazi salutes as jokes. They are trying to frame the white race as a disadvantaged interest group, just like the abused minorities who quite properly have enjoyed affirmative action. They are troubled children craving more of their parents’ time and attention.

If not just its usual focus on the colorful but irrelevant, the Axis media’s obsession with the white supremacist fringe is an attempt to distract attention from the real breadth and depth of Trump’s tribes. Every one of the last three is vastly more important, both to Trump’s victory and to our nation’s future.

Trump himself recognized the second “tribe” repeatedly in his campaign, and he’s doing so in his transition. His proposal of a 35% tariff on goods imported from factories newly sent abroad, after fair and ample warning, might actually keep some good jobs onshore. If he can make that plan work, at least credibly, he might have a second term, barring international disasters.

The skilled-worker tribe’s very importance itself undermines the fear of racism. As careful analysis of voting patterns has shown, many of these Trump supporters voted for Obama in 2008 and/or 2012. They don’t want Nazism or white supremacy. They want good jobs and secure futures for themselves and their families, even if their educations aren’t superior and they didn’t go to schools in the Axis or the Ivy League.

But the last two “tribes” may be the real wild cards in the next decades of American politics. Most pundits and analysts barely recognize their existence. But they are there, big time.

The third tribe—opponents of Wall Street and our financial elite—may be the most immediate reason Hillary lost. Perhaps unwittingly, Hillary excited their animosity with (to quote a recent North Carolina court decision striking down voter ID laws) “almost surgical precision.”

Not only did she take big money from Wall Street and refuse to disclose what she said to it—an error that Russian hackers and Wikilieaks later corrected. She also did with her own e-mail, for a very important job, what no other desk worker is allowed to do. For a woman who reached the Axis from Chicago by way of Arkansas, she couldn’t have done herself more damage if she had worn a sign board declaring, “I’m elite! I’m from the Axis. If you don’t like what I do, suck it up! I’m smarter and better than you and I’m going to rule, so get used to it!” Any pol who can do the opposite of what Hillary did, and earn this tribe’s trust and confidence, will have a potent instrument of political power.

Donald Trump oft courted this third tribe during his campaign. He even stole lines from Bernie declaiming a “rigged economy.” But his chosen team of tax-cutters and deregulators, including two Goldman Sachs alumni, belies his intent to do anything real for this tribe. His neglecting them would open a huge opportunity for the Dems, especially for Elizabeth Warren. If Wall Street causes another financial panic in the interim, which it well might, the resulting political opportunity would be as golden as FDR’s.

Yet the most mysterious and probably the most consequential of Trump’s four tribes is the last one, the geographic one. Just look at my table of landslide votes for the red states. They exceed even the landslides for Hillary in blue states like California and New York.

Why do you suppose that is? Could it be that people in all those states are sick and tired, not just of being ruled by the Axis, but being lied to, deceived, talked down to and belittled?

Here my mind wanders to that joyful photo of Bill and others, in 1999, as Bill signed the Gramm–Leach–Bliley Act, also known as the Financial Services Modernization Act of 1999, which paved the way for the Crash of 2008 nearly a decade later. There were all the usual suspects—lackeys, sycophants and donees of Wall Street, including Alan Greenspan (far left). But there, too, were some new faces, including Bill from Arkansas and Phil Gramm from Texas (third from left).

Never mind that Bill’s penchant for triangulation with an ever-rightward-drifting Republican party had led him just one bridge of middle-seeking too far. Never mind that Phil Gramm was one of the biggest economic morons ever to gain undeserved influence over our national economy. Just look at their faces, especially Bill’s and Phil’s. Their smiles say, louder than words, “We’ve made it! We’re part of the Axis now! We’re helping them do their work and earning their gratitude. What a party!”

What a party, indeed. Our nation and the world are still feeling the hangover. There’s a direct line from that big party in 1999 to the one that the Kennedy School recently canceled.

Quite apart from the resentment of a whole nation of 320 million people being ruled from a narrow strip of highway on the East Coast, there’s an enormous waste of talent and resources. Maybe it was just a coincidence. But a few days after I published my post decrying Trump’s neglect of biotech and Silicon Valley, some of their biggest entrepreneurs appeared suddenly at Trump Tower.

The purpose of the meeting was unclear. Apparently, it was a command performance, rather than the party-crashing I had recommended. According to PBS’ brief coverage, Trump congratulated the assembled CEOs as doing great work and then, uncharacteristically, listened a bit. PBS never revealed what he listened to.

All I could see in the brief video was Elon Musk, sitting way at the end of the table and glowering. It wasn’t hard, in my imagination, to verbalize his glowering. What he might have been thinking is this:
“What the hell am I doing here?!?! I got called all the way across the country, for what? I’m running three leading-edge businesses, for electric cars, storage batteries, and private space travel. I work harder than any being on the planet, if not in the Universe. I don’t have time for this!

Just as Trump put up his own money for his campaign, I’ve promised to put up my own wealth to keep these businesses alive. I believe in them. To justify my trip across country, I need more than just ‘have your people call my people.’ I need some assurance that the president-elect and his team understand what I’m trying to do and what it means for California and the nation. I’m not getting that here.”
Whatever Trump does or doesn’t do, the West Coast blue states will be fine. All by itself, California now has the world’s sixth largest economy. Together the “high-tech” states of California, Washington, Oregon and Colorado, whose CEOs were there at Trump’s command performance, have produced more wealth recently than any other sector of the American economy. They may even have produced more wealth than Wall Street destroyed in the Crash. They certainly have produced far more wealth than Commerce-designate Wilbur Ross and his ilk saved by bottom-fishing and saving a few Rust-Belt firms.

But I think the mood of the CEOs in that room must have been similar to the moods of the leaders and voters in all the red states that supported Trump by landslides. Look at the abbreviated list in my table. They’re all in the Midwest and the Old South. They’re all “flyover states” neglected by the elite in their rush to power, which Wall Street drained dry in the Crash.

In short, they all have much the same complaints against the Cambridge-Manhattan-D.C. Axis. If Trump’s team can figure out what those complaints are and address them, he can probably have a second term. If he fails and the Dems can figure it out, there will be a counter-landslide in 2020 as great as the one we have just witnessed.

For far too long, an arrogant, self-righteous elite from a tiny sliver of land on our East Coast have told the rest of us what is “fact,” what’s important, what to think, and what to do. They are far more polished than Trump but not much less self-assured. The most conspicuous results of their rule have been the biggest economic collapse since the Great Depression and the tide of resentment that has put Donald Trump in office.

The obvious solution is to invite the neglected to the party, give them some say, and help them control their own destinies better. The “forgotten” skilled workers are a big tribe, which also inhabits the neglected territory outside the Axis. So are the folks who desperately want to see Wall Street get its comeuppance. But the biggest “tribe” of all is simply the rest of the country outside the Axis.

The pols that first succeed in supporting and attracting that tribe are going to build an unbeatable political coalition. Doing that may be as simple as consulting the locals for more than photo-ops, listening to them, and then actually doing some of what they ask.



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