The rise of Donald Trump

I had done two blog posts recently on my exchange with Martin Wolf on the causes behind the phenomenon of Donald Trump. You can see them here and here.

After my argument with Mr. Wolf, I came across articles that were more in support of my position that there is more ‘blame’ to be shared for the rise of demagogues and populists. IN any case, let me stress that I am not confidently prophesying that Donald Trump would make a bad (or, good) President for America and, consequently, for the rest of the world. I have no idea and I have an open mind on it. I lack certitude in this matter as in many others too.

Among the democratic Presidential candidates, it will be very interesting to see Americans experimenting with Bernie Sanders. I think Ms. Clinton represents continuity and that is not good either for America or for the world.

But, this piece is not about my predictions or preferences. Both don’t matter. This is about analysing the Trump phenomenon.

The issue is that those who are scared of the rise of Donald Trump for the world, for America (and, perhaps, more importantly, for themselves) do not want to blame themselves and the policies they advocated, espoused or supported as potential causal factors.

My exchange with Martin Wolf was all about that. I present more supporting evidence below.

(1) Here is an answer Branco Milanovic gives to a question posed to him about Donald Trump:

The book seems to suggest that inequality can drive politics. Do you see that today? Does inequality help explain Donald Trump?

Definitely. For Donald Trump I would say it’s an easy question.

It was really absence of growth, stagnation of incomes in the US middle class, not only from loss of jobs, but also from loss of dreams of upward mobility for many people. Or perhaps because of imports, or because of direct competition with Asia or other emerging markets. So that was clearly one strong element which explains Trump. I would stop there.

He was being interviewed by Quartz on his forthcoming book, ‘Global Inequality’. He was formerly the Chief Economist for the World Bank and was a Senior Associate at the Carnegie Endowment for International Peace, among many other things.

(2) George Friedman (Stratfor) now writes for John Mauldin too. Here is his piece that provides another aspect of Trump’s strength. Just few paragraphs from his missive dated March 7, 2016:

The white lower-middle class is divided into two parts. One part has already been shattered by economic pressures, family fragmentation, drugs, and other forces. Another part is under equal economic pressure but has not yet fragmented. It retains values such as religiosity, traditional sexual mores, intense work ethic, and so on.

This is the class that has been deemed pathological by the media and the upper classes. Its opposition to homosexuality, gay marriage, abortion, promiscuity, and the rest (which was the social norm a generation ago) is now treated as a problem that needs to be overcome, rather than the core of a decent society. The speed of the shift in the values of dominant classes has left this class in a position where those values taught at home and at church are now regarded by the broader society as despicable. Repercussions are bound to happen.

The issue is not the gap between rich and poor, but the fact that the lower-middle class is becoming part of the poor, and the middle class is moving that way as well. As in Europe, the inability of the political and financial elite to see that they are presiding over a social and political volcano will produce more and more exotic alternatives.

When those people who have skills and are prepared to work can’t get a job that will allow their families to live reasonably well, this is a problem. When statistics show that vast numbers of people are entering this condition, this is a crisis. When there is a crisis, these people will turn to politicians who speak to them and give them hope. What else should they do?

(3) Dani Rodrik writes that ‘moderate’ politicians around the world have failed and that they should offer real solutions:

The appeal of populists is that they give voice to the anger of the excluded. They offer a grand narrative as well as concrete, if misleading and often dangerous, solutions. Mainstream politicians will not regain lost ground until they, too, offer serious solutions that provide room for hope. They should no longer hide behind technology or unstoppable globalization, and they must be willing to be bold and entertain large-scale reforms in the way the domestic and global economy are run. [Link]

I have one major problem with Dani Rodrik’s piece: who exactly are these ‘moderate’ politicians. How can those politicians and policymakers who gave us extreme inequality and negative interest rates be called moderate? Shouldn’t ‘whatever it takes’ policymakers be considered extreme and not moderate?

(4) For once, I agree with Krugman:

he’s a con man, but he is also effectively acting as a whistle-blower on other people’s cons. That is, believe it or not, a step forward in these weird, troubled times. [Link]

That is correct as long as ‘other people’ included the Democratic candidates too.

[p.s: Eric Posner gives us an idea of how Trump could become a dictator]


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