Election 2016: The Revenge of the Forgotten People

In the seminal 1988 film Mississippi Burning, two FBI agents, one a rookie from the city, the other a former local, investigate the disappearance of three civil rights activists in a small town.

In one of the most memorable scenes from the film, the worldly Anderson (Gene Hackman), explains racism to a fresh-faced Ward (Willem Dafoe – hard to believe he was once fresh-faced, but there it is) in the form of a parable:

Ward: “Where does it come from, all this hatred?”

Anderson: “You know, when I was a little boy, there was an old Negro farmer lived down the road from us, name of Monroe. And he was, uh, – well, I guess he was just a little luckier than my Daddy was. He bought himself a mule. That was a big deal around that town. Now, my Daddy hated that mule, ’cause his friends were always kiddin’ him about oh, they saw Monroe out plowin’ with his new mule, and Monroe was gonna rent another field now they had a mule. And one morning that mule just showed up dead. They poisoned the water…So one time, we were drivin’ down the road and we passed Monroe’s place.  I looked over at my Daddy’s face – and I knew he’d done it. And he saw that I knew. He was ashamed. I guess he was ashamed. He looked at me and he said: ‘If you ain’t better than a nigger, son, who are you better than?’…He was an old man just so full of hate that he didn’t know that bein’ poor was what was killin’ him.”

This story is powerful because it highlights the shame, and the rage that comes with being poor and economically immobile, when you are in a demographically privileged group.

The emotions felt by Anderson’s father in the story are especially relevant to the uneducated rural white voter of today.  To this voter, terms like “white privilege”, “mansplaining,” and “cisgender” must sound like a cruel cosmic joke.

Twenty years of being told they are the demographic most likely to succeed, whilst being increasingly left behind in an economy run by urban elites, has taken its toll. In addition, constantly being reminded that they are privileged, may have been the last straw.

Instead of quietly killing a mule, they elected a candidate whose divisive rhetoric embodied the hate and rage that has been growing amongst America’s forgotten people. But to think that the rhetoric of hate is what defines these people would be a grave mistake.

In their cosy urban apartments, the US political elites mistakenly thought this election was primarily about identity politics. It seemed inconceivable that someone could become President off the back of the following statements:

  • On women: “Grab ‘em by the pussy.”
  • On Mexicans specifically: “They’re bringing drugs. They’re bringing crime. They’re rapists.

And yet exit polls show that, despite having a barrage of hate speech directed at them:

  • 42% of female voters polled indicated they voted for Trump.
  • 30% of Hispanic voters polled indicated that they voted for Trump.

Groups that were repeatedly vilified or denigrated by Trump during the election did not turn away to the extent elites had expected. Which suggests other drivers were at play.

Looking at the breakdown of exit polls by demographic, what most stands out are the difference in preferences between city voters and rural voters, and between pro free-trade versus anti-free trade voters.

city
Figure 1 Exit poll on residence.
freetrade
Figure 2 Exit poll on perception of effect of trade with other countries on U.S. jobs.

Rather than strictly hearing the rhetoric of hate, it seems that Trump voters responded strongly to:

  • Messages about the Clinton’s championing of free trade through the Trans-Pacific Partnership (TPP), a process begun by her husband Bill Clinton with the North American Free Trade Agreement (NAFTA) twenty-two years earlier.
  • Messages about Clinton’s close relationship with Wall Street, in particular her speaking engagements with financial crisis villains such as Goldman Sachs and JP Morgan.

For people trapped in a rural ghetto of shrinking opportunity and growing economic inequality, anti-free trade sentiment expressed by Trump is very appealing.

During the course of his campaign he has threatened to slap a 45% tariff on Chinese imports and to bully firms into returning their factories to America.

At best, these kinds of measures are unfeasible, at worst, they will trigger a financial crisis the likes of which the world has never seen.  Trump voters are probably aware of this, but given they have not seen the spoils of globalisation, they just don’t care.

When it comes to free trade, the political elite have recognised that there are winners and losers. However according to the conventional wisdom, the overall gains in export growth and cheaper goods for consumers, far outweigh the short term pain caused by job losses. Therefore we should all be happy with the outcome.

Trade economists such as David Autor have shown that this does not always hold. At a geographic level, the pain is far from short-term. In some areas employment falls at least one-for-one with jobs lost to trade, with displaced workers unlikely to move to seek new work. The lowest-skilled who do find new jobs tend to move to similar, and thus similarly vulnerable, employment.

The gains in manufacturing brought about by free trade – say in the automotive parts or ICT – have come at a time of increasing automation and specialisation. Thus Americans without transferable knowledge capital have not been able to cash in on the spoils.

As is evident in the chart below, the job market has become both increasingly unwelcoming and unrewarding for those without a university degree.

median-wage
Figure 3. Declining returns to labor for non-graduates

To add insult to injury, income and wealth inequality have continued on an upward trajectory in the United States. As you can see from Figure 4, below, the top 1% and the bottom 90% enjoyed roughly equal levels of growth until the late 1970s.

However over the last decade the wealth of the top 1% of families has grown at a faster rate than for the bottom 90% of families. The very rich moreover, appear to have made a full recovery from the Global Financial Crisis, whereas the bottom 90% are still recovering from the impact of the housing bubble. Their wealth has fallen to early 1990 levels.

inequality
Figure 4 Growth of wealth of the top 1% and the bottom 90% from 1946 to 2014

In this context, with the investment banks behind the financial crisis bigger and brighter than ever, it is easy to see how the Clinton’s close ties to Wall Street only served to fuel working class resentment.

Bernie Sanders tapped into a rich vein of resentment with his message that, under the status quo the rich got richer. Meanwhile in the best case, the situation for everyone else was, meh.

Some will speculate that Sanders, with his social democrat credentials and his commitment to put Main Street ahead of Wall Street, could have pulled off this election. I think that this is unlikely. Sanders may be an idealist and a champion of meritocracy, but he could not have mobilised the army of crusty middle aged white voters with Confederate flag bumper stickers the way that Trump has.

We are talking about people who have been told again and again that they are privileged and ignorant, whilst watching their real wages decline and their communities become decrepit.  People who have been scolded for providing  insufficient opportunity for minorities and women in non-traditional professions, when they cannot be certain that there will be a career path for themselves or their children.

Their response? Anger. Hatred. Scapegoating. Celebration of a man who throws verbal punches at all those minorities they have been told to embrace, and has shown a willingness to poison the proverbial mule.

So they have voted in a man who has given them the promise of bringing back jobs and the plan of building a wall.

Whether he can deliver on this promise is doubtful. He cannot reverse automation or bring coal back to the mining towns. However one thing is for certain, these constituents will never again be neglected. If they have not succeeded in electing a President who will deliver jobs today, they have guaranteed that future candidates will deliver a policy platform that puts their needs front and centre tomorrow. It is up to the Democrats to offer a renewed vision. One that recognises that economic growth that leaves vast swathes of people behind is not viable.

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