Washington, DC, October 25, 2016 --  

Trump's angry white men won't disappear after the election. Coastal elites would be wise not to ignore them.

The angry crowds that filled Donald Trump's campaign rallies were reviled by America's coastal elites. Violent confrontations between protesters and the candidate's supporters were seen as proof of their thuggish nature¹ and their often racist statements presented as evidence of their moral depravity.² Hillary Clinton's description of these people as a “basket of deplorables” was widely criticized, and yielded an apology, but the sentiment was widely shared in upper middle class America.

Dismissing these people as a bunch of peasants with pitchforks is shortsighted. They won't disappear just because an election comes and goes. Their failure to storm the castle of power occupied by America's elites should provide little comfort -- the next time they might succeed. Consider that Paul Von Hindenburg defeated Adolph Hitler's populist movement in the election of 1932, only to be forced to cede power two years later. To be clear, Donald Trump is no Adolph Hitler, and his supporters are certainly not Nazis. But the comparison is useful to remind coastal elites that victories over populism can be quite fleeting. And when populist movements rebound, both their leaders and followers can become more extreme.

The populist mood gripping middle America is based on legitimate grievances. Working class Americans, particularly men, believe that their economic situation is bad and there is little hope in the future. Four decades of industrial decline has turned once highly paid unionized industrial workers into much lower-paid service employees or part-time laborers with much lower incomes. Left-wing elites dismiss their plight because many of those suffering the setbacks are white men, a historically advantaged group that they see as unworthy of sympathy. The same anger would be considered righteous if it were expressed by people of a different color or gender. But because they are disproportionately white and male, the small minority that lashes out with racist or anti-immigrant language are highlighted as a means of discrediting them all.

Slow economic growth is often blamed for the plight of these workers. In the final presidential debate, Trump correctly highlighted America's slow GDP growth of 2 percent or less in recent months.³ This is much less than typical growth rates of over 3 percent enjoyed in prior decades, and severely hurts worker incomes. Economists have offered lots of explanations of why America's economic growth may have slowed: The Baby Boomers are retiring and switching to consumption which make America produce less; government action perpetuated stagnant businesses like General Motors during the financial crisis, and prevented resources from being freed for higher-growth businesses; high debt levels, particularly of governments, have tied up money that could otherwise be spent on activity that generates growth.

Some commentators like Warren Buffet have ridiculed this pessimism, noting that even 2 percent growth rates will lead to huge gains in standards of living over the long term thanks to the magic of compound growth.⁴ But a big part of the problem is where the gains are going. Two percent growth may be acceptable to the country as a whole, but not if all the gains are going to executives and shareholders. Left-wing politicians vilify growth-based economics of the Regan era with as "trickle down", whereas defenders point to the fact that gains were shared by all, even if the most of the money went to those at the top. With growth rates down to 2 percent or less, gains never manage to reach the workers. Their wages stagnate or decline in real terms.

Unfortunately, America's political system has offered few constructive solutions. The right-wing populists like Trump suggested building wall with Mexico. Left-wing populists like Bernie Sanders suggest taxing the rich and increasing government spending. What is undoubtedly needed is to arm working-class Americans with the tools, education and opportunity to get ahead and improve their own economic situation. But these are difficult goals to accomplish, that require hard work and don't easily fit into populist sound bites that rally the crowd.

It's always possible that America's economy will sort this out by itself. Market economies have a tendency to correcting problems like an underused labor force all by themselves, often in ways that none of us imagine. And economic trends like slowing growth rates and increasing income inequality often reverse themselves when people least expect it.

This would be the best-case scenario for America's coastal elites, as they stick their heads in the sand about the growing anger of America's working class. The worst-case scenario would involve a second assault by pitchfork-wielding peasants on the castles of American power. Given politicians' bankrupt ideas, let's hope the economy sorts itself out before this second assault comes.

Related Web Columns:

Just Not Worth It, September 29, 2015

Please Paint My Ceiling, August 21, 2012

Dead Wood
The Unemployable Working Class, November 3, 2009

Sustaining the Unsustainable, June 2, 2009

Worse than Worthless
The Coming Dependent Majority, October 25, 2008

Notes:

1. Slate, A Continually Growing List of Violent Incidents at Trump Events, April 25, 2016

2. New York Times, Voices From Donald Trump's Rallies, Uncensored, August 3, 2016

3. Reuters, Atlanta Fed Raises U.S. Third-Quarter GDP Growth View to 2.0 Percent, October 19, 2016

4. Business Insider, In His Latest Letter to Shareholders, Warren Buffett Shreds the Most Popular Idea in Economics Right Now, February 27, 2016