Where did “Trumpism”–the political movement–come from?[1] It arose out of the profits and losses from globalization. The costs were born by one segment of American society while the profits flowed to another segment. The beneficiaries were, first and foremost, the “political, cultural, and financial elite.” Their right to lead rested upon the pursuit of the common good.
In theory, the free-trade policies pursued by a whole series of American administrations after the Second World War would benefit Americans. They would allow the American economy to shift jobs producing low-value goods offshore and to redeploy assets toward higher-value jobs and goods. For a long time, these policies had no costs for Americans. The American economy emerged from the war with a long-term competitive advantage over anyone else. It could have not only butter and guns, but low-end butter and high-end butter. By the Sixties, that advantage had eroded badly. As foreign competition began to bite, it turned out that a lot of people depended on those low-value jobs for their living and found it difficult to shift into high-value jobs.
Globalization began to take a more serious toll on the American working class in the wake of the “Oil Shocks” of 1973 and 1979.[2] That seems incomprehensibly long ago to most journalists and politicians, so they just ignore the larger story. Then the North American Free Trade Agreement (NAFTA, 1994) reduced tariffs on trade with Mexico and Canada. It accelerated the early wave of job-losses. Already in the 1990s, Pat Buchanan and Ross Perot could run for president, if not win, on the loss of blue-collar manufacturing jobs. At the same time, China’s abandonment of suicidal Maoist economic policies and its entry into the World Trade Organization (1990) greatly accelerated the loss of jobs. Those job losses not only tossed many workers into unemployment, they also left whole communities hollowed out and unable to address human problems. They not only tossed workers into unemployment, they undermined the value of the homes that formed an important asset of many workers. They not only tossed workers into unemployment, they also foreclosed the possibility of the children of the workers finding steady work at a living wage anywhere near their parents.
Globalization may have eroded manufacturing jobs, but it created enormous opportunities for the American financial services industry. Industrializing countries needed capital and expertise. Wall Street could provide both, not least because of the inflow of Chinese profits to New York banks and to the swelling 401(k) savings of the Baby Boomers. Increasingly “cosmopolitan” in its outlook, Wall Street also became increasingly influential over national economic policy.[3]
The year 2008 marked a turning point. A great deal of elite foolishness and some guile created the 2008 financial crisis. That, in turn gave rise to revolts on the right (Tea Party) and left (Occupy Wall Street); and to the invasion of the political system by “outsiders” like Barack Obama and Sarah Palin. Donald Trump, the ultimate outsider, was just a heart-beat away.
[1] Gerald F. Seib, “Where Trump Came From—And Where Trumpism Is Going,” WSJ, 16-17 January 2021.
[2] “In the wake of” does not mean “solely caused by.” For more of my peculiar view of this process, see https://waroftheworldblog.com/2015/03/02/american-union-stay-away-from-me-uh/ and https://waroftheworldblog.com/2015/12/17/the-new-economy/
[3] For one highly critical view of this process, see Simon Johnson, “The Quiet Coup,” The Atlantic, 5 May 2009.
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