Robert Reich on “The Roots of Trumpism”

Donald Trump’s legacy — a proto-fascist movement we might call Trumpism — includes a Supreme Court rapidly taking America backward, state legislatures suppressing votes and taking over election machinery, and an emboldened oligarchy taking over the economy. While the January 6 committee is doing a fine job exposing Trump’s attempted coup that culminated in the attack on the Capitol, it is not part of the committee’s charge to reveal why so many Americans were willing — and continue to be willing — to go along with Trump. Yet if America fails to address the causes of Trumpism, the attempted coup he began will continue, and at some point it will succeed. My purpose in today’s post (and others to come) is to begin to expose the roots of Trumpism, and suggest what must be done.

Let me start with some personal history.

In the fall of 2015, I visited Michigan, Wisconsin, Ohio, Pennsylvania, Kentucky, Missouri, and North Carolina. I was doing research on the changing nature of work in America. During my visits I spoke with many of the same people I had met twenty years before when I was secretary of labor, as well as with some of their grown children. I asked them about their jobs, their views about America, and their thoughts on a variety of issues. What I was really seeking was their sense of the system as a whole and how they were faring in it.

What I heard surprised me. Twenty years before, many had expressed frustration that they weren’t doing better. Now they were angry – at their employers, the government, and Wall Street; angry that they hadn’t been able to save for their retirement; angry that their children weren’t doing any better than they did at their children’s age. They were angry at those at the top who they felt had rigged the system against them, and for their own benefit. Several had lost jobs, savings, or homes in the Great Recession following the financial crisis. By the time I spoke with them, most were back in jobs, but the jobs paid no more than they had two decades before in terms of purchasing power.

I heard the term “rigged system” so often that I began asking people what they meant by it. They spoke about the bailout of Wall Street, political payoffs, insider deals, CEO pay, and “crony capitalism.” These complaints came from people who identified themselves as Republicans, Democrats, and Independents. A few had joined the Tea Party. Some others had briefly been involved in the Occupy movement. Yet most of them didn’t consider themselves political. They were white, black, and Latino, from union households and non-union. The only characteristic they had in common apart from the states and regions where I found them was their positions on the income ladder. All were middle class and below. All were struggling. They no longer felt they had a fair chance to make it.

With the 2016 political primaries looming, I asked them which candidates they found most attractive. At that time, the leaders of both parties favored Hillary Clinton and Jeb Bush to be the Democratic and Republican candidates, respectively. Yet no one I spoke with mentioned either Clinton or Bush. They talked about Bernie Sanders and Donald Trump. When I asked why, they said Sanders or Trump would “shake things up,” or “make the system work again,” or “stop the corruption,” or “end the rigging.”

The following year, Sanders — a 74-year-old Jew from Vermont who described himself as a democratic socialist and who wasn’t even a Democrat until the 2016 presidential primary — came within a whisker of beating Hillary Clinton in the Iowa caucus, routed her in the New Hampshire primary, garnered over 47 percent of the caucus-goers in Nevada, and ended up with 46 percent of the pledged delegates from Democratic primaries and caucuses. Had the Democratic National Committee not tipped the scales against him, I’m convinced Sanders would have been the Democratic Party’s nominee.

Trump — a sixty-nine-year-old egomaniacal billionaire reality TV star who had never held elective office or had anything to do with the Republican Party, and who lied compulsively about almost everything — won the Republican primaries and then went on to beat Clinton, one of the most experienced and well-connected politicians in modern America (granted, he didn’t win the popular vote, and had some help from the Kremlin).

Something very big had happened, and it wasn’t due to Sanders’s magnetism or Trump’s likability. It was a rebellion against the establishment. That rebellion — or, if you will, revolution — continues to this day.

Hillary Clinton and Jeb Bush had all the advantages — deep bases of funders, well-established networks of political insiders, experienced political advisors, all the name recognition you could want — but neither of them could credibly convince voters they weren’t part of the system, and therefore part of the problem.

When I interviewed these people, the overall economy was doing well in terms of the standard economic indicators of employment and growth. But the standard economic indicators don’t reflect the economic insecurity most Americans felt then — and continue to feel. Nor do they reflect the seeming arbitrariness and unfairness most people experience. The indicators don’t show the linkages many Americans still see — between wealth and power, crony capitalism, stagnant real wages, soaring CEO pay, their own loss of status, and a billionaire class that has turned our democracy into an oligarchy.

The standard measures also don’t show that for four decades, Americans without a four-year college degree have worked harder than ever, but gone nowhere. If they’re white and non-college, they’ve been on a downward economic escalator.

Finally, the standard measures don’t show what most Americans have caught on to — how wealth has translated into political power to rig the system with bank bailouts, corporate subsidies, special tax loopholes, shrunken unions, and increasing monopoly power, all of which have pushed down wages and pulled up profits.

Much of the political establishment still deny what has occurred. They prefer to attribute Trump’s rise solely to racism. Racism did play a part. But to understand why racism (and its first cousin, xenophobia) had such a strong impact in 2016, especially on the voting of whites without college degrees, it’s important to see what drove the racism. After all, racism in America dates back long before the founding of the Republic, and even modern American politicians have had few compunctions about using racism to boost their standing. Richard Nixon’s “law and order” campaign on behalf of “the silent majority” was an appeal to racism, as was Ronald Reagan’s condemnation of “welfare queens,” and George H. W. Bush’s use of Willie Horton against Michael Dukakis. Racism was also behind Bill Clinton’s promises to “end welfare as we know it” and “crackdown on crime.”

What has given Trump’s racism — as well as his hateful xenophobia, misogyny, and jingoism — particular virulence has been his capacity to channel the intensifying anger of the white working class into it. It is hardly the first time in history that a demagogue has used scapegoats to deflect public attention from the real causes of their distress, and it won’t be the last. In 2016 Trump galvanized millions of blue-collar voters living in communities that never recovered from the tidal wave of factory closings. He understood what resonated with these voters: He promised to bring back jobs, revive manufacturing, and get tough on trade and immigration. “We can’t continue to allow China to rape our country, and that’s what they’re doing,” he said at one rally. “In five, ten years from now, you’re going to have a workers’ party. A party of people that haven’t had a real wage increase in eighteen years, that are angry.” Speaking at a factory in Pennsylvania in June 2016 he decried politicians and financiers who had betrayed Americans by “taking away from the people their means of making a living and supporting their families.”

Worries about free trade used to be confined to the political left. But by 2016, according to the Pew Research Center, people who said free-trade deals were bad for America were more likely to be Republican. The problem wasn’t trade itself. It was a political-economic system that had failed to cushion working people against trade’s downsides or to share trade’s upsides – in other words, a system that was rigged against them. Big money was at the root of the rigging. This was the premise of Sanders’s 2016 campaign. It was also central to Trump’s appeal (“I’m so rich I can’t be bought off”) — although once elected he delivered everything big money wanted. It is well worth recalling that in the 2016 primaries, Bernie Sanders did far better than Clinton with blue-collar voters. He did this by attacking trade agreements, Wall Street greed, income inequality, and big money in politics.

The January 6 committee continues to do an excellent job exposing Donald Trump’s attempted coup. But, as I’ve noted, the question remains: why have so many Americans been willing to sacrifice American democracy to this man? Earlier this week, in The Roots of Trumpism (here), I began pulling the strands together. Today, I look at what’s happened to wealth and power, and how the dramatic consolidation of both at the top of America continues to fuel Trumpism.

Wealth and power are inseparable. Democracy depends on the support of a large and growing middle class that shares a nation’s growing wealth — and through that wealth, its power.

But for the last four decades, even as the American economy has tripled in size, the wages of most Americans have gone nowhere (in terms of real purchasing power) and America’s middle class has shrunk. An increasing portion of the nation’s wealth has gone to the top 10 percent — and a disproportionate amount of that to the richest 1 percent (and of that to the richest 1 percent of the richest 1 percent). Most Americans, by contrast, are now living paycheck to paycheck, and barely making it.

This vast consolidation of wealth and power at the top has not been due to neutral market forces. It is the product of a vicious cycle. With their wealth and influence, those at the top — Wall Street moguls, corporate CEOs and top executives just below them, venture capitalists, and private-equity mavens — have altered the rules of the American system in ways that have further enlarged their wealth and power, entrenching their dominance over the system. They have spent billions of dollars supporting the campaigns of candidates that will make changes in laws and regulations that further enrich them, billions more opposing the candidacies of those who will tax and regulate them, and additional billions seeking to sway public opinion in favor or policies that will benefit them and against policies that will harm them. In this way, increasingly over the last four decades, they have siphoned off economic gains that otherwise would have gone to the bottom 90 percent.

Let me be clear: Stagnant wages and insecure jobs for most people, and the erosion of the middle class, are not the consequences of the so-called “free market.” They are the results of a massive shift in power.

One of the most dangerously deceptive ideas is that we face a choice between the “free market” and government — between capitalism and socialism — and that the “free market” is preferable because the alternative would destroy freedom. Conservatives repeatedly say that the inequalities and insecurities we experience are beyond our control — the consequences of “market forces.” They argue that efforts to reduce inequality and insecurity are dangerous “constraints” on the market, likely to cause grave unintended consequences. By this view, if millions of Americans must work two or three part-time jobs with no idea what they’ll earn next month or next week, that’s just the natural outcome of market forces. If one out of five American children lives in poverty, the free market is to blame. If we are losing our middle class, that’s because too many people are lazy or unqualified for the “new economy.”

This is rubbish. In reality, the “free market” is nothing but a set of rules — about (1) what can be owned and traded (corporations? enslaved people? machine guns? nuclear bombs? babies? votes? the right to pollute?). (2) On what terms? (hostile takeovers? corporate monopolies? the right to organize unions? a minimum wage? the length of patent protections?). (3) Under what conditions? (uninsured derivatives? fraudulent mortgages? mandatory arbitration of disputes?). (4) How to repay what’s owed? (debtors’ prison? bankruptcy? corporate bailouts?). (5) What’s private and what’s public? (clean air and clean water? healthcare? good schools?). And (6) how to pay for what’s deemed public? (corporate taxes? property taxes? user fees and tolls? personal income taxes? a wealth tax?).

These rules do not exist in nature. They are human creations. Governments do not “intrude” on free markets. Governments organize and maintain markets. The choice is not market or government; governments make markets. Markets are not constrained by rules; the rules define them.

The real question — often hidden behind the jargon, behind the supply-and-demand curves, the blather about inflation and the Federal Reserve or federal budget deficits or trade deficits or economic growth, behind the monthly reports on unemployment and inflation — is whether the system is improving the lives of most people, including the least fortunate, or is mainly making the rich even richer.

The rules emerge from the decisions of people who occupy a wide variety of positions — judges, lawyers, administrators, politicians, advisers — and who are put into their positions by whomever has power in the system. The central issue is not more or less government. It is who is the system for? If democracy were working as it should, the people making the rules would be acting on behalf of the vast majority — especially the bottom 90 percent.

But in the vicious cycle that’s been accelerating for the last four decades, the rules are in effect made by those with the wealth to buy or bribe the politicians, regulatory heads, and even judges (and the lawyers who appear before them). As wealth has concentrated at the top, so has power.

Wealth is not a “zero-sum” game in which the more of it held by some, the less of it is held by others. But power is a zero-sum game. And therein lies the problem.

So taxes on corporations and wealthy individuals are lowered while taxes on estates on their way to the descendants of the wealthy are eliminated. An increasing portion of government revenue comes from Social Security taxes, sales taxes, property taxes, and user fees (such as tolls), which fall heaviest on the bottom 90 percent. Meanwhile, loopholes are created in tax laws for the partners of hedge funds and private-equity funds. Tax laws also contain special loopholes for the oil and gas industry, pharmaceuticals, Wall Street, Big Agriculture, and Big Tech.

Intellectual property rights — patents, trademarks, and copyrights — are continuously enlarged and extended, thereby creating windfalls for pharmaceutical, high tech, biotechnology, and entertainment companies. They’re all able to preserve their monopolies longer than ever. This also means higher prices for American consumers, including the highest pharmaceutical costs of any advanced nation.

Antitrust laws are relaxed, resulting in larger profits and bigger political clout for the most dominant corporations, and higher prices and less leverage for workers. (Corporate profits are driving the current inflation.) Financial laws and regulations instituted in the Depression decade of the 1930s are abandoned, allowing the largest Wall Street banks to acquire unprecedented influence over the economy. Corporations that make so-called “critical” technologies, such as semiconductor chips, receive huge government subsidies.

Bankruptcy laws are loosened for large corporations but tightened for homeowners and graduates laden with student debt. In a financial crisis, the largest banks and auto manufacturers get bailed out, but homeowners who can’t pay their mortgages — disproportionately low-income people of color — do not.

Contract laws are altered to require mandatory arbitration before private judges selected by big corporations, and permit “non-compete” clauses that reduce worker mobility. Securities laws are relaxed to allow insider trading of confidential information. CEOs use stock buybacks to boost share prices and cash in their stock options.

Labor laws are changed to make it harder to form unions.

Corporate governance shifts from all stakeholders (including workers and communities where companies do business) to solely shareholders. Bargaining power shifts from large unions to giant corporations. Financial power shifts from local and regional banks to Wall Street.

As these changes — and thousands like them — go into effect, wealth and power move upwards, with the result that subsequent changes in the rules are even more skewed toward benefiting those at the top. This vicious cycle has caused a giant but hidden upward distribution of income and wealth from the bottom 90 percent up to the top.

Another consequence is growing anger and frustration felt by people who are working harder than ever but getting nowhere, accompanied by deepening cynicism about our system. That anger, frustration, and cynicism is corroding the moral foundation of our society. It has created a large and growing number of people susceptible to the appeals of demagogues, strongmen, and even sociopaths.

Once a vicious cycle gets fully underway, it cannot easily be stopped without calamities that shake a system to its roots, such as economic depression, war, or revolution. But even these calamities are no guarantee that the new emerging system will be any more just than the one it replaces. It may be worse.

As Franklin D. Roosevelt warned America in 1938, when the nation was still in the throes of the Great Depression, “democracy has disappeared in several other great nations, not because the people of those nations disliked democracy, but because they had grown tired of unemployment and insecurity, of seeing their children hungry while they sat helpless in the face of government confusion and government weakness through lack of leadership in government. Finally, in desperation, they chose to sacrifice liberty in the hope of getting something to eat.”

In many respects, the upheaval that began with the candidacies of Bernie Sanders and Donald Trump in 2016 marked the start of a revolutionary period in America. But revolutions can be democratic or they can be authoritarian; they can give more power to the powerless or they can end up entrenching the power of the powerful. Tragically, after Trump became president, even more wealth and power surged toward the top. Trump’s anti-democratic revolution continues to this day.

We need a pro-democratic revolution. This is still possible. But for a vicious cycle to be reversed without loss of democracy requires large-scale mobilization.

Something of this kind occurred in the early twentieth century, when progressives reclaimed our economy and democracy from the robber barons of the first Gilded Age. Wisconsin’s “fighting Bob” La Follette instituted the nation’s first minimum wage law. Presidential candidate William Jennings Bryan attacked the big railroads, giant banks, and insurance companies. President Theodore Roosevelt busted up the giant trusts. Suffragettes like Susan B. Anthony secured women the right to vote. Reformers like Jane Addams successfully pushed for laws protecting children and the public’s health. Organizers like Mary Harris “Mother” Jones spearheaded labor unions.

The Progressive Era, as it was called, welled up because millions of Americans saw that wealth and power concentrated at the top was undermining American democracy and stacking the economic deck. Millions of Americans overcame their cynicism and began to mobilize.

The central question is whether we can do so again. To answer that, though, we need to examine what has happened to the Democratic Party over the last four decades — and why it has so far failed to mobilize a new progressivism. That’s to come.

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