THE BIG NULLIFICATION

Nullification is the new word creeping into the talking points and vocabulary of Trump supporters. The word is meant to convey that Trump's enemies are trying to reverse the will of the voters in the 2016 election.  It is a word meant to spin the case against impeachment and its users seek to include it in the conversation as "received wisdom."

A Little Background
In October and November 2016, with the polls indicating that a Hillary Clinton presidency was all but inevitable, the Republican Party was preparing its opposition plan for the following four years. They planned to create a “living hell” for the next president of the United States, vowing not to approve any Supreme Court nominee over the next four years and preparing a draft of articles of impeachment based on “her e-mails and other crimes” shortly after inauguration.

Congressional Republicans publicly floating support for this notion at the time included Rep. Jason Chaffetz (R-UT, Chairman of the House Oversight Committee), Sen. Ron Johnson (R-WI), and Reps. Michael McCaul (R-TX), Louie Gohmert (R-TX), Jim Sensenbrenner (R-WI) and Peter King ((R-NY), among others. In late October and early November 2016, talk radio was all abuzz about the upcoming impeachment. Of course, Candidate Donald Trump weighed in:

"Hillary Clinton is the most corrupt person ever to seek the presidency, and if she were elected, it would create an unprecedented constitutional crisis. You know it’s going to happen. And in all fairness, we went through it with her husband. He was impeached. ... Folks, do we want to go through this again?" (Trump rally in Florida, Nov. 2, 2016)

That Republican Party's position was in line with their historical opposition to the presidency of Obama, an obstruction plan fraught on the same night he was inaugurated for his first term. This time however, as opposed as to when Obama was elected in 2008, they controlled the House. 

Representative Chaffetz said about the expected Clinton presidency: “Even before we get to Day One, we’ve got two years of material lined up.” As Chairman of the Oversight Committee he already had several years’ experience on partisan obstruction, having led the investigation of Secretary of State Clinton on Benghazi (in one of seven congressional committee investigations into the matter) and her emails. Then came the surprising victory by Donald Trump, who obtained 46.1% of the vote and 304 Electoral votes, while Clinton had 48.2% of the vote but only 227 Electoral College votes. Rep. Chaffetz left Congress shortly thereafter to join Fox News.

Representing the Will of the Electorate

This talk about nullification brings scrutiny to the way public officials are elected. The “will of the voters” most direct measurement is votes cast and that, perhaps, should be the standard. While the Electoral College is representative of “the will of the voters” in landslide victories, this is not the case for close calls. A recent study by M. Geruso et al, published by the National Bureau of Economic Research, NBER, analyzes statistically how the Electoral College is more likely to overturn the will of the voters, so-called “inversions”, in close elections.  That is, the Electoral College is more likely to “nullify” elections than impeachment proceedings, which have resulted in zero removals from office for a president. Inversions have actually resulted in four presidents winning the Electoral College but not the popular vote. It is estimated that 40% of elections in which the popular vote difference is 1% (less than 1.3 million votes in 2016) can result in that outcome, i.e. nearly half. In recent times this has occurred twice, in 2000 and in 2016. It also happened in 1876 (S. Tilden 50.9%, RB Hayes 47.9% - Hayes became president), and in 1888 (G. Cleveland 48.6%, B Harrison 47.8% - Harrison became president)[1].  Furthermore, the statistical analysis as applied to our current electoral demographics and map indicates a 65% chance of any Republican presidential candidate emerging victorious, even when losing the popular vote by a 3% margin.

These distortions of representation “trickle down” to the House of Representatives, but by a different mechanism: Gerrymandering. Over the last 10 Congressional elections, three have resulted in Democratic majorities and seven in Republican ones. The average popular vote resulting in a majority for the Democrats has been 53%, resulting on an average House majority of 55.6%, a two and a half point spread. The average popular vote resulting in a House majority for the Republicans is 49.5% for a House majority of 54%, a 4.5% spread. This spread increased substantially after the redistricting of the 2010 census, as Republican led state houses gerrymandered many congressional districts to their favor.

	Democrat			Republican			All Reps
	Pop Vote	Reps	D Caucus	Pop Vote	Reps	R Caucus
2000	47.10%	212	48.96%	47.60%	221	51.04%	433
2002	45.20%	205	47.24%	50.00%	229	52.76%	434
2004	46.80%	202	46.54%	49.40%	232	53.46%	434
2006	52.30%	233	53.56%	44.30%	202	46.44%	435
2008	53.20%	257	59.08%	42.60%	178	40.92%	435
2010	44.90%	193	44.37%	51.70%	242	55.63%	435
2012	48.80%	201	46.21%	47.60%	234	53.79%	435
2014	45.50%	188	43.72%	51.20%	242	56.28%	430
2016	48.00%	194	44.60%	49.10%	241	55.40%	435
2018	53.40%	235	54.15%	44.80%	199	45.85%	434
Win AVGs	52.97%		55.60%	49.51%		54.05%

(Since 2010, the one D led House had a +0.75% relative to the popular vote, while the R led Houses had an average +5.38 spread)

Voters perceive these representation distortions and react accordingly, because they become voting disincentives. Voter turnout is pushed down by these mechanisms as people think that, after all, their vote will not really count. People in a “Blue” or “Red” State or Congressional District will believe, with logic and reason, that their vote does not make a difference in the final outcome as the Electoral Votes or the party majority in their CD is, essentially, predetermined (“rigged”?). The “Voice of America” is stifled.

 When it comes to presidential elections, the Electoral College has created an institutional monster: “Swing States,” with their “Swing Districts.” These so called electoral battlegrounds result in other regions of the country being almost ignored by the campaigns. Jamelle Bouie has written a well-reasoned argument about the nationwide coalitions of interests that would make it to the national discussion in a campaign, instead of local state issues if it were not because of Electoral College politicking (The Electoral College is the Greatest Threat to Our Democracy). Farmers in Iowa and Ohio have the same type of challenges as those in Kansas or New York, but the latter two are ignored, while the former ones are courted in retail politics. The same happens with urban problems of Atlanta or Detroit, or in the manufacturing plants of South Carolina and California, national issues being addressed in a skewed manner--only looking at the trees, not the forest. Many solutions have been offered to this slow creeping poison in our democracy, which creates divisiveness and apathy simultaneously, from the National Popular Vote Compact, to apportioning by Congressional District (for example Maine and Nebraska), to Constitutional Amendments (of which over 100 have been offered). 

The end result of this electoral model has been simultaneous growth of voter apathy and sectarian divide. The political consequence is the creation of partisan factions which drive the discourse and increased frequency of impeachment calls. We have been seeing this happen over the last twenty five years or so, like a frog in slowly heating water.  

Impeachment as a Political Crisis

The calls for impeachment before the expected victory of Clinton have not been the only instance of Republicans calling for this constitutional remedy. It is significant that during the first two years of Obama’s presidency, with the Democrats controlling the House, national opinion polls found that 35% of Republicans favored impeaching the president, even though there were not any ongoing investigations of any sort. Reasons given for opening impeachment inquiries during the Obama years ranged from the “Climate-gate” email controversy, the methodology used by the Bureau of Labor Statistics to measure jobs, the response to the BP Oil Spill, undermining US security by brokering a prisoner exchange of an army soldier for five Guantanamo detainees, to his “foreign” birthplace; and, of course, Benghazi.

Using impeachment calls as a political rallying cry is a signal of the toxic divisiveness underlying the body politic (more on this) and originated in the poisoned well of faulty representation. Out of 45 presidents, thirteen have had inquiries or resolutions introduced in the House calling for their impeachment, including all eight since Ronald Reagan (Iran-Contra). Typically the underlying offenses have been abuse of power or corruption. The case of Hillary Clinton is unprecedented in that calls for her impeachment were being made before she had been elected. 

The increasing use of impeachment threats based on political interest or bias has cleft the nation into sectarian partisanship. The political discourse and rhetoric has shifted, characterizing opposition sympathizers and leaders as enemies, not just adversaries. This political and sectarian nature of impeachment had been forewarned by Alexander Hamilton:

“Pre-existing factions … [agitating passions and dividing the community] into parties more or less friendly, or inimical, to the accused... [enlisting] animosities, partialities, influence and interest on one side or the other … [result in ] the greatest danger, … [that] the decision will be regulated more by the comparative strength of parties, [rather] than by the real demonstrations of innocence or guilt.”[2]

Differences of opinions on how to reach national goals have been colored by partisan politics, but the primary goal remains: a better and more secure future for generations to come.[3] 

If, as Hamilton feared, the final result is not dependent on “the real demonstrations of innocence or guilt,” we are in for a rough ride descending further into an abyss of sectarian partisanship enmity, as opposed to politically adversarial relationships. The feared trauma to the country associated with impeachment has actually been with us for more than twenty years. This is truly it: we have been living “the trauma of impeachment” far too long.

But if the Trump impeachment results in his removal from office, it may be a sign that the country is beginning to heal from the sectarian sickness vise which grips it, because it will have demonstrated a resolve of purpose beyond partisanship. The blatant and clear unfitness of Trump as president of the United States and leader of the free world allows for a constitutional remedy that forces unity and can bring an end to the dark era of divisiveness. And it is time for it to end.

Some more essays:
On party rule: "A Weak Democracy"

On impeachment: "We'll See What Happens...."

All on Elections and Other Complications of Democracy

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[1] The 1824 election of John Quincy Adams (30.9% of the vote vs Andrew Jackson with 41.4%) is not comparable to the other four, because it was so split between all the candidates that it was decided by a final vote in the House of Representatives.

[2] Federalist 65

[3] Or, as Thomas Jefferson said, “Life, liberty, and the pursuit of happiness.”

All illustrations copyright their respective authors.

Frankenstein's Monster Redux - Wrecking Havoc from Day One.

Nearly eight years ago, on the evening of Inauguration Day 2009, a group of leading Republicans gathered for dinner and vowed to make the president inaugurated that same day a one term president. President Obama had nominated to the Cabinet two Republicans (including the Secretary of Defense) and reached across the aisle in his Inauguration Speech to champion a government for all Americans. But his presidency was to be undermined from day one by the dogged pursuit of the political goal of restoring a Republican to the White House above all. This in spite of the U.S. being involved in two ground wars and in the depth of an economic recession the likes of which had not been seen since the Great Depression. A situation that would seem to clamor for bipartisanship.

The conspiracy begat that evening eventually led to, among other things, the scuttling of the budget deal and the demonization of immigration reform, as well as to a few government shutdowns. The Republican opposition to President Obama relished, encouraged, grew and supported factions and groups that distorted his origins, mocked his race in the most disturbing ways and generally were visceral and toxic to government institutions in general and the president in particular.

The environment emanating from such confrontational partisanship is at the root of destructive interactions between and within our political parties. It is an environment that, fueled by the contrived hyperbole of fringe media (radio and on-line), desensitizes a basic sense of civility that allows social co-existence. Incendiary talk radio and web sites that are just a notch below in their rhetoric of the ones used by Hutus in Rwanda or Serbs in Bosnia to inspire genocidal rampages have become increasingly pervasive in the partisan dialogue and in social media. And with no doubt within this environment we can find the origin of that political Frankenstein monster: Mr. Donald Trump. A creature nurtured by an unfettered sense of entitlement, a sublimated inferiority complex and a craving for attention at any price. A creature pieced together and supported by a coalition of people exactly like him showcasing in social media and any other vehicle they may find their blinder constrained narcissism. These are not Bush or Romney Republicans, not Reagan or Clinton Democrats, confrontational and antagonistic, but they are politically alienated, for lack of a better word, anarchists.  Après nous, le déluge!

Trump’s claim to fame and biggest selling point is that he is a successful businessman, that he knows how to run a business, knows about money and that it is time someone with his credentials ran the country.  Setting aside the fact that he has not demonstrated that he has had the acumen to use his inherited fortune to grow it over market returns (without bilking thousands of customers, contractors and even state and federal government), the notion that a nation can be run like a business is spurious. The last time that was attempted here was by Calvin Coolidge and it led to the Great Depression.

A successful business is a closed system with a clear goal: survive market competition and the innovation forces of creative destruction to maximize the profits to its limited number of shareholders.  A successful nation is an open system that by regulating market failures, externalities and common goods seeks to maximize the well-being of all its citizens. The set of skills and knowledge that lead to success in one endeavor are not the same for the other.

If it were granted that Trump has been a successful CEO, to transfer his skill set to running the government could lead to the worst cases of influence peddling and conflicts of interest since Spiro Agnew (when America was great?). In a perfectly logical pursuit of benefitting his present and future investments, decisions impacting markets and regulations would be taken in “best for the business” mode, disregarding the overarching economic and political reasons for national government.

Of course, that is what some in the Republican leadership are counting on. Not that Trump will use the government to benefit himself personally (like any businessman would naturally tend to do), but that his lack of skills for governing will force Trump to call on them for assistance in running the country--at which point they will just tell him what to do. This party leadership tries to convince itself and a diminishing group of their followers that Trump is “politically manageable.” However that, a risky proposition at best, does not account for the obvious personality traits embodied in Trump.

Because power limits through checks and balances do exist, a temperament recognizing such limits and acquiescing to this most basic tenet of our government is one of the fundamental reasons to choose a candidate over another. Trump has made clear he does not believe in limits to his use and manipulation of power. The latest evidence of his sense of entitled power and his willingness to abuse it is the “Access Hollywood” video where he says: “And when you’re a star they let you do it. You can do anything.” 

President Trump as a risky proposition does not even begin to describe the possible scenarios of uncontrolled abuse of power that could occur with a White House occupied by an unapologetic reckless bully. A bully directly descended and nurtured by the blind partisan interest wrought upon the nation that cold January evening in 2009. This is a risk that America should not allow itself to take. It has a lot to lose.

All images copyright their respective owners,

The Immigrant.

I am an American born abroad: born from an American parent in a foreign land. I have dual citizenship and lived a large portion of my formative years outside the U.S. in a country close to my heart, Venezuela. I have relatives, friends, dear memories and continued interest and involvement with the country where I was born. Its current situation and of those I have left behind pains me greatly. This is a common affliction shared, with different details, stories and backgrounds, by many in the U.S. born in other countries and living here now; and while I am not technically an immigrant I understand, literally, where they are coming from and have an ear attuned to anti-immigrant rhetoric.

That anti-immigrant rhetoric ignores a basic question: why did 42 million people, a number greater than the whole population of Canada or half the population of Germany, decide to migrate to the U.S.? Contrary to the current Republican candidate’s messaging, no country actually “sends” people to the U.S.

Migrants make the individual hard choice of leaving their home country because they see no other way out of their situation, be it political, economic or personal. They believe that in the U.S. they will have a new opportunity to improve and/or protect themselves and their families. They believe such opportunity is lacking in their country of origin. Many make the trip thinking they will go back once they’ve made it (“if you can make it there, you can make it everywhere”) or conditions “back home” have changed. A great majority eventually remains in the U.S. once they have constructed a new life, under new rules and with a reliable social contract. They sometimes try to return and realize, as Thomas Wolfe wrote, “you can’t go home again” as the home they once knew exists no more.

A portion of U.S. born Americans always says before any election that if the candidate they oppose wins, they will move out of the country. Canada has often been the supposed destination, New Zealand seems to be a popular choice this season. No mass migration has in fact occurred after any U.S. elections, but immigrants in many cases have not only chosen but been forced to leave their own country of birth for political, war strife, hardship or safety reasons. The quipped motivation in the “if he/she wins I’ll move to Canada” retort, is augmented hundreds of times over for many incoming migrants. They have truly voted or been forced to vote with their feet. Most have probably not read or know but would empathize with the lines by Emma Lazarus:

“Give me your tired, your poor, 
Your huddled masses yearning to breathe free,

The wretched refuse of your teeming shore.

Send these, the homeless, tempest-tossed to me,
I lift my lamp beside the golden door!”

By definition immigrants believe in the promise of America. Their economic contribution is significant and their social contribution incalculable. Many have mixed marriages and there are 36 million U.S. born children of immigrants. Immigrants by the most part do not want to reject their origins and naturally seek fellow expatriates to socialize and live with, maintain their country of origin customs and enjoy the cuisine they miss. That is not a rejection of U.S. values and customs, it is an addition. When their origin values and customs are anathema to those in the U.S. in most cases they and their children adapt, particularly when they feel socially welcomed by their new country. Conversely, the U.S. adapts elements of immigrant culture and makes it our own. Salsa, pizza slices and Chop Suey come to mind as adaptations now natural to the U.S. culture.

The hard numbers of size, scale and factual contribution are clear:

• The Migration Policy Institute calculates, derived from Census Bureau statistics, that the immigrant population (defined as “people residing in the United States who were not citizens at birth”) totals 42.4 million people. That is a little over 13% of the country’s population. For perspective, the African American population is 12.2% of the population and the Hispanic American population is 16.3% (2010 Census). The estimated population of undocumented migrants is around 11.2 million which would make approximately 3.5% of people residing in the country “illegals,” a small minority bearing a disproportionate amount of vindictive political venom and upon which countless ills are laid on. The number of undocumented immigrants has decreased from a little above 12MM in 2008 to its present level and counting.

U.S. Foreign Born Population by Region of Origin. 

Europe Region: 4.8MM

Asia Region: 12MM (East Asia: 3.77MM / So. Central Asia, including India: 3.2MM / West Asia, including Israel: .96MM)

Africa Region: 1.75MM

America Region: 22.3MM (Central America, including Mexico: 14.8MM / Caribbean: 3.88MM / So. America: 2.8MM)

Migration Policy Institute, U.S. Immigrant Population by State and County (accessed Sept 1, 2016)

• The Pew Research Center calculates there are 36 million second generation Americans, of which 20MM are adults, i.e. can vote. Added to the approximately 19MM immigrants that are naturalized citizens it makes for a powerful voting bloc. Even with a 50% abstention rate it would mean almost 20 million votes, enough to swing many an election.  Politicians demonize immigrants at their own peril when driving wedges between long timers and newcomers.

Much ink and bytes have been used to counter arguments laid out by the anti-immigrant rhetoric. In a fact-free reality immigrants (coded as “illegal” to slander a population much greater than the actual 3.5%) are accused of stealing jobs at best and being harbingers of terrorists and criminals at worst.

• Fact is, as has been pointed out, the low end jobs “stolen” usually do not involve language skills (typically crops, dishwashing, abattoirs, gardening, clean up, etc.) and higher end jobs are filled by companies skirting laws and ethics in pursuit of self-interest through legal corporate sponsorships. In 2012, there were nearly 420,000 “removals” by Immigration and Customs Enforcement (ICE), of which 228,000 were by border capture (they never made it in) and 190,000 where “interior apprehensions.” During 2012 there were 1.8 million jobs created by the private sector, that is, nearly the same number of jobs were created every month than all “interior apprehensions” for the whole year. Of the total removals, 55% were of convicted criminals--not everyday workers.

• Facts are, as has been repeatedly demonstrated, neighborhoods and cities with increasing immigrant populations have seen decreasing crime over the years. While absorbing a portion of immigrants, members of the Muslim community aid in uncovering terrorist plots, and members of Hispanic communities work with police to better control gangs. This does not mean that there are no bad apples, but the rhetoric paints broad strokes with a wide brush, smearing minorities to reinforce stereotypes.

• The Institute for Taxation and Economic Policy has calculated that undocumented alien residents (“illegals”) currently living in the United States collectively paid $11.64 billion in state, local taxes, sales taxes and government fees in 2015. These do not include their tax withholds which will not be returned.

• GDP is the sum of all transactions in products and services. The contribution of 78 million immigrants and children of immigrants to the market of transactions make for a sizable chunk of America’s GDP.

There comes a morning when the immigrant looks in the mirror and realizes that an American is staring back; an American accepting of differences, striving in the pursuit of happiness, created equal; and troubled by the whipping up of anti-immigrant sentiment. Many have seen and lived such persecution of minorities for electoral purposes in their country of origin and know what it has led to. Thus, when asked, “Is America headed in the wrong direction?” their answer is “yes” because of the celebration of obstructionism, racism, extremism and sheer stupidity in political discourse, its lackadaisical treatment by the so-called mainstream media and the rising influence of fringestream media feeding populist frenzy. The wrong direction. Something I have lived, outside of the American Democracy bubble. I personally know that democracy is not the end of history: we can regress.

There will always be a special place in the immigrant heart for his or her roots. This is human, understandable and not a reason to marginalize. I know of the pain they feel when there is pain in the country they grew up in. Immigrants will support in humanitarian ways and with patriotic fervor the causes they believe in and, in so doing, defend and spread true American values throughout the world. They are the newest Americans. Welcome.

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Links and References

Migration Policy Institute: Where do Immigrants Come From? (Interactive Chart)

Migration Police Institute: FAQ and Statistics

U.S. Population by Race and Hispanic/Latino Origin (Census 2001 and 2010)

World Population by Country

Foreign Born Population in the U.S. (U.S. Census Bureau Presentation)

U.S. Deports Families

Deported in 2013

Immigration and Customs Enforcement (ICE) Deportation Statistics 2015

Pew Research Center: Second Generation Americans (PDF)

The Great American Con

It must be conceded that some Trump supporters are not only sincerely convinced Trump's beliefs and positions are based on true American values but believe these positions, if enacted, will improve their lot and their countrymen’s to “Make America Great Again.” Otherwise a Trump supporter is either a self-serving cynic or a willfully ill-informed disaffected protestatarian with anarchic tendencies. While these two latter characterizations do indeed define important groups of Trump supporters, these segments cannot to be reasoned with; and all of the three major groups, the American value based, the self-serving cynics and the anarchists, attract their share of morally reprehensible racists, xenophobes and nativists which are also beyond reasoning with.

Yet, it is within the first group, the one embracing their interpretation of American values, that we must seek to understand the appeal of the economic case Trump claims to have. This is a group of Americans that should be listened to, understood, and be afforded empathy, to start a conversation of reason. Not to do so is not only politically unwise, it seeds the possibility of a “better Trump” in the future: someone with the same divisive discourse but better disguised and better scripted. So, how does Trump then embody the emotional needs of these followers?

American Values

American values are set forth in several origin documents of the nation. The Declaration of Independence, establishing the right to representation and the foundation of inalienable rights; the Constitution establishing the separate powers of government, a united federation in pursuit of a common goal and the Bill of Rights; and the Gettysburg Address establishing American democracy as an experiment in progress. The Federalist Papers could be added, as they illuminate the thoughts and interpretation of our founding fathers on the first two documents and the role and promise of the union.

A common thread in these documents is faith and optimism in the future and role this grand experiment will have in the world. This has become a core value of America: a belief that the best is yet to come, that this is the land of opportunity, that there exists an inalienable right to the pursuit of happiness. This is at the root of what is commonly called American Exceptionalism. Trump makes a primal call to that core belief. He vociferously denounces America as a land that has lost its way and promises to rectify and restore that faith in America and its people. 

But Trump distorts the essence of American Exceptionalism and has deceived a large portion of the values group. He has done so by making up some facts unabashedly and distorting others, starting by his vague claim but catchy slogan “Make America Great Again.” By the numbers, this claim is spurious. Just a few gross indicators tells us that:

• From 1947 to 2016 GDP per Capita (constant) steadily climbed from $13,407.01 to $51,276.06.
• Infant mortality rates for full term births decreased from 15.2 per 1000 in 1960 to 2.6 in 2006.
• High school graduation rates increased from 74% in 1990 to 82% in 2013.
• The economy is currently in its longest streak of monthly job creation on record.

Civil rights have unquestionably expanded over the last 100 years and such expansion has accelerated at an increasing pace in the last 50. More Americans than ever can fully participate in the civil, social, political and economic life of their own country. Social nets have spread, nearly eliminating destitute elderly, protecting children and assisting low or no income Americans in their plight.

Those Jobs are Not Coming Back

Emotionally, however, the case to “Make America Great Again” rings true.  The flip side to the listed achievements attained is a sense of unfairness and abandonment from the technological and social displacement such progress has wrought. That is the raw nerve that Trump touches. Trump argues that American workers have lost their jobs to overseas cheaters, stoking xenophobia and false expectations simultaneously, promising (as do some Democratic politicians) to bring back “good manufacturing jobs” to America, typically meaning by that heavy industry and manufacturing jobs.

The reality is quite different, as technology is more to blame for such job losses. Silicon Valley technology thinkers are so aware of this issue that talk of “Universal Basic Income” is commonplace (along with speculation on the Singularity) among them. The UBI would be a way to ensure the welfare of everyone when all jobs are lost to automation and robots. But that is a whole other discussion and argument.

What is beyond argument is that technology disrupts the labor force, and that there is no turning back to a glorious past of a different (and “greater”) labor market structure. Productivity and output increases have been taking place in America and affecting the labor market structure. Suffice these examples:

Agro Industry:

• From 1900 to 2000 farm employment fell from 41% to 1.9% of the total workforce
• From 1948 to 1996 agricultural productivity increased 250%
• From 1955 to 2000 agricultural and farm exports increased approximately 800%

Automobile industry:

• 1980: 8,011,000 vehicles manufactured in the US by 725,000 workers – 11 veh/worker
• 2014: 11,661,000 vehicles manufactured in the US by 714,000 workers – 16.4 veh/worker
• The US accumulated Auto worker productivity increase from 1950 to 2013: 243%
• Estimated growth 2014-2018 - Employment: 2.1% / Productivity: 2.4%

Steel Industry:

• 1980: 101,455,000 Metric Tons shipped – employment: 398,829 – 254.38 MT per employee
• 2014: 95,400,000 Metric Tons shipped – employment: 149,800 – 636.85 MT per employee
• Overcapacity of the industry is estimated around 25 to 30% while steel imports estimated at 20 to 30% of the US market.

Electricity Generation:

• 2006 Generation: 4,060 TWh / By coal: 2,000 TWh (49.26%) / coal used: 1,030,556 K Tons
• 2014 Generation: 4,255 TWh / By coal: 1,600 TWh (37.60%) / coal used: 853,634 K Tons

Each of these industries has its own set of issues and problems, some of their own making, some related to unfair trade practices and some structural, but all indicate a substantial increase in output while reducing total employment or shifting resources. In fact, manufacturing jobs as a percentage of the total labor force has decreased from above 30% in 1960 to less than 8% in 2014 while manufacturing as a % of GDP has remained constant. No investor, businessman, entrepreneur or factory will give back the productivity gains attained to “Make America Great Again.”

Job Creation Blues

It is the reality and nature of a developing and growing economy that there will be labor force displacement, but no one expects or wants to return the economy to a country where 41% of the labor force worked in farms. The political promise of returning to an imagined better past is a pipe dream; in fact it is the original Marxist dream of Social Utopia. It also has striking visual imagery. The closed factories of old technologies create urban wastelands. Populists stand in a blighted area and decry such closings, making for a great image. It is not as striking to stand month after month in front of a hospital, a technology information park, or a construction site and say that in the last month more jobs were created than all existing jobs in the steel industry. If it bleeds it leads and that is red bleeding meat eaten up by voters of all persuasions.

According to labor economists it takes a little less than 150,000 jobs created monthly to keep the unemployment rate steady. Since 2010 this number has been exceeded repeatedly, decreasing unemployment from its peak of 10% in October 2009 to 4.9 % in August 2016. To compare, the highest unemployment rate since 1948 was 10.8% in Nov. 1982, and its lowest 2.5% in June 1953. Still, why does a steady stream of jobs created at a greater rate needed than by natural growth does not to quell the malaise that is touched upon by the slogan “Make America great Again”? When did this malaise begin?

Recessions strike employment as a lagging indicator, meaning unemployment peaks at the end of the recession once GDP starts growing again and impacts the labor market. The graph from the Federal Reserve clearly illustrates it well (shaded areas are recession periods). But this graph can also help us understand somewhat the underlying malaise tapped by Trump’s economic speech. The labor participation rate, i.e. the amount of people working and wanting to work, increased steadily at a rapid rate from around 1962, at 58% of the population, to 1990 at 67%. The participation growth curve slope starts to taper off in 1990 and peaks at 67.3 % in April 2000, climbing steadily down ever since to its July 2016 level of 62.8%.

Social changes have an impact, of course. The incorporation of women to the labor force likely explains part of the steep climb in labor participation rates between 1960 and 1990, while the growing peaks of recession-end unemployment rates in that period correlates to the desire of people to work during those years.  That growing participation curve can be interpreted as an optimistic outlook by the labor market. People expected the labor market to grow and have a good paying job waiting for them. Even in recessions, America was The Land of Opportunity. This may be, perhaps, the period to which Trump beckons when he says “Make America Great Again.”

The late 80’s and early 90’s changed the game. The biggest hoax perpetrated on the American people is the hoax of Supply Side economics. Begun with Reagan and synthesized in the phrases “trickle-down economics” and “a rising sea lifts all boats” but better described by Reagan’s own primary rival George H. Bush as "voodoo economics,” Supply Side economics transformed the economic landscape of the American worker.

The American labor market was under strain already. Technological disruptions (as described above) were driving down the manufacturing sector’s labor participation, and light industry, such as clothing and small goods, were feeling the beginning of globalization’s impact.  Starting in the mid 70’s the disconnect between productivity growth and wage growth became the norm. While many explanations for this disconnect have been put forward (including methodology problems measuring factors in the transit from a manufacturing to a service economy) undoubtedly the gap exists, resulting in owners of capital accumulating a greater share of the productivity gains than owners of labor.

The graph illustrating the disconnect between productivity and compensation (Lawrence Mishel, 2012) also indicates a sharp uptick in the slope of productivity gains in the advent of voodoo economics, while not as much in the hourly compensation curve, albeit it stopped declining.

In addition to these structural shift trends, income inequality has steadily increased in the US since 1969. Mercantilist policies, pushed by political “protectors” of business, created subsidies, tax loopholes and protective regulations resulting in increasingly non-competitive markets for goods and services benefitting the owners of capital. The GINI coefficient (indicator for income inequality) tells us that between 1969 and 2009 such inequality has increased an astounding 122%. This means that the increase in GDP per capita noted before has been distributed disproportionally at an increasing rate.

Increased income inequality has been directly correlated with increased divorce rates, increased personal bankruptcies and increased commute times, all associated with a lower quality of life. The increased income inequality pattern in America is a fundamental cause of the anger of the electorate with the political establishment as it fails to deliver the promised opportunity for a better life.

Hope and Greatness: Is There an Economic Case for Trump?

Reexamining the Unemployment/Participation chart from the Federal Reserve, 1990 onwards can now be understood as a period in which factors affecting the labor market structure and the remuneration of labor have come to a head. It is from that time that a trend of disillusionment begins for the American worker: a feeling that the American Dream is out of reach. It is no wonder that by 2008 the message of “Hope” resonated in the electorate enough to choose as president its purveyor, Barack Obama.  

Because the built-in structures (tax code) driving income inequality remain mostly unchanged, the faithful of voodoo economics hang on to the levers of economic policy and discourse, and the labor market structure is still buffeted by globalization and technology with no clear answer, it is no wonder that Hope gave way to Revolution in the 2016 election cycle. The “Rage Against the Machine” is understandable. And Trump preaches rage.

Yet, the answers Trump offers to quench this anti-establishment mood created by the disenfranchisement from the American Dream do not address the nature, origins or bases of this condition. His “recipe” includes more of the supply side economics that have been demonstrated time and time again to stifle growth and drive up inequality (supply-side faithful devotees are as blind to the failures of their economic ideology from the right as Marxist socialists are to theirs from the left). He promotes trade barriers potentially increasing by thousands of dollars per household prices for consumer goods from cars to TVs to toasters. Other agenda points in his recently announced master plan: weaken the social net and generally make the tax code more regressive for individuals and more generous for corporations, accelerating income inequality.

Trump’s answers are not the ones that will solve America’s woes. His answers do not even address the problems he highlights in his economic speech: job creation, fair trade and America’s “greatness.” It may be probable that by the way he posits the problems—with his knack for finding the raw nerve—and the way he parrots solutions from his supply side economic advisors, it may be just probable that he truly does not know how to link problems with solutions; and it is possible that at least some of those supporters that believed Trump could embody their aspiration of restoring America as the Great Land of Opportunity will soon see in Trump what Michael Bloomberg saw in him: A loud mouthed New York City conman.

Trump’s answers are not new, they have been tested before. Supply side economics has been tried throughout the world and failed—and brought us the Great Recession. His stance on trade has been tried before—and brought us the deepening of the Great Depression. And, beyond economics, his tribal stance of Country First has been done before—and brought us at its best ethnic cleansing and at its worst World War II. Trump is not the answer to America or is what America stands for. The grand experiment must go on, but different results should not be expected from trying the same solutions over and over again, no matter how loudly those solutions are pitched. His sales pitch is the Great American Con.

 Auto Industry in the 1980’s: A Decade in Transition; Christopher Singleton, Monthly Labor Review Feb 1992 (Accessed 8/7/2016)

Decline and Resurgence of the US Auto Industry (EPI) (Accessed 8/7/2016)

Economic Policy Institute, Surging Steel Imports Put Up To Half a Million U.S. Jobs at Risk, Briefing Paper #376 (Accessed 8/7/2016)

The US Steel Industry, Where we Have Been, Where we are Going, Keith Buse Feb 2005, Citing statistics from the American Institute of Iron and Steel (accessed 8/7/2016)

The 20th Century Transformation of U.S. Agriculture and Farm Policy, Carolyn Dimitri, Anne Effland, and Neilson Conklin, USDA Economic Research Service, June 2005 (Accessed 8/7/2016)

Coal Usage for Electricity Generation (Accessed 8/7/2016)

Manufacturing and the GDP (Accessed 8/7/2016)

Total Electricity Generation (Accessed 8/7/2016)

Manufacturing Labor Participation Federal Reserve Blog (Accessed 8/7/2016)

Labor participation rate/employment Federal Reserve Blog (Accessed 8/7/2016)

US GDP per Capita (Accessed 8/7/2016)

Infant mortality (Accessed 8/7/2016)

GINI in the US: Income Inequality and its Costs (Accessed 8/7/2016)

The wedges between productivity and median compensation growth, Lawrence Mishel,  April 26, 2012, EPI Issue Brief #330 (Accessed 8/7/2016)