The Paradox in President Trump's Attacks on Big Government and

Globalization

Cal Clark, Auburn University

Evelyn A. Clark, SUNY Oswego

Paper prepared for presentation at the 2017 Conference of the Public Administration Theory Network, University of Wyoming, June 1-4.

1

Donald Trump ran for President on a platform that included

strong denunciations both of big government and of globalization.

The former was a traditional position of Republicans. The

latter, however, challenged the normal stance of business, a

primary Republican constituency, and indeed many, if not most,

Republican leaders. Rather, Mr. Trump actively directed his

appeal to the white working class who blamed their deteriorating

conditions on the forces of globalization which had destroyed

much of America’s manufacturing base; and this group played a key

role in his presidential victory (Cillizza, 2016; Edsall, 2017;

Jones, 2017; Long 2017a, 2017b). Trump was, in fact, the only

presidential candidate who has promised “good jobs” to the less

educated and less skilled who have lost out to the processes of

globalization over the last four decades. This paper analyzes

the Trump initiative to revitalize America’s working class. We

argue that we must first understand the economic changes that

globalization has brought to America. When we do so, the

conclusion seems inescapable that President Trump’s current

attack on big government (Berg, 2017) will almost inevitably

undercut his goal of bringing prosperity back to the working

class. The first section, hence, develops a model for

conceptualizing how globalization has affected the U.S. economy;

and the second examines the Trump program.

2

Globalization’s Impact on America

The 1980s witnessed a revolution in developmental economics

that represented the convergence of two distinct trends. The

first was the growing globalization of the world economy brought

about the tremendous drop in transportation and communications

costs, which allowed the movement of standardized production to

the developing world to take advantage of low labor costs. The

second was the increasing popularity of the tenets of

neoliberalism, which argued that laissez-faire policies were

necessary to promote development through “the magic of the

market.” While the importance of globalization or the economic

and social linkages binding the world together has been widely

acknowledged, scholars and policy-makers disagree vehemently

about whether globalization is inevitable; whether it is, on

balance, positive or negative; who, if anyone, controls the

processes; who are the winners and losers in the fundamental

transformations being wrought by globalization; and what policies

should be adopted in the face of globalization. There does seem

to be a consensus among most of both the advocates and critics of

globalization that globalization and neoliberalism are tightly

intertwined (Dicken, 2007; Harvey, 2005; Mirowski and Plehwe,

2009; Steger, 2003; Steger and Roy, 2010), although recent

3

analyses indicate a much more complex reality (Clark and Clark,

2016).

Globalization -- that is, the substantial growth of

interlinkages among nations and societies -- is generally

considered a process of the postwar era that took off in the

early 1980s, although important aspects of it can be dated back

to at least the 1960s. The predominant connotation of the term

refers to growing economic interdependence (i.e., trade and

capital flows, multinational corporations, transnational

corporate alliances, and even international networks in the

making of specific products) across national borders that

developed during the late twentieth century. Two important

causes for globalization should be distinguished. First, the

transportation and communications revolutions of the second half

of the century have made it possible to ship goods, funds, and

information around the world cheaply and quickly (Greider, 1997;

Thurow, 1992). By themselves, though, these technological

changes would not have created an integrated global economy.

Consequently, a second revolution was vital as well. This is

that national borders have become much more porous to economic

transactions as part of the U.S.-led efforts at creating a

neoliberal or free-trade global economy (Dicken, 2007; Gilpin,

1987; Harvey, 2003, 2010).

4

Globalization, furthermore, has become increasingly central

to economic development in both the developing and developed

worlds. For the last several centuries, development has been

generally associated with industrialization. The nature of

industrialization as depicted in Figure 1, of course, changed

dramatically over the 19th and 20th centuries in terms of what

industry was the most advanced or technological driver: first

textiles, then iron and steel, then automobiles, and most

recently high tech and advanced electronics. In traditional

economies, productivity increases are relatively small, but

productivity and, consequently, GDP growth “take off” (Rostow,

1960) once industrialization starts. In addition, the late 20th

century witnessed the emergence of what Alvin and Heidi Toffler

(1980, 1995) have called the “Third Wave” of massive economic

change. Following the first two waves of economic transformation

in human history (the development of agriculture and the

Industrial Revolution), the Third Wave encompasses a

technological revolution which is creating an information-age

society (Drucker, 1989; Reich, 1991; Thurow, 1992, 1996).

Figure 1 here

The theory of the “international product cycle” explains how

each of various industries in turn spread like a wave through the

global economy. In essence, the international product cycle

refers to the life cycle of a particular good or product.

5

Generally, new products are developed and produced in the most

advanced industrial nations because they involve the latest (and

most expensive) technologies, are produced by very capital-

intensive processes, and require highly skilled production

workers. Over time, however, the production of an item becomes

more standardized and labor-intensive. Consequently, as an

industry (e.g., textiles and apparel) “matures” so that

production becomes highly standardized and labor-intensive, the

product cycle works to diffuse its production to countries that

are not so technologically advanced but which have lower labor

costs and standards of living (Gilpin, 1987; Vernon, 1966).

The impact of globalization upon the economic fortunes of

the United States changed fundamentally during the postwar era.

For approximately a quarter of a century from the late 1940s

until the early 1970s, it clearly promoted economic growth whose

benefits were spread widely throughout American society. During

the 1970s and 1980s, in contrast, globalization began to have

decidedly mixed effects upon America as the country’s basic

industries increasingly moved off shore under the push of the

international product cycle. Renewed growth during the second

half of the 1990s temporarily raised hopes that the emerging

information-age society would lead to greater prosperity.

However, the bursting of the high tech bubble at the beginning of

the new century, the ensuing stagnation in wages and salaries,

6

and the collapse of the Great Recession that commenced in 2008

brought home the fact that the U.S. economy faced serious

problems.

Figure 2 summarizes American’s economic position in the

early postwar era. The top part of the figure shows the dynamic

resulting from America’s being the only industrial economy that

was not destroyed during World War II. This left the U.S. as the

world’s sole economic superpower. In the late 1940s, for

example, the U.S. accounted to 40% to 50% of global GDP. This

dominant position gave America a vested interest in an open

international economic system to promote its exports and the

activities of its multinational corporations and financial

institutions. Consequently, the United States used its economic

power to create laissez-faire international trade and, to a

lesser extent, financial systems, which promoted the growing

globalization of the international economy (Gilpin, 1987;

Huntington, 1988).

Figure 2 here

America’s dominant economic position at the midpoint of the

20th century, of course, reflected its previous “developmental

success.” The bottom part of Figure 2, thus, models the dynamics

of its economic growth from the late 19th century to 1950. The

lower right side of the figure indicates two important

innovations which played a key role in America’s

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industrialization. First, the United States took a huge head

start over the rest of the world in providing mass public

education. This both created human capital for the rapidly

expanding industrial workforce and hastened the advent of middle

class society (Garfinkle, 2006; Reich, 2010; Thurow, 1992).

Second, Henry Ford’s combination of standard parts and assembly-

line mass production represented an organizational revolution

that transformed America’s (and later the world’s) economy and

society. The tremendous increase in productivity simply swamped

more craft-oriented techniques that utilized skilled workmen.

Within the corporation, the scale of production multiplied; and

corporate entities became huge with the development of

professional management, horizontal and vertical integration, and

the other advantages that large organizations can garner from

applying economies of scale (Chandler, 1977; Piore and Sabel,

1984; Reich, 1991; Womack, Jones, and Roos, 1990). Mass

production revolutionized society as well. The low costs of mass

production also meant that many goods became affordable for broad

segments of the population. Together, rising wages and lower

prices created an increasingly middle class society whose

consumption demands drove industrialization further. Finally,

mass production also fit well with two other aspects of America’s

economy. An extremely rich natural resource base reduced

industrial costs; and a continental market created a huge demand

8

for industrial products. The top half of Figure 3 sketches these

positive dynamics.

Figure 3 here

As summarized in the bottom half of Figure 3, however,

globalization put America’s system of mass production came under

increasing pressure by the last quarter of the 20th century. The

first problems appeared in standardized and labor-intensive

production, which increasingly began to move off-shore to

countries with cheaper labor, starting in the 1960s and

accelerating in the 1980s. In addition, other countries, such as

Japan (Okimoto, 1989) and Germany (Streeck, 2009), had developed

alternatives to mass production that gave them an advantage in

high-quality manufactured products, which America’s middle class

was increasingly demanding. Unfortunately for the United States,

its previously successful reliance on mass production resulted in

a lack of interest and emphasis in creating a highly skilled

workforce, which hindered a strategy of industrial upgrading.

More fundamentally, economic change began to threaten America’s

success in creating a broad middle class. High-paying

manufacturing jobs were increasingly replaced by low-paying

service ones; and the lack of retraining or other kinds of

adjustment policies resulted in downward mobility for a

substantial number of Americans (Greider, 1997; Reich, 1991;

Rifkin, 1995; Thurow, 1996).

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It is not surprising, therefore, that America has seen many

more challenges than triumphs in the economic sphere lately as

outlined in Figure 4. The workings of the international product

cycle and technological innovations continued to erode the

manufacturing sector. This was exacerbated by the hopes

surrounding America’s ongoing transformation to an information-

age in the 1990s being crushed in the early 21st century. First,

the bursting of the high tech bubble in 2001 struck a major blow

to the sector. Second, the new technologies that had aided the

growing value of knowledge workers turned on them by allowing the

outsourcing of many jobs to much cheaper foreign employees,

leading to the displacement of highly skilled computer scientists

and radiologists, as well as low-skill occupations like customer

service representatives. This made Jeremy Rifkin (1995) appear

prophetic in his argument that the information revolution would

augment the industrial revolution to make productivity so high

that many fewer workers and employees would be needed.

Figure 4 here

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Trumponomics and the Problems of the Working Class

Overall, the push of globalization has created growing

economic problems for the United States, in particular the loss

of well paying jobs for those without a college education, such

as factory and low-skill service workers and rural residents, who

are now considered the working class in the United States.

Furthermore, as Figure 5 shows, globalization is only one of the

factors that have been squeezing the working and middle classes

in contemporary America. Rapid technological change has replaced

workers with robots and other devices; and improvements in

communications have escalated the out-sourcing of jobs in such

diverse professions as computer programmers and radiologists

(Dicken, 2007; Gillespie, 2017; Smith, 2012; Thurow, 1996). Two

noneconomic factors are important as well. First, business

became much more aggressive and assertive in dealing with labor

and government starting in the 1970s (Reich, 2015; Smith, 2012;

Vogel, 1989, 1996). Second, perhaps in response to business

lobbying, the government has adopted a series of policies that

exacerbated the long-term trends of decreasing the social-welfare

net and of growing income and wealth inequality in the U.S.

(Bartels, 2008; Hacker, 2006; Phillips, 1990; Pierson and Hacker,

2010; Smith, 2012). Taken together, these forces produced a

11

“perfect storm” that devastated much of the working class

(Kallenberg, 2011; Murray, 2012).

Figure 5 here

The growing economic stress on the working class in the Rust

Belt and rural areas has certainly created a serious challenge

for the United States. Table 1, therefore, lists 13 economic

challenges affecting the working class and President Trump’s

responses to them, at least as far as can be ascertained so early

in his term. The first challenge is that globalization and

neoliberalism are promoting the economic changes that have

increasingly marginalized the working class. Here, President

Trump strongly rejects neoliberalism’s advocacy of free trade and

capital flows throughout the global economy. Instead, he views

international economics as a competition among nations, whose

outcomes are shaped by the “deals” that they make with each other

and promises that he will use the U.S.’s economic and political

power to force concessions from other countries. Indeed, he has

roundly been criticized by many economists for this position

(Douma, 2017).

Table 1 here

While President Trump may not be an orthodox neoliberal in

his strategy of using state power to wring concessions from

America’s trade partners, he might well represent the “crony

capitalism” of exchanging corporate donations for favorable

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government policies (Lewis, 2013). In fact, during the campaign

he argued that his past participation in such practices gave him

the inside knowledge to crack down on them. So far, his actions

as President have sent some mixed signals in this regard. On the

on hand, he has jaw-boned CEOs of major corporations to provide

more jobs, which does not sound like crony capitalism. However,

a variety of other actions are just what would be expected of a

crony capitalist. These include an ambiguous view of conflict of

interest issues, Chinese approval of the Trump trademark,

appointing a large number of rich businesspeople to his

administration, holding a series of meetings with CEOs, and

pushing a series of business-friendly policies including

deregulation, tax cuts, and anti-union policies (Barria, 2017;

Berman, 2017; Frum, 2017; Hakim and Wee, 2017; Johnson and Mui,

2017; Mullen, Isidore, and Todd, 2017; Venook, 2017). There is

little evidence, hence, that President Trump sees crony

capitalism as a problem in the United States.

Likewise, he has not discussed several other potential

economic problems. One is the possibility that America’s

overemphasis on finance may hurt productive activities as

occurred in 20th century Britain (Gilpin, 1987). In America, for

example, the financial sector almost doubled in size from 5% to

9% of GDP between 1980 and 2010. This expansion was partly

stimulated by the deregulation of banking by both the Republican

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Reagan administration in the 1980s and the Democratic Clinton

administration in the 1990s. This resulted ultimately in the

financial collapse of 2008 that caused massive dislocations both

in the U.S. and globally. America’s large financial institutions

(Wall Street) reached the brink of ruin over the first decade of

the 21st century by engaging in increasingly speculative

activities that, while enormously profitable in the short run,

became increasingly risky and almost sure to fail over the longer

term. One was the increasing use of “derivatives” (securities

based on some other security). A second practice was that

“subprime” housing loans to people who ordinarily would not

qualify for them assumed an unimaginably central role in the

financial system (McLean and Nocera, 2010; Philippon, 2012;

Reich, 2015; Sorkin, 2009; Smith, 2012; Stiglitz, 2010). Trump

has promised to reduce the regulation of the finance industry;

and the deteriorating position of his Chief Strategist Steven

Bannon, the leading populist in the administration, in mid-April

made it more likely that the financial industry will be given

freer rein (Hohmann, 2017; Zeleny and Murray, 2017). Two other

problems do not seem to have made it to the President’s radar

either. First, popularity of the business “low road” strategy

of stressing cost minimization especially in salaries as the best

method of increasing profits has clearly hurt the working class

(Clark and Clark, 2011; Harrison, 1994); and, second,

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technological advancement has played a substantial role in

American job losses during the early 21st century (Editorial

Board, 2017; Gillespie, 2017; Krause, 2017).

Candidate Trump stridently denounced what he saw as the

faltering economy in the United States, which he blamed on the

policies of incumbent President Barack Obama. As indicated in

the middle part of Table 1, he proposed six policies to stimulate

economic growth and job creation. One was a plan to spend $1

trillion on restoring America’s infrastructure (Campbell, 2017;

Zanona, 2017). The second was a border tax of 20% that would

raise the price of imported items substantially, thereby creating

a strong incentive for domestic production. Third, he actively

jawboned individual corporations to keep their U.S. production

facilities in operation to open new factories and facilities in

America (Graham, 2016). Two other policies were more indirect in

their operations. A massive tax cut for business and the wealthy

would produce more resources for savings and investment in what

is called “supply-side economics” (Nunns, Burman, Rohaly, and

Rosenburg, 2016; Rozsa, 2017); and deregulation would free

business to operate more efficiently and, in particular, create

more jobs in energy sectors, such as coal (Horsley, 2017; Johnson

and Mui, 2017; Pisani, 2017). Finally, the sharp immigration

crackdown promised by Trump would free more jobs for U.S.

citizens, although it was primarily justified by national

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security considerations (Ainsley, 2017; Graham, 2016; McCarthy,

2017).

Another source of stress on the working and middle classes

is the Great Risk Shift (Hacker, 2006) that has increasingly

placed the burden for health and retirement security on the

individual as the government and business have reduced their

previous support. Here, President Trump has shown some sympathy

to the problem as he has expressed support for Medicare and

Social Security despite the plans of Congressional Republicans to

move toward their privatization. Still, his strong commitment to

repeal and replace the Affordable Care Act or Obamacare (Bade,

2017; Pear, 2017) may well exacerbate the financial problems

facing the working class. A second problem in this area is that

the major reductions in domestic spending included in the first

Trump budget will have a major impact on working-class citizens

(Alcindor, 2017; Brownstein, 2017; Flegenheimer, 2017; Goldstein,

2017; Liptak, 2017; Nunns, Burman, Rohaly, and Rosenburg, 2016;

Shapiro, Trisi, and Chaudhry, 2017; Shear, 2017).

President Trump’s plan to revive American industry is

perhaps unique. Several countries, such as Germany and Japan,

have successfully extended their industrial production by

focusing upon high quality products that require advanced capital

goods and highly skilled labor (Okimoto, 1989; Streeck, 2009).

Trump’s strategy instead is to create good jobs for the less

16

skilled and less educated working class. The Trump strategy,

hence, offers hope to those without a college education who have

especially suffered in the emerging information-age economy.

This raises the question of how effective the Trump model will

be. This is rather uncertain at the moment because of the two

distinct reasons listed in the bottom two rows of Table 1.

First, the efficacy of these policies is questionable in several

respects; and, second, many of these policies are quite

controversial and even have stimulated conflict among a variety

of Trump and Republican constituencies.

Table 2, therefore, lists three prominent Trump policies and

the possible counterproductive effects that they may exert on his

proclaimed goal of generating a large number of good jobs for the

working class. The first policy initiative is to use the border

tax and trade protections to reduce competition to domestic

manufacturers. One potential negative consequence is that

America’s trade partners would almost certainly retaliate. This

would, of course, significantly reduce U.S. exports and might

even include capital restrictions that would hurt the large U.S.

financial industry. Second, a 20% border tax would inevitably be

passed along to consumers, which would hurt the poor and working

class the most. Finally, although less recognized, many domestic

manufacturers import parts and components, even in the key

manufacturing sector of automobiles; so that their viability

17

could be challenged by a large border tax (Confessore and

Rappeport, 2017; Douma, 2017; Gabriel, 2017).

Table 2 here

A second and related Trump initiate is to stimulate the

development or expansion of new industries through a combination

of trade protection, tax cuts for business and the wealthy, and

deregulation. The middle part of Table 2, however, implies that

the success of this endeavor may be limited by four factors.

Manufacturing has become much more skill- and technology-

intensive over the past several decades, thereby reducing the

total number of jobs and disqualifying many working class

Americans for them (Gillespie, 2017; Long, 2017b; Petroff, 2017;

Skoczek, 2017). In another area, Trump’s harsh immigration

crackdown may push some relocation of the high tech industry to

Canada, which would reduce the number of good jobs in America.

Moreover, the sharp cut in environmental protection might not

bring a surge of energy jobs for two reasons. Technology is

reducing the demand for labor in energy extraction; and the

resurgence of coal predicted by the President will be hampered by

the higher cost of coal compared to natural gas and some

renewables (Gillespie, 2017; Isidore, 2017; Krause, 2017).

Finally, business’s “low road” strategy, about which the

President has expressed little concern, continues to reduce, not

improve wages. For example, corporations are contracting out a

18

significant number of functions to temp firms with very low wages

(Porter, 2017).

The final policy included in Table 2 is Trump’s approach to

education, which emphasizes expanding private and charter schools

(Elder, 2017). This may not help the working class much for

several reasons. First, the effectiveness of charter schools

remains controversial (Buckley and Schneider, 2007; Ravitch,

2010). Second, regardless of the quality of the new private

schools that may develop under Trump’s program, most working

class children will remain in public schools. Thus, despite the

fact that high-paying jobs are linked to advanced skills and

expertise, the Trump administration has yet to have any interest

or plan for helping working-class citizens become equipped for

better jobs.

A second obstacle to Trump’s success in promoting the

interests of working-class Americans is that many are quite

controversial; so that their adoption and implementation are not

foregone conclusions. Many of Trump’s policies evoke the normal

cleavage between Republicans and Democrats, being loved by

conservatives and hated by liberals (Abramowitz, 2011; Brewer and

Stonecash, 2006; Brownstein, 2008; Campbell, 2016; Doherty,

Killey, Tyson, and Johnson, 2016). Consequently, they face

strident resistance of Democrats in Congress and opponents in the

general public (Ball, 2017). How effective this will be is

19

debatable, however. The Democrats could block Republican

legislation in the Senate with filibusters which, in effect,

require 60, not 51, votes to pass legislation, but Republics are

already threatening the “nuclear option” to circumvent

filibusters on legislation, as they did on President Trump’s

first nomination for the Supreme Court (Silver, 2017).

Furthermore, at least so far, the Republican leadership appears

disdainful toward the anti-Trump popular movement (LiBianco, Fox,

and Killough, 2017); and President Trump is using threats,

unsuccessful thus far, to pressure Democrats to support the

repeal and replacement of Obamacare (Pear, 2017).

More importantly, perhaps, Trump’s Republican supporters do

not constitute a consistent and unified whole, as a variety of

constituencies or groups exist within the party (Abramowitz,

2011; Baron, 2017; Brewer and Stonecash, 2006; Brownstein, 2008;

Campbell, 2016; Confessore and Rappeport, 2017; Coppins, 2017;

Doherty, Killey, Tyson, and Johnson, 2016; Paletta, 2017; Wong,

2017). Table 3 lists nine such constituencies. Five --

business, religious and social conservatives, deficit hawks,

foreign policy hawks, and the elderly -- have been widely

recognized. Four other Republican groups can also be identified,

although they have been fairly marginal in the party’s policy

discussions until recently. Three of them -- the alienated white

working class, isolationists, and “Alt Right” white nationalists

20

-- along with religious and social conservatives formed the core

the Trump coalition. In addition, neoliberal libertarians, who

often clashed with businesses that wanted governmental support

and favors, became more prominent in the second decade of the

21st century.

Table 3 here

Donald Trump’s ability to mobilize previously marginal

Republican constituencies provided an important part of the

explanation for his victory but also increased the likelihood for

intraparty conflict considerably. Table 4 lists ten important

economic issues with which the Trump administration is dealing.

On only one of them, deregulation which is almost universally

supported by Republicans, is there little, if any, conflict or

potential conflict within the party. The second issue of Trump’s

infrastructure plan faces a strange situation. It clearly would

create a large number of working-class jobs; and it is strongly

supported by both business and the white working class. Yet, it

is now seen as endangered by the opposition of deficit hawks and

many congressional Republicans (Campbell, 2017). For five of the

other issues, there are clear factional divisions among

Republicans. Business and the white working class support

Trump’s managed trade approach, while neoliberals oppose it.

Business actually splits over the idea of a border tax, as

producers like the idea, while retailers do not; and, in

21

addition, the white working class and the Alt Right support and

neoliberals oppose this initiative. Trump’s immigration policies

produce a different alignment that is opposed by business and

supported by the white working class, social conservatives, and

the Alt Right. The relationship between Trumponomics and the

class division is exactly the opposite for Crony Capitalism,

which is loved by business and loathed by labor.

Philosophically, neoliberals should oppose a tight relationship

between business and government, but their pro-business

orientation might make them more tolerant. On the sixth divisive

issue of tax cuts, which are almost universally loved by

Republicans, there is a little split between the conventional

Republican strategy of giving most of the benefits to business

and the wealthy and Trump’s plan to provide more tax breaks to

the middle and working classes. Finally, the last three issues

-- the business “low road model,” anti-union policies, and

cutting domestic spending -- are generally backed by most

Republicans, especially businesspeople and neoliberals. Yet,

there is also the possibility that they could face growing

opposition from the working class if it sees significant losses

from these policies, which is now seen as increasingly likely for

Republican budget cuts (Liptak, 2017) and for Trum’s “delicate

dance” with labor unions (Alemany, 2017).

Table 4 here

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The Paradox of Trumponomics’ Clashing Goals

Donald Trump, in sum, won the presidency to a considerable

extent because of his promise to bring good jobs for the working

class (i.e., those without a college education) back to the

United States. As the last section sketched, this involved a

combination of trade protection, infrastructure spending, tax

cuts for “job creators” (i.e., business and the wealthy),

deregulation especially in the area of environmental protection,

and a harsh crackdown on immigration. The data in Tables 2 and 4

above, however, suggest that the effectiveness of these policies

remain unclear. Some may well set off counterproductive effects

on working class employment; some may be defeated by political

conflict, both between Democrats and Republicans and with the

Republican Party; and President Trump does not appear to

recognize how good working-class jobs are suppressed by such

factors as business’s “low road” strategy and the lack of

advanced skills and expertise among the working class.

Furthermore, there is, we argue, a more fundamental factor

which undercuts Trump’s goal of improving that status of

America’s working class. This is his seemingly unwavering

23

assumption that he can “make America great again” only by tearing

down the current national governmental structures or in Steve

Bannon’s pithy phrase “deconstructing the administrative state”

(Posner, 2017; Rucker and Costa, 2017). Trump’s commitment to

attack “Big Government,” therefore, explains his selection of

policies and his implicit conclusion that some issues are

irrelevant to helping the working class. This leads Greg Sargent

(2017) to predict that “Trump will likely sell out his working-

class white base.” There is a paradox, in sum, between President

Trump’s attacks on Big Government and Globalization, which will

probably be resolved to the detriment of the working class in the

United States.

24

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Figure 1

CHANGES IN LEADING ECONOMIC ACTIVITYAND THE "S-CURVE" OF PRODUCTIVITY AND GNP GROWTH*

POSTINDUSTRIAL Services SOCIETY harder to increase productivity; greater wage inequality)

High Tech (Flexible Production)

Automobiles (Mass Production & Consumption)

INDUSTRIAL Iron & REVOLUTION Steel

Textiles

TRADITIONAL ECONOMY Commerce, Handicrafts

Agriculture

*The steeper the curve, the higher the rate of growth

36

Figure 2

THE EMERGENCE OF POSTWAR GLOBALIZATION

DEVASTATION U.S. LONE ECONOMIC U.S. PUSH FOR BEGINNING OF POSTWAROF WW II SUPERPOWER IN OPEN WORLD GLOBALIZATION (freer POSTWAR WORLD ECONOMY trade & capital flows)

PREVIOUS DEVELOPMENTSUCCESS

PLENTIFUL CONTINENTAL NATURAL MARKETMASS RESOURCESEDUCATION GREATLY RAPID EMERGENCE OF INCREASED GROWTH MIDDLE CLASS SOCIETY PRODUCTIVITY MASS PRODUCTION INCREASED CONSUMER SPENDING

37

Figure 3

GLOBALIZATION GIVES TO AND THEN STARTS TO TAKE AWAY FROM THE U.S.

U.S WORLD FINANCIAL CENTER

GLOBALIZATION GROWING MARKETS GREAT PROFITS; IN 1950s & 1960s FOR U.S. EXPORTS RISING WAGES; (both manufactures MORE SOCIAL & primary products) WELFARE PROGRAMS BEGINNING OF DE-INDUSTRIALIZATION 1970s & 1980s INCREASED ACTIVITIES OF U.S. MNCs 1970s & 1980s

INCREASED COMPETITION FROM DEVELOPED WORLD

GROWING PERCEPTIONS THAT U.S. USING ECONOMIC HEGEMONY TO EXTRACT MONOPOLY RENTS

U.S. CORPORATIONS BEGIN TO MOVE LABOR-INTENSIVE PRODUCTION OFF SHORE

38

Figure 4

GROWING CHALLENGES IN THE EARLY 21st CENTURY

TECHNOLOGY REPLACES LABOR

LOSS OF MANUFACTURING CONTINUES

GLOBALIZATION TECH BUBBLE BURSTS

ECONOMIC PERFORMANCE, WHILE GOOD OUTSOURCING OF FOR A DEVELOPED NATION, CREATES MANY TECH JOBS INCREASING STRESS AND INSECURITY FOR MANY TRANSITION TOINFORMATION-AGE RISING POWER OFECONOMY FINANCIAL(new technologies) SECTOR

FINANCIAL COLLAPSE OF 2008

39

Figure 5

Factors Squeezing America’s Working Class

Push of Globalization

Technology Advances Escalating Stress

On Working ClassMore Aggressive Business Stance

Public Policies Favoring Business and Cutting Social Welfare Net

40

Table 1

Trumponomics and the Stresses on the Working Class

Economic Challenge Trump ResponseNeoliberalism and Globalization promoting adverse economic change

Rejects neoliberalism and advocates economic nationalism and mercantilism to revive U.S.

Crony Capitalism Doesn’t see as a problem, may well make worse

Finance prioritized over Production

Doesn’t see as a problem, very responsive to financial sector

Business’s “low road” model Doesn’t see as problem, anti-union policies may well hurt workers

Technological unemployment Doesn’t see as a problemStimulate Economy #1 Huge infrastructure programStimulate Economy #2 Border tax to discourage

imports Stimulate Economy #3 Jawboning business to produce

domesticallyStimulate Economy #4 Massive reduction of taxes on

business & wealthy to increase investment

Stimulate Economy #5 Deregulation to reduce burdens on business and promote energy burdens

Stimulate Economy #6 Harsh crackdown on immigration to create more jobs for U.S. citizens

Great Risk Shift #1 Unlike many Republicans, wants to protect Medicare and Social Security, but repeal of Affordable Health Care Act will probably make problem worse

Great Risk Shift #2 Sharp cuts in domestic spending will almost certainly hurt working class

Effectiveness of pro-manufacturing policies Unclear #1

Efficacy of policies uncertain

Effectiveness of pro-manufacturing policies Unclear #2

Political opposition, especially conflicting interests of Trump constituencies

41

Table 2

Counterproductive Possibilities of Trump Policies

Policy Possible Counterproductive Effects

Border Tax and Trade Protectionism

Trade partners retaliate, hurting exports and perhaps financeBorder tax hurts consumersBorder tax hurts component importers

Stimulate New Industries, Even If Successful

Manufacturing now more skill- and technology-intensiveImmigration crackdown may drive some high tech to CanadaTechnology limits job creation in energy extraction, especially coal “Low road” business practices bring more low-wage jobs

Emphasis on Expanding Charter Schools in Education

Effectiveness controversial

Many, if not most, working-class students will remain in public schoolsHigh paying jobs tied to skills and expertiseNo plan to make working class equipped for better jobs

42

Table 3

Republican and Trump Constituencies

Previously Seen as Key ConstituenciesBusinessSocial & religious conservativesDeficit hawksMilitary hawksElderly

Previously Seen as More MarginalNeoliberal libertariansAlienated white working classIsolationists“Alt Right” white nationalists

43

Table 4

Republican Divisions Over Trump’s Economic Policies

Issue Pro-Trump Anti-TrumpDeregulation Business

NeoliberalsMost Republicans

No Republican Constituency

Infrastructure BusinessWorking Class

Deficit HawksMany Conventional

RepublicansManaged Trade Business

White Working ClassNeoliberals

Border Tax ProducersWhite Working ClassAlt Right

RetailersConsumersNeoliberals

ImmigrationCrack Down

White Working ClassSocial ConservativesAlt Right

Business

Crony Capitalism BusinessNeoliberals???

White Working Class

Huge Tax Cuts,Primarily for Business & Wealthy

BusinessNeoliberalsMost Republicans

Trump wants more tax breaks for middle and working classes

Business “Low Road”Strategy (cut wages & costs)

BusinessNeoliberalsMost Republicans

No Republican Constituency now but bad effects could mobilize White Working Class later

Anti-Union BusinessNeoliberalsMost Republicans

No Republican Constituency now but bad effects could mobilize White Working Class later

Cut Government Services

BusinessDeficit HawksNeoliberalsMost Republicans

No Republican Constituency now but bad effects could mobilize White Working Class later

44