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Millennials Rebuilding America

A Manifesto for the Future

1. A Millennial Story: Are Millennials the next Hero Generation?

2. American Generations

3. Boomer World

4. Identity

Intermission: Disruption isn’t just about Silicon Valley

5. Sunset, Sunrise

6. Prime

7. The Next Hero Generation

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America: 1981–2050

This Document will continue to grow.

I. A Millennial Story

Why I Am Moving Back to America

“Go East, Young Man.” In 2006, two years out of college, I stepped into my boss’s office and told him “Send me anywhere outside America.” Young and ambitious, I knew there was a huge, changing world out there, full of tremendous opportunities. I graduated from high school in the year 2000, the “Last Class of the 20th Century!”, exclaimed the little t-shirts given to every kid in my kindergarten, and by some definitions the first year of the Millennial generation. What would this new millennium bring?

One week later I was at O’Hare, boarding the longest flight of my short life, bound for Asia. From the moment I landed in Hong Kong, I could feel the boomtown electricity in the air. The world was flat, and powerful forces of globalization were changing the way entire societies interacted. Fortunes were made every day, and — no matter what your race, religion, or nationality — if you had the drive, there were opportunities to shine.

I was determined take advantage of it. I wanted to learn as much about the changing world as possible, and I tried to travel nearly everywhere in the region. Work took me to far-flung corners of the globe, from Indonesia to Kuwait to South Korea, places I had barely considered in my sheltered suburban adolescence. Called back to Chicago after a year, I frequently returned to East Asia. My job is to invest in global economic trends, and every day I could feel my picture of the world growing — Asia was obviously the future. My career was taking off, and I was advancing rapidly at a company at the pinnacle of my industry.

That was until the global financial crisis struck, and my entire division was laid off. Soon I found myself completely lost. Hadn’t I had done everything “right”, everything they said made for a successful young person?

“Go East, Young Man,” they repeated, as Asia quickly regained its footing. Again I listened, still too young to have my own view of what success meant. Searching for opportunity in a world that was rapidly crushing dreams, this time I moved to Singapore, where a once-sleepy port was being transformed into a world-class global city. Before long I was the only American working for the fastest-growing hedge fund in Asia. I came home one Thanksgiving, rented a convertible, and sped through the mountains surrounding L.A. I was back on top of the world!

But a nagging feeling emerged that something wasn’t quite right. It started in conversations with my colleagues in Asia. “Aren’t you glad you escaped America? The West is in permanent decline!” they’d say. “I hadn’t escaped, I’d pursued opportunity- that’s the American way,” I’d counter. “The American System will bounce back like it always has.” Yet my arguments began to ring hollow every time I watched our policymakers bumble, our institutions fall short, our country more divided. I sent my brother a Facebook message after the US debt rating downgrade triggered a stock market downturn. “I nailed that trade, just like I told you!” I bragged, having recognized the market’s vulnerability to a lack of policymaker coordination. “I’m getting laid off again,” he replied, another opportunity closed off. “And you’re well on your way to being part of the 1%.”

My future flashed before my eyes: at best I’d be a rich American living way out in Asia, placing bets on where the world was going — and increasingly disconnected from the reality on the ground. Facebook launched my senior year at Harvard; my graduating class was the first to be “socially networked” for its entire life in the real world. Still, it wasn’t nearly enough. And having a high-end apartment on the river couldn’t possibly make up for my sudden, intensifying homesickness. “Success” meant enormous wealth, and spreading the American model across the planet — didn’t it? I was losing faith, beginning to feel like some sort of traitor escaping the hardship back home as the country struggled to bounce back. Every day I stayed in Asia I was a harbinger of America’s decline.

I searched for answers. On the internet. Looking to make sense of why the world was shifting the way it was, and why now. I started with Google. Which linked to Wikipedia. I kept clicking through articles. Until I found one that finally clicked.

In their ground-breaking 1991 book, Generations: The History of America’s Future, the historians Strauss and Howe trace a revolutionary framework for analyzing the history of the English-speaking world. Going back hundreds of years, they identify a periodic cycle in the way four different generational Types approach the world based on their common coming-of-age experiences during four recurring Eras in history, which together span the length of a long human life:

  1. There’s the so-called Silent Generation, born during the Crisis of the Great Depression and World War II and entering adulthood during the post-World War II High; the first generation in the cycle is the Artist, with its Beatles and Bob Dylans adapting to their harsh conditions at birth and expressing themselves to the kids born after the war.
  2. They’re followed by the Baby Boomers, the huge generation born into the post-war High and never knowing an America that wasn’t the global superpower, this Prophet generation has always bent the country to its will due to its sheer size. It highly values individual expression and experimented with many different lifestyles in the Awakening period of the 60s and 70s. Yet it is prone to the ideological wars and distrust of government during its middle-age Unraveling years from the 1980s into the early 2000s — as the economy unevenly booms while social cohesion decays.
  3. Generation X, the much smaller, post-boom generation that might always be lacking in political weight; as under-protected children during the Awakening they saw the rise of a chaotic world of parental drug use and rising divorce rates, and came of age during the Unraveling as archetypical Nomads, like Kurt Cobain.

But to understand how America became great, we need to understand the generation that built the world we live in today, the world they built coming out of the last major Crisis — the Hero generation of JFK and Ronald Reagan that preceded all three.

4. / 0.

Born during the long, increasingly unequal economic boom from the turn of the 20th century into the Roaring 20s, the Greatest Generation was confronted in early adulthood with a national emergency that began with the stock market crash of 1929 and didn’t end until Victor-over-Japan Day in 1945. It united to win the largest war in history, then went on to build a new global order whose foundations rested on the institutions of the United Nations, NATO, the World Bank, the IMF, and a cooperative global system of trade among the world’s democracies, all of which stood the test of time past their golden years.

As each generation fades into history, a new one rises to take its place, shaped by similar experiences and faced with similar challenges. Now we’re again in a period of great Crisis, beginning with the crash of 2008, and the institutions of the old world order are decaying and under attack. With all the simmering tensions in the world, it’s hard to think that this crisis period will be over anytime soon. But Strauss and Howe define a Hero generation as one born during a time of laissez faire, weak institutions, and distrust in government; a generation that grows up as increasingly protected post-Awakening children, comes of age as team-oriented young optimists during a Crisis, and emerges as energetic and vigorous institution builders in middle age — advocates of economic prosperity and public cohesiveness.

Are Millennials the next Hero Generation?

I can’t get this question out of my mind. Maybe it’s me. Or maybe it has something to do with when I was born. I don’t know if every generation has a question it’s trying to answer, a destiny it might fulfill, but I can’t help thinking this one does. No matter how technologically connected to the world I might be, I realized I was losing my connection with my country — and I can’t help answer my generation’s question living 8,000 miles away from home. I can’t help being optimistic.

I’m typing this on the notepad app on my iPhone, flying from JFK to a connecting flight in Dubai. By my count this is my 35th flight between America and Asia, and I’m sure there will be many more to come. But this time I have a different mission. I’m packing my bags, putting all my stuff in an ocean container, and coming back to America for good.

Jonathan Lerner is moving to New York City.

Submitted to New York Times Op-Ed, September 2012. Rejected.

II. American Generations

You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you.

-Walt Disney, Hero Generation

Every American generation is united by a shared set of experiences early in life, a set of experiences that shapes the values and worldview of that generation far into the future. This is the key idea.

As individuals, we are often built from our experiences early in life: it is how we make sense of the world, how we learn about what the world ‘is’, and the base from which we compare all future experiences and decisions. It is also the basis for our lifelong identity, both as individuals and as a collective generation — a generation shares formative experiences from the same era, and those formative experiences percolate into our consciousness as we go on to lead. Everything we “take for granted”, everything we think of as our “conventional wisdom” about who we are and how we view others, is etched from the backdrop of that formative era.

Part of what shapes a generation is that shared history, or more importantly, a shared age location in history: a generation encounters key historical events and social trends while occupying the same phase of life. Whereas our pop stars are Britney, Beyonce, and Boy Bands, our parents had Elvis, the Beatles, and Motown. Whereas our parents asked each other Where were you when JFK was shot? we ask each other Where were you on September 11th?

But the most important factor that shapes a generation is where it falls in the larger American cycle. Does it come of age at a time of the individual or a time of community? Are we celebrating an epic victory and new world order (as America did following the Revolutionary War, the Civil War, and World War II) or bracing for an epic clash that will require our most-courageous teamwork (as during the Great Depression, and — perhaps — today)?

So where are we, and how did we get here? How can the past can help us make sense of the present?

Progression of History →
(Red Outline: today’s position in the cycle, and in the comparable previous cycle)

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In each era an elderly generation fades away, while a new one rises to take its place. In each era the country’s Midlife leaders shape the world to address the challenges of their time, and react to their collective coming of age experiences. How they shape the world then imprints onto the following generations, who, as they rise, prioritizes issues that reflects their own, different coming of age experiences, correcting the mistakes and confronting the challenges that cascade forth from previous generations — and in the process ensuring the cycle continues.

Progression of Generations / Archetypes

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In shaping the world, the single biggest realm in which society makes its collective decisions is politics. It is often here where our preferences, our biggest underlying assumptions about the direction of the country and our world, are most magnified. America is a republic, a representative democracy — meaning we, the people, decide who makes those decisions. At the same time, this means we are responsible for those decisions. Ultimately, those decisions come from us. The state of our politics reflects the imprint we have left on it. It reflects the power and motivations we have endowed in our politicians. In particular, it reflects the motivations of Americans who vote.

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So why have American politics become so wrenchingly polarized — so gridlocked? It should be blindingly obvious: the current state of our politics reflects the imprint Americans have left on it in the power and motivations we have endowed in our politicians. Specifically the imprint of the generation of Americans who voted in the decades leading up to today.

Now, who exactly voted?

But what is Government itself, but the greatest of all reflections on human nature?

-James Madison, Hero Generation

III. Boomer World

A common lament of the World War II generation is the absence today of personal responsibility.

-Tom Brokaw, writing in The Greatest Generation (1998)

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High: Superpower America!

In 1992, the first Baby Boomer was elected President, by the greater part of his fellow Boomers. Bill Clinton was born in 1946, the year after World War II ended and the first year of the Baby Boom — a child of the peace dividend. The parents of the Baby Boom celebrated their victory in the most destructive war humanity has ever known by multiplying: adding 76 million Americans to the country before birth rates returned to pre-War levels. At that point the new Americans amounted to a whopping 40% of the country.

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Man of the Year 1966: “25 and Under”

Due to their sheer size, these children would soon become the country’s dominant force, driving economic and social activity at every stage of life, from booming diaper sales as toddlers to income tax cuts and booming McMansion sales as adults. Time Magazine declared the 1966 Man of the Year was “a generation: the man — and woman — of 25 and under” — in other words, Boomers — the only time an age group has ever been selected. They were passed the keys to the Post-War American superpower, and, for the entire lives of nearly all living Americans, the world has been oriented around them.

Boomers are a Prophet archetype in Strauss-Howe’s theory — a generation that grows up as the increasingly indulged children of the post-Crisis era High, comes of age as narcissistic young crusaders of a spiritual Awakening, and cultivates principle as moralistic mid-lifers during an Unraveling. Their spiritual awakening was the counterculture revolutions of the tumultuous 60s and 70s, and Boomers had a very specific rhetoric of rebelling against their parents and society, from “Don’t Trust Anyone Over 30” to “Hope I die before I get old” when Talking ‘Bout [Their] Generation. It was during this era that Boomers’ trademark fractiousness first appeared in the sometimes-violent protests between Hippies and young ROTC soldiers over the country’s involvement in the Vietnam War.

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30: When Voter Turnout Surpasses 50%

As they got older, their hold on the levers of power and influence became more direct.

By the 1992 election nearly every Boomer was finally 30 years old — when Americans start to reliably vote — and since then every President has been a Boomer.

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Three Presidents born in 1946 — a coincidence?

The Cold War had just come to a peaceful conclusion, and America found itself the last hyperpower standing — leaving even fewer constraints on Boomers’ willingness to fight with each other. With a Democrat in the White House, two year later Boomers swept into Congress with Newt Gingrinch leading the Republican side, his party capturing both houses of Congress for the first time in forty years. Soon clashes between the two parties led to the first full federal government shut-down in history. Why unite for the common good when hating on each other is so much more fun (and has so few short-term consequences)?

A Country Dividing: 1949–2013

Newt zealously prosecuted Bill for getting a blowjob from an intern at the same time he cheated on his own wife with a congressional staffer. What began with Hippies vs ROTC in Boomers’ early adulthood evolved into MSNBC vs Fox News in their midlife. Politics has only become more polarized, from the decision to go to war in Iraq, to the financial crisis and its aftermath, to the 2016 election. Republicans in the Tea Party kicked out all the moderate Republicans (In Name Only), while Democrats rammed through Obamacare with the uncompromising power of a rhino.

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In reality, President Clinton was a continuation of the political wave that started with Reagan in 1980 — when the youngest Boomer was nearly old enough to vote, and the generation began to wield its political influence. Reagan cut taxes, opened up global trade, blew out deficits, and didn’t care much about the national debt.

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Clinton campaigned as a “New Democrat,” shedding the Democratic party’s historically anti-trade, high-tax, pro-union platform for many of the same policies Reagan championed. That meant welfare reform, deregulation of the financial system, NAFTA / Acceptance of China to the World Trade Organization, and especially, no big tax hikes. It was the only way a Democrat could get elected after twelve years in the wilderness, having been labelled “tax and spend liberals.” That’s a clue that something larger than political party loyalty had changed in the underlying politics since 1980.

What changed? Well, Boomers had entered their prime earning and consuming years, and they sure as hell didn’t want their income to be taxed!

The point is, ladies and gentlemen, that greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA.

-Gordon Gekko, Wall Street (1987)

Taxed income would surely be wasted by the “big government.” Each Boomer wanted to decide exactly what happened to all his/her own money by him/herself. That taxed income could have been invested somewhere else with broader benefits— infrastructure, research, education — making the country stronger as a whole. But national riches aren’t an obvious boon to individual Boomers’ bank accounts. Of course, now Baby Boomers are retiring en masse — 10,000 a day since 2011. If income taxes do go up some day, Boomers won’t have much to worry about: their prime income-taxed years are well behind them. Besides, after years of wrenching fights, debating income taxes is played out — what’s really exciting is debating healthcare and social security!

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Probably not their overrepresentation in Congress

What will the famously-labelled “Me Generation” fight over in the nursing home?

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For a generation that was gifted American Superpower, their stewardship has become a cautionary tale. But many Boomers will hardly care — their entire lives have been geared toward themselves as individuals rather than larger society. While the Greatest Generation — coming of age in the Great Depression — valued self-sacrifice, Boomers value self-fulfillment. This is just the way of the world for every post-War Boom generation. To a Boomer, Boomer legacy — as a generation — hardly registers. It’s Bill’s legacy, and Oprah’s legacy, and Donald’s legacy, and…

Man, who would have expected the ride we’re all having right now? The money’s rolling in and this is fun.

I’ve never seen anything like this, and this is going to be a very good year for us. Sorry. It’s a terrible thing to say. But, bring it on, Donald. Keep going!

It may not be good for America, but it’s damn good for CBS!

-Les Moonves (President of CBS), Baby Boom Generation, on ad revenue from the 2016 Presidential Election

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That malfunctioning corporation called the USA

With great power did not come great responsibility.

We must condemn those who seek to divide us… We have no place for haters in America — none, whatsoever.

-Ronald Reagan, Hero Generation

IV. Identity

Don’t be shocked when your hist’ry book mentions me
I will lay down my life if it sets us free
Eventually, you’ll see my ascendancy
And I am not throwing away my shot!

I am not throwing away my shot!
I am not throwing away my shot!
Hey yo, I’m just like my country
I’m young, scrappy and hungry
And I’m not throwing away my shot!

It’s time to take a shot!

-Alexander Hamilton (in Hamilton), Hero Generation

Read this chapter in Snapchat-story-style format by clicking here

What makes a generation’s identity? A generation’s destiny? Who Are We American Millennials?

We’re also the largest generation in the developed world, and the largest of its Millennial generations, by far.

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source: UNData

We’re remarkable in another important way. America is a rare country: Millennials outnumber Baby Boomers

We have grown up in a different America than the generations before us. Our country is changing.

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source: Brookings Institute

And we’re young. We’re still very young! The oldest of us have just crossed 35, the very first year a Millennial can be President. The median age of an American is 38, of an American adult it’s 48. We’ll likely have the longest lives in human history. There’s a long road ahead.

So what has been the road so far? What experiences have shaped us — what experiences unite us?

The biggest ones will certainly leave an imprint on us for the rest of our lives: 9/11, the Financial Crisis, the election of Barack Obama, the election of Donald Trump. But no event happens in a vacuum. How do we place these events in the broader contours of our history?

Let’s check out Strauss and Howe’s Generational Theory one more time.

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The charts are complicated, but the takeaways are simple: We grew up in an Unraveling, a time when our Baby Boomer parents, who had attacked America’s institutions during their Awakening during the 60s and 70s, graduated into their height of power and influence. Society became more and more defined around their ideal of the importance of the individual, with government viewed as the source of what was wrong with society. Lower taxes, culture wars, increasing government debt, globalization, the birth of the internet. It was a boom time, but it was also a time of decreasing social cohesion. Toward the end of the Unraveling, a vast study of interviews of how America had evolved since the birth of Baby Boomers concluded:

Americans sign fewer petitions,
belong to fewer organizations that meet,
know our neighbors less,
meet with friends less frequently,
and even socialize with our families less often.

We’re even bowling alone.

— Bowling Alone: The Collapse and Revival of American Community (2000)

But while our parents’ America was unraveling, what about us? We grew up with the internet, with computers, with smarter and smarter phones, with social media — connection is in our blood, technology in our brains.

Our schools increasingly emphasized teamwork, and we were generally “good kids” —

with lower drug use,

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source: UMich, Monitoring the Future study

decreasing rates of teen pregnancy,

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decreasing levels of,

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source: Center for Disease Control

and exposure to, youth violence

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and fewer high school dropouts

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Demon child in The Exorcist (1973)

During the Awakening, before we were born, society neglected children as the large Boomer generation left childhood.

Hit movies reflected that mood, even starring monster children.

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Boy Antichrist in The Omen (1976)

But by our childhood, Boomers had moved into their prime parental years, births had risen, and Hollywood began reflecting society’s renewed attitude toward children as special, to be protected:

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Three Men and a Baby, the #1 Movie of 1987

Our childhood marked the rise of helicopter parents, tiger moms, and participation medals. While our parents fought with each other, they increasingly cherished us. So much that in 1996 the Simpsons created a whole character around the idea:

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Were we raised to be high achievers? Were we overcoddled, overpraised? Maybe all of the above.

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We’re much closer to our parents than our parents were to theirs — in some cases literally, with an increasing number of us living with our parents.

Our generation was nurtured during a boom-time, which made the next phase of our lives all the more a shock.

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We’ve been faced in early adulthood with the shadow of the Great Recession, with a long period of high unemployment that hit young people hardest, and a real chance of being worse off than our parents.

The American Dream, at the very least, means doing better than your parents. But these wounds runs deep. So deep that the American Dream is now the American Coin Toss

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Child’s earnings compared to parents, at age 30 for each (by child’s year of birth)
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This even though we’re the most educated generation in American history

But at every education level, whether we have debt or not, we’ve fallen behind where our parents were at the same age

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Source: Young Indivisibles
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Why has the American Dream gone dormant? On the surface it’s simple: lower income, higher student debt, higher cost of living, and much more concentrated wealth.

Ultimately all those factors reflect the world created by previous generations during the Unraveling.

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Just like the Greatest Generation, our childhood was an Unraveling of American social and economic cohesion. And just like the Greatest generation, our early adulthood has been a Crisis.

While we’ve witnessed the collapse of civic engagement, the collapse of American unity, the stagnation of the American Dream, this wasn’t our generation’s doing. Though we bore the brunt of it, we didn’t cause it.

With all the simmering tensions in the world, it’s hard to think that this Crisis period will be over anytime soon. But Strauss and Howe define a “Hero” generation as one born during an Unraveling era of weak institutions and societal decay; that comes of age as team-oriented young optimists as that Unraveling culminates in a Crisis, and emerges as energetic and vigorous institution builders of a new American High — champions of economic prosperity and public cohesiveness.

Are Millennials the Next Hero Generation?

We’ll remember this period of Crisis our whole lives — and out of its scars, its setbacks, its institutional decay — out of its lessons! will be born the the next phase of American unity. After all, our ideals are teamwork and connection.

What will be our generation’s legacy?

Rebuilding America.

Happy will it be for ourselves, and most honorable for human nature, if we have wisdom and virtue enough to set so glorious an example to mankind!

-Alexander Hamilton, Hero Generation


Disrupting the Status Quo Isn’t Just About Silicon Valley

(a discussion among twelve ex-college roommates)

Subject: Hire American, Buy American Program Is Protectionism & Redistribution | National Review

From: 😎 / To: [Meat_Locker] / Thu, Apr 20, 2017 at 7:47 AM

At the risk of starting a flame war, I thought this article was a really good critique of the “economic nationalism” of Trump from the right. (Or maybe just from an understanding of the modern economy since I agree with it and other arguments against protectionism).

From: / To: [Meat_Locker] /
Sun, Apr 23, 2017 at 8:37 AM

😎, I’m guessing this hedge-fund-to-silicon-valley capitalist is the last person you expected to start a flame war with here. But I mostly disagree with this article, and this is the one area I actually sometimes find myself, shockingly, agreeing with Trump. If Democrats want to win back the White House they’re well-served to understand the deep (and in many ways pretty justified) chord these economic nationalism arguments struck with the very people who won Trump the election. Seriously, we gotta get out of the coastal elite bubble — this is the bubble that saw all the upside, but none of the downside of policies that the conservative National Review supported. I’ll try to keep this entertaining, mostly by being liberal…in my usage of the word fuck.

If you’d showed me this article when we graduated college I would have had the exact same opinion as you. But, basically, I’ve seen some shit. Some shit that runs completely counter to the reality-divorced economic theories that became well-accepted in the 80s and 90s, and were particularly influenced by the man 😜 once put his arm around after storming the field in Harvard stadium, completely sober of course.

Stick with me, but let me start with some basic statistics, for context, we have to admit are just plain fucking shocking:

  • Real median wages in America haven’t increased in our lifetimes
  • For men they have actually gone down
  • Income inequality in 2014 matched the all-time high levels we saw prior to the Great Depression
  • Life expectancy for white middle-age Americans has been going down since the beginning of the Millennium
  • So has labor force participation for all Americans of prime working age

I’ll give you references if you need them, but they’re all easy to google.

Let me also prompt the discussion with what I consider one of the most important papers in Macroeconomics this century, written last year by the MIT economist David Autor: The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade (2016). Here’s the key line from the abstract: At the national level, employment has fallen in the US industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize. Better understanding when and where trade is costly, and how and why it may be beneficial, is a key item on the research agenda for trade and labor economists.

Translating this from polite-Economist-in-an-academic-journal speak, I’ll summarize for you in layman’s terms what the author would tell you he really meant if you got him as hammered as 😋 got me on my 21st birthday: All you old-fart Macroeconomists have been totally fucking wrong about trade. Make no mistake, this paper is a complete revolution.

Up to now the conventional wisdom among economists was that more trade is always a good thing. But now that whole idea has been blown apart: here’s a case where there was serious, academically-verified damage from a large trade relationship. Areas of the US most exposed to China (read: what became Trump country) went down, and stayed down. That’s not to say the pendulum should swing to the other extreme — trade can be a good thing when it’s done on the right terms. But for reasons I won’t go into here, and that were specific to this trading relationship — starting with massive currency manipulation — things didn’t go down as the old-school theory would have predicted.

OK, onto the National Review. There are some major parts of the NR article I disagree with. Starting with this gem of a line:

The goal of an economy is to create better products and services at a lower price, thereby creating new cycles of supply and demand.

Totally fucking wrong. The goal of an economy is to serve the needs of society. You know, like, the people thing in We the People.

Here’s another fun one:

The [mistaken] notion here is threefold: American companies should be forced to hire American labor; government contracts should go to American companies; American producers should be protected from domestic competition by revoking or altering international trade agreements. All three of these policies have a long, ingloriously stupid history.

Also totally fucking wrong. The US has an incredibly protectionist history. And by the way, so do most countries. This country was built on protectionism. Don’t believe me? Well, let’s look at the first line of this fine Wikipedia article, Protectionism in the United States:

Protectionism was America’s de facto policy from … 1816 to World War II.

It’s actually really important to understand this history, because if you don’t you won’t understand why America changed its policy and why the chickens are coming home to roost right now. So why did America change its policy at the Bretton Woods conference in July 1944, the single most important economic event of the 20th century? Was it because the Americans, who basically were dictating their terms to the rest of the world, wanted “to create better products and services at a lower price, thereby creating new cycles of supply and demand”?

Of course fucking not. The world was in shambles (except for America, in pristine condition), and our newly-emerged Superpower didn’t want to have to keep rescuing the world after two wars. Not to mention the Cold War loomed.

So basically America bribed the fucking world. The Democratic world that is. “Hey allies! Yes you, even you Germany and Japan! Let’s make nice now, we’re all friends, and we want you to be with us and not with scary Russians. No more wars, they’re pointless and a pain in the ass. Let’s all get rich together too, and we’ll use that money together to fight the Soviets. Here’s the deal: you get complete access to the American market for all your exports. What do you have to do in return you say? Nothing! Absolutely nothing! Just dig yourself out of that massive economic hole.

Oh, actually there is one thing. You’re not allowed to have a Navy. And you have to buy US Treasuries with all that money you’re getting rich off. But don’t worry, we’ll be the one with the massive Navy protecting all trade, and why would you want to have an expensive Navy anyway — you only really needed it to protect your trade! Now we do all the work for you! And none of you will want to fight when you’re all getting so rich!

And let’s be honest, I’m making you an offer you can’t refuse.”

Really, that’s basically how it started. Worked like a charm.

My main point is that Free Trade started as a Geostrategic policy, not a fucking economic policy for its own sake.

That sets the stage for part 2 where I explain why the whole system has been coming under strain and how the theoretical idea of “Global Free Trade” has often played out far differently in the messy modern world than what theory would suggest. Hope this was a fun read. Flame away.

OH, and if you want to be entertained and educated in the meantime, see this absolutely prescient 1994 interview of investing legend Jimmy Goldsmith warning about the predecessor to the World Trade Organization. Margaret Thatcher called Sir James “one of the most powerful and dynamic personalities that this generation has seen.” He was also smart as hell, and rumored to be Princess Diana’s secret father, among many other colorful facts about him: Charlie Rose: A Prophetic Interview with Sir James Goldsmith

From: 😎 / To: [Meat_Locker] / Sun, Apr 23, 2017 at 10:28 AM

Haha that is a fantastic email! And thank you for liberally using the word fuck to describe economics. I feel like I would have paid much more attention in econ if my professor sounded like us playing Halo.

The first U.S. Secretary of the Treasury, Alexander Hamilton, advocated tariffs to help protect infant industries in his “Report on Manufactures.” Heeding Hamilton’s advice, George Washington signed the Tariff Act of 1789, making it the Republic’s second ever piece of legislation. Increasing the domestic supply of manufactured goods, particularly war materials, was seen as an issue of national security. Washington and Hamilton believed that political independence was predicated upon economic independence. For the most part, the “Jeffersonians” strongly opposed it. However, after the War of 1812, Thomas Jefferson himself acknowledged that tariffs were necessary for preventing import dependency, which undermined the nation’s security.

-Wikipedia, Disruptor of the Encyclopedia status quo

V. Sunset, Sunrise

Great necessities call out great virtues.

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The Journey continues in 2020


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