The middle class is about to flourish, and it’s not a good thing
Honored promises and the plight of Trump’s economic agenda
Following the announcement of his candidacy, Donald Trump embarked on an unconventional presidential campaign often defined by staunchly made promises that were perceived as uncivil and uninformed, even facetious — and as unlikely as it once seemed, those promises are going to be honored.
After two weeks of swift policy realization, only the President’s inauguration speech vow to unite America looks doubtful to materialize. As millions of Americans celebrate the administration, millions more are protesting it. Some are quietly sulking in voter’s remorse. Others are retreating into their temporal lobe interior, searching for the clusters of neurons within the hippocampus that store the warm and happy memories of yesteryear; a time when Donald Trump’s presidential campaign — rife with a brand of nationalism reminiscent of those that plagued twentieth century Europe — felt distinctly finite and as though it was only an innocuous manifestation of the GOP’s collapse.
The ensuing act of the Trump campaign, however, was decidedly more threatening and unique to American politics. Many were staggered to witness, yet hopeful to suppress, the rise of a political figure whose momentum felt almost as unnerving as his message. The political newcomer was promising stringent immigration overhaul, harboring disconcerting views on environmental issues, and avowing that America’s membership into any global communities or alliances would be contingent upon a recognition by fellow participants that America will not be their equal, but rather first; not to mention the undeniable creativity with which he offended nearly every protected class. Then it happened. Against all odds — or simply in accordance with the exclusively accurate polling data from which Trump and his camp of derelict conservative surrogates fastidiously maneuvered — Donald J. Trump became the forty-fifth president of the United States of America. And he is wasting no time.
Two weeks into the Trump presidency, the executive orders and memos are flowing in a hard and fast attack on immigration, free trade and globalization. As Trump proceeds under the façade of valiant protector solemnly striving on behalf of national security, hoping to lead Americans down rabbit holes of false context, the administration’s economic policy is underway. With a Republican-led House and Senate and having already moved on legitimizing even his most outlandish campaign resolution — the wall — Trump looks poised to manifest the bulk of his promises. And it will actually be great for America’s middle class — at least until it isn’t.
The story of the American middle class has had a lot of subplots over the years, but in its most recent chapters, themes surrounding the threat of globalization have become increasingly prominent. That is not to say that globalization — which has its own story — is necessarily a bad thing. In fact, it has arguably been a triumph for humanity at large. It has almost certainly made the world a better place from a utilitarian “greatest good” perspective. Hundreds of millions in the labor pools of China, India and other developing nations have been liberated from dire poverty through jobs outsourced by Western nations. Furthermore, the plutocrats in America and Europe have profited enormously from the reduced costs that accompany exploiting third-world labor standards.
Unfortunately for globalization, there’s just too much ambiguity as its story intersects with that of the American middle class — often seen as globalization’s victim. This is American politics; stories need a clear protagonist, entrenched in an unresolved and often ephemeral state of conflict, moving closer to triumph with the turn of each page. And somehow, replete with three-finger points and condescending squints, Donald Trump emphatically dictated what that story would be in a historic campaign season. In the broadest sense, it was going to be America first. But more specifically, not aspiring immigrants that reflect our nation’s history, or foreign labor pools; definitely not polar bears; not even necessarily the “job creators” that Republicans have heralded in every campaign since the genesis of Reaganomics — at least not after Mitt Romney’s 2012 faltering. In what might be one of their last outings as the major protagonist, it was the blue-collar American middle class worker. And as it happened, Trump’s story wasn’t so different from that of others.
The triumph of the middle class over globalization had a short-lived chance to commence regardless of how the votes tallied in November. Despite the polarity of their tones and some policy specifics — whether or not to construct a two-thousand mile-long edifice at the border and vet immigrants on a basis of ethnicity — Bernie Sanders and Donald Trump campaigned on a lot of common ground. Both launched from an American-centric protectionist platform that promised to shield the middle class from globalization. For Sanders, however, restricting trade and reclaiming jobs doubled as means of attacking inequality by virtue of corporate accountability — the plutocrats being the villainous antagonists most distinctly in his telling of the story. Furthermore, Sanders’ plan had an added feature of funneling the tax revenue scored by increasing domestic output into social programs. But out with Sanders’ campaign went any battle plan for the middle class against globalization that fostered economic progressivism. Trump’s one-part protectionist plan certainly didn’t carry equivalent components; Hilary Clinton had a different plan altogether.
It sometimes felt like Clinton was punting on globalization, and it was problematic because of how salient an issue Trump and Sanders had framed it to be. Ultimately, Clinton pitched free trade to middle class America as an asset that kept consumer costs down and led to domestic economic growth via export opportunities. Still, there was a sense that Clinton — who has been attributed a hawkish interventionist reputation — was too global in her politics. There was a morally commendable, yet politically stifling vibe of a humanitarian who saw the impoverished living in developing nations and being lifted by the developed West’s migrating jobs as protagonists. She was an unconvincing champion for the American middle class, contrasting with Sanders and Trump. And you don’t have to be Karl Marx to admit it; among the profusely hypothesized independent variables acting on the election — private email servers, Russia, Comey, disparities between rural and urban America, racism, sexism, the shortcomings of the electoral college — concern surrounding Clinton’s allegiance to the middle class in a globalizing economy has its place.
However it came to a Trump presidency, the dealmaker-turned-politician is now assembling policy from the executive office that’s as misaligned with actual circumstances as the dystopian characterization of America that served as his campaign rhetoric since the early days of the GOP primaries.
While Trump and affiliated spokespersons have maintained turbulent relationships with facts, here are two the administration should diligently consider embracing: (1) at under 5%, unemployment is at its best rate in nearly a decade and historically low, (2) America’s labor pool is already set to contract organically in trends toward population decrease and an aging demographic.
Reclaiming lost manufacturing jobs, birthing new ones in the process of rebuilding America’s infrastructure, and overhauling immigration — possibly setting in motion plans to reduce by 30 million or more in coming decades according to Pew Research Center — will all converge to create a lot of job opportunities for Americans; too many. As Trump’s economic policy agenda proceeds, conditions for a labor shortage are ripening.
First, don’t let that proud academic friend who studied economics and believes that the x and y axes of a scatter chart can sufficiently explain human behavior tell you that labor shortages don’t exist. They happen, and they are often resolved most efficiently through immigration. Countries with more jobs than workers in a given labor pool will often respond by opening their gates a little wider, as the U.S. has done many times. In more dire situations, immigrants are invited and practically sent a pickup ride, as Jamaicans were by the U.K. in the mid-twentieth century — jobs were filled, London’s culinary scene improved overnight, rock’s eventual affair with reggae produced some notable Clapton-issued covers, bouncing Stones’ tunes, and The Police, and it was a win for everybody.
The issue with labor shortages, however, is when they go unfilled. While various labor pools may be temporarily lifted by abundant employment opportunities and artificially inflated wages that desperate employers have no leverage against, the instability of the situation eventually unleashes consequences on a macroeconomic scale. As too many jobs remain unfilled, costly inefficiencies plague entire industries, domestic output decreases and economic growth is throttled. Under current circumstances, significant increases in jobs will only further short industries that are already contending with labor droughts such as construction — the effects of that being quite problematic approaching a potential $1 trillion infrastructure rebuild plan. If creating vast numbers of jobs in an economy with low and stable unemployment rates is potentially problematic, reducing immigration while doing so is dangerously stupid. In all its irony, a project like constructing a wall between the U.S. and Mexico will require a lot of labor from Mexican immigrants.
The one-two punch of retrieving manufacturing jobs and containing labor pools by reducing immigration could’ve been a viable strategy to deal with urban deindustrialization a half-century ago, but will have short-lived efficacy in reconciling the middle class with the evolving manufacturing industry of today. Job loss in the manufacturing industry isn’t just about globalization; it’s about vulnerability to technological advancement. Clinging to manufacturing jobs that are inevitably doomed by technology rather than fostering the growth of modern industries is analogous to shirking the replacement of a timing chain that’s been rattling under the hood; you can probably squeeze a few more miles out of it, but once it gives, the whole engine might follow. While Trump’s economic plan promises to recreate some of America’s finer times had in the twentieth century — and it will — a catastrophe from not fostering the evolution into a more diversified economy looms large.
In addition to the inherent inadequacy of short-lived solutions to what will be enduring problems for the middle class — majorly if not addressed at the roots — Trump’s economic policy presents with another flawed notion: restricting free trade will be good for the American economy — particularly the manufacturing industry. Trump’s pledge to redraw or withdraw from major U.S. trade agreements such as NAFTA and the TPP is already materializing and, once fulfilled, the outcome will hardly be a prize born of artful deal making.
Amid heavy criticism that Trump-proposed border tariffs would be unprecedented in modern trade, advocates are largely responding with claims that it’s only semantics — border tariffs being effectively similar to the value-added taxes (VATs) that American exports are subjected to in foreign countries. It’s true that VATs — since they tax at every stage of production and distribution, basically whenever the ownership of goods changes — impose a tax on American goods immediately upon entry into many foreign markets, whose own goods carry no such tax upon entry to America. It’s also true, however, that VATs apply indiscriminately to goods whether imported or produced domestically and simply represent tax strategy for countries that use them — not unfairly advantageous trade policy. Ultimately, America’s exports exist in a relatively level playing field when arriving in countries with VATs.
There is a distinct difference between American exports having fair opportunities within foreign markets, and American exports being greeted by the identical circumstances that America greets foreign goods with. And while the President’s position that only the latter reflects honest reciprocity in trade agreements predates his access to the Steve Bannon playbook, it ultimately represents another cheap disguise for the administration’s xenophobia translating into isolationist economic policies.
Renegotiating or scotching agreements that have liberalized international trade in favor of what will almost inevitably become competitive tariff levying will only limit market prospects for domestic production. It won’t be a counterintuitive success to champion American manufacturing while contemporaneously restraining its ability to export beyond America’s native shores; it will be self-defeating to a degree that Americans-buying-American can’t compensate for. While the Trump administration is envisioning an increasingly self-sufficient and thriving American economy, increased costs for consumers and reduced export opportunities that stifle economic growth should be realistically expected consequences from such isolationist policy.
Modern civilization is well beyond globalization as an ideology. Gone is the rationale for treating globalization as an issue of policy preference — particularly in a country with a consumer appetite as large and a private sector as unleashed as America’s. Launching an economic agenda that is anti-globalization is a mistake, albeit one with deferred consequences. The Trump Administration’s economic agenda will create jobs, give advantages to American workers and companies, and facilitate American manufacturing. And the middle class will be lifted — until being slammed back down by rising costs, inevitable rebound job loss, and a shrinking economy.
Beyond even the long-term macroeconomic consequences of myopic policies looms something worse. The most devastating blow of the Trump Administration’s economic agenda will be the hurling of America to the brink of moral bankruptcy. Stringent immigration policies that keep apart families; building literal and figurative walls to isolate, even from our allies; abandoning those who have served us in our time of need; dismissing refugees that need a safe haven from gross abuses of their human rights; relegating millions of workers in developing nations back into impoverishment because we would rather reclaim the jobs they depend on than foster our own ingenuity in replacement industries through investments in education, or address our own issues of inequality; these will be deep wounds to America’s character, and only an honest acceptance that they are a product of democracy and some ensuing soul-searching will heal them. Furthermore, America will have to humbly bare the scars of these wounds when the opportunity to rejoin the international community comes — after the diplomatic crisis that this administration provokes is over.