Well, David Brooks did know about him. Sam Francis died in 2005. He was also a racist, he flat out thought white people have a superior intellect than people of all other ethnicity. But his thoughts predicted the issues that drove the election of Donald Trump.
1. Globalization was destroying US manufacturing employment in Middle America.
2. Politicians did not understand that fact.
3. "His third insight was that politics was no longer about left versus right. Instead, a series of smaller conflicts — religious versus secular, nationalist versus globalist, white versus nonwhite — were all merging into a larger polarity, ruling class versus Middle America."
This is the challenge for Democratic candidates. How to find policies that will address these issues while maintaining policies that the winners from globalization can support.
Sorry for the change in font. I am not sure how I did that, but I like the larger font.
Link to David Brooks column
Showing posts with label globalization. Show all posts
Showing posts with label globalization. Show all posts
Friday, September 22, 2017
Tuesday, April 26, 2016
I Didn't Realize How "Wrong" I Was on Globalization
Long time readers know I have recognized that U.S. Factory workers have suffered economically from globalization. What I didn't realize until a New York Times article this morning was how much it was influencing the outcomes for this primary election season.
I have been focused on Trump's birtherism against President Obama and all his other crude remarks towards various peoples. But it is really his anti-trade agreement stance that is fueling many of his supporters who are angry at the GOP establishment for not doing anything to protect their jobs.
This mistrust of trade agreements is also fueling some support for Bernie Sanders, including one Verizon workers (currently on strike) who says if Bernie isn't a candidate in November, he will probably vote for Trump. Now I can make a case that free trade has no effect on that Verizon workers employment prospects. His industry is a purely domestic one that is being buffeted by changes in technology, and he benefits from the lower cost of goods that globalization brings.
And overall, trade and globalization provide the revenues and profit margins that allow many companies to pay their workers very well. But the benefits of trade are spread across the whole population in a diffuse manner while the costs are concentrated in the lives of workers who lose their jobs.
Where I have been really really wrong is in my belief that people who have been sucking up their disappointment with what has happened to their livelihood without disrupting the overall trend would continue to do so, and allow time to equalize wages, at which point jobs will migrate back to the U.S. when it makes competitive sense for that to occur. And it is happening in some ways already.
But what Trump and Sanders have tapped into is that exact disappointment and there may be a sufficient numbers of votes for that concentrated issue that Congress will feel compelled to do something that I believe would be very dangerous to the overall health of the global economy.
And what is most interesting to me is that when the North lost these jobs to the South, the focus was on the roll of Unions in the North and the weakness of Unions in the South with costs being lower in the South. Now these Southern workers have lost their jobs and they are angry about it. And those workers in the North who are left are angry about it.
My tendency based upon my education in economics is to let the market and time force adjustment on capital and labor so that we have an efficient market economy. But individual people don't have the luxury of time as too much time just ends up with them being dead. And now they are rising up!
Will the people based in the global economy be able to protect the global economy? We shall see over the next 7 months. And it is no wonder the conservative blogosphere is so silent on this, this problem is not a point on the partisan spectrum so it is out of their framework. It is a bipartisan problem in need of a bipartisan solution.
I think the solution is some movement minimum wage increases (with different urban and rural levels) and infrastructure spending. With unemployment at 5%, you wouldn't need to export the 11 mm immigrants, you would need them to fill jobs. One benefit of that would be the Fed could raise interest rates and savers could return to the bond market with their investment capital.
Link to NYT article that motivated this blog
I have been focused on Trump's birtherism against President Obama and all his other crude remarks towards various peoples. But it is really his anti-trade agreement stance that is fueling many of his supporters who are angry at the GOP establishment for not doing anything to protect their jobs.
This mistrust of trade agreements is also fueling some support for Bernie Sanders, including one Verizon workers (currently on strike) who says if Bernie isn't a candidate in November, he will probably vote for Trump. Now I can make a case that free trade has no effect on that Verizon workers employment prospects. His industry is a purely domestic one that is being buffeted by changes in technology, and he benefits from the lower cost of goods that globalization brings.
And overall, trade and globalization provide the revenues and profit margins that allow many companies to pay their workers very well. But the benefits of trade are spread across the whole population in a diffuse manner while the costs are concentrated in the lives of workers who lose their jobs.
Where I have been really really wrong is in my belief that people who have been sucking up their disappointment with what has happened to their livelihood without disrupting the overall trend would continue to do so, and allow time to equalize wages, at which point jobs will migrate back to the U.S. when it makes competitive sense for that to occur. And it is happening in some ways already.
But what Trump and Sanders have tapped into is that exact disappointment and there may be a sufficient numbers of votes for that concentrated issue that Congress will feel compelled to do something that I believe would be very dangerous to the overall health of the global economy.
And what is most interesting to me is that when the North lost these jobs to the South, the focus was on the roll of Unions in the North and the weakness of Unions in the South with costs being lower in the South. Now these Southern workers have lost their jobs and they are angry about it. And those workers in the North who are left are angry about it.
My tendency based upon my education in economics is to let the market and time force adjustment on capital and labor so that we have an efficient market economy. But individual people don't have the luxury of time as too much time just ends up with them being dead. And now they are rising up!
Will the people based in the global economy be able to protect the global economy? We shall see over the next 7 months. And it is no wonder the conservative blogosphere is so silent on this, this problem is not a point on the partisan spectrum so it is out of their framework. It is a bipartisan problem in need of a bipartisan solution.
I think the solution is some movement minimum wage increases (with different urban and rural levels) and infrastructure spending. With unemployment at 5%, you wouldn't need to export the 11 mm immigrants, you would need them to fill jobs. One benefit of that would be the Fed could raise interest rates and savers could return to the bond market with their investment capital.
Link to NYT article that motivated this blog
Sunday, January 17, 2016
Sunday Musings 1/17/16
It was 20 years ago that I realized my time as an employee of a sell side firm was coming to an end because I had an a**hole of a boss who believed that no one older than him should work for him. He actually had the nerve to say that to me. So I started to network around and see what I could find with another firm. That led to my going over to the buy side where I would last for 5+ years until I caught up in one of those inevitable corporate downsizings. Which led to a period of unemployment but eventually I found a job in Vermont and became friends with RedStateVT as we shared observations of dysfunctional clients, while not being able to see the dysfunction in our own firm, which ultimately led to both of us being retired too young (for our ideal long term financial health).
I muse on that because we saw a play last night about the stresses globalization and Moore's Law (technology advances at an ever increasing rate) put on a work force and the different ways people react to that and how their humanity may come through. And the play left me pondering this morning the state of our politics, the anger people feel at things they do not control, and how that can come to manifest itself with varying degrees of humanity toward our fellow man.
As I have said before, there is only so much politicians can do for people whose skill sets get left behind by globalization and technology. Society by virtue of its need to compete much always focus on the young (educate and keep them healthy) and encourage those older workers to achieve the best they can and live an honorable life within their means recognizing that they must bear responsibility for decisions they made earlier that have ramifications later on. That was the moral of the play last night while it also explored why even these unfortunate souls deserve some support from society if they are working to be deserving of that support.
And it is that latter point that is so underdeveloped in our political discourse. Neither party is really addressing what can society afford and how should we spend it and how do you make people happy when they have to downsize their economic needs and objectives. If you can't get a $25 an hour job, you take a $15 an hour job, downsize your lifestyle, and find ways to be joyous. But at the same time, the minimum wage cannot be so low that hard working people without an education cannot afford the basic necessities of life including health insurance. That is why the Heritage Foundation, when they had a soul, designed Obamacare the way they did.
In a similar manner we are not having an honest discussion of the real problem with guns because the two sides speak past each other and do not give. The ease of access for the criminally minded and the mentally deficient is the real problem, not 7 vs 10 bullets in a gun magazine, and as one liberal columnist pointed out this morning, not concealed weapons with a carry permit. And how do the criminally minded get so many guns, straw man purchases in places where there are no background checks. And how do the mentally deficient get guns, well that is a huge problem as no one has a sanity problem until they have exhibited the sanity problem and that is frequently after they already have their semi-automatic weapon. Maybe there should be an age restriction on use of semi-automatic weapons, along with background checks on obtaining them. It seems to be angry frustrated older teens and early 20's who shoot up movie theaters and commit acts of terrorism. Technology with thumb print recognition systems would seem to be a place where some effective gun control policy could be created in the middle if the NRA were isolated politically.
In conclusion, once again as I write on a Sunday, I am left feeling very discouraged about our political discourse and see little hope of it improving after November. The anger on the right is encouraging anger on the left with the result that we will not have Clinton vs. Bush III in November, we may well have Sanders vs. Cruz or Rubi and then one can only hope that Michael Bloomberg decides to run (I think he needs to make that decision very soon). And without Bloomberg in the middle, calm rational people will have a very hard choice to make and while I would vote for Bernie in that case for the 1st time (having never voted for him while I lived in Vermont), I am not at all sure Bernie can win Florida, Ohio or Virginia with his European Socialism.
The New York Times some years ago had a game like graphic where you could pick and choose policies to balance the budget over 5 years. If you value the need for infrastructure, defense, providing some level of humanitarian support for all ages, controlling the percentage of GDP the government takes, you had to control the growth in Social Security and Senior Health Care (Medicaid 's worst growth is in paying for Long Term Care of people with dementia who spend down what they have saved and they have no more) and no politician wants to talk about this. They are just going to let us spin into a crisis.
While I promised myself I wouldn't go there, the problem is not Heritage Foundation/RomneyCare/ObamaCare. That is trying to keep the cost of health insurance and the health of people under 65 affordable and effective. The problem is dementia and the use of Medicaid to pay for it. My mother had dementia for over 20 years and my father paid for her care until he hit the minimum wealth allowed and my mother went on Medicaid. Her final Medicare bill was $400,000 for care that should have never occurred because of her DNR, but it did. And I don't know exactly what Medicaid actually paid because I never saw those bills, but at $150 a day for the 10 years of her institutionalization that was another $550,000. And now those dementia care costs are somewhere between $200 and $500 a day. So a dementia patient can cost society close to $1 million each and if over time (the favorite government accounting technique) 30 million people end up with dementia (10%) and they end up on Medicaid, that is a potential cost of $3 trillion.
That is not trivial, and I wish our political discourse would allow a coherent holistic discussion of the demands on our budget and a balanced approach to giving ourselves a budget surplus when we have full employment and an affordable deficit when we are in a recession. Right now we are nearing full employment, have a budget deficit of 2.5% or so, and political Armageddon between liberals and tax cutting conservatives.
Oh, and what happened to that a**hole younger boss who made me leave the sell side, he returned to N.C. ran for Congress as a Conservative GOP and lost. So now he is on some Board of Directors enjoying the income of being a pal of rich people who appoint him to their Board's.
I muse on that because we saw a play last night about the stresses globalization and Moore's Law (technology advances at an ever increasing rate) put on a work force and the different ways people react to that and how their humanity may come through. And the play left me pondering this morning the state of our politics, the anger people feel at things they do not control, and how that can come to manifest itself with varying degrees of humanity toward our fellow man.
As I have said before, there is only so much politicians can do for people whose skill sets get left behind by globalization and technology. Society by virtue of its need to compete much always focus on the young (educate and keep them healthy) and encourage those older workers to achieve the best they can and live an honorable life within their means recognizing that they must bear responsibility for decisions they made earlier that have ramifications later on. That was the moral of the play last night while it also explored why even these unfortunate souls deserve some support from society if they are working to be deserving of that support.
And it is that latter point that is so underdeveloped in our political discourse. Neither party is really addressing what can society afford and how should we spend it and how do you make people happy when they have to downsize their economic needs and objectives. If you can't get a $25 an hour job, you take a $15 an hour job, downsize your lifestyle, and find ways to be joyous. But at the same time, the minimum wage cannot be so low that hard working people without an education cannot afford the basic necessities of life including health insurance. That is why the Heritage Foundation, when they had a soul, designed Obamacare the way they did.
In a similar manner we are not having an honest discussion of the real problem with guns because the two sides speak past each other and do not give. The ease of access for the criminally minded and the mentally deficient is the real problem, not 7 vs 10 bullets in a gun magazine, and as one liberal columnist pointed out this morning, not concealed weapons with a carry permit. And how do the criminally minded get so many guns, straw man purchases in places where there are no background checks. And how do the mentally deficient get guns, well that is a huge problem as no one has a sanity problem until they have exhibited the sanity problem and that is frequently after they already have their semi-automatic weapon. Maybe there should be an age restriction on use of semi-automatic weapons, along with background checks on obtaining them. It seems to be angry frustrated older teens and early 20's who shoot up movie theaters and commit acts of terrorism. Technology with thumb print recognition systems would seem to be a place where some effective gun control policy could be created in the middle if the NRA were isolated politically.
In conclusion, once again as I write on a Sunday, I am left feeling very discouraged about our political discourse and see little hope of it improving after November. The anger on the right is encouraging anger on the left with the result that we will not have Clinton vs. Bush III in November, we may well have Sanders vs. Cruz or Rubi and then one can only hope that Michael Bloomberg decides to run (I think he needs to make that decision very soon). And without Bloomberg in the middle, calm rational people will have a very hard choice to make and while I would vote for Bernie in that case for the 1st time (having never voted for him while I lived in Vermont), I am not at all sure Bernie can win Florida, Ohio or Virginia with his European Socialism.
The New York Times some years ago had a game like graphic where you could pick and choose policies to balance the budget over 5 years. If you value the need for infrastructure, defense, providing some level of humanitarian support for all ages, controlling the percentage of GDP the government takes, you had to control the growth in Social Security and Senior Health Care (Medicaid 's worst growth is in paying for Long Term Care of people with dementia who spend down what they have saved and they have no more) and no politician wants to talk about this. They are just going to let us spin into a crisis.
While I promised myself I wouldn't go there, the problem is not Heritage Foundation/RomneyCare/ObamaCare. That is trying to keep the cost of health insurance and the health of people under 65 affordable and effective. The problem is dementia and the use of Medicaid to pay for it. My mother had dementia for over 20 years and my father paid for her care until he hit the minimum wealth allowed and my mother went on Medicaid. Her final Medicare bill was $400,000 for care that should have never occurred because of her DNR, but it did. And I don't know exactly what Medicaid actually paid because I never saw those bills, but at $150 a day for the 10 years of her institutionalization that was another $550,000. And now those dementia care costs are somewhere between $200 and $500 a day. So a dementia patient can cost society close to $1 million each and if over time (the favorite government accounting technique) 30 million people end up with dementia (10%) and they end up on Medicaid, that is a potential cost of $3 trillion.
That is not trivial, and I wish our political discourse would allow a coherent holistic discussion of the demands on our budget and a balanced approach to giving ourselves a budget surplus when we have full employment and an affordable deficit when we are in a recession. Right now we are nearing full employment, have a budget deficit of 2.5% or so, and political Armageddon between liberals and tax cutting conservatives.
Oh, and what happened to that a**hole younger boss who made me leave the sell side, he returned to N.C. ran for Congress as a Conservative GOP and lost. So now he is on some Board of Directors enjoying the income of being a pal of rich people who appoint him to their Board's.
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