economics

The Trap

About halfway through the first quarter of the Super Bowl this year I began to get the feeling that the American consumer, or at least the corporations that sell to the American consumer, were not big fans of the inward anti-globalism focus voted into office with the Trump administration. The global cultural mindset was everywhere. Coca-Cola ran an add with people from all over the world singing America the Beautiful in their native tongues. Budweiser told the story of Adolphus Busch’s immigration. And 84 Lumber (they sell wood) showed the first half of a story that had to be cut off and shown on the internet because it actually showed the dubious great wall of America.

The message was loud and clear. Americans associate positive sentiment with a modern, compassionate, global perspective. We feel warm and fuzzy about the idea of diverse cultures all longing for and participating in the American dream. That message was market tested and executed by multi-national corporations who spent $160K a second on air time to deliver it. It was not an unintentional endeavor.

There’s a trap that orbits around that message though. And it’s craftily set on both sides of the political debate to latch on to portions of the American electorate yearning for something they can’t define on their own. We independent thinkers, though, who strive to remain un-trapped in our thinking, have got some work to do to define our own views lest we get caught too.

Globalism is a pretty complicated thing. The commercials we were fed were about people and culture and diversity. And tolerance. Which is something as Americans, we’ve at least tried to be about, even if we’ve been grossly imperfect in our execution. That’s why the sentiment sells. And it’s also one side of the trap. It’s the progressive globalism trap. It pushes the notion that globalism is about people and tolerance. And if you’re about people and tolerance (I am), than you are about globalism.

Globalism is quite a bit more complicated than feeling warm happy feelings about including other people though. And in contrast, opposition to it is about more than protecting our culture and way of life from the infringement of outside forces.That’s the conservative globalism trap. That trap implies that if you are for protecting American jobs and having America first priorities, then you are for protecting our way of life from the external forces of diverse cultures and people who may come here with the intent to harm. You are therefore against immigration, legal or otherwise.

If you subscribe to either of those sentiments as a primary motivation for how you think politically, then you’ve been trapped.

In reality, globalism as we know it, the globalism that’s actually materially impacting Americans has almost nothing to do with people and cultures. And everything to do with trade and money. The standards enforced by the World Trade Organization and the outcomes that reducing barriers to free trade have ushered in an era of unprecedented global growth. They’ve drastically reduced inequality across nations. But at a cost. And that cost has been the re-distribution of wealth and the increase of income inequality within already wealthy nations like America. It’s a firm reality of economics. You grow other place’s middle class at the expense of your own.

That’s the trade side. The opening up of the international flow of capital over the last three decades has allowed money to move seamlessly from country to country. But that’s come at a cost too. And that cost has been a financial interdependence that fuels global recessions without alleviating the need for sovereign nations to bail out institutions deemed “too big to fail”.  And it’s allowed open competition for corporate earnings to drive the corporate tax rate down globally almost 50% in just a few decades.

That last one sounds like a good thing. Until of course you realized it just throws the tax burden back on private citizens while the corporations no longer paying it move their capital and jobs over seas.

The cases most politically argued for or against globalism mostly ignore these realities. They’re motivated by the polar perspectives of either caring for and tolerating all and any or protecting us from the evils and dangers of the outside. But neither one of them actually solves the pain that real hyper-globalism causes. So we’re using a “tastes great vs. less filling” debate to figure out which car to drive. It’s not answerable. And even if it was, it would get you the right answer to the wrong question.

I’m not a fan of protectionism. Historically, things like tariffs and border taxes hurt more than help. If you want to buy an iPad that was assembled by someone making union wages in Michigan, be ready to spend a lot more. And buy a lot less. But there’s a difference between full blown protectionism and allowing sovereign nations the freedom to dictate rules of trade and capital flow as they see fit to handle their domestic economic issues. And not usurping that responsibility to global governing bodies that don’t feel the impact when they go wrong and don’t have real authority to take measures to get the train back on the tracks when it falls off.

That’s the really good argument that the Trump White House could make relative to globalism.

I’ve got to hand it to them. Though I’d argue that leaving Trans Pacific Partnership is more of a signal to the base that they’re trying than a real live effort that helps, they’re on the right side of the tracks on trade. But they’ve got a deep political problem. They can’t seem to get America’s focus or energy on it. Because they’ve trapped themselves.

I once asked aloud on Twitter, where it’s easy to find the vocal Trumpers, what would be the thing that Trump could do that would anger his base to the point that they felt he had alienated them. Without hesitation, the response was clear and unambiguous. Go soft on immigration.

It’s pretty clear. In order to get a man like Donald Trump elected president, America needed to tap into the base psychology of nativism. It’s not new. It’s been around since Ben Franklin expressed concerns about the German immigrants muddying the English only waters of colonial America. It’s a bit of a political cheat button though. Because it will get certain threads of the collective American consciousness to love you. But it makes you focus on something that matters less to the material things causing the pain you promise to address. Immigration talk lathers people up. But it’s neither the cause nor the solution to the deep problem America has right now. Which is a growing income inequality gap between high skilled and low skilled labor.

Immigrants make up 13.5% of our population. And the jobs being taken by those immigrants, legal or otherwise are not the jobs responsible for the wage gaps between working class and white collar America. Those jobs have left America because of the spread of cheap global manufacturing and automation. And that is what’s driving the wage gap and the material impact on our lives and the economy.

Over the last 40 years, the world has seen globalization of trade and capital flows like no time in the last 150 years. But it has not seen a massive movement of people. No matter what any politician or talking head says. We are at our historic norms. Which means that hyper-globalization and the new modern red scare of foreigners are two distinct issues. But they’re argued like they are the same thing. When they are not. Which means the following two statements are true:

-You can argue for America first economic policies that are reasonably grounded in economic observation and reality, without ever mentioning immigration or the fear of foreigners.

-You can argue for tolerance and acceptance and inclusion of different people, without demanding lubricated free trade and movement of capital across borders.

Which means that the trap is a choice made by those who need to satisfy the already politically trapped in order to seek power. But it’s a choice that we in the middle, the ones who actually choose which ideologue sounds reasonable enough to support, don’t actually have to make.

I’ve been asked more than once if I’d ever consider running for office myself. And because I’d never be able to facilitate the kind of nonsensical idealogical circle jerk that would get me elected, the answer is no. And likely always will be. But if I were, and I were allowed to run on a reasonable platform related to things like the economy and immigration, I would say the following three things:

1- We as America, the largest economy in the world that drives the global consumption engine, absolutely reserve the right to dictate our own trade and foreign capital policies to other nations who want access to the richest economy in the world if current terms are not helping Americans.

2-Immigrants are welcome here. As are disparate cultures. But we need to account for the 11.5 million people in our borders here on an other than legal status. So they either have to go or we have to make them legal. I am for the latter for many reasons more than just cultural sensitivity inclusion and being a damn human. Which makes things like the entire sanctuary city debate irrelevant overnight.

3-America is allowed to enforce sovereign borders and sustainable immigration policy. It’s not inhumane to control who enters our country. Actually dealing with the 11.5 million undocumented people who live here humanely enables us to do this more effectively going forward.

You’ll never hear one candidate say all three. But listen hard for just how far off someone is, especially to number 1, and you’ve got a shot at picking the next leader of our country to actually get us closer to the great we think we deserve.

And watch out for traps. They work. That’s why they’re traps.

 

 

 

 

 

 

 

 

Categories: economics, immigration

6 replies »

  1. Thanks for articulating a start of a platform– it’s great to read coherent thinking and alternatives.

    Is the title an intentional or unintentional reference to Sir James Goldsmith’s “The Trap”? I wouldn’t think so based on your second and third planks, but there’s enough overlap to make one wonder.

    As I recall, like part of your #1, Goldsmith argued against unfettered free trade between countries at different levels of development. Yet he also argued against restrictions on the flow of capital– perhaps not surprising for an international financier.

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  2. Thank God! Some one is willing to write on complicated matters like they deserve! With reason and even handedness! Please start teaching journalism if you’re not planning on running for office!

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