The Center Cracked

I am resigning effective immediately my post as election forecaster. My only consolation is that I am far from alone in predicting a Hillary Clinton victory. The media will be filled with instant analyses of the meaning of Donald Trump’s victory, but I caution that it will take some time to determine the real causes of this unexpected victory. Was it a one-off, or does it signal something much deeper in American society? Don't forget that Hillary Clinton won the popular vote. So we should be careful about making sweeping conclusions about major upheavals in American society as a whole.

What will change more, Trump or Washington?

            The one thing, perhaps the only thing, we can say for sure at this point is that Trump’s victory demonstrates just how deeply unpopular on a personal level Hillary Clinton is with a large number of voters. She doesn’t deserve this opprobrium, but no one said politics is fair. She just didn’t resonate with voters the same way Obama can. His particular electoral genius is being able to combine the calm, reasoning – almost philosophical – approach to governing with a genuine human touch. Can you imagine Hillary Clinton leading a gospel choir in the deeply moving Amazing Grace during a memorial service for people slain inside a black church in yet another senseless shooting? I can't.

             Is Trump’s victory a crushing statement against the so-called privileged, cocooned elite that has -- allegedly -- constantly denigrated working class America and followed economic policies stripping the Rust Belt of its old-line manufacturing jobs? Too simple. For one thing, unemployment in America is at its lowest level in more than a decade, and wages are going up. Another point is that the Rust Belt began losing those old manufacturing jobs decades ago. For example, my hometown in Vermont lost its machine tool business in the 1950s and 1960s.  Also, if this election was a mass cry against the much-maligned establishment why is Obama’s personal popularity at an all-time high? Unlike recent presidents he will leave office with his flag flying high and proudly. And the one good note of this horrible campaign was the performance of Michelle Obama.

            I accept the fact that thousands of voters are furious that no one was thrown in jail or even severely punished after the sub-prime crisis destroyed homes and livelihoods. It is even more infuriating when those deemed responsible for the crisis were rewarded with ever higher bonuses. But this can’t be the main reason for Clinton’s defeat. That same anger existed in 2012 when Obama was easily re-elected and carried several states that then – as now – suffered from the erosion of traditional jobs.

            Neither candidate seriously addressed the issue of the Rust Belt job losses or the real impact of globalization on American workers. I think a little honesty would have gone a long way. I remember very well when Bill Clinton was addressing workers in Portsmouth, N.H. during the 1992 primary. The workforce of Portsmouth was devastated by the loss of Navy-related jobs. Bill stood in front of a hostile crowd and simply, honestly, admitted that those jobs weren’t coming back. The challenge, he continued, was to find a way to support their income while re-training them for new types of employment. You could almost see the relief and grudging acceptance on the faces of the audience that someone was at last treating them honestly – like grown-ups. Bill Clinton, like Obama, had the crucial ability to empathize with people and soften the harsh reality of what they faced. Incidentally, we returned to Portsmouth last summer and found that it has come a long way from those dark days of the early 1990s. Once down-trodden communities can, and do, rejuvenate.

            No matter what Trump says, no one is going to turn the clock back on globalization. Let’s assume he succeeds in erecting high tariff barriers blocking imports from Mexico or China. Instead of establishing manufacturing plants overseas those companies in places like Michigan, Ohio or Indiana could simply shut down because they are no longer profitable. How does that help anyone? There is nothing, absolutely nothing, he or anyone can do to change the reality of higher costs in the United States putting great pressure on manufacturing business already operating on low margins. Are Wal-Mart customers going to be happy paying much higher prices just to buy goods manufactured in the United States? I doubt it.

Wal-Mart customers won't easily give up these low prices

            Thousands of American companies have found that the solution is to move up the food chain, creating and using high technology that cannot be easily replicated overseas. Basic low-margin manufacturing is nice, but high tech design and engineering is much, much better. Just ask the American oil service companies that dominate the industry world-wide. Also, traditional trade figures ignore another critical area of American dominance – the service industries of finance and insurance. Throw those into the mix and the total trade balance picture changes dramatically.

            I have a friend who is rubbing his hands in glee with the image of Trump riding into Washington and ‘cleaning the swamp.’ I hate to disappoint him, but Washington is a very seductive place with a well-earned reputation of swallowing would-be swamp cleaners. Rather than challenge the so-called establishment he so vociferously denounced Trump could well wind up as a charter member. If this happens, thousands of those who cheered for him on election day could be sadly disappointed.

Trump, a person with no known convictions one way or another, could also have serious problems with a Congress filled with many people in his own party who don’t trust him. Much too early to tell just how this will unfold, but I suspect the Republic will survive even a Donald Trump.