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HOW DID IT HAPPEN?

December 2, 2016

HOW DID IT HAPPEN?

Sheila Kennedy, an IUPUI professor in Indianapolis, wrote a blog seeking commentary this morning on alternative ideas on what happened that elected Trump,               ranging from white rage to race to a number of rationales, including one citation which I thought underplayed the role of economics as one of the major reasons               Trump did so well with his platitudes and generalities. I responded to her invitation with the following, which I here have transformed into a blog.

  1. Shelia – Social change and economic change are inexorably intertwined. If, for instance, one makes minimum wage and hits the Irish sweepstakes, he or she moves out of the ghetto and into the house on the hill. When on the hill, the lucky winner will begin to do and act like his or her new neighbors. There are, of course, exceptions to this rule (see the Beverly Hillbillies), but they are exceptions.

    I disagree with one of your citations to the effect that this is not an economics issue. I believe it is because when Americans are making good wages, live in nice houses, send their kids to good schools, can set aside money for retirement, then the Norman Rockwell effect sets in as they recognize they are not “losers” but winners and are thus far less likely to complain about gays, welfare bums etc. since they have no particular failure in life to project into, for instance, a vote for Trump. They are in good shape and though perhaps living in a social cocoon, are satisfied and happy with their lots in life. What’s not to like in their little world – for them?

    Thus while marooned socially, it works for them, and the increased taxes they pay works for those who are still in the ghetto (if as a political choice we can keep the Republicans from giving such increased revenues over to the superrich). My understanding of the socio-economic situation we have has led me to harp incessantly on the crying need to end wage inequality, which we have suffered for some four decades with no movement in inflation-adjusted median wages even though the Dow is at historic highs, strongly suggesting if not proving that Wall Street is involved in what amounts to wage theft to prop up its capital gains potential.

    Thus one economist writes that if wages had moved in tandem with capital appreciation for the past 40 years we would have a median wage of $97,000 today. Imagine what that would do in terms of aggregate demand! Talk about a boom! As I frequently blog, we have enormous wealth; the problem lies in its maldistribution.

    My final conclusion from recent socioeconomic history is that in one way or another wage inequality has led to the election of a clueless goon who preyed largely on the unhappy and disadvantaged who due to Wall Street greed and compliant Republican politicians are in fact hurting in the economic ghetto and that, of course, with the sprinkling of the Nazi-minded and hedge fund managers in his cabinet, it will get worse with a possible loss of social cohesion as an end result of the unraveling of our social compact. I cannot and will not pretend to be optimistic in view of where our politics has taken us as of a few weeks ago. Like the con man in the musical The Music Man, “Folks, we got trouble, right here in River City.”       GERALD       E

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