America is likely to dump the Trump-Insular-nativism versus leftish-liberalism
by Kumar David-May 14, 2016, 9:02 pm
It is pretty certain Hilary Clinton will be the Democrat’s candidate and Donald Trump has clinched the GOP (Grand Old Party or Republican) nomination. GOP high ups loathe Trump; House Speaker Paul Ryan, Bush-41, Bush-43, David Petraeus and former candidates John McCain and Mitt Romney have declined to endorse him. Eventually most will climb down but internal GOP schisms will debilitate his campaign and the scenario in the party is still murky. This piece explores Trump’s appeal and why nevertheless he is likely to be rejected by the electorate.
The odious contours of Trump’s campaign appeal to America’s economic losers and the Tea Party gadflies that the GOP recklessly encouraged as a whip against Obama. But he is resonating far beyond and has attracted the blue-collar white working class and it is not true that his appeal is only to a minority in the party. In recent weeks a majority of Republicans, frustrated by the debility of the economy, seem to have thrown in their lot with ‘outsider’ Trump. It is the economy/jobs/government spending not his outlandish pronouncements and whacky bluster that keeps Trump’s image alive.
Donald Duck economics
Trump’s table thumping on the economy has little connection with reality, but it is blunt. The US economy is in trouble; but not because it is being ripped-off ("raped" is his latest ejaculation) by China, Mexico, presumably Vietnam and other low labour cost (high productivity) countries. "We are a great nation but shackled by foreigners; there is nothing wrong with America per se (except of course Obama and the Democrats) it’s the fault of trade, currency manipulation, immigrants stealing our resources and the dirty doings of crafty Chinese and dumb Mexicans"; that’s his message. It speaks to falling living standards of working and lower middle classes and the fears of middle-middle class conservatives. What I am driving at is this: It’s not new that Trump’s fans are daft, but the point is that economic insecurity in many population pockets resonates with his rant.
That people are in a funk does not make Trumponomics (Donald Duck economics) coherent though the forces driving it are real. The contentious issue is the near collapse of US manufacturing in the face of global competition. In simple terms: If it costs $10 to make and market a commodity in the US, then it can be made in China or Vietnam, shipped to the US and sold for $7. The US cannot meet this challenge, notwithstanding its higher productivity, because wages (and therefore living standards) are disproportionately higher. Production of that commodity may take one man-hour in the US and a wage of $10 (ignore profit, materials and energy costs) and one and a half hours of $4 per hour labour in Asia. Then the Asian labour contained in exactly the same commodity is $6. Add $1 for shipping and still the American housewife makes a gain of $3 (30%). To put it another way there is a transfer of $3 of surplus-value from Asian labour to American consumer. Since labour is cheap in China or wherever (cheaper than necessitated by lower productivity) there is a transfer of surplus-value to the US commodity market; that is lower prices benefit the buyer as well. This is the crux of the matter in the simplest possible terms, not cheating, "raping" or unfair trade practices.
