A recent book serves as a reminder of what happened in the economic collapse of 2008. Lessons from 1929 were learned, and the world pulled itself back a few inches from the brink. Major economies, principally the US and China, pushed enough money into the world financial system to keep it going. We didn’t have a depression, and ten years later we’re doing well enough that we seem ready to forget.
Who were our friends in 2008? The Chinese and the competent people who knew what they were doing. Who won out? Opportunists of various stripes who saw the near-depression as an opening. And their villains were the usual suspects: elites and foreigners.
Elites and foreigners are always convenient scapegoats, but scapegoating these days seems to dominate all political discourse. That is a problem for both the left and the right. Let’s start with “elites”.
On one side there is multi-millionaire Trump, who has never wanted for anything or hidden his blatant self-interest, but who has nonetheless successfully portrayed himself as a warrior against elites! From his inaugural address: “a small group in our nation’s Capital has reaped the rewards of government while the people have borne the cost.” On the other side I’ll quote a recent email article from Robert Kuttner admiring Trump’s trade war against China and decrying how “the corruption of ruling U.S. elites created a vacuum that opened the door to Trumpism.”
When you come down to it, in both cases the elites are charged with the crime of turning the US into something that doesn’t look like a rose-colored picture of the 1950’s and 60’s, when America was “great.” It’s convenient to find someone to blame for those changes, but the world is not the same.
You can argue about trade policy (and why it happened), but you can’t wave away the accelerating effects of technology and globalization (itself fueled by technology) with scapegoating. No nation today can isolate itself behind tariff walls or anything else and maintain its standard of living. We’ve done a bad job of solving problems of transition for the current real world, but trivializing those problems doesn’t help. In Trump’s case we have the craziness of reducing support for education and research while promoting coal mining instead. His trade wars are more a publicity stunt than a solution to the problems of the working class.
There’s another issue too. As a nation we are in desperate need of elites: the people who make our economy go and who understand how things work. Who kept us out of depression following 2008. But those aren’t the only elites in the picture. There’s Trump. There are the ultra-rich behind the Koch organization who want to maximize their profits and bring back the not-so-great gilded age. There are the politicians and lobbyists in Washington. There are even the sinister invisible elites we keep hearing about behind the scenes. Accusing “elites” mixes up the picture. It creates innocent targets as a mask for not solving real problems such as education, wages, economic dislocation, racism, financial and geographic inequality…
With “foreigners” the problem is if anything worse. It is worth remembering our common interest with the Chinese in 2008. Despite the current trade war propaganda, China is neither friend nor enemy. China is a major partner in worldwide, technology-fueled growth that has made the world and us richer. They are a major player with a common interest in dealing with climate change. You can’t deny their effect on the domestic economy, but we also contributed to the pain.
We have specific issues that need to be addressed—e.g. intellectual property, opening of markets in a now richer China—however the main challenge from the Chinese is that they are good at what they do. American high-tech companies have had trouble making headway in China largely because of real competition. As China grows, we need to remain at the top of our game and to adapt to a world where we are not the largest and richest market (already true). That could be quite a good future with new products and new markets, or we could all strangle in trade (and possibly real) wars.
The divisions in this country are deep, but it is perhaps encouraging that it is less about issues than about scapegoats. If we could just remember that it is NOT all about ill-defined elites and foreigners, we could get quite a lot done.