How Globalized Capitalism Drives Worldwide Fear And Discontentment

The right and the left seem to maybe agree on one thing. They oppose globalism. Not everyone on the right, not everyone on the left, but there is a commonality there. Do they oppose it for the same reasons?

ROBERT KUTTNER: No, they oppose it for very different reasons. The progressive critique of globalization is very simple. It is a critique of the use of a certain kind of globalization to dismantle what used to be a manage form of capitalism that delivered broad prosperity. The democratic nation-state after World War II was able to regulate markets in the broad public interest so that ordinary people would have economic security and economic prosperity. Beginning in the ’70s and ’80s, trade deals were used to undermine the ability of governments to regulate banks. They were used to put cheap labor that had no labor standards into competition with labor in the United States and in Europe that benefited from protections. And so globalization was used to return to a more primitive version of raw capitalism. That’s the progressive critique.

..  But I think if you want to get elected, you can’t ignore the plight of ordinary working people at the same time you’re asking the voters to open their hearts to immigrants and to other claimants for social justice. It’s asking too much of people whose living standards have gone down the drain to expect them to be liberal on social issues.

Trump was an election surprise. Expect more.

The Trump election likely signals a new era of extreme voter discontent and improbable national election results. Why? Because the so-called American Dream — that each generation would live better than its predecessor — has ended for most of our citizens. Half of the young adults in this country will earn less over their lifetimes than their parents did. Indeed, the whole idea of rising living standards, which defined this country for so long, is a thing of the past for most Americans. More and more voters realize this and are angry about it.

.. Are wages rising? Looking back over the past 40 years, the answer is no.

According to the Hamilton Project, overall U.S. wages, adjusted for inflation, are essentially flat over this period — registering about 0.2 percent growth. Which means that purchasing power, a good proxy for living standards, is flat, too.

 .. The 2016 Federal Reserve Board survey of household well-being found that 46 percent of U.S. adults could not meet a $400 emergency expense without borrowing or selling something they owned.
And a stunning one quarter of adults cannot pay their monthly bills in full.
.. A series of powerful, entrenched factors have brought the American Dream to an end. Economists generally cite
  • globalization,
  • accelerating technology,
  • increased income inequality and
  • the decline of unions.
What’s noteworthy is that these are long-term pressures that show no signs of abating.
.. there continues to be a debate among political scientists and sociologists as to whether these income pressures or cultural factors such as a rebellion against the establishment contributed more to the Trump upset. But, in reality, the two factors are interrelated. Household financial troubles increase cultural resentment and the sense that there are two Americas. Especially with the share of national income going to the lower 80 percent of earners at a 100-year low.