Trump Win Provides Moment of Clarity on Income Equality
Donald Trump’s populist victory may, finally, usher in an era of common sense thinking on the topic of economic inequality. The widening gap between rich and poor has been the topic of much discussion and debate of late.
However, the solutions proposed by Democrats and others of the left invariably miss the mark. We will not reduce inequality by robbing Peter to pay Paul or by saddling American business with burdensome regulations and mandates. A Donald Trump presidency uniquely represents an opportunity to bolster the middle class through policies that actually help build and strengthen the middle class.
The essence of Trump’s new populism is that free trade agreements, coupled with uncontrolled illegal immigration, are the main factors that drive income inequality. Free trade agreements, particularly NAFTA, lessened import tariffs and empowered American companies to move jobs overseas where labor costs are lower. Without tariffs, foreign-made goods could enter the United States cheaply.
Additionally, the influx of illegal immigrants beginning in the early 1990s increased the pool of cheap labor for American employers. This pushed down wages for the jobs that could not be shipped overseas.
These results were assuredly not the intended result of the trade and immigration policies. But whatever the intentions, the effect has been a double whammy for blue collar, middle class Americans. Predictably, fewer jobs and lower wages have created and exacerbated income stagnation and inequality.
Neither political party has been willing or able to address the true root cause of economic insecurity, until now. Democrats, in thrall to identity politics, pay lip service to “workers” but often support trade agreements and cannot oppose illegal immigration. Indeed, opposition to illegal immigration is seen by many Democrat leaders as racist and nativist.
The Republican Party establishment, under the influence of big business, pays lip service to “national sovereignty” but generally supports free trade agreements and often turns a blind eye to illegal immigration. Big business prefers a large pool of cheap labor.
Thus we have an unrepresented segment of Middle America that came out in droves for Donald Trump. In business terms, Trump identified a market of political consumers for whom there was no attractive political “product.”
Do not expect progressives to help attack the real cause of distress to the middle class. Democrats are simply incapable of opposing globalization. At this point in history, the Democrat Party is the party of coastal liberals who seem to favor globalization because it suits their economic interests and because its ethos comfortably accommodates liberal social values such as gun control and abortion rights.
Liberal policy solutions to income inequality — typically more redistribution of wealth through tax hikes and increased business regulation — actually harm workers by stifling job creation. Progressives, having misdiagnosed the causes of income inequality in America, propose heavy-handed policies that merely vindicate a rigid ideology that demands greater centralized control of the economy. Yet, it is government immigration and trade policies that drove away jobs and reduced wages in the first place.
In my view, Republicans in Congress face a dilemma on trade and immigration policy that is analogous to a problem Democrats confronted in the 1990s. Great Society liberals did not intend to trap generations of the poor in low quality housing or induce dependency on government handouts. Dependency and crime-ridden public housing were the real-world consequences of progressive social programs. Thus, the Democrats reluctantly agreed to reform the welfare state in 1996.
Republicans will need to do the same with trade policies. Whatever noble intentions motivated NAFTA, the result has been unfair to the middle class.
The challenge, going forward, for the Republican Party and Donald Trump is to defend the interests of blue collar, Middle American voters. To be sure, Republicans will benefit from the fact that Democrats have all but abandoned the working classes in the South and the Mid West. But merely being the least bad option will not build a stable political coalition for future elections. Conservative-leaning populists now have a seat at the grown up table, and deservedly so.
Our country cannot promote prosperity for all Americans without revisiting trade agreements and stopping illegal immigration. In the 2016 campaign, publicly recognizing this commonsense fact induced shivers among elite policy makers and opinion leaders but motivated voters to hand Donald Trump a victory of historic proportions.
We cannot fix problems that we cannot discuss or debate. Donald Trump did the American public a great service by identifying the real reasons for economic discontent.
Some might call it committing the truth.
McMickle is a former counsel to the Senate Judiciary Committee and legal policy advisor to the Trump Campaign, Washington D.C. Policy Office. He is a co-founder of North South Government Strategies.