The future of the US will depend on how Americans from all walks of life respond to this unprecedented assault on our form of government.
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Donald Trump’s election victory is widely attributed to the public perception (hyped by the right-wing propaganda machine) that the US economy under Joe Biden was a disaster in slow motion. In fact, far from being a disaster, the US economy is considered by the rest of the world as a model of sustained success.
The US has been dealing with inflation, but so is everyone else; it’s a global phenomenon, considerably worse in most countries than in the US. Economic growth during most of the Biden administration was almost identical to that of Trump’s first term in office: 2.2 percent versus 2.3 percent.
COVID-19 and the Price of Eggs
The real problem was the COVID-19 pandemic, which brought most of the global economy to a halt in 2020. The US economy faced a serious recession or worse. Biden, along with the Federal Reserve, managed to avoid that and steer the economy towards a soft landing, but the cost was a period of inflation. The idea that such a disruptive event as COVID-19 could pass without so much as an economic sniffle is, frankly, absurd.
It’s easy to forget just how enormous the shock from COVID-19 really was. Many Americans were in danger of losing their homes and facing bankruptcy. More than 20 million jobs were lost and US unemployment peaked briefly at 14 percent. During the Biden administration, unemployment fell to around 3.5 percent. That was largely owing to Biden’s American Rescue Plan, which injected $1.9 billion into the US economy — an emergency cash transfusion that brought welcome relief to the job market but also contributed to a spike in inflation.
The aggregate US economy remains strong and resilient. What has gone off the deep end is not the economy itself, but the way in which American wealth is currently being distributed.
The most notable day-to-day impact has been in sharply rising food prices. Besides COVID-19, the price rises were exacerbated by Russian attacks in Ukraine, which cut the Middle East and other countries off from what had been their major source of grain and led to competition to replace the missing supply. Climate change, which is beginning to have a significant impact on global farming, also contributed. At its peak in 2023, grocery prices rose an astounding 13 percent for the year. By the end of Biden’s term, grocery price increases had stabilized at around 1.1 percent year-over-year, which is actually about half the Federal Reserve’s target inflation rate for a healthy economy..
For the average American voter, the chaos was most visible in the dizzying rise in the price of a dozen eggs. Something had to change, and Trump offered a self-confident — if inane, to anyone bothering to penetrate his chicken-in-every-pot rhetoric — answer to growing consumer uneasiness.
What Price Democracy?
What Trump’s election victory is likely to do to the country now has nothing to do with fixing the economy. Whether cheaper eggs and other price reductions in the supermarket are justification for trashing the US Constitution, destroying the country’s regulatory agencies, and appointing an amazing collection of misfits and incompetents to high office may depend on your taste for eggs — and your taste for democracy.
What seems clear enough is that Trump is bent on destroying representative democracy, taking aim at American norms and institutions much as Hitler, having been presented the political gift of a genuinely collapsing Depression-era economy, took aim at the Weimar Republic.
Given the glaring differences in circumstances and context, how did we wind up in much the same place as Weimar in 1933, under the thumb of an aspiring dictator? The aggregate US economy remains strong and resilient. What has gone off the deep end is not the economy itself, but the way in which American wealth is currently being distributed.
A handful of Americans — Jeff Bezos, Elon Musk, and a half dozen others — currently control assets equal to that of something like 100 million ordinary Americans. And it’s getting steadily worse: At last measure, the wealth of the top 0.1 percent was more than five times greater than that of the bottom 50 percent.
The inequality that is strangling America is not a function of the business acumen of a few billionaires. It stems from a lack of civic responsibility and a failure to understand that for a society to move forward, there needs to be investment in the commonwealth of that society.
Alexander Hamilton went to great lengths to convince the original 13 colonies that for their nascent union to survive, the wealthier states needed to bolster the finances of the poorer states, and that all the states needed to contribute to the joint defense of the country. The point was to achieve a level of economic sustainability that applied to the entire country.
In 1986, a right-wing political activist, Grover Norquist, convinced Republican members of Congress to sign a pledge not to increase taxes. Norquist joked that his goal was to shrink government until it was so small he could drown it in a bathtub. What he neglected to mention is that taxes are, in fact, an investment in the future. Without that investment, the nation withers and eventually dies.
Franklin Roosevelt realized the need to invest in the nation, but he also felt that the greatest part of that investment should come from the wealthy, who were most able to afford it. During the Middle Ages, the duty of the nobility to sustain the state was known as “noblesse oblige.” In the US, the opposite has happened. The wealthy have used their money to buy their way out of paying taxes, leaving the burden on those least able to afford it.
As a result, the national infrastructure is falling to pieces. The ability of American business to compete in the rest of the world is turning out to be a mixed bag. We buy Japanese and Korean cars assembled in Mexico. American business depends on cutting costs and firing workers and transferring economic assets out of the country. The aggregate profits are there; they simply aren’t reaching huge swaths of the American public.
The unspoken American mantra is that people are worth what you pay them and you pay as little as possible — the MBAs call that “efficiency.” But it’s also an axiom that if people no longer have enough money to buy anything, there is no point in producing new products. The result is a downward spiral leading not just to mass poverty, but also to a frozen economy in which (eventually) no one prospers.
For several decades, America has been living an illusion. Starting in the 1970s, American corporations began seriously transferring most of their manufacturing operations to China and the Third World, where they could take advantage of cheap labor. Slashed labor costs led to cheaper products sold to millions in America’s lower economic brackets by mass distributors like Walmart and Costco, while personal income increased many-fold for corporate CEOs.
The illusion was that the lower economic classes, including a number of minorities, were moving into a larger middle class.
Instead of correcting what’s wrong, Trump appears determined to move in a direction that is certain to make things worse.
Trump’s insistence on funding the government with import tariffs will end the illusion. Everything will become more expensive, and lower-income workers who are now trying to hold down two or three jobs to make ends meet will finally be dumped in the cold.
Automation and now artificial intelligence will undoubtedly bring new disruptions to the labor market. The original justification for outsourcing so many lower-skill jobs offshore was that American workers would be freed to fill higher-skilled and better paying jobs here. But the assumption that such a massive shift could happen without some kind of government oversight — providing retraining and stopgap subsidies for the workers whose jobs “migrated” overseas — proved unfounded.
Only I Can Break It
If you want to lead a population through thoroughgoing change, first make them confident about their place in the changed future. America has done the opposite.
Trump’s ability to give voice to the frustrations of that sector of the American public that has been left behind undoubtedly contributed to his election success. The fact that Biden is, as one commentator put it, “rhetorically challenged” — and incapable of explaining how his administration brought the country safely through the post-COVID vicissitudes — is surely a major reason that Democrats lost. Kamala Harris turned out to be more articulate than Biden but appeared too late in the game to persuade the public that she could build on the groundwork of her predecessor.
Instead of correcting what’s wrong, Trump appears determined to move in a direction that is certain to make things worse.
Not least of his absurd recent decisions is appointing Elon Musk and Vivek Ramaswamy to a new government department that will theoretically attempt to reshape the entire US civil service by eliminating the “fat.” Forget the fact that Musk’s efforts to reshape Twitter turned into a management disaster or that Tesla’s board has considered firing him for erratic behavior, or that Musk, a first-generation immigrant from South Africa, has absolutely zero experience in or understanding of how the US government actually functions.
What clearly matters to Trump is that Musk is en route to becoming the planet’s first trillionaire. No question that he is a brilliant, innovative, and imaginative entrepreneur, especially when it comes to electric cars and reusable spaceships, but as the current richest man in the world, with a serious empathy deficit, he cannot begin to conceive of the economic hardships faced by a growing number of Americans.
Entrepreneurs are great at starting new companies. They are usually lousy at maintaining their own companies once they reach a certain size. Stability, predictability, and comforting routine are not part of the entrepreneur’s zeitgeist. And yet Trump, who made little or no sense during the election campaign, picked Musk to remake America. His other choices have been even more suspect.
Trump’s selections of people he thinks should run the government are frighteningly revealing of his one-track mind — which places loyalty to his own self-interest above any hint of devotion to the US Constitution, which he will solemnly swear to uphold on January 20.
The future of the United States of America will depend on how Americans in all walks of life respond to this unprecedented assault on our form of government. When Benjamin Franklin left the Constitutional Convention in 1787, he was supposedly asked what form of government the delegates had bequeathed to the American people. His reply: “A republic — if you can keep it.”
Ben, meet Don.
