The Resistible Rise of Donald Trump (Updated with Guest Editorial from Robert Reich)

“Imagine if Hitler had liked Jews,” I told an Israeli politician recently who asked me to characterize the Republican frontrunner. The comparison seems more apt every day. The title of this note refers to Bertolt Brecht’s 1941 satire, “The Resistible Rise of Alfonso Ui,” portraying Hitler as gangster in the mode of Al Capone.

Donald Trump has tapped an ugly mood in America’s middle class, whose prospects have dimmed noticeably since the 2008 financial crisis. For the first time since the Great Depression Americans are losing ground that they cannot regain. Median household income fell by nearly 10% from 1999 through 2011 and remains far below previous peaks. Home ownership is down from 69% in 2008 to just 64%. The rate of participation in the labor force has fallen from 66.5% before the crisis to just 62%, the lowest since the 1970s. A generation of young people has graduated from college with mediocre earnings prospects and mountains of student debt.

Median Income Falls for the First Time Since the Great Depression Median Income Falls for the First Time Since the Great Depression

 

Jobs are to be had flipping burgers, emptying bedpans or driving a UPS truck.

Burger and Bedpan Jobs Predominate Burger and Bedpan Jobs Predominate

The last two generations of American entrepreneurs–the dot.com bubblers of the 1990s and the mortgage manipulators of the 2000s–got carried out in body bags. The great mortgage scam sucked tens of millions of Americans into the bubble. Late entrants lost their homes, with 4 million homes under foreclosure by 2012 and another 6 million at risk. It’s not just that Americans are earning less, but that their path back to financial security is cut off.

A lot of Americans are looking for someone to blame, and Trump is there to point the finger: It’s Mexican illegals. It’s the Chinese dumping goods on us. Deport 11 million illegals! Slap a 40% tariff on Chinese imports! Never mind that there aren’t 11 million Mexican illegals in the U.S., and a trade war with China would blow the world economy to piece. Neither China nor Mexico has very much to do with America’s economic woes. There are fewer illegals in America today tha in 2008 and the growth rate of Chinese imports has fallen to next to nothing.

FT_15.11.19.Mexico.Unauthorized.Immigration

The authoritative Pew Research Center estimates that the number of Mexican illegals peaked at 6.9 million in 2008 and fell to 5.6 million in 2014. That’s a problem, but it’s a diminishing problem.