This past Tuesday evening as I watched Bernie Sanders and Donald Trump vanquish their rivals handily in the New Hampshire presidential primary election, I received an e-mail from my brother, Nelson Nones, with his observations on “what it all means.”
As someone who has lived and worked outside the United States for years, Nelson’s views are often quite perceptive — perhaps because he is able to look at things from afar and can see the “landscape” better than those of us who are much closer to the action.
Call it a “forest versus trees” perspective.
And when it comes to the 2016 presidential election, it is Nelson’s view that the Sanders/Trump phenomenon is absolutely real and not something based on personality or celebrity — for good or for ill.
Shown below is what Nelson wrote to me.
… On the Underlying Dynamics
For context into what’s happening in the United States, the Pew Research Center’s recent report on the wealth gap in the United States is instructive.
In a nutshell, over the past 30 years Pew’s data points reveal:
- Upper-income families currently represent ~20% of the total, and their wealth (measured by median net worth) has doubled.
- Middle-income families represent 46% of the total. Their wealth barely changed (up 2%).
- Lower-income families therefore represent ~34% of the total, but their wealth fell 18%.
Now, after the end of the Cold War in 1992 until the onset of the Great Recession in 2007, the wealth of all three groups did rise, albeit by varying degrees:
- Upper-income by 112%
- Middle-income by 68%
- Lower-income by 30%
Here’s how they fared during the Great Recession (2007-10):
- Upper-income wealth declined by 17%
- Middle-income wealth fell by 39%
- Lower-income wealth fell by 42%
And after the Great Recession:
- Upper-income families recovered 36% of their wealth lost during the Great Recession
- Middle-income families recovered none
- Lower-income families lost an additional 7% relative to their wealth in 2007
So, if we assume wealth to be a proxy for the feeling of well-being, then one could surmise that ~80% of American families feel like victims today — of which nearly half feel they are still being victimized.
… On “Anger”
Are people feeling angry about this? You bet.
Who are they going to blame? The other ~20% and foreigners, of course.
Never mind the exculpatory hard data proffered by defenders of the nation’s elites revealing that big banks paid back all the bailout money they received during the Great Recession, or that bankers cannot be jailed for their alleged misdeeds unless and until proven guilty by jurors in courts of law (like anyone else), or that pharmaceutical companies’ margins on $45 billion of profit, at 12%, aren’t “quite” as obscene as they appear at first glance.
None of those facts can ever restore wealth that’s been lost and never recovered, or is still falling. When you feel like a victim, such hard data are utterly and completely irrelevant.
Both Bernie Sanders and Donald Trump are tapping into this anger with great success. As I watched both Sanders’s and Trump’s victory speeches, to vastly oversimplify, here is what I heard. Sanders essentially said:
“It’s not fair that most Americans can’t get ahead or are falling behind. I’ll expropriate money from the rich by taxing Wall Street bankers and give it to you in the form of free tuition, student debt restructuring, lower healthcare costs and single-payer healthcare!”
Trump essentially said:
“Political hacks are negotiating bad deals, letting China, Japan and Mexico take our money away from us every day. As the world’s greatest businessman, I’ll negotiate great deals fast to give you universal healthcare, and beat these countries so you get your money back – without having to share it with all those illegal immigrants!”
In my view, what both Sanders and Trump recognize is that ~80% of American families may have lost 40% of their wealth since 2007 with little or no hope of recovering it … but they haven’t lost any of their voting power.
It makes no difference that the prescriptions offered by Sanders and Trump – squeezing money from Wall Street, China, Japan and Mexico, for example – are nonsense. As a lawyer I once knew always said, “Winning isn’t everything; it’s the only thing.” To have any chance of accomplishing something useful (or not) as President, you have to win first.
… On Populism being the Winning Ticket
In this election, under present circumstances, populism is a sure winner.
The wealthiest ~20% of families (Democrats as well as Republicans) who represent the “establishment” in the eyes of the angry Sanders and Trump crowds, don’t quite smell the coffee yet.
The angry crowds are out for money this election cycle, and I believe they hold enough votes to elect one of the two populist candidates (Sanders or Trump) who is promising “money.”
… Not “experience,” “pragmatism,” “conservativism,” “liberalism,” “socialism,” “limited government,” “feminism,” “pro-life,” “pro-choice,” “pro-LGBT,” “hope,” “change,” or whatever. But money.
To protect as much of their wealth and status as they can, the elites have little choice but to scuttle their aspirational platitudes and learn to deal with it.
So there you have it — a view of the presidential election from the outside looking in. I think there’s food for thought here — and very possibly a look at where we’ll be in another nine months.
What do other readers think? Agree or disagree? Please share your observations here.