Tanya Azarchs: Another Point of View

Tanya, a friend of Mark's (at least until this post), sent the following interesting comment:

What we have just witnessed is really a landslide of a victory of populism that started with Bernie and ended with Trump.  Let me define populism as a political stance that rides into power on a wave if promises that only wishful thinking can bring rational people to accept as believable and not leading to disaster down the road.  It manipulates people, energizing them with fear, and offering enticing promises that awaken their greed.  I might smile tolerantly and say let’s let the experiment go on, if it weren’t that the populist fanfare cloaks a radical revolution that is unprecedented in US history.  In the back halls of power, there are those that are champing at the bit to institute a vision of an America that hearkens back to the debates between Jefferson and Hamilton/Washington at the beginning of this country on what should be the role of the federal government.  That debate was not present during the election which was fought on the issues that seemed more important to voters:  whether Hillary mishandled her emails and whether Donald groped women.  The important issue of how we should be governed, and what is the role of government, which is about to undergo a radical transformation, was not mentioned. The transformation is of such a magnitude that if it had been a leftist agenda, there would be calls for a crackdown on subversive activities. The will result in a massive dissolution of federal government programs other than defense.  Some of those may be taken up by the states, but that will take time. And not all states with have the wherewithal to leap into the breach.
Under the battlecry of “drain the swamp,” the powers of agencies involved in social welfare—Medicare and other healthcare, Social Security, education and the EPA—will be curtailed and the benefits they afford will be sharply decreased.  Privatization and voucher schemes sound efficient, but the amounts proposed for vouchers would not begin to pay for private programs equivalent to the government programs.  Civil liberties will also increasingly be thrown back to the states to determine.  Why not, you might say.  But empirically, the impetus for advancing civil rights and social reform has not come from the states, let alone the free market; they have had to be dragged forward by federal mandates on such things as the right of all citizens to vote, to receive an adequate education, to have employment protection, to be free of discrimination, to have a safety net in times of misfortune, to be secure in retirement—and the list goes on.  All these are the hallmarks of a civilized, advanced economy. 
The radicals in the Republican party are romantics, hankering for a simpler time when society did well (they don’t read Dickens) without a “nanny state”.  We need to have a dialogue on just how much individual responsibility we can expect in a world that is too complex for too many people, and headed to even greater complexity when robots will do all the work.  It will not be sufficient to say that those left behind are just lazy; structural unemployment is expanding and will need to be recognized as something neither markets nor incentives can solve. 
Already the perception of inequality of opportunity is expressing itself in anger, and demands for radical change.  Social unrest can become serious if Trump’s proposed changes do not address the causes of that anger.  However, his changes are not designed to help the structurally unemployed or underemployed (rather the reverse), so the prognosis is not good.  Mercantilist policies will not bring jobs back to the US—certainly they will hurt the high-skilled jobs market that exports services like finance, and do not recognize that low skilled jobs fell prey to automation and breakup of unions rather than globalization. Other policies will attack the very social and educational programs that that could help provide a safety net or a path to social mobility.  The tax cuts will disproportionally help the wealthy and corporations.  The best one could say is that the cuts might unleash a wave of investment that will benefit all.  But investment does not take place until an increase in demand is identified. While the market is obviously focusing on the fiscal stimulus that may come, it is discounting the potential for a severe impact from a high dollar and potential trade wars.  If the positive forces do not outweigh the negative, the economic revolution may well produce a social revolution.  Austria of the late 30’s comes to mind.

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