Economic growth—meaning a rising standard of living for the clear majority of citizens—more often than not fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness, and dedication to democracy…But when living standards stagnate or decline, most societies make little if any progress toward any of these goals, and in all too many instances they plainly retrogress.
The election of Donald Trump seems to confirm this theory. It is perhaps the most morbid symptom of secular stagnation.
Now, I appreciate there’s some resistance to this idea. A Gallup poll has found that Trump’s supporters are reasonably well-off – albeit not as much so as the finding that his supporters in the primaries have an average household income of $72,000 would suggest. And Ezra Klein points out that Trump supporters (like Brexit voters) tend to live in areas of low immigration.
Such facts, though, are consistent with Jason Brennan’s theory that voters are sociotropic: they vote not in their personal interest but in the national interest as they perceive it. And as Simon says, these perceptions are distorted by media lies.
Those lies, though, contain a germ of truth – that median incomes have been stagnating for years. Although they have picked up recently, they are still below their late 90s levels*. Trump has exploited the anxiety that this stagnation has generated – for the country if not so much for his individual voters' pocketbooks.
Which brings me to my fear. What if Trump proves unable to reverse this stagnation? What if protectionism (and the fears thereof that might depress business investment) and tough immigration controls depress incomes by more than looser fiscal policy raises them? Or what if the forces of secular stagnation simply keep income growth down?
It would be nice to think that, in such an event, voters would infer that closed borders are the wrong way to reverse stagnation and that more liberal egalitarian methods must be tried instead and so there’ll be a backlash against Trump.
This, though, is naïve. When people are confronted by evidence that contradicts their beliefs, they often do not revise those beliefs but instead double down on them and become more dogmatic: this is the backfire effect or asymmetric Bayesianism. Picture the scene in 2020:
Fact: the US economy has performed poorly.
Response: “This only shows that we haven’t done enough to protect the economy from cheap foreign competition or to reduce immigration. We need to get tougher.”
This, surely, is more likely to be the response of Fox News than an admission of failure. As Max says:
Trump might satisfy some of his base (as Tory Brexit will satisfy to some extent the ‘left behind’ in this country) but nothing will ever satisfy the true believers, because while we can do more to stimulate domestic industry and control immigration we cannot reverse time or socially engineer a lost country. There will be more bitterness, more resentment, more backlash.
Normally, political partisans hope that their opponents fail in office. Such a hope should be resisted. A successful Trump presidency might be as unpleasant as it is unlikely. But I fear that a failed one would be worse.
* The recent pick-up is consistent with Friedman’s thesis, if it is long periods of growth or the lack thereof that influences ideology rather than shorter-term fluctuations.