Underlying Assumptions – Western Style

 

It is fascinating to examine the polarization, the down and dirty anger, that is raging like forest fire across the Western world. Cadres of displaced workers, their belief in a system that operated well for many post-WWII decades shattered, are expressing their anger everywhere. In the United States, they elected Donald Trump as their savior, despite his rather blatant “wolf in sheep’s clothing” policies that really only seem to benefit the rich. Hillary was supposed to be a slam dunk.

English voters, mostly outside London, pushed a U.K. Brexit referendum to a narrow passage, even as then-PM David Cameron believed rejection was a slam dunk. The U.K. is struggling between an unpopular no-longer-subject-to-negotiation deal presented by PM Theresa May, reflective of a recalcitrant EU, and a looming March 29, 2019 date when Brexit is supposed to occur. Without an agreement, the impact of Brexit could be particularly devastating. Adding fuel to the fire, an Italian election resulted in a bizarre parliamentary extreme left-right coalition that is questioning the benefits of remaining in the EU and railing under the mantle of the euro.

Recently, displaced blue-collar, rural and resource-extraction workers descended on Paris (above), wearing yellow safety vests mandated in all French cars… and began to sack the city, starting with its most symbolic landmarks. The target appeared to a new tax on diesel fuel imposed by the administration of French President Emmanuel Macron, but his proposals to reform archaic work rules that have hobbled French businesses and made it difficult for entry-level youths to find jobs found equal enmity. When the diesel tax was withdrawn, the protesters continued… a grassroots eruption with no clear leadership.

Immigration/migration issues have elected new leaders in Scandinavia, pushed moderate Angela Merkel out of German politics, and fostered autocratic regimes in Eastern Europe. Workers want to work. But they also want to work at jobs that either no longer exist, exist as vastly lower rates of pay, have long-since been outsourced to cheaper countries or have been or are about to be replaced by artificial-intelligence-driven automation. Even farms and fossil fuel drilling (where it continues) are being invaded by automation.

The new game is to find blame and legislate solutions that move time backwards. Immigrants/migrants are job-stealers, educated elites in big cities are creating selfish policies that only benefit them and devastate lower-paid workers. Workers can force a return to better days. Tariff Man Trump can redesign global trade that defies both history and the most basic economic theories. Really? If democracy itself is predicated on massive “fair wages” for displaced jobs, is democracy thus doomed?

Writing about the unraveling of Europe in the December 19^th New York Times, Thomas Friedman examines the roots of this economic displacement, a trend that is only going to accelerate: “The middle classes that powered the growth of the U.S. and the E.U. in the 20th century were built on something called a ‘high-wage, middle-skilled job.’ But robotics and artificial intelligence and outsourcing and Chinese imports have wiped out a lot of middle-skilled routine white-collar and blue-collar work.

“Now there are high-wage, high-skilled jobs and low-wage, low-skilled jobs. But high-wage, middle-skilled jobs are vanishing, leaving a considerable cohort of people with stagnant incomes and burning resentments at the globalized city slickers who they think look down at them and have mastered the non-routine skills required for a high-wage job today.

“When you simultaneously challenge all these things that anchor people — their sense of home, their job security, their prospects for growth and the social norms that, for better or worse, defined their lives — and then amp it all up with social networks, you can get a really ferocious blowback, as France’s president, Emmanuel Macron, saw across his country.” You mean like American coal miners, steelworkers, assembly-line employees and other manufacturing labor? Yup! King coal, meet the Rust Belt.

We are transitioning to a world of part-time work, a gig (contractor-driven) economy, accelerating change necessitating a lifetime of parallel reeducation and perhaps frequent job changing, and the demise of just about any task that can be performed more effectively by a “smart” (self-learning) machine. The idea of lifetime employment – with parallel fringe benefits of vacation pay, healthcare, retirement savings and disability coverage – is on the brink of extinction. Some workers experienced a rather dramatic loss of retirement benefits and healthcare when the companies they worked for filed bankruptcy or simply ceased to exist. Global warming is real, and industry is beginning to react. Clean is in. Dirty power’s days are numbered.

Even as 19 Republican state Attorneys General revel in their victory in a Texas federal court, finding the Affordable Care Act unconstitutional (appellate courts will probably reverse this holding), as their high-roller contributors wallow in the thought that society will no longer need to provide those healthcare benefits, reality is showing a different path. Without companies to provide healthcare, with most Americans having little more than Social Security with which to retire, the fondest wishes of the GOP to disassemble social programs to pay for their tax cut are little more than pipe dream with a catchy conservative slogan.

Efforts like the failure of that GOP tax reform to upgrade jobs are no longer viable programs. Sorry Donald, but 70% of workers (many in your “base”) are no better off today, but over $1 trillion in resulting stock buybacks have made a lot of rich people even richer than they assumed that tax cut alone would give them. Hey balance-budget-Republicans, that tax reform generated a huge new add to our already-bloated deficit. No trickle down; there never is. Nice wealth transfer from the middle and lower earning classes to the rich. We either have to figure out how to take care of those displaced by change… and soon… or the relevant governments that fail to find a solution will fall.

              I’m Peter Dekom, and when politicians promise the impossible while lifting one narrow class of wealthy citizens farther above the rest, remember that sooner or later, heads will roll… sometimes real heads.