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Demagoguery and Democracy

It’s hard to believe we’re only three weeks into the Trump Administration. In that time, I’ve written three articles assessing how we got here and where we’re going; I’ll summarize the thrust here, but I hope you’ll follow the links to the articles and give them a read in the original to get the full argument. (That also helps my “metrics” and keeps my editors happy!)

On Inauguration Day, I published a piece originating in a conversation a few days earlier with my friend, Jimmy Cauley. Jimmy was the campaign manager for an obscure state legislator in Illinois who was elected to the US Senate in 2004, named Barrack Obama. Jimmy has been saying for a long time a lot of the same things for which J.D. Vance, author of Hillbilly Elegy, has been celebrated in the last year (except Jimmy’s a whole lot funnier). The conversation reminded me of a piece I’d written when Obama was elected president; I’ve raised similar warnings since about Democrats’ failure to address the concerns of white working class Americans. But I was surprised, when I went back and reread my 2008 diatribe, by the Republican response that year that completely foreshadowed the Trump message “by redefining who has been in charge”:

It really hasn’t been George Bush, the largely Republican Congresses, or the 7-2 Republican majority on the Supreme Court – it’s been a national elite of “cosmopolitan” types (you know, highly-educated, diverse, globally mobile)….

Of course, resentment of elites has a long history in America.   What has changed, however, is that those who might have felt “bitter” about being left behind by the new economy in prior ages – Jacksonian Era frontiersmen, Southern planters and Western ranchers, underpaid workers in Pennsylvania steel mills or West Virginia coal mines – all voted Democratic, and the Democratic Party was unrepentantly proud to speak for them. Today, the Democratic Party increasingly consists of the well-educated, the worldly, the owners of the keys to the economy of the future – and it is at risk of losing interest in helping those it sees as “bitter,” unfathomably ungrateful, and not just inferior but frightening.

You can read the full discussion in The More Things Change.

Many fear a fascist takeover driven by such demagogic reaction. In Make America Hollow, I argue that “[t]he Americas Bannon and Trump envision are depressing, but not totalitarian: One is illiberal but not necessarily authoritarian, the other authoritarian but not necessarily illiberal. Both lead to a society embodying not so much the banality of evil as the evil of banality.”

Bannon’s conformism is not that of Stalin’s Russia, but of the roughly-contemporary Peyton Place; his vision of America is one – socially, economically, politically, religiously – out of an idealized 1950s…. Matt Bai paints a similarly dispiriting picture in a recent piece asserting that Trump – like other contemporary demagogues – is less Orwell’s 1984, with its “vision of fascist repression,” and more Aldous Huxley’s Brave New World, “with [its] trivial, substanceless society.”

Where Trump and Bannon come together “is not the creation of a fascist state, but rather the opposite: The hollowing out of the state as a viable institution.” That, of course, is a subject I write about frequently. Please read the whole piece for more.

Like all demagoguery, much of Trumpism is driven by misrepresentation. Rather predictably, President Trump has chosen a Supreme Court nominee who claims to be guided by the intent of the Framers; as the apparently-rare liberal who actually agrees with conservatives that the Constitution must be “strictly construed” according to “the intent of the Framers,” I’ve got news for them: That doesn’t mean what they think it means.

[T]he Constitution has been amended many times – sometimes in fashions that dramatically changed its meaning. For all intents and purposes, the post-Civil War 14th Amendment represents a new Constitution, fundamentally altering the balance of power between the states and the federal government. It’s debatable that all those 18th-Century guys in white wigs, whom self-described patriots today like to single out, believed in a largely denuded federal government – the motive for many, like Alexander Hamilton, in creating the Constitution was precisely the opposite – but the 19th-Century Framers of the 14th Amendment clearly did not.

You can read the full discussion at A Constitutional Reality Check.

Easy links in this update:

– The More Things Change

– Make America Hollow

– A Constitutional Reality Check

As always, I welcome your comments below!


The Torch Passes



This week saw President Barack Obama’s formal farewell – and further revelations about what Vladimir Putin’s relationship with Donald Trump portends for the future.

In A Legacy of Hope but Modest Change, published in the Aspen Institute’s Aspenia Online, I tried to provide a balanced assessment of Obama’s tenure, focusing on, in my view, the “two defining accomplishments of Obama’s presidency,” his response to the financial crisis of 2008, and Obamacare.

In the stimulus, as in everything to follow, Obama was intelligent yet uninspired. Most economists, and certainly those amongst Obama’s own advisors, argued for an even larger stimulus than the one he ultimately embraced; the “small-c conservative” argument – advocating caution because of political difficulties – prevailed with him then, as it did often thereafter.

But Obama also “left the details of the stimulus to Congress – which promptly loaded it up with pork-barrel spending,” which “debased the entire concept to the public, reduced its economic efficacy, and in fact resulted in a lot of waste. It also meant that, despite the administration’s own mantra of not wasting a crisis as a chance to accomplish major change, the stimulus package became merely a huge but uninteresting example of textbook Keynesian economics in action rather than a truly transformative event.”

Most crucially, the Great Recession was not simply the bursting of a speculative bubble: It represented a “phase transition” from the booming late-20th century economy to the new economy of the 21st century, which will eliminate large numbers of existing occupations and life-paths – like the transition from an agricultural to an industrial economy, except at about ten times the speed. … Obama’s stimulus plan reflected his understanding of the importance of this new economy, but his obliviousness to the fact that it was not an unalloyed good, in that half the country essentially would be obsolesced by it in their own lifetimes, caught between a recovery that would not reach them and a future that would not include them. The foundations for the coming, deepening division – and the politics of 2016 – had been laid.

A similar pattern followed with Obamacare:

[T]he main problem with Obama’s push was that it took his eye off the only ball that should have mattered at that point – the negligible economic recovery….  Ultimately, as with the stimulus, Obama did not care as much about the details as about making the history books. But the massive reform gave fodder to Middle Americans who believed they were being asked to pay for Obama’s (and liberals’) greater interest in the poor.  Again, the battle lines of 2016 were already forming.

So, what comes next? “The recent news sounds basically like a technologically-updated version of a Cold War-era political pulp thriller,” I wrote in Putin’s War on Information in US News: “The evil Ruskies undertake espionage and disinformation efforts to create a chaotic American election, spend years cultivating a useful stooge easily manipulated by flattery, greed and sex to help spread divisive views about US foreign policy, and then along the way suddenly realize they actually might get him elected president. All of this, however, concerning as it is, is neither novel – unless it turns out that Trump was actually colluding with Russia all last year – nor, even then, the real threat.” So what is the real threat? Putin’s desire

to return to a world predating the New Economy with its increasingly-liberal political norms and social mores … (the unconfirmed private intelligence reports underlying the latest Trump revelations assert that Russia’s “TRUMP operation should be seen in terms of PUTIN’s desire to return to Nineteenth Century ‘Great Power’ politics anchored upon countries’ interests rather than the ideals-based international order established after World War Two”)….

Putin has marketed his regime as the defender of traditional social values (including religious fundamentalism and vehement opposition to homosexuality), traditional national prerogatives, and traditional (heavy) industrial economies – more-or-less a return to the Good Old Days of the 1950s. … Does this sound familiar? Of course it does.

What Putin has realized, more than anyone else, is that this hated New Economy rests entirely on the ubiquity of information, and that is its point of weakness. Putin’s war on information – and, unfortunately, it’s not his alone – is a wager, like many before, that there’s a thin line between liberalism and chaos. Those are the stakes at issue here.

You can read the full analysis by clicking on the article titles above. Meanwhile, buckle your seatbelts.

As usual, I welcome you comments below!


A Season of Caring


As the turbulent year 2016 winds down, I’ve bookended the holidays with two pieces about caring. The first, The Age of “Who Cares?”, appeared in US News & World Report two weeks ago and was featured in my last update. The following day, I received an invitation from a Canadian talk show, to discuss it.

You can listen to the whole interview on your computer or smart phone, but here are some highlights:

“Walls are not going to keep the world’s problems out of the United States because the problems are bigger than that and we live in a world that’s largely interconnected now. We don’t have the luxury of not caring about what goes in the Middle East – or any other country, for that matter.”

“At the moment, the focus has clearly shifted to self-centeredness more than a larger vision. And I think that can be destructive to our lives individually and to the society as a whole.”

“I think everybody involved on both sides of this election have paid inadequate due to the needs and problems of other people in this country. It’s not just Aleppo, it’s not just Trump people, it’s not just this election – we’re living at a time of great, great change, and I think it’s leading a lot of people to feel insecure on all sides, and to focus on themselves as a result. And I think that’s understandable. But it’s not good.”

In my new piece for Christmas in US News, So Much You Can Do, I tried to suggest what some responses to these challenges. Please click the link to read the full piece (my editors keep track of that sort of thing!), but here’s the gist:

Instead of crying by the riverbank at the dismantlement of Obamacare, the block-granting of Medicaid, and the defenestration of Social Security and Medicare, or spending the next four years idly proposing a return to similar New Deal and Great Society programs in some imagined future, we can start using [new] technologies to build virtual communities – the real future – that do choose to cross-subsidize health care, secure retirements and educational opportunity for those who need them, and to reap the benefits.

But there are countless other ways on an individual basis to stand against the incoming tide. There are children who need mentoring – and adults who do, too. There are immigrants who need welcoming, and values like free speech that need exercising. There are small acts anyone can undertake every day that make a small difference, but if repeated by the rest of us would make a large difference – in, say, wasting less energy or consuming less needless packaging or paying slightly more to support better working conditions. You can find one way each day to check your self-interest and act with kindness toward another. You could easily fill your day with things that will make a difference in ways that, without you, will go in the opposite direction under the Trump Administration.

You can decry that there’s so little you can do. Or, as you gather with loved ones over this holiday period, and pass by countless strangers in the streets, you can recognize that, in fact, there’s so much more you can do than there is possibly time for.

I’m looking forward to putting a dent in that in 2017. I’ve got in the works:

Our new-and-improved education consulting practice. We recently completed two studies in Alaska, are wrapping up another in Texas, and my whitepaper on school innovations in Massachusetts will be published in the new year.

A new social venture to accomplish some of what’s discussed above. Alumni of the University of Chicago’s business school have volunteered to help work out the financing and technology details, so I hope to “go live” with this venture in late 2017.

Expanded adventures in academia – including a series of forums and podcasts from the University of Chicago on “The Future of …,” flowing from my course there, “The Future of Government”; a new course this winter at Union Theological Seminary in New York on the deeper drivers of right and wrong –from biology to psychology to game theory – and what we can do about them; and a new annual conference tying together all the foregoing at Brown University, to be announced early in the year.

I’ll be giving you details in further updates in the coming weeks. But until then, have a Happy 2017, filled with caring!


Happy holidays from our family to yours.



Charles Adler Tonight

Charles Adler Tonight Eric Schnurer

My piece in US News & World Report last week, The Age of “Who Cares?”, attracted the attention of a Canadian talk show, Charles Adler Tonight, which invited me on to discuss the article.  In the course of a 15-minute interview, I talked with host Charles Adler about Syria, Donald Trump, racial animosity, international responsibility, and how they’re all interrelated:

“We’re quite fortunate in the US, and we’re quite fortunate in most of the western world, compared to huge swaths of humanity today.  It’s just, things aren’t quite as good in a lot of ways as most of us would like it to be, and they’re certainly nowhere near as good for a large segment of the population in this country as they could be and should.  I think they rightly feel that a lot of people don’t care about their problems, and it’s hard to get exercised about other people’s problems in that kind of environment.”

You can listen to the whole interview on your computer or smart phone.


Thanks, but No Thanks

eric_schnurer_elections_2016_1In the two weeks since Election Day, I’ve been trying to explain to various audiences what I think it all meant. Just before the polls closed that evening, I moderated a panel of experts from a half-dozen countries on what the election would mean for the rest of the world. As I discuss in a piece out today in US News & World Report, “The New Old Nationalism,” the Russian pollster on the panel

made an interesting comment to me in advance of our session: Russian citizens have more sympathy to Trump, he said, because he is an “American nationalist, not globalist.” Not that long ago, “an America nationalist” would have been a damning epithet coming from the Kremlin, basically a longer version of the word “imperialist.” Now, it’s … something that both foreigners and “conservative” Americans alike embrace[:] They see global economic and social integration as a perversion of the rightful natural order, in which different peoples hold discreet territories, separated by walls.

… All of this – the tribalism, the illiberalism, the eternal struggle – its proponents would say, is simple realism. It is, in any event, the “alt” view of the future that the 2016 elections (and those coming in 2017) are elevating to global policy. I believe that, in the long-run, it’s a view that will lose. But in the long-run, we’re all dead.

One of my greatest regrets about 2016 is an article I didn’t write: When I returned from a European conference in May at which the dynamic duo of Kristina Wilfore and Stephanie Berger presented polling data on attitudes toward women, I began to write a piece predicting that misogyny would become the central fact of this campaign. My editors persuaded me to split the resulting diatribe into two parts, one of which became the first of several I’d write on how Hillary Clinton needed to overcome some of this by addressing the concerns of white working class men – but the argument on the coming wave of misogyny got sidelined, at least during the campaign. After the piece I wrote a few weeks ago complaining that discussions of “morality” have been largely hijacked by the subject of “sex,” the folks at Aspenia asked me to expand the argument for an issue on “Women & Power”; an abridged version was published online yesterday in Italian – until the English version is published, you’ll have to make do with this synopsis, building off Newt Gingrich’s outburst late in the campaign to Megyn Kelly: “You are fascinated with sex, and you don’t care about public policy”:

But the description – fascinated with sex, don’t care about public policy – might best fit the American public as a whole. One major subtext of the 2016 election has been sex and America’s ambivalent relationship with it…. Issues involving women and power – whether political leadership, their broader place in society, or their preponderance on the receiving end of all forms of violence from the physical to economic exploitation and poverty – aren’t really about whether they are strong or intelligent or emotionally stable enough to lead others or to protect themselves. They are, rather, about women’s position as gatekeepers of men’s access to the reproductive process – and sex – and men’s desire to wrest away that control for themselves.

In case all this leaves you unduly depressed headed into Thanksgiving – at least, any more so than most people I know already are – I argued in my main assessment of the election itself that you shouldn’t be, although not perhaps for the reasons most people might think:

Yes, there are some authoritarian, reactionary people amongst both Trump’s supporters and his advisers – but that’s not the majority, amongst either them or the rest of the American public. So put on your big-boy pants….

The future belongs to the decline of the nation-state. That sounds just as scary to liberals as it does to the reactionary, anti-globalist “nationalists” of Trumpworld. The real challenge for progressives is whether greater equity can be created within, not ignoring, this reality. Trump’s victory ironically provides the opportunity to explore the possibilities today rather than, as would otherwise be the case, sometime later this century in (as I described here just before Election Day) an even more troubled environment.

You can read the full piece, “Party Will Be Irrelevant,” here. As always, I welcome your comments. Meanwhile, a Happy Thanksgiving to all!


It’s a Tie!

eric_schnurer_elections_2016_itsatieWhich will it be?

Veterans of campaign work know that the slowest day of the year is, ironically, Election Day with its long wait for the results. For those of you counting the hours to poll closure, standing at a polling place waiting for voters to show up, or simply trying to find someone with exit-poll results or the latest turn-out rumors, here’s some reading material to while away the time. My last pre-election piece ran Friday in US News, and, in it, I pulled together my thinking over the past year on the future of government, the Trump phenomenon, Brexit, my visits to six countries and meeting political leaders from several more, and evolving technologies. If you want to know what happens starting tonight when the polls close, here’s my best guess:


Looking back at the turn of the 22nd century, the collapse of the nation-state system, which had existed for roughly 400 years, now seems obvious and long-overdue. But historians agree that the critical point, when the outcome went from unimaginable to unstoppable, was the disputed United State election of 2016, which ignited what has come to be known as the “Disunited States” Period.

Rumblings had been coming for decades: The collapse of empires throughout the 20th century. The increasing frequency and severity of global financial crises. The rise of nonstate challengers to the major states. And the geometric growth of technologies that simultaneously undermined the two defining elements of the “modern” nation-state – control over (1) the monopoly of force, and (2) a defined geographic territory.

Together, these changes had opened up a wide cleavage between two broad classes globally, cutting across traditional national borders: the so-called “Globopolitans” – sometimes denounced in the ensuing wars as the “elites,” but really people of all economic backgrounds in the interconnected global metropolitan centers, where incomes generally were rising – and “Remnants” of the less globally integrated regions of every continent, whether within single countries (like the interior of the former United States) or across multiple countries (like the Middle East or Horn of Africa). Differences in income levels between countries had narrowed – but incomes within them severely diverged worldwide. Globopolitans, regardless of location, saw a world of opportunity growing ever wealthier and more equitable; the Remnants saw a world of stagnation, widening unfairness and, perhaps as importantly, “cultural extermination” due to post-modern global change.

Remnants believed their salvation lay in eradication of this globalist threat through a return to earlier cultural, economic and national structures. They failed to recognize, at least initially, the twin ironies of their anti-globalist grievances: This actually connected them with similarly aggrieved peoples globally – the gods they worshiped and cultures they defended may have differed, but the worldviews were much the same. And it triggered the ultimate destruction of the traditional “nations” on which their traditionalist ideological agenda became increasingly fixated.

Working class revolt, fueling populist politics of both left- and right-wing varieties, simmered across Europe and other regions to a lesser extent in the wake of the global financial crisis that struck in 2008, but the first clear flare was the surprise “Brexit” vote in Britain to leave the European Union in mid-2016. This was hailed as the triumph of traditionalist, nationalist values over a condescending globalist elite – but it led in quick succession to the break-up of first the United Kingdom, then of England itself: Globopolitan London jettisoned the anti-globalist regions holding it back, pegged its currency to the American dollar and reunited informally with Scotland, Wales and Ireland to rejoin the European economy. In many ways, this presaged the (typically) larger and more violent developments in America.

The 2016 U.S. presidential election was widely perceived to be the nastiest in well over a century, with underlying themes of fraying racial, sexual, religious and national identity. But most historians today ascribe the uprising, and ensuing crack-up, to the tectonic economic forces described above.
The actual winner of that election was lost to the historical record in the disorder that followed. But we do know that the results were so close that they triggered months of unrest, refusal to accept defeat by the losing side and bitter paralysis of the government. In a notable departure from the country’s long-standing norms, both presidential contenders were subjected to post-election prosecution and ended up jailed. A deep, worldwide recession resulted, exacerbating the underlying tensions even further.

If you want to know what “happened” after that … click here to read the rest of the piece. Whatever you do, exercise your right as an American: Get out and vote! And as for the results, register your prediction below: Which tie will I being wearing on Wednesday?


Trump, Trade & Immigration

immigrants-on-dockThroughout the summer and fall, I’ve been trying to address the serious economic issues underlying the anxiety and anger dominating this year’s presidential campaign. I’ve gotten through some of these intended essays – you can read them in prior posts like The Future of Work and The Great Realignment. And I have a few more to share with you this week. But I keep getting interrupted by the campaign itself.

I know, we all say we don’t want to see anything more about this campaign – but we say that about all those car wrecks, too, don’t we? As I emailed my editors at US News & World Report last week when Donald Trump amped up his claims that the election was rigged: “I wish this guy would stop saying insane things so I could go back to writing about other subjects.”


In any event, I was impelled to dash off another fairly personal piece, revisiting my earlier days in government and law, fighting real election rigging. My conclusion:

[T]here’s always the threat of election cheating. But in our system (unlike, say, Russia’s), it’s thankfully rare. It’s not voters doing it. It’s not hordes of minorities voting illegally but, most often, large numbers of minorities being denied their right to vote legally. And to affect the presidential election outcome would require either a conspiracy larger than the entire U.S. Army, or a discreet, targeted area and a much closer vote count in a pivotal state than we are likely to see in Pennsylvania or any other state this year.

You can read the full argument in The Sorest Loser.   But fortunately, before that, I was asked by the Aspen Institute to address the real costs and benefits of two of this year’s hot-button issues: trade and immigration. In the shorter, online piece, US economic dilemmas: immigration, inequality, trade and the budget, I argued that “The nationalism, nativism and xenophobia given voice by Donald Trump are understandable reactions to the global changes that are harming many working-class Americans. They are not, however, intelligent responses to them. That’s because they miss the real problems driving employment and wage declines for (essentially) non-college-educated, white males outside the country’s thriving coastal economies.”

[T]he real challenge from global trade comes not so much from the existence of cheaper labor abroad as from US companies moving jobs there to take advantage of it. Both nominees this year offer unsatisfying solutions to this problem. Trump has claimed, to great fanfare, that he will simply prohibit firms from doing so. How? By fiat? By turning the US into a business gulag from which companies are prohibited to escape? Not happening. Clinton starts down the more promising path of tax reform to change incentives and “claw back” some of the advantages in abandoning American workers – but her “exit tax” is unwieldy, limited, and unlikely to help. Instead, there is an older and simpler approach: taxing all revenue earned from Americans and crediting companies for all investments – plant and equipment or wages and benefits – made in Americans.

Read the full piece for the policy details. Meanwhile, the longer piece I wrote for the print journal Aspenia expands on this discussion and also addresses the related subject of immigration. You can read the full piece, Facts and Myths on Immigration, below. But here’s the “money quote,” combining several points I’ve been making the last few months:

[T]he real problem confronting the disenchanted voters flocking to Trump’s anti-immigration banner is not immigration…. These angry voters … are not “conservative” and they’re not anti-government, and that’s why traditional Republican leaders have lost them to Trump (who advocates an activist government that protects entitlements – not, unlike, say, Juan Peron). They want government – just for themselves.

But then how does America pay for these expensive programs as the retired population grows? Well, unlike virtually any other country, we can – and will – grow our workforce, increase the number of young workers supporting each retiree, provide more low-cost caregivers for the aging population, increase the level of economic activity through innovation, and generate higher tax revenues to pay for it. What’s the secret weapon?


As always, I would love to know your thoughts. Feel free to leave your comments below.

aspeniaFacts and Myths on Immigration 

by Eric B. Schnurer

(From print journal Aspenia)

Colorado – besides being home to the Aspen Institute, Aspenia’s parent organization – is a beautiful state spread across the high plains that ramp slowly up to mile-high Denver, its capital and largest city, and then into the majestic Rocky Mountains heaving upward and hurtling downward again for hundreds of miles westward. There’s a saying in Colorado politics: A developer is someone who wants to build his mountain cabin this year; an environmentalist is someone who built his mountain cabin last year.

The allure of the American Dream and the desire to close the door behind oneself once attaining it are two sides of the same coin. Americans have long prided themselves on being a country of immigrants – and have for just as long feared immigration and attempted to shut it off for those coming next. Most Americans today would find it surprising to hear that there once was tremendous opposition to, and prejudice against, such newly-arriving supposed-undesirables as (more or less in order) Germans, Irish, Italians, other Southern Europeans, and Slavs. On the West Coast, in particular, an influx of Chinese immigrants to work the railroads and goldmines of California fanned anti-Chinese hostility. Jews, of course, were objects of fear and enmity throughout the great immigrant waves after the 1848 European revolutions and the years leading up to the Russian revolution. In World War II, Japanese-American citizens were herded into concentration camps over misplaced fears about their loyalty.

All prior waves of immigration, which made the US what it is today, were met by strident political reactions. In the 1850s, an expressly anti-immigrant party was formed, calling itself the American Party, but it is better known to history as “the Know Nothings”: Party members were instructed to say they “know nothing” about the secretive group when asked – leaving a legacy of “Know-Nothingism” that serves as a recurrent and apt epithet in the US to this day for those with similar views. It has been reflected throughout the nation’s history in immigration restrictions aimed at arrivals of particular ethnicities and nationalities, based on assertions that their religious and cultural differences made them a threat to the nation’s values and precluded assimilation, or that they were taking jobs from “real Americans.”

Obviously, such attitudes continue today. A poll just before the Republican convention this past summer found that most white Americans were skeptical of immigration – as were Hispanic Americans, the longer they had been in the US: the same urge to close the open door behind oneself.

Nevertheless, the US today is the greatest nation of immigrants in the world, with 47 million – roughly 20 percent of the world’s immigrant population. (The US immigrant population roughly doubles if you include birthright citizens – immigrants’ children, lawful or not, born on US soil – a status that the US and Canada, alone in the developed world, recognize.) Similarly-large, continental nations like India (2.3 percent), Brazil (0.8) and China (0.4) lag far behind – as do such countries in the news for their relative immigrant-friendliness as Germany (#2 in the world at 4.9 percent) and Canada (3.1). Most Americans learn as children the lines from the poem, The New Colossus, by Emma Lazarus – “Give me your tired, your poor/ Your huddled masses yearning to breathe free” – inscribed on the base of the Statute of Liberty in 1903, at the height of the country’s greatest immigration wave: It is a national point of pride.

And yet the argument persists in every generation: Are immigrants destroying America?

Like all ideological arguments, each side believes the statistics support the position they already hold. The data are fairly clear-cut, however, if a bit more nuanced than the usual black-and-white debate allows. Virtually all studies show that immigration boosts the economy, at least in the aggregate; in fact, the Congressional Budget Office found that the failed attempt at immigration reform a decade ago would have increased Gross Domestic Product by 1 percent per year and created an additional 3 million jobs by now.

But that’s in the aggregate. The argument about whether immigration undercuts wages for “real Americans” turns out to be more complicated: A Federal Reserve Bank economist found a slight increase in wages for professionals – but a slight decline (less than 1 percent) for manual workers. Another economist similarly found a decrease in wages among low-skilled workers – an effect that was stronger in cities where there were more immigrants and amongst workers with lower skills – but increased wages for high-skilled workers. Yet another study concluded that immigration raised wages of native-born Americans but reduced those of existing immigrants, because these new immigrants take the places of their predecessors.

In sum, immigration is a major driver of the US economy overall, and particularly in the vital technology start-up field: Immigrants found start-ups in America at a higher rate than the native born – although the percentage of Silicon Valley start-ups due to immigrants has declined markedly from a majority (52%) in the decade through 2005, to “only” 44% since then due to immigration restrictions. But the benefits – as with everything – are not uniform: The top of the pyramid benefits greatly; low-skilled workers – including other immigrants – suffer, however.

As for the largely non-economic arguments against immigration, though, there is scant evidence to support them. Do immigrants cause crime? The answer is a resounding “no,” at least as to violent crime; there is some evidence that immigration can be associated with a small amount of property crime – largely related to poverty – but its costs, at less than $1 billion annually, are dwarfed by the economic benefits. How about the specter of Islamic terrorism and the imposition of sharia law that haunts so many on the right? Muslims appear, in fact, to be more assimilation-oriented than most – with 70 percent becoming US citizens, compared with only 50 percent of other immigrants. A 2011 study by the Pew Foundation found Muslims to be “highly assimilated into American society,” with 80 percent expressing satisfaction with their adoptive country. The FBI says that it gets most of its tips about radical Muslims from … other Muslims.

In fact, it’s the exception that proves the rule: One community – a neighborhood in Minneapolis, Minnesota, known as “Little Mogadishu” – has produced one-quarter of all American recruits to ISIS; it is noteworthy for its poverty. On the whole, however, the Muslim community in America is quite comfortable: The Center for Immigration Studies – a non-partisan think tank whose board includes leading conservatives – reports that “Muslim immigrants of recent years boast exceptionally high levels of education” and that “Muslim Americans proudly say that theirs is ‘the richest Muslim society on Earth,’ and they are right; more than that, it may be the most accomplished.” In short, in the US Muslims are far more assimilated than in Europe – and have produced far fewer terror attacks and markedly fewer ISIS recruits, as a result. America’s assimilationist ideology in fact helps it.

So are Donald Trump’s angry supporters wrong to be angry? No – but their anger against immigrants is misplaced. Trump’s vote is heavily concentrated amongst older white men, particularly those with lower educational levels. This demographic feels itself under assault: Whites no longer dominate the country (although, in reality, they remain a majority and, even after slipping below majority status in another decade or so, will still make up by far the largest racial group in the country). Christians feel persecuted (although 83% of Americans self-identify as Christians and Americans are well-known as the most church-going population in the developed world). Men are losing out in the workplace (even though the top positions at the largest corporations are still overwhelmingly held by men).

Meanwhile, however, the economic position of these voters has stagnated and declined – and most rapidly in the last eight years since the advent of the Great Recession. So it is easy to see how the correlation of this decline with larger demographic and cultural changes – most obviously of all, the first black president, potentially to be succeeded by the first woman, book-ending the Supreme Court decision last year declaring gay marriage a constitutional right – provides an easy leap to causation. The fear these cultural changes are engendering are hardly unfathomable – or new: In his speech at the 1968 Republican Convention nominating Richard Nixon – upon whose campaign Trump is explicitly modeling his own – Nixon’s vice president, Spiro Agnew, declared, “We are a nation in crisis. Right now change rules America. It’s time for America to rule change.” But all these changes are themselves part of a larger tectonic global shift, of which non-Caucasians, immigrants, foreigners and even liberals are not the cause.

The angry working class is right to be angry about jobs and wages: Their jobs have been – and continue to be – threatened. But it’s not because a bunch of immigrants have come over here and taken those high-paying manufacturing jobs. It’s because those jobs, to the extent they still exist, have been shipped overseas. Yes, US jobs are threatened by lower-paid foreigners – but those abroad, not in the US. Trump even hinted at this in his apocalyptic acceptance speech at the Republican convention in July, when he declared that he not only would restrict immigration and renegotiate trade deals, but also would stop US companies from moving their operations abroad. Of course, it’s not entirely clear how he could do that – or what major corporate leaders, most of them Republicans, would say about such a thing.

American workers deserve a platform that combats their real problems. But the real problem confronting the disenchanted voters flocking to Trump’s anti-immigration banner is not immigration – after all, while relatively downscale, these are not the workers at the bottom whom the studies find losing out to low-paid immigrants – or even trade. It is the hemorrhaging of the former manufacturing jobs that paid relatively low-skilled and lightly-educated workers relatively well. Yes, renewed trade restrictions would drive back up some of the wages in these areas, at least in the short term – but they would hurt long-term demand for their products by reducing US access to foreign markets, and would increase the cost-of-living for Americans across the board. Again, trade benefits America in the aggregate; it nonetheless hurts many individual Americans. These workers would – and increasingly will – be coming out on the short end of the economic stick anyway, however, as the value of manufacturing jobs decays relative to other fields requiring newer skills and higher levels of education, and as businesses find themselves more able to substitute capital (in the form of technology and robotics), more cheaply, for workers.

So the world’s direction – as Trump portrays it – is indeed grim for these voters. But there’s one further challenge that the economically-threatened Americans drawn to Trump’s rhetoric face; fortunately, it’s one that America is uniquely positioned to overcome: As in all developed countries, the US faces a burgeoning fiscal problem over the next three decades as the older generation – the core of the Trump vote – enters its final, and extremely expensive, years. Conservatives generally call for meeting this challenge by cutting their expensive “entitlement” programs – mainly Social Security and Medicare. Good luck with that: It’s their own constituency now that depends on these programs – hence the Tea Party’s simultaneous demands for the federal government both to repeal Obamacare (which expanded health benefits to the poor and young) and to “keep its hands off” their Medicare: These angry voters – both in the US and in Europe – are not “conservative” and they’re not anti-government, and that’s why traditional Republican leaders have lost them to Trump (who advocates an activist government that protects entitlements – not, unlike, say, Juan Peron). They want government – just for themselves.

But then how does America pay for these expensive programs as the retired population grows? Well, unlike virtually any other country, we can – and will – grow our workforce, increase the number of young workers supporting each retiree, provide more low-cost caregivers for the aging population, increase the level of economic activity through innovation, and generate higher tax revenues to pay for it. What’s the secret weapon?




Up Close and Personal

Trump_Clinton_2016_ElectionsIn the last three weeks, I’ve grown increasingly saddened about the state of American politics and have begun writing increasingly personal articles about it. These aren’t about policy issues – they’re about deeper concerns over the direction we’re headed.

In my last update, “My Old School“, I mentioned a piece I wrote about a recent visit to my old high school. This brought back memories of various student government battles from decades ago – the productive results of which were still visible decades later. As I wrote in that piece,

Back then, we talked across belief structures about real-world results – and, as a result, improved conditions for most of us…. In almost all cases, compromises were achieved based on practical realities, not dug-in positions, on even the most controversial issues. Adults and adolescents, jocks and nerds, overachievers and slackers – they all understood one basic fact: Like it or not, we were all there together.

The next week, in “A ‘Genius’ like Trump,” I addressed the New York Times story on Trump’s $917 million tax deduction. In my view, most commentators focused on the wrong aspects of this story. Sure, it’s rather shocking that anyone could run up a nearly $1 billion loss – in the casino industry! – and then claim that his business chops are his main qualification to be president. But there’s nothing wrong, let alone illegal, with writing off that loss on your taxes – or carrying it forward for as many years as necessary to balance off profitable years. It’s a valid part of our tax code – particularly for the help it provides start-ups, the major creators of jobs in our economy. Rather, what really – and personally – offended me about Trump’s operations was how he restructured after he made such bad decisions that they cost him $1 billion:

When the recession hit several years ago, I faced an unpleasant choice: Suffer a loss on the year equal to about three years of profits, or lay off most of my employees. For better or worse, I believe that the way to make a business work is to stand behind your employees when times are bad. I took the loss…. The business recovered, enough that I was eventually able to sell it – and I preserved the jobs of all my employees and contractors as a condition of the sale.

According to the Times story, in contrast, Trump’s genius involved stiffing his creditors, laying off more workers than other Atlantic City casinos, shorting his contractors, driving the equity of investors down to about 0.5 percent of what it had been and then restructuring his operations so that, when all around him lay in ruins, Trump was able to pay himself $45 million a year for continuing to preside over this disaster and then shelter that income from taxes, perhaps completely. The billion-dollar pain cost others around him – his lenders, investors, vendors and employees – most of their incomes from the same venture. But not him. And that’s the kind of genius most of us will never be.

Last week, of course, brought the continuing revelations about Donald Trump’s treatment of women, and the execrable second debate. As I wrote on Friday in US News, in A Morality Test for Leaders, what’s wrong extends far beyond Trump’s misogyny – bad as it is – to encompass something I hinted at in the two prior columns: our entire abdication, as a society, of true concern for morality, in large part, I argued, because we’ve allowed “the hijacking of ‘morality’ in recent years to concern nothing but sexuality.” I asked, “What’s the real disgust at” Trump’s or Bill Clinton’s behavior?

For most, I’d assert it’s not a Puritan revulsion to sex: It’s the extent to which these purported leaders care about themselves more than others. Authorities from Hillel to Jesus to Kant point to this (Golden Rule, anyone?) – not sexual discretion – as the central issue of morality….

The relevant moral question is the degree to which those who seek to lead in fact care about Something Greater Than Themselves…. [T]hat’s the test of morality that we ought to demand of our leaders – and the discussion we ought to be having. We have abdicated that discussion on all sides, however, which is what I find most dispiriting about the World Wrestling Federation spectacle that our presidential election has become.

If you want to know what I think that means as to the choice we face in the voting booth next month, you’ll have to read the piece.

As always, I would love to know your thoughts. Feel free to leave your comments below.


My Old School

eric-schnerer-old-schoolThe last two weeks have taken me back to my old high school, college, and graduate school. My trip back to Redwood High was for a reunion – but it triggered thoughts resulting in my post this week in US News, “Politics Today Make Me Miss High School.” My visits to Brown University and Harvard’s Kennedy School of Government, on the other hand, were outgrowths of the very frustrations expressed in the US News piece.

As I’ve noted here before, earlier this year I reorganized my business life to focus less on advising governments and elected officials (although I’m still doing that with my firm, Public Works) and more on other activities including writing, teaching and launching the “social venture” I’ve been thinking about for several years – related to all the writing and teaching.

I mentioned in my last update that I’ve been working on new models for delivering public goods and would be discussing these with officials at Brown, where I hope to institutionalize some of this work as a sort of “Davos for Doing Good,” and with students at the Kennedy School.  I wanted to share with you an edited transcript of my talk at Harvard last week explaining in more detail what I’m thinking, so we could continue the conversation:

I write for a variety of publications, and teach at the University of Chicago’s graduate policy school, on “The Future of Government” – which was also the impetus behind the original founding of Public Works: The world is changing. Borders are falling, distinctions are blurring. Non-public sector entities will increasingly “do” government – which leads me to my newest venture.

Here’s the idea. Governments are now selling their services to citizens of other countries: I went to Estonia earlier this year, which is selling its business registration and business services to entrepreneurs elsewhere.

Slim Sikkut, policy advisor to Estonia’s Prime Minister.

With Slim Sikkut, policy advisor to Estonia’s Prime Minister.

Meeting with communications consultants in Sweden.

Meeting with communications consultants in Sweden.

I visited Scandinavia, where governments are both competing and cooperating across national borders in the delivery of mail to citizens of each other’s countries. There will be more of this in the future – in a decade or two, you will be getting your retirement from the German pension system, your business services from Estonia, your kids’ educations from Singapore or Arizona State University, your health insurance from Scandinavia. Once that happens, there’s no reason that non-governmental organizations – for-profits, non-profits, even extra-legal entities – can’t deliver the same services, and they basically already do. There are entities already attempting to create private “governments,” relying on platform and blockchain technologies – which is going to revolutionize service provision more than the Internet has done – but right now these are confined to services like property registries, marriages, ID, and a national anthem. I think these technologies can be applied more creatively to enable the provision of public goods beyond the areas like security, war-making, education, private legal systems, or garbage pickup where private models already exist.

What’s done less successfully is the delivery of classic public goods, like justice, trust, and equity, because those are traditionally incapable of generating value that can be quantified, captured, and monetized. Technology is changing that, lowering the marginal cost of just about everything – including the transaction costs of collective action, which is basically what governments do – and making it possible to monetize and capture value that previously could not be monetized and captured. That makes it possible to have profitable and sustainable business models for delivering more public goods.

I believe we can capture and monetize the benefits of reducing poverty, investing in human capital, increasing social trust and justice, and promoting opportunity – and, in doing so, increase their provision. Launching a business model to do that is my goal over the next year – and that requires tech, finance, business and start-up expertise, and I need some smart Harvard students to help with that. So, if you know any, let me know.

As always, I would love to know your thoughts. Feel free to leave your comments below.


The Future of Work





Since my last update, I wrote a piece in US News, The Man Who Would Be Caesar, arguing that Democrats need to develop an agenda to address the challenges of threatened working Americans:

  • This will hardly come from the upward income transfer policies of those on the right, including [Donald] Trump, who cynically have exploited these voters’ ennui to promote policies that actually run counter to their economic interests.… These are people our country has failed.

Of course, every time I write about Trump, I receive nasty emails from Trump supporters. This time, besides the usual vitriol, the writer complained that I didn’t really have a plan myself for how to address these problems. So, I decided I should sketch what a fuller agenda might look like – however, I quickly realized that would take more than a single piece. So, in a Labor Day article, Misdiagnosing Labor Pains, I first laid out my three-part diagnosis:

  • American consumers benefit from the lower prices of goods produced overseas; workers who used to produce those goods in the U.S. do not. This does not mean that we ought to resist trade or immigration … but it does make it incumbent upon proponents of each to consider how to help those displaced by change to transition to new jobs.
  • Another related challenge is technological advance…. [F]urther technological advances in robotics and Artificial Intelligence, among others, will render even more jobs obsolete.
  • [T]he giggification of work, the reduction of most of us from lifelong employees to day-to-day, part-time, self-employed “consultants,” has been occurring for decades, too. It will intensify.

In yesterday’s article, Our Looming Economic Future, I describe how to address the transition the transition to this new high-tech economy. I’ve got some wonky suggestions (“focus more workforce funding and attention on the often-neglected area of incumbent worker retraining … and improve the wayward ‘Trade Adjustment Assistance’ program with expanded ‘wage insurance’”), some surprising facts (it takes roughly 10 Chinese workers to match the output of one American worker), and some of my favorite ideas for the future:

  • Elite school and public colleges in some jurisdictions are slowly transitioning to a “pay it forward” system in which the education is free upfront but paid for over a lifetime commensurate with the outcome it produces; this is the future, and public institutions should lead the way in getting there sooner.
  • Tilting the playing field back toward worker organizing is one of the easiest things government can do to improve the economic prospects of many working class Americans…. [T]he ultimate answer probably will be not further pro-union legislation but the development of worker-owned, for-profit labor supply firms.

I found a further piece was necessary just to address the problems of the “gig economy.” You’ll see that next week – along with articles in two other publications on related topics: immigration in the print journal Aspenia, and trade in Aspenia Online.

As for my future work, I hosted a two-day retreat last month to discuss new models for delivering public goods that I’m working on with some other folks, and which I’ll be talking about at Harvard next week. I’m also meeting about institutionalizing the retreat – a sort of “Davos for Doing Good” – with officials at my two other alma maters, Brown and Columbia. And I’m kicking off a new series of forums this fall on the “Future of [everything from politics to conflict to economics],” in addition to my “Future of Government” course, at the University of Chicago. Further details on all these in my next update.