Mark Blyth: “Global Trumpism” And The Revolt Against The Creditor Class | Video | RealClearPolitics

Mark Blyth is a Scottish political scientist and a professor of international political economy at Brown University. At an event November 9 at Brown’s Watson Institute for International and Public Affairs, he spoke about “Global Trumpism” — a worldwide working-class backlash against harmful macroeconomic trends. “What we have everywhere are creditor-debtor standoffs,” he said. “If you look at the states that really fell hard [for Trump] in the Rust Belt, it is economic. Now, if you recognize that simple fact, you can put Trump in there with Brexit.”Blyth wrote more about Global Trumpism in this week’s edition of Foreign Affairs.MARK BLYTH: I wasn’t suprised [by Trump’s victory] at all. Many of you have sat here in this room with me and heard me speak about ‘Global Trumpism’ and various things like this. The first time I came out publicly and said I thought he would win was at a Watson event in May last year. I did an interview in Greece that went viral last year where I predicted both Brexit and Trump. And it is not because I have a clairvoyent crystal ball sitting on my desk, or I made a pact with Satan to see the future in a mirror, it is simply pretty obvious if you think about it in a more global way. This is not a local event. Everything Professor Schiller said is true about this election, but Brexit happened. It is a left-wing version of this that brought us [the new government in] Greece. There is a shrinkage of center-party votes across the entire OECD. There’s the collapse of left wing party votes, in particular, across Western Europe. Coming up next, [Italian PM Mateo] Renzi is going to fail in the referendum coming up, which will cause a Constitutional crisis in Italy. Shortly after that, we have the French election coming up. I would like to remind you of the following statistics. The lowest George W. Bush ever got as president in his approval rating was 29%. The president of France currently has an approval rating of 4%. And the National Front have nearly 40% of the intended vote. So even with the design of the French Constitution, which makes it very difficult, and you have to have a second round, etc. The most popular political party, by a factor of two in France is the National Front. After that we have the German elections coming up. Merkel is vulnerable. How is all of this going to play out, and how is it all connected? Here’s a simple way of thinking about it: From 1945 until 1975, we targeted a particular economic variable called ‘full employment.’ And there’s a thing called the Lucas Critique, which says that if you keep targeting something, people will game it. And they did. Unions gamed it, employers gamed it, and the result was inflation. And after a while, that inflation became painful. Painful enough that the people who were hurt by it –the creditor classes in these countries– had to band together and form a market-friendly revolution. And they liberated finance, and they deregulated finance and they integrated the economies of the world. And they globalized labor such that labor could no longer demand that it gets its share of productivity. Because if you do, they’ll move your job somewhere else. And all of those trade agreements that were signed -which is inevitable and we can never roll back. You know you can go on the web and type in: “WTO text.” And you’ll find that it is a very long 700-page legal agreement that took years to negotiate between corporate interests, lawyers, lobbyists, with very little input from civil society. The same is true of the EU’s agreements on capital movements, the banking union, take your pick. And there was a moment when people began to figure out, for the past 30 years, going from 1985 until now, huge amounts of money have been generated in the global economy. And as we know from the work of Thomas Picketty and others, most of it has gone up to a tiny fraction of the population. There has been a huge amount of growth, but hardly anyone has seen any benefit. You don’t have to go far to see this. Get off the East Side. Go to Northwest Providence, and walk into the neigborhoods which have check-cashing agencies, pawn shops, broken-down fix-your-mobile and networks you’ve never heard of stores, fried chicken joints. That’s the reality for people here and in many, many countries. So they’re a bit fed up with this. And they’ve decided that any possible opportunity, whether it is Brexit, the Italian constitutional referendum, or anything, to basically give their elites notice: We’ve had enough of this. And that’s what this is. Now there’s a macroeconomic underpinning to this one too, and that is that after we decided to target full employment for 30 years, we decided to target inflation for 30 years. I don’t see why the Lucas Critique doesn’t actually apply to that one too. And we’ve managed to create a world in which you can dump 13 trillion Euros into the global money supply through Quantitative Easing and other programs, and not see any inflation

Source: Mark Blyth: “Global Trumpism” And The Revolt Against The Creditor Class | Video | RealClearPolitics

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