The election last month of Donald Trump as President of the United States of America has received extensive media coverage. Much of the reporting has, understandably, focused on the individual and his idiosyncratic, even eccentric behaviour. How did such an unconventional character manage to persuade a majority of Americans to vote him into such a powerful office, many ask.
The answer lies not so much in an analysis of his personality or that of his supporters but rather in a combination of factors: some global, some occurring within the USA itself. These are factors that will ultimately impact far beyond the shores of North America, possibly with devastating consequences.
Let’s look at the US today. As is so often the case, economic conditions underpin much of what happens. That much has been evident over the past four decades in the United States, as capitalism has turned ever more aggressive. On taking office in 1980, Ronald Reagan orchestrated a campaign to break trade unions. In the process encouraging investment to be transferred to so called “right to work states”. In effect, these were anti-union states where a recent AFL-CIO report[1] found wages to be on average US$8,500 less per annum than in other, more labour-tolerant, states.
Moving in tandem with union-busting was the inevitable disinvestment in previously industrialised regions leading to what is now known as the “Rust Belt”. In time the process of deindustrialisation was exacerbated as the powerful financial sector increased the export of capital in pursuit of still cheaper labour overseas.
Taking free-marketism to its extreme resulted in the gap between the country’s working people and the super-rich increasing enormously. Americans now pay more than any other nation for prescription drugs, while 60% of people live paycheque to paycheque[2]. Worse, an astonishing 12.6% of the population received state provided food assistance[3] last year. All in all, this has created a situation where for many there has emerged the realisation that their prospects are for a less prosperous way of life than that enjoyed by their parents’ generation. This has undermined the so-called “American dream”.
For the many seeking an answer to their depressing situation, the political establishment offered no answer. For years the Democratic Party posed as the friend of ordinary people, a claim that has been exposed as frankly untrue. Indeed, Democratic Senator Bernie Sanders has admitted that his party has abandoned working class people.
Therefore, it is little surprise that a populist would emerge offering a number of simplistic, mendacious and potentially destructive “solutions” that nevertheless appeal to an angry, alienated section of the population.
It is important to be clear about something. The rise of Donald Trump to a position of power did not bring about this manifestation of capitalism in America. Instead, it is American capitalism that brought about the Trump style of presidency. In other words, it is not just a matter of keeping our fingers crossed for the next four years and hoping for the best. The US problem is endemic and systemic.
Nor is it a problem that may be cured by deporting migrants, cutting corporation tax, or imposing punitive tariffs on imports. Even free-market economists are convinced this MAGA package will only deliver stagflation at best if not outright recession, the impact of which will be felt globally. Locally, the ramifications of Trump’s policy is very likely to include the Republic of Ireland with its fiscal over-dependence on taxation of US multinationals.
One country in particular that will be targeted economically by the Trump administration is China. On the surface, the supposed rationale for doing so is the claim that the Chinese government is creating unfair trading practices via state subsidy. This, however, is a deliberate misinterpretation of the actual situation which also conveniently ignores the fact that the current US government is grant aiding[4], among others, its flagging tech sector.
Unlike the United States, the People’s Republic of China has a booming manufacturing economy delivering increased prosperity across the board to all its citizens. Moreover, it boasts an economy that has an impact felt across the Western capitalist world. Take just one example that underlines the strength and dynamism of China’s economy in contrast to its competitors. As the Chinese car industry constantly increases output, its equivalent in Europe is faltering. Ford, Volkswagen and Vauxhall have all recently announced major layoffs in their factories in Britain and Germany[5].
In reality, the competitive advantage enjoyed by China is not due to unfair trading practices but is the result of its economic system. In other words, a planned socialist economy under the guidance of the Communist Party of China. And therein lies the real dilemma for Trump’s America.
The solution to US economic woes lies not in tariffs nor deportations but instead, it is to follow Beijing’s example, plan the economy and distribute wealth more evenly. Such a policy is unlikely, though, to sit well with America’s ruling class. Especially alarming for them is the realisation that a growing number of people globally, see merit in socialism with Chinese characteristics.
There is a real danger that faced with such a situation, Trump, backed by his angry, alienated supporters and egged on by the wealthy and its Deep State may opt for a military confrontation with China.
The clock is getting dangerously close to the midnight hour.
[1]“Right to Work is Wrong”. AFL-CIO website: https://aflcio.org/issues/right-work
[2] Gray, R. (2024) “The Democrats Have A Problem. And It’s Not Just Trump“, Shadow Magazine website: https://tinyurl.com/5n8tuh9d
[3] “Food Security and Nutrition Assistance”, US Dept of Agriculture website: https://tinyurl.com/bdz9a85j)
[4] “Biden-Harris Administration Announces CHIPS Incentives Award with Intel to Advance U.S. Leading-Edge Chip Capacity and Create Tens of Thousands of Jobs”. US Dept of Commerce website: https://tinyurl.com/37mb6ryf
[5] Jolly, J (2024) “Vauxhall owner plans to shut Luton van factory, putting 1,100 jobs at risk”, The Guardian website: https://tinyurl.com/rewa9n2m
