Why The Rise of Populism in America?

This post is by Jeff Carter from Points and Figures

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We drove to Dallas, Texas yesterday. Spending a couple of days here. My wife lived here back in 1986. The last time I was in Dallas was 1988. It’s changed a bit since then!

Met some people and Trump was on their minds. People are very uneasy about Trump. I call him the classic “Risky Hire”.  Either he will perform really great, or will be horrible.  There is probably no in between.

My friend Michael Lotus wrote a book that I highly recommend.  It’s called America 3.0.  I wrote about it here.  He blogs at Chicago Boyz.  I asked Michael what the rise of Trump (and Sanders) told him, and how it fit into the America 3.0 thesis.    He said,

He is a symptom of the disintegration of the A2.0 industrial era political framework. That machine has become completely corrupt and incompetent. We are into a period of contentious politics. In the 19th century the populists represented dying middle-class of family farmers. Trump represents the dying industrial era middle class as well as an attack on the Brezhnevite monstrosity in DC. The Democrats are completely backwards looking at this point, from what I can see, but there are elements within the GOP which are grasping toward types of reforms we need to transition to institutions that suit our current and future needs. But there is nothing close to coherent yet. These things take time and they’re painful processes.

Very interesting.  If you think about elections back at the turn of the century, William Jennings Bryan ran three times for the Presidency and lost every time.  He was a Democrat and Republican William McKinley beat him.  He was a populist, and I think that you can say the same about Sanders and Trump.

If we examine the history of the time, there had been a financial calamity.  In 1893, banks crashed and people were hurt.  European Colonialism was coming apart.  The French were fighting in Thailand. Great Britain and South Africa were at odds, and the Boer War started in 1899.    The US would go to war against Spain in 1898.

The Wall Street Journal has an article today that says this election is more reminiscent of the 1930s and the rise of populism in Europe.

Among the parallels: The growing belief that democracy is rigged. That charisma matters more than ideas. That strength trumps principles. That coarseness is refreshing, authentic.

Also, that immigrants are plundering the economy.

My friend Albert Wenger has seen parallels to pre WW1.

I don’t think you can characterize this age to another age specifically.  What I do think is that from 1890-1930, we had the rise of Industrialization and had to deal with huge upheavals from transitioning out of an Agrarian Age.  The election of Woodrow Wilson, and then FDR were responses to those upheavals.  Much of the New Deal put in place by FDR was placed to placate farmers, and provide for a Democratic reign that Republicans would find hard to overcome.

We certainly are transitioning from an Industrial Age to the Information Age.  The upheaval will be cataclysmic for many people.  It will unearth populism and some very ugly pieces of human psyche.

I am not disenchanted with the break up of the Republican party, or for that matter, the Democratic party.  As my friend Craig Pirrong tweeted, “if you merge DEMe and GOPe you get DOPe.”  The Washington bureaucrats in both parties have way too much power and it needs to be hacked away.  Control and power need to be returned to individuals.

In my home state of Illinois, we are in this power struggle.  Democrats have built in bureaucratic monstrosities that cost billions of dollars.  In many cases, people now pay more in property taxes per month to the government than they do to a bank for their mortgages.  Virtually every part of government is a joke.  Our educational bureaucracy is a massive albatross.  The Federal government is the same.  Why is disintegrating things like this a bad idea?

My recommendation is to pick up Michael Lotus’s book and read it.  It shows a path forward using the foundational American history we have since the Magna Carta and Plymouth Rock.

The first step in understanding you are out of control is sometimes pinching yourself and waking yourself up.  Virtually all of what Sanders says is out of touch with reality.  Hillary is looking backward into 1960.  Rubio is more of the same.  Cruz seems like he might take a slash to part, but not all of big government.    Much of what Trump wants to do would not take the country forward into America 3.0.