Why Populist Movements Are Inherently Dangerous

If there's one thing the candidacies of Bernie Sanders and Donald Trump have proven it's that there are an awful lot of pissed off people out there. Millions of people are showing up at rallies and they are making their voices heard, loudly I might add. These populist movements are sweeping the country and are threatening the power structures of both political parties.

And while many see this wave of populism as a good thing, there are inherent risks involved. For one thing, while populist movements are quite adept at identifying the problems besetting the country, they seldom come up with workable solutions. This is because they haven't correctly diagnosed the underlying cause of the problems.

Several examples underscore this. The first is one of the central themes of the Sanders campaign: that trade deals like NAFTA have cost millions of American jobs. Yet, an objective look at the numbers does not support that claim. One of Sanders's staunchest supporters, Robert Reich, has debunked this theory. If anything, Reich says, the trade agreement was a net positive for job creation.

Reich believes the real problem isn't free trade but the lack of a system that helps displaced workers find comparably paying jobs. In a global economy there will always be winners and losers. It's how you deal with the losers that determines the overall strength of an economy. But you'd never know that attending a Sanders rally. So far as they are concerned all our problems would be solved if we opted out of NAFTA and didn't join TPP.

A second example is yet another central theme of Sanders: income inequality. Sanders has proposed raising the minimum wage to $15 an hour. Suffice to say that proposal has become quite popular among progressives. There is no doubt that wages have been stagnant over the last couple of decades and that the minimum wage has not kept up with worker productivity. If it had, it would be over $21 an hour. But Sanders' solution to unilaterally raise it to $15 an hour would not solve the problem of income inequality. In fact, it could cost jobs, particularly in areas of the country where the cost of living is far lower than other parts.

Then there's the obsession Sanders and his supporters have with breaking up the banks and reinstating Glass Steagall. Economists like Paul Krugman have stated repeatedly that Glass Steagall would not have prevented the Great Recession from happening, nor would reinstating it prevent a repeat performance. Still, the Sanders campaign has clung to this issue like white on rice.

Now onto the Trump campaign, where there are a litany of examples of misdiagnosed problems. The first of these concerns immigration. There can be little doubt that America's immigration system is broken. Only a fool would say otherwise. But the solution that Donal Trump has peddled to his supporters consists of building a wall along the U.S. / Mexican border, rounding up as many as eleven million people and deporting them back to Mexico.

Putting aside that the former will never happen and the latter is unconstitutional - not to mention a logistical nightmare - neither proposal would properly address the underlying issue. Both ignore structural problems that are decades old. The two main culprits behind the surge of undocumented workers into this country are economic turmoil throughout most of Latin America and the demand for cheap labor in this country. Until and unless both are effectively dealt with, the immigration issue will continue to be both a political and economic thorn in the side of the United States.

But the people who attend Trump rallies have convinced themselves - or more accurately have been convinced - that getting rid of these unwanted immigrants will cure all our problems. All the jobs that those brown people illegally took from us will now go to deserving white folk. Not only won't that happen, but the problem could potentially get worse as employers, unable to find enough cheap labor, resort to raising prices for their goods.

"Unfair" trade agreements aren't just the purview of the Left. Trump has made it a focal point of his campaign. To hear him tell it, the United States is being screwed by other countries who take advantage of these agreements and flood our country with cheap products that make it all but impossible for American companies to compete. His solution is to punish these countries by placing tariffs on them.

As attractive as that might sound, there is not a single economist who thinks this policy would work. Just the opposite, in fact. Imagine for a moment that in response to a tariff imposed by a President Trump, countries like China cut off all imports from the United States. Other countries soon follow suit. Not only would the American consumer be hit with higher prices due to the tariff, industries like agriculture, which depend on exports, would be devastated. Something similar happened after the Smoot-Hawley Tariff Act was passed in 1930. Trade wars always end up bad for the countries that instigate them.

The threat of terrorism is very real and poses perhaps the biggest challenge of any presidential candidate. But Trump's solution to cut off all immigration of Muslims from Islamic countries not only wouldn't prevent a possible future attack in the United States, it would act as a recruitment tool for ISIS and other extremist groups throughout the Middle East. It could also have the unintended consequence of radicalizing young Muslims already here in this country by isolating them from the rest of American society. Left unsaid in the terrorist attacks in both Paris and Brussels is that the Muslim communities throughout Europe are deeply segregated from the mainstream populations, thus making them ideal breeding grounds for radical jihad . Why on Earth would the United States wish to model itself after such a failed policy?

But perhaps the greatest threat populist movements present, apart from their eschewing the complex for the simple, is the virulent nature they often display. There is an almost cult-like atmosphere that permeates them. And while the dynamics between Bernie supporters and Trump supporters are different in both style and substance, in temperament both are virtually identical. Both treat any criticism of their cause as a personal affront and both are loyal to a fault. If their candidate doesn't get the nomination, they will not vote for anyone else.

How did we get here? Well, for starters, both political parties were tone deaf to the unrest percolating throughout the electorate. On the Right, Republicans rode the Tea Party wave all the way to power in 2010, but never fully understood the vein they were tapping into. They assumed that the base was all about deregulation and lower taxes on the wealthy - dyed-in-the-wool Reaganites who embraced supply-side economics as staunchly as their parents did a generation ago. Part of that was certainly true, but deep down many of them were seething with resentment over how badly their station in life had slipped.

Neal Gabler has an excellent piece in The Atlantic, titled "The Secret Shame of Middle-Class Americans" that is a must read.  In it he uncovers some rather unsettling facts about the middle class. In one survey, when respondents were asked how they would pay for a $400 emergency, 47 percent said they would either have to borrow the money or they wouldn't be able to pay for it at all. Another survey found that only 38 percent of households could cover the cost of a $1,000 emergency room visit or a $500 car repair out of their savings. Also troubling was a report by the Pew Charitable Trusts that said "55 percent of households didn't have enough liquid savings to replace a month's worth of lost income." Astonishing would be a word in a half.

Maybe in Paul Ryan's world life is as simple as lower tax brackets, deregulation and personal liberty, but to millions of his constituents the only thing trickling down from the GOP was piss and vinegar. Donald Trump not only challenged the Party orthodoxy, he finally gave the disenfranchised a voice and a champion to believe in, albeit a deeply disturbed and unhinged one. The fact that Trump won in all parts of the country, including the famed Bible-belt is proof that the rank and file have had it with being told who is acceptable and who isn't.

And while the GOP was busy ignoring their base, the Democratic Party spent most of the last 25 years lining up to play the lead role in the next Ritchie Rich movie. Throughout most of the '60s and '70s, the terms Democrat and progressive were inexorably linked. But devastating electoral college defeats in the '80s tried the patience of the Party; so much so that in 1992 it turned to a Southern centrist by the name of Bill Clinton for salvation. Clinton turned around the party fortunes by winning not one but two terms as president; the first time a Democrat had done so since FDR.

But Clinton was no FDR, and progressives had to bite down hard and swallow, consoled by the knowledge that at least the GOP had been denied the White House. But they wouldn't be denied for long. Welfare reform and a crime bill, that at the time seem innocuous, helped sew the seeds of discontent within the Left. They would eventually take their frustrations out on Al Gore, who lost the 2000 election despite winning the popular vote.

It was not until 2008 that the Left found their hero. The ascendency of Barack Obama gave progressives something to believe in. Obama was seen as a transformational candidate who was going to change the way politics in Washington was done. Change we can believe in was his campaign slogan. However, once in the White House, Obama found out what every president knows all too well: that it's a lot easier to campaign on change than it is to govern on it.

Progressives once more were disillusioned. They had invested everything into a charismatic president only to be disappointed. Many expressed their frustrations by staying home in the 2010 and 2014 midterms. Obama may have won his reelection in 2012, but he is seen by the Left more as a centrist than a liberal president; a sentiment shared by many moderate conservative writers like Bruce Bartlett.

But though progressives were down, they were hardly out. Bernie Sanders has now become their new darling. His rallies are like rock concerts and his followers are true believers. For many of them, the Democratic Party has become more an enemy than an ally. Sanders reinforces that sentiment by taking on Wall Street and the corporatists that have taken over the Party establishment. Though he is not going to win the nomination, he has managed to change the discussion and move Hillary Clinton further to the left than she otherwise would've preferred. Her biggest challenge this fall will be to convince the Left that she is a better choice for the country than Trump. She will have a hard sell on her hands.

The epic fail of both political parties - their inability to listen to and serve their constituents - was the catalyst behind the rise of Donald Trump and Bernie Sanders. Both men have capitalized on the shortcomings of a system that is seen by millions of people on both sides of the spectrum as rigged. Trump appeals to a nationalist, xenophobic element that is fearful of a pluralistic and multi-cultural society; Sanders to a idealist, if somewhat utopian, element that is contemptuous of power and greed.

These populist movements are not going away anytime soon. Regardless of what happens in November, they are here to stay. When political institutions become flaccid and paralyzed they cease to be effective and lose their legitimacy and authority. They are then ripe for overthrow. That is precisely what happened to the Weimar Republic in Germany, and it could very well happen here. Bernie Sanders has said he wants to start a revolution; Donald Trump intends on bringing one. We should take both men at their word.

In retrospect, none of us should be surprised at what is happening in this country and to our political system. This moment has been slowly building for almost two decades. Now that it's here, the only mystery is why it took so long.