In the Shadow of the Statistics. How Donald Trump United Economic and Identity Politics

In the Shadow of the Statistics. How Donald Trump Unites Economic and Identity Politics

by Marcos Barreira

[This article posted on 12/18/2024 is translated from the German on the Internet, https://www.krisis.org/2024/im-schatten-der-statistiken-wie-donald-trump-wirtschafts-und-identitaetspolitik-vereint/.]

first published in Jungle World 2024/48

The Democrats ran their election campaign on socio-political and economic issues. In this area, they believed the Biden administration's record was good enough to deliver strong arguments in their favor. The fact that Donald Trump won the election nevertheless has less to do with the consequences of identity politics than some might believe.

The economy was recovering from the Covid-19 pandemic and inflation, unemployment was at a relatively low level, inflation was falling, interest rates were falling, and stock market indices were rising. You would think that this would have provided a good basis for U.S. Vice President Kamala Harris to triumph over Donald Trump in the election campaign. Two weeks before the election, a 2.8 percent increase in gross domestic product in the third quarter compared to the previous year was even reported.

But it turned out differently. The reasons for the relatively clear victory of the Republicans in the US elections must therefore lie beyond the economy, according to the general diagnosis.

The discrepancy between the “good” economic performance and the defeat of the president's party was explained by the fact that voters decided not on the basis of the economic situation, but on the basis of their views on identity politics and the culture war, as Jan Tölva also argued here. However, Trump has shown that identity politics and the assessment of the economic situation do not necessarily have to contradict each other.

The global economic crisis of 2008 signaled the lasting universalization of a crisis that had until then been limited to emerging markets in Latin America, the Asian “tiger economies” and Russia. US President Barack Obama responded by expanding social security, though it hardly deserves the name by Western European standards, and by a timid reform of the health care system to minimize the social damage that came with an increase in the economically redundant population.

Eight years later, the situation had not eased, but worsened. In the wake of the Covid-19 pandemic, the Trump administration further inflated the liquidity bubble that had been pumped up in 2008: in March 2020, it passed a $2 trillion relief package; by the end of that year, a second package of $900 billion was approved. Senate Republican leader Mitch McConnell compared the economic stimulus measures to “war-level investments.” $120 billion was set aside for direct aid to the unemployed alone. Under President Trump, the budget deficit reached 15 percent of gross domestic product (GDP) and the national debt rose above 100 percent of GDP for the first time since World War II. The weak economy was a decisive factor in Trump's defeat four years ago.

Joe Biden's economic stimulus plan

In January 2021, Joe Biden presented an economic stimulus plan similar to those of previous administrations, this time worth $1.9 trillion. By the end of the year, US GDP had grown by 5.7 percent. This was primarily due to the extremely low starting point of the previous year. However, the average annual growth rate under Biden, at 2.2 percent, was the same as under the previous administration. Thus, the recovery under the Democratic administration remained too weak for a long time to be truly felt by the electorate. Inflation flattened too slowly, as did interest rates. Biden tried hard to emphasize the historically low unemployment rate. But that did not catch on with voters either.

To understand this, one has to take a closer look at the employment figures. Officially, the unemployment rate in the US is around four percent. This figure refers to “open unemployment,” that is, the number of people active in the labor market who have sought employment in the past 30 days. It thus represents short-term unemployment in the segments of the labor force that are integrated into the market. According to the U.S. Bureau of Labor Statistics, a government agency, the rate rises to 7.7 percent when including people who have looked for a job in the past twelve months.

But even that does not provide a realistic assessment of the actual unemployment situation. Since 2004, Walter John Williams has been monitoring the long-term unemployment rate in his newsletter Shadowstats, which also takes into account those who have been unemployed for more than a year and have disappeared from the statistics according to official criteria. Based on official data, Williams concluded that the actual unemployment rate must be at least 15 percent of the working-age population.

Disconnect from reality

Over the past two decades, Williams said, “the quality of government statistical information has deteriorated significantly. Disclosure problems include methodological changes in economic data that have led to important economic and inflation outcomes becoming disconnected from the real world or common experience.”

In an article for Bloomberg, Jeanna Smialek and Patricia Laya addressed the problem of structural unemployment in the US, which is not reflected in the official statistics. Their conclusion was that even if there were full employment according to current recording methods, approximately 20 million Americans of working age would not be able to participate in the labor market.

In this sense, the disconnection from reality is no longer the sole preserve of fanatical conspiracy theorists. Thirty years ago, Robert Kurz showed how “entire nations that benefit from numerical prosperity and high average incomes actually live in miserable conditions”. Above all, the employment statistics were manipulated until their results appeared justifiable in the new “facade capitalism”.

Reality of the crisis

This circumstance has now become apparent in the US: While the Democrats' election campaign was based on this false perception of social conditions, the demagogue Trump fueled the social anger and resentment caused by the reality of the crisis. During his term, for example, he claimed that there were “96 million people looking for jobs” in the US. Despite the arbitrary number, his words corresponded with the perception of many citizens in a country that is highly polarized socially. They corresponded particularly strongly with the perception in the ruined former industrial or mining regions, where a large part of the population is dependent on state aid. Trump lied when he said that he had created the “greatest economy in the history of our country” and that the Biden administration had ruined everything. But in the perception of many Trump supporters, both the current crisis and the real estate crisis in 2008 were artificially created to bring down Republican administrations.

However, Trump's greatest mobilizing force does not come from a false positive image of his term in office, but from a construction of an enemy. Trump presents China as the external enemy and the “invasion of immigrants” as the internal one. In both cases, a fundamental change in the conservative argumentation pattern can be seen. In the eighties and nineties, impoverishment was still individualized. Accordingly, there were no structural problems, only a lack of motivation or qualifications. In her book “Strangers in their own country – On the American Right”, the US-American sociologist Arlie Russell Hochschild showed how this idea has changed: the individual problem has become a group problem that the Democrats are said to have created. Based on the idea that minorities are being favored, who “skip the line” and thus block the former worker (often white) from accessing the “American Dream”.

At this point, the notions of economic crisis and identity become mutually reinforcing factors. Trump's speech replaces individual shame over failure with the rescue of the pride of the worker who wants to rebuild America. The conflicts that arise in crisis capitalism feed the identity delusion, and Trump has managed to offer the economically dependent majority an identity. Meanwhile, even immigrants, especially Latinos, increasingly identify with the conservative values of “Great America”. Their economic motivation is largely tied to the idealization of market freedom, flexibility in the workplace, and the new religious fundamentalism of the Evangelicals.
In this sense, the left-wing argument that the identity appeal is counterproductive misses the point. Trump and the conservatives are successful because they do not make this distinction. Ideologically fanatical right-wing populism is winning in the economic debate and in identity politics.