Macro Roundup

Factoids we have used to illustrate America’s outperformance versus Europe,

CEA’s version of Sanandaji’s Scandinavian American outperforming their native comps“…. Figure 7’s red bars show the per capita income of people with Nordic ancestry living in the U.S., and therefore not subject to Nordic tax rates and regulations. They have incomes of about 30 percent more than the average American and, based also on the red bars, about 50 percent more income than the average in their home country. This suggests that the incomes of Nordic people are not lower because, apart from public policy, low incomes are somehow part of Nordic culture. However, the difference between the incomes of Nordic people in the U.S. and Nordic people living in the Nordic countries is too large to be entirely due to policy differences between the two sets of countries. One contributing factor may be that ancestry is self-reported and that, holding actual ancestry constant, the propensity to identify with Nordic ancestry may be correlated with income. Another factor may be that there was positive self-selection bias among Nordic emigrants to the United States. That is, those who emigrated from the Nordic countries to the United States would be earning more than the home country average if they and their families had not emigrated….”

The White House, "The Opportunity Costs of Socialism," Council Of Economic Advisers, October 2018, https://www.whitehouse.gov/wp-content/uploads/2018/10/The-Opportunity-Costs-of-Socialism.pdf

Cancer survival rates“…Figure 9’s disease-specific evidence is more informative of the benefits of health care than often-discussed cross-country comparisons of nationally aggregated outcomes, such as overall population longevity and aggregate health care spending. There are many determinants of overall population health other than healthcare—such as diet, exercise, genes, and violence—that differ across countries. These factors may be more prone to lead to lower U.S. longevity even while U.S. healthcare is of higher quality. The fact that U.S. exports specialized care to many foreigners that can afford to come to the U.S. to receive it is perhaps the strongest indication of its superior quality. The general pattern of medical tourism is that the United States exports high-quality care while importing low-cost care(Woodman 2015)….”

Ryan Streeter, "Trumpism is more about culture than economics," American Enterprise Institute, November 23, 2020, https://www.aei.org/articles/trumpism-is-more-about-culture-than-economics/

Trumpism is more about culture than economics

The question of whether Trumpism will survive a Trump presidency was answered affirmatively after the November 3 election by a number of commentators and politicians, most of whom have been advocating working-class conservatism for a while.

The basic argument is that Trump’s performance with voters without college degrees, together with an increased share of ethnic minorities, proves the GOP should embrace economic populism. This is a classic case of David Hume’s famous “is-ought” problem whereby one easily slides from an observation of what is to prescriptions about what ought to be. Upon inspection, it is hard to find much evidence that a vote for Trump was a vote for economic populism. What does seem clear, rather, is that Trumpism has always been more of a cultural than economic phenomenon.

Scott Lincicome has helpfully catalogued how conservative voters don’t embrace economic nationalism’s protectionist trade and restrictive immigration policies. He also shows how working-class voters have been negatively impacted by Trump’s protectionist actions. This follows Jonah Goldberg’s observation that Trump’s campaign in 2020, like his governing successes since 2016, had virtually nothing to do with economic populism. In fact, one can argue that policies aimed to appeal to the working class, such as wall-building, were largely failures.

If we look a bit deeper at Trumpian populism, it becomes clear it is mostly a bundle of cultural sentiments. It is rooted in anti-elitism, which does not necessarily mean support for industrial policy, protectionism, or restrictive immigration. Large national surveys conducted by the American Enterprise Institute suggest Trump’s supporters are actually quite content with American economic life but highly reactive to elite dominance of American cultural life.

For instance, working-class Americans are more bullish on economic matters than conventional wisdom suggests: 71 percent of them believe they have either achieved the American Dream or are on their way to doing so, in line with the national average of 70 percent. Fifty-nine percent of the working class believe that anyone can start a business in America, compared to the national average of 56 percent. Working-class Americans who live in small towns and rural areas have been more optimistic about the economy during the pandemic than college-educated people in the same areas. Forty-two percent of working-class people in the heartland are confident in the economy during the pandemic versus 41 percent among heartlanders with college degrees and 38 percent nationally. In other words the reality of frustration in the heartland is a bit different than the narrative we hear so much about.

The “anger” that has been endlessly analyzed since 2016 has always been more of a cultural phenomenon than an expression of economic anxiety. Donald Trump antagonized the elite classes of American society from the beginning of his campaign in 2015, and his supporters loved him for it—and no one more than his non-working-class, college-educated supporters. It turns out that Trump voters with a college degree are more anti-elitist and ideological than the working class. Six in 10 Americans think journalists have a political agenda, but this jumps to nine in 10 among Trump supporters with college degrees and eight in 10 working-class Trump supporters. When asked how much influence liberals and conservatives have on American culture, 56 percent of college-educated Trump supporters think liberals have more influence, compared with 33 percent of the Trump working class.

When it comes to political discourse, educated Trump voters are more likely than working-class Trump supporters to view politics as a zero-sum game and to have less tolerance for disagreement with political opponents. Trump supporters with college degrees are also considerably more distrusting of experts than people with college degrees who live in small towns and rural areas, so there really is something about Trumpism that is more powerful than geography and demographics.

On race, 71 percent of the population thinks black Americans suffer discrimination. Given common portrayals of the working class, one shouldn’t be surprised that this drops to 46 percent among the Trump working class. But one might be surprised to know it drops even further to 33 percent among Trump supporters with college degrees.

Trumpism is an anti-leftist, anti-elitist cultural stance. It is not a policy agenda. If Trump had campaigned on eliminating the inheritance tax for the rich while keeping up his anti-elitist bluster, his support would have remained unchanged. The fact that working-class Trump supporters believe in entrepreneurship more than the average American could be just as easily used to suggest that a pro-worker agenda should focus on small business and angel investing rather than industrial policy. Economic populism seems to enjoy more support from highly educated writers, pundits, and politicians than the working class whose interests they claim to defend.

On the state of the American dream“…For instance, working-class Americans are more bullish on economic matters than conventional wisdom suggests: 71 percent of them believe they have either achieved the American Dream or are on their way to doing so, in line with the national average of 70 percent. Fifty-nine percent of the working class believe that anyone can start a business in America, compared to the national average of 56 percent. Working-class Americans who live in small towns and rural areas have been more optimistic about the economy during the pandemic than college-educated people in the same areas. Forty-two percent of working-class people in the heartland are confident in the economy during the pandemic versus 41 percent among heartlanders with college degrees and 38 percent nationally. In other words the reality of frustration in the heartland is a bit different than the narrative we hear so much about…”

On anti-elite anger, “…It turns out that Trump voters with a college degree are more anti-elitist and ideological than the working class. Six in 10 Americans think journalists have a political agenda, but this jumps to nine in 10 among Trump supporters with college degrees and eight in 10 working-class Trump supporters.When asked how much influence liberals and conservatives have on American culture,56 percent of college-educated Trump supporters think liberals have more influence, compared with 33 percent of the Trump working class….”

On race, “…71 percent of the population thinks black Americans suffer discrimination. Given common portrayals of the working class, one shouldn’t be surprised that this drops to46 percent among the Trump working class. But one might be surprised to know it drops even further to 33 percent among Trump supporters with college degrees. …”