Macro Roundup

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. …”

Reviewed the research Rana mentioned in her column your friend fwd you. Before my summery I wanted to note I've attached a Noah Smith Bloomberg column from last summer that did a good job debunking this sort of analysis (from another research team which McGuire/Delahunt base their paper off) pointing out that there is a great deal of alignment btw the middle classes' policy preferences and the rich. Smith, "...More importantly, theauthors found a strong correlation between the preferences of this affluent group and those of the middle class -- in other words, the policies that are enacted don’t often seem to buck the will of the broad public.Additionally, correlation doesn’t equal causation -- politicians might do things that they think will benefit the overall economy, and that only coincidentally happen to please the affluent. It’s also likely that Gilens and Page are just wrong. A number of other research teams have done their own studies, and most concluded that it’s the middle class, not the rich, who tend to hold sway in democratic politics. A 2015 paper by political scientist Peter Enns, for example, concludes that “policy ends up about where we would expect if policymakers represented the middle class and ignored the affluent.”…”

The Research finds that the views of the top 10% and a handful of interest groups are predictive of policy changes, the views of lower income groups have less predictive power. Granted that pushes back at the criticism Smith made of the previous paper, that the elite and middle class are generally aligned on policy preferences. Here is McGuire/Delahunt bottom line, "...We offer two main findings: (i) Policy outcomes on holdout sets can be predicted with approximately 70% balanced accuracy (vs 50% chance baseline) using only a few feature categories from the Gilens dataset: preferences of high-income earners, a subset (as few as 14 out of 43) of individual IGs’ preferences, and policy area labels. Holdout test sets can be predicted with approximately 70% balanced accuracy by models that consult only the preferences of those in the 90th income percentile and a small number of powerful interest groups, as well as policy area labels. These results include retrodiction, where models trained on pre-1997 cases predicted “future” (post-1997) cases. The 20% gain in accuracy over baseline (chance), in this detailed but noisy dataset, indicates the high importance of a few distinct players in U.S. policy outcomes, and aligns with a body of research indicating that the U.S. government has significant plutocratic tendencies. (ii) The feature selection methods of RF models identify especially salient subsets of interest groups (economic players). These can be used to further investigate the dynamics of governmental policy making, and also offer an example of the potential value of RF feature selection methods for inference on datasets such as this one...."
They look at the preferences of the P90 in terms of income. "....Voter preferences (P90): Preferences of different income tranches were obtained from national surveys of the general public, where participants were asked whether they favored or opposed a proposed policy change. Preferences along the income distribution were then imputed at various income percentiles, viz 90th, 50th, and 10th (hereafter P90, P50, P10). Gilens and Page noted that P90 was a (rough) indicator of the preferences of even higher income percentiles (e.g. P99). One of their key findings was that, among voter preferences, only P90 impacted case outcomes.Our models used P90 as the sole voter preference feature (use of P50 or P10 as features degraded model accuracy)..."
Later they note that the suspect the P90 is a proxy for say the P99, "... We suspect that the 90th income percentile serves as a proxy for the opinions of the extremely wealthy and that our results would likely be better with, say, the opinions of the 99th income percentile. However, chasing down the opinions of the top 1 percent via a random population survey would be a massive effort.... The results indicated, among other things, that the very wealthy held policy preferences that were much more conservative in such important domains as social welfare programs, taxation, and regulation of the economic system. Their research also showed that the very wealthy were more politically active, with higher rates of financial contributions to, and contact with, public officials compared to the general population. Within this elite cohort, roughly two-thirds contributed an average of approximately $4,600 to political organizations and campaigns. While this survey method yielded very important understanding, we must also consider that the sharpest increase in correlation between policy outcomes and high-income earner opinions may occur somewhere in the high end of the top 1 percent. Trying to increasingly hone in on the stated opinions of those in, say, the 99.9th percentile has a few potential issues. First, it would likely involve a large, possibly prohibitive, amount of effort. Second, the results may improve correlation with - but not definitively address - the likely lodestar variable affecting policy outcomes, which is the transfer of large amounts of money to policy makers from the wealthiest sources focused intensely on particular policies. For example, the biggest corporations who can influence in their own right or members of the billionaire class throwing around their financial weight in the political sphere..."
Shawn McGuire and Charles Delahunt, "Predicting United States Policy Outcomes With Random Forests," Institute For New Economic Thinking, October 27, 2020, https://www.ineteconomics.org/uploads/papers/McGuire-and-Delahunt-predictingPolicy_INET_25oct2020.pdf