If there’s one picture that I think explains the power of Donald Trump, it’s this one:
The chart shows the percentage of GDP that each of the wealthy countries of the world (the OECD) spends in helping labor deal with rapid technology-induced change in the nature of work. This is important because a central part of the standard economic argument for allowing disruptive innovation is that governments must step in to support displaced workers. By and large that’s happening around the world. Not in the US, though, where it seems to be an article of political faith that adjustment will somehow happen by itself.
The US is dead last in the OECD, spending about a third of what the average country does, during both Republican and Democratic administrations. Japan, where the workforce has been shrinking for a quarter-century, is the only other country that comes close.
I’m not sure which is more telling about the American economic mindset–that Trump’s appeal is so powerful to the displaced, or that his support has come as such a total surprise.
how well preserving industries of the past pans out
Whether the Trump plan, to roll the clock back to the 1960s, is feasible is another matter, though.
The Japanese example is instructive. That country is in many ways like the US, but with a population that’s significantly older. As such, it can serve as an indicator of a possible Trumpish future for the US. Unfortunately, the picture isn’t pretty. The “Keep Japan Great” program in place since the early 1990s has resulted in almost three decades of economic stagnation, a huge increase in government debt, a sharp fall in living standards and a Millennial generation alienated and angry about the economic disaster they’re inheriting from their parents. In 1989, Japan was the second-largest economy in the world, after the US. It is now #4, having been surpassed by China and India and having lost a third of its size relative to the US. National debt has risen from 70% of GDP to 250%.