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US midterm elections

Nov 08,2018 - Last updated at Nov 08,2018

Barack Obama said of the US midterm elections that “the character of our country is on the ballot”, and the outcome proved him right. The United States is a psychological basket case, more deeply and angrily divided than at any time since the Vietnam War.

It is not evenly divided, of course. The popular vote saw the Democrats lead the Republicans nationwide by an 8 per cent margin, but that translated into only a modest gain in seats in the House of Representatives and in state elections because of the extensive gerrymandering of electoral districts in Republican-ruled states.

The more important truth is that the Republican Party is now almost entirely in the hands of “white nationalists”, and totally controlled by Donald Trump. It is no longer “conservative”. It is radical right, with an anti-immigrant, racist agenda and an authoritarian style, and about 90 per cent of the Republicans in Congress are white males.

The Democratic Party is multi-cultural, feminist (84 of the 100 women elected to the new House of Representatives are Democrats), and even socialist. Only one-third of the Democrats in the new Congress will be white men, and almost half the Democrats in the House of Representatives can be classed as democratic socialists.

President Donald Trump will get little further legislation through Congress, and a Democratic-controlled House will be able to subpoena his tax returns and investigate his ties to Russia, but he did not lose spectacularly on Tuesday. Indeed, he proclaimed that it was “a great victory”, because that is what he always does, win or lose.

But Trump did not lose all that badly, either. The Republicans’ losses were within the normal range for a governing party in midterm elections, so the political civil war continues unabated.

The divisions will continue and even deepen because neither of the major American parties understands what is making Americans so angry and unhappy. Donald Trump knows that it is fundamentally about jobs, but he is barking up the wrong tree when he blames it on “off-shoring” and free trade and promises to make the foreigners give the jobs back.

Many Democrats suspect what the real problem is, but they will not discuss it openly because they have no idea how to deal with it. What is really destroying American jobs is automation.

It is destroying jobs in other developed countries too, with similar political consequences. The “Leave” side won the Brexit referendum in the United Kingdom because of strong support in the post-industrial wastelands of northern and central England. The neo-fascist candidate in the last French presidential election, Marine Le Pen, got one-third of the vote because of her popularity in the French equivalent of the US “Rust Belt”.

But the process is farthest advanced in the United States, which has lost one-third of its manufacturing jobs, 8 million jobs, in the past 25 years. Only 2 million of those jobs were lost because the factories were “off-shored” to Mexico or China, and that happened mostly in the 1990s. The rest were simply abolished by automation.

The Rust Belt went first, because assembly-line manufacturing is the easiest thing in the world to automate. The retail jobs are going now, because of Amazon and its ilk. The next big chunk to disappear will be the 4.5 million driving jobs in the United States, lost to self-driving vehicles. Et cetera.

The “official” US unemployment rate of 3.7 per cent is a fantasy. The proportion of American males of prime working age, 25-54, who are actually not working, according to Nicholas Eberstadt of the American Enterprise Institute, is 17.5 per cent. Or at least that is what it was when he did his big study two years ago.

Maybe the allegedly “booming” economy of the past couple of years has brought that number down a bit, but it is a safe bet that it is still around 14-15 per cent. This is a rate of unemployment last seen in the Great Depression of the 1930s. Why is there not blood in the streets? There certainly was in the 1930s.

The Great Depression led to the rise of populism, the triumph of fascism and the catastrophe World War II, so almost all developed Western countries created welfare states in the 1950s and 1960s in order to avoid going down that road again. The economy might tank again, but at least people would not be so desperate and so vulnerable to populist appeals.

It kind of worked: There is plenty of anger among the unemployed, and the under-employed, but they do not turn to violence. They do vote, however, and their votes are driven by anger.

Until the major parties can acknowledge that it is the computers that are killing the jobs, and that it probably cannot be stopped, the anger will continue to grow. You cannot begin to fix the problem until you understand it.

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