Saturday, June 25
All the news on TV and radio is about Brexit. Few pundits expected the Brits to leave the EU, but here we are with everything now up in the air. No one knows how this will ultimately play out, certainly not me, but this I do know: for us it is a shot across the bow.
This is what scares the bejesus out of me. A large number of those who voted to leave– nobody knows exactly how many, of course, but a lot–did not understand what the implications of leaving the EU actually were. (This is based on Google searches, Twitter, Facebook comments, and post election interviews .) They did not vote against leaving the EU so much as they voted against the Establishment. The votes were pretty much along class lines with the more educated, the professionals, the well-off voting to stay in and the working class–and those whose lives are disrupted by the new globalism– voting to get out. The Establishment wants in? A vote against the Establishment sends a message. The same thing, of course, is happening here with the Trump phenomena. Trump is sticking it to the traditional leaders of both parties. A vote for Trump sends a message—throw the bums out. Hillary is quintessential establishment. It could happen here.
So what is behind all this? A few years ago when I was teaching a course on housing and urban policy at GW, I told my students that I could not understand the steep rise in housing prices since incomes determine how much house you can afford and incomes had been stagnant for years. All I knew was that the bubble had to burst. (If only I had been smart enough to do a Big Short!) The income issue is what is behind Brexit and behind the Trump (and Sanders) movement—along with fears of change, being left out of the new global economy and the changing nature of the population. Of course people are angry, and many have good reason to be angry. They have been hurt as good jobs have been shipped off shore and competition for the scraps that remain increases. They do not see the current political system working for them.
As we cross the country on the southern route, I check online for basic demographic information, such as race and income. It is no surprise that many of the states we have visited—Tennessee, Arkansas, and Oklahoma—have median incomes below the national median in the low $50,000s. Try living comfortably on $50,000 for a family of four. Sure, prices are lower here than in DC, but not all that much lower.
Bottom line: this is the fundamental issue that has got to be fixed. The challenge is that in the brave new world of a global economy nobody really knows how to do it. There is no silver bullet. It is going to take a long time and will require a lot of smart people working on it. If it does not happen? Think housing bust of 2008 or worse.
The fear I have regarding Trump is that the same mentality that caused people to vote against their own self interest in the UK in order to make a point will happen here. Trump is the farthest thing we need—an insecure, ignorant, ego maniac with fascist inclinations. Yet voting for him makes a point.
It could happen here.