It is impossible to give President Trump much credit for having a coherent strategy about anything (except the primacy of belligerency), but he certainly plays the fear card with uncanny success.
At its most basic level, communities that perceive stagnant growth, wages and advancement opportunities will be exceptionally vulnerable to fear of displacement.
That fear is easily exploited by the near-daily barrage of simplistic and hateful rhetoric from Trump about immigrants. As we saw in early August, that fear can translate directly into domestic terrorism.
Trump appears to approach every problem from a transactional worldview. A transactional relationship is one where every “party” involved is “in it for themselves.” If you play the game right, you can expect reciprocation (also called crony capitalism). Building consensus, planning for the future, free enterprise, altruism, kindness, wisdom in general … there is no room for such lofty ideas with this worldview.
Transactional leaders like Trump use rewards (e.g., tariffs to protect preferred industries) and punishments (e.g., migrant rhetoric) to keep his cultish followers motivated on a daily basis.
But there is another element to this worldview, which is that fear is best motivated when people are convinced that they face a zero-sum game. For this kind of “game,” one person’s losses or gains are exactly balanced by the losses and gains by the other participants.
For this kind of game, America has a stagnant pie that can’t be divided further without existing participants paying a cost. This leads naturally to the argument that immigrants coming to America are a bad thing because, among other things, they “take jobs” from Americans.
We know, however, that America’s pie is not fixed. With a gross domestic product of $19.39 trillion, the US economy grew by 2.3 percent in 2017, which means that wealth in this country increased by at least 445 billion dollars. If distributed “fairly” such growth isn’t even remotely threatened by the 30,000 limit for annual admissions of refugees and asylum seekers (over 600 million dollars per immigrant plus added growth as these individuals integrate into the economy).
The percentage of nonresident immigrants in the U.S. today (13.7 percent) is lower than the historical high from 1890 (14.8 percent). So why are Americans so afraid that their slice of the pie is shrinking under an onslaught of immigrants?
Part of the reason is that there is some truth to their angst. Despite this tremendous economic engine with an unemployment rate at a historical low (3.8 percent), the pie is not being shared much with the average American.
In essence, slices are not growing with the economy, and hence fear about competition from immigrants might be valid in some communities, although the problem is not caused by the immigrants.
Consider a recent report by the Washington Center for Equitable Growth showing that the wealthiest 1 percent of families in the U.S. hold 40 percent of all wealth, while the bottom 90 percent of families hold less than 25 percent of all wealth. An astonishing 25 percent of American families have less than $10,000 in wealth, and the majority of these families have heads-of-households younger than 35 years old in 2016.
Contrast this with a recent report by the Institute on Taxation and Economic Policy showing that following the Republican tax cut of 2017, 60 of American’s largest corporations paid nothing in income taxes. Amazon, with a net worth that recently exceeded $1 trillion, generated a profit of $11 billion in 2018 and paid an effective tax rate of -1 percent. These companies depend on a highly trained workforce and yet they make no direct contribution to the system that produces these workers. Taxpayer investment is sequestered by the giants.
Finally, consider that in 2016, families headed by someone with a 4-year college degree had a median wealth of $292,000, while a family headed by someone with a high school diploma had a median wealth of $67,000 ($23,000 without a high school diploma).
Imagine the growth and opportunities that would emerge if we could increase higher education opportunities for low-income families … something that could be promoted considerably if large corporations were forced to invest through taxes.
Income taxes are a useful tool for combating wealth inequity, and applying these resources to help those in most need would lead to a significant increase in the size of the pie that all Americans and immigrants can enjoy.
We can either get this right, or continue to play the fear game with Trump blaming “the other” while he and his wealthy friends continue to rake in most of the benefits of our economy.
Douglas Call is a microbiologist. He and his family have lived on the Palouse for more than 20 years.