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Is Trump rational?

By Michael Knox - posted Tuesday, 1 May 2018


Research published in June 2016 by William A Galston of the Brookings Institution detailed the enormous differences in the opinions of White voters with college degrees and those without. The findings were based upon research done by the Public Religion Research Institute (PRRI).

Most Whites, with a College degree or more, have incomes above $50,000. Most working class voters have an income of less than $50,000. Most working class Whites, rate their financial circumstances as only fair or poor. Most College educated Whites, rate their financial circumstances as good or excellent. The result, is that the political and social views of working class and college educated White voters, could not be more different.

62% of working class Whites, think that America's culture and way of life has changed for the worse since the 1950s. 68% of working class Whites, believe that the American way of life needs to be protected against foreign influences. 66% of working class Whites believe that discrimination against Whites, has become as big a problem as discrimination against Blacks or other minorities. 62% of working class Whites, believe that discrimination against Christians has become as big a problem as discrimination against other groups.

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This brings us to immigration. 61% of working class Whites, say that immigrants weaken the USA by taking jobs, housing and health care. 71% of working class Whites, think that immigrants mostly hurt the economy by driving down wages. 59% of working class Whites, believe the USA should make a serious attempt to deport all illegal immigrants back to their home countries. 55% of working class Whites,think the USA should build a wall along its border with Mexico.

Opinions on trade are similar. 62% of working class Whites believe that trade agreements are harmful,because they send jobs overseas and drive down wages. Finally, and most dramatically, 60% of working class White voters, believe that the USA has gotten so far off track, that the US needs a leader who is prepared to break some rules, if that is what it takes to set things right.

These findings are replicated in further research published by the PRRI in The Atlantic on 9 May 2017.

We have elsewhere discussed the work of Nobel Prize winning economist Sir Angus Deaton,on how death rates of the American White working class are rising and their social conditions are falling.

In our Economic Strategy of 5 October 2017 "Deaths of Despair", we reviewed two articles on the deterioration of the US White working class over the period since the beginning of this century. We found that following the entry of China into the World Trade Organization (WTO) in 2001, some six million US manufacturing workers lost their jobs. This resulted in a 34% decline in US manufacturing employment over the period from 2000 to 2010. The entry of China into the World Trade Organization has led US firms to shift their operations to China along with the associated US manufacturing jobs. Chinese producers then expanded into the US market which increased competition for US producers. Prior to China's entry in the WTO, the risk associated with the annual review of import tariffs,had kept manufacturing employment in the USA.

Figure 3: Regional prime male not working rates

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SOURCE: Authors' calculations using Integrated Public Use Microdata Series (IPUMS) Current Population Survey data; published March 2018

At the very same time that manufacturing employment fell for the US working class, the death rate for the US working class began to rise. Sir Angus Deaton and Ann Case, found that deaths among non-Hispanic White Americans in midlife began to rise at the beginning of this century and continued to climb through to 2015. Increase in drug overdoses, suicides, and alcohol related liver death, particularly amongst those with a high school degree or less, were responsible for an overall increase in deaths amongst Whites. The references associated with our paper are found at the bottom of this article.

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This article was first published by Morgans.

Disclaimer

The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents ("Morgans") do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so. Those acting upon such information without advice do so entirely at their own risk.

This report was prepared as private communication to clients of Morgans and is not intended for public circulation, publication or for use by any third party. The contents of this report may not be reproduced in whole or in part without the prior written consent of Morgans. While this report is based on information from sources which Morgans believes are reliable, its accuracy and completeness cannot be guaranteed. Any opinions expressed reflect Morgans judgement at this date and are subject to change. Morgans is under no obligation to provide revised assessments in the event of changed circumstances. This report does not constitute an offer or invitation to purchase any securities and should not be relied upon in connection with any contract or commitment whatsoever.



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About the Author

Michael Knox is Chief Economist and Director of Strategy at Morgans.

Other articles by this Author

All articles by Michael Knox

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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