Feature 11.11.2020 11 minutes

The Real Winners


With the Left in control, who controls the Left?

Progressive ideologues often like to evoke the idea that they speak “truth to power,” but this year it’s their leaders who are consolidating their clout. Although Democrats did far worse on the whole than expected, control of the White House assures greater influence for those already occupying what Lenin referred to as “the commanding heights” of both society and economy.

Tech elites and their Wall Street allies, as opposed to more populist candidates like Bernie Sanders and Elizabeth Warren, ruled Democratic primaries. Whereas Sanders and (to a lesser extent) Warren ran legitimately grassroots-backed campaigns, they could not withstand the money, influence, and media power of the oligarchies. In the presidential race Joe Biden and Kamala Harris won the backing of Wall Street, tech, and Hollywood moguls, including bundlers who allowed them to raise unprecedented money. Among financial firms, communications companies and lawyers, Biden outraised Trump by five to one or more.

All these interests had one main priority: to remove the disruptive, irascible, and unpredictable Donald Trump. If spending tens of millions wired from the coasts to may not create a Democratic Senate, the executive alone can deliver on the critical aspects of the oligarchic agenda: friendly ties to China, the suspension of antitrust action, a full-bore assault on the tangible economy, and executive action that damages the great American heartland in favor of the dense, high-cost coastal areas. Consider this agenda’s winners and losers one by one.

China: The Big Winner

Trump’s willingness to stand up to China’s economic, political, and media threats constituted his signature departure from the corporate elite—notably in tech, where the oligarchs remain generally friendly to China. Beijing can count on friends from Never Trumping free traders to high fliers in Hollywood, the legacy media, and Silicon Valley, all of whom have censored critical coverage of China’s handling of the pandemic, and most of whom are allied to the amoralists on Wall Street.

The corporate members of the Biden coalition generally see China as a source of customers and capital, not a threat to American industries. The new Democratic gentry, epitomized by former New York Mayor and super-mogul Michael Bloomberg, even express open admiration for the Communist regime. Not surprisingly Vice President Biden, whose own family had had close business ties with Beijing, has minimized the Chinese threat to our economy, claiming incredibly last year that “you know, they’re not bad folks, folks. But guess what? They’re not competition for us.”

As the Biden family saga reveals, the most enduring reason for embracing China is, of course, money. Since 1990 the U.S. deficit in trade goods with China has ballooned from under $10 billion annually to over $345 billion last year. China’s ratio of imports to exports was four to one in 2018. This has enriched many of our leading manufacturing companies—notably Apple—while costing an estimated 3.4 million job losses in the U.S. since its inclusion in the World Trade Organization in 2001.

China trade has benefited consumers of course, at least for the short run. But it has also emboldened the army of lobbyists and political forces paid to hustle for “open trade” with the crony Communist regime. Numerous prominent figures from both parties, including former GOP Speaker John Boehner as well as former China ambassador and Democratic Senator Max Baucus, have signed up to defend China’s interests; we can imagine they will be fine with allowing China to go ahead and conquer Taiwan. Like Stalin’s liberal apologists in the 1930s, some progressives, including the Atlantic’s Peter Beinart, even deny that China’s economy engages in “cheating,” particularly through the theft of technology.

Losers: Israel, UAE, Developing countries

Not every foreign country will benefit from regime change in Washington. Although Iran’s mullahs will no doubt breathe a sigh of relief, those countries that have allied against them—Israel, UAE, and Saudi Arabia—seem likely to feel double-crossed, especially given the growing grassroots tolerance in the Arab world for the Jewish state. Biden is no Jeremy Corbyn, thankfully, but he may be more susceptible to leading lights of the progressive Left who share hostility to Israel, as well as former Obama officials who consider the Iran deal the epitome of smart global politics.

The Administration’s shift to green policies, with an inevitable slowdown in economic growth for high-income countries, could make things worse for the developing world in particular—that is, for nearly half of all humanity. There, according to the United Nations, the pandemic recession could plunge as many as 420 million people into extreme poverty (less than $2 a day). And the loss of remittances from workers now stranded at home or away from their jobs has cost developing economies billions more.

A Biden presidency could be worse for oil exporters like Nigeria, Angola, and Indonesia, which will find their petroleum and natural gas products unsaleable in western countries seeking to eliminate fossil fuels; others may find exports of agricultural goods more difficult due to the extension of anti-GMO rules from Europe to America. In an increasingly debt-ridden world, their prospects are not great outside of China.

This creates ideal conditions for Chinese-style colonialism. With the western countries in disarray amidst the pandemic, China’s “medical diplomacy,” taking advantage of that country’s increasingly dominant position in producing protection gear and other critical equipment, has boosted its leverage not only in developing countries across Africa and Latin America but even in hard-hit European ones such as Italy and Spain. All this feeds an increasingly nationalistic China’s great ambition to replace the West, and notably America, as the heart of global civilization.

Winners: The Tech Oligarchy

Joe Biden’s election likely will take Big Tech—the dominant force in the domestic economy—off the hot seat they so richly deserved to occupy. The oligarchs overwhelmingly backed Biden, using both their fortunes and ability to manipulate the media to good effect. Once in office, the new regime likely will choose, like Barack Obama, to wink and nod as Microsoft, Amazon, Apple, Facebook and Google acquire or crush competitors. The erosion in anti-trust enforcement, previously ongoing under both parties, will resume. When Biden declines, his replacement, Kamala Harris will be, if anything, even more the tool of Big Tech: she has particularly close ties to Facebook, Twitter, and other Silicon Valley giants.

Tech was once a dynamic and entrepreneurial industry, but now it has morphed into a system of conglomerate control more akin to the pre-war German cartels, Japanese keiretsu, or Korean chaebol. For them the pandemic shift to on-line, covering everything from finance and retail to gaming, has provided an unprecedented boom. The tech giants now account for nearly 40% of the value of the Standard and Poor index, a level of concentration unprecedented in modern history.

Today the tech giants stand astride the country like new lords. Amazon founder Jeff Bezos saw his wealth rise by an estimated $48 billion to an estimated $183 billion, making him the world’s richest man. The Seattle uber-lord envisions an “ unprecedented holiday season,” a digital ho-ho-ho to make him and his company even richer.

Still more troublingly, this amassed wealth has afforded its owners the ability to control information. Firms like Twitter and Facebook can handily cut off the New York Post, or even the president and his administration. This brazen use of power, left-wing investigative reporter Glenn Greenwald suggests, shows how these companies now “cross a line more dangerous” in censoring thoughts, essentially controlling “the public square” on critical public issues from climate change to the pandemic.

Losers: The Yeomanry, the Poor, and the Tangible Economy

The triumph of the oligarchs parallels the decline of the nation’s middle and working classes. Small businesses, particularly in blue states like Illinois, have been hit very hard by the continuing lockdowns, which Biden’s advisors and much of the Left seem tempted to extend indefinitely. Already an estimated 100,000 businesses nationwide have been liquidated. The recent urban disorders have added extra grief in particular to inner-city and minority businesses, already devastated by the lockdowns.

Overall, as Democratic analyst Ruy Teixeira notes, the Democrats largely have abandoned large parts of the working and middle classes, something reflected by the votes in both 2016 and 2020. The pandemic-related lockdowns, strictest generally in blue states, have crushed workers in industries like hospitality. Almost 40% of those Americans making under $40,000 a year have lost their jobs, seeing wage gains made during the first three years of the Trump Administration evaporate.

Under Biden’s executive control, people employed in basic industries like energy, agriculture and manufacturing, critical to electing Donald Trump, now face a full-bore assault from regulators. At risk are people who often hold relatively well-paid blue-collar jobs. Energy prices, almost certain to rise due to Democratic demands to eliminate fossil fuels, affect so many other things, like our daily bills, and employment opportunities for people without elite college degrees.

More and more Democrats envision a future working class increasingly dependent on what Marx called “the proletarian alms bag.” The resurgent “Brahmin left,” as economist Thomas Picketty puts it, is now back in power, positioned to benefit from green energy subsidies and centrally imposed scarcity on everything from housing to energy. We can already see how extreme environmental policies, as seen in California, devastate the incomes and aspirations of working- and middle-class households.

Reversed Geography: Blue Cities Over the Heartland

Arguably, the Biden Administration’s greatest political imperative will be to rescue their strongest political constituency—that of the big, dense cities. These were already losing population before the pandemic, but that pattern of population and job losses has accelerated since the pandemic. For places like New York, Chicago, and Los Angeles, only a raid on the national treasury can fund their lavish pensions as well as their increasingly disused mass transit systems. Also likely are attempts to restore write-offs for state and local taxes, a vast giveaway to the wealthy in these states.

Meanwhile, whole regions of the country, stretching from Appalachia to the Gulf, will see their livelihoods threatened. Efforts to “ban” fracking, or regulate it into oblivion, could have catastrophic effects in places like Texas, North Dakota, Ohio, West Virginia, and Pennsylvania. In Texas alone, by some estimates, 1 million jobs would be lost. Overall, according to a Chamber of Commerce report, a full ban would cost 14 million jobs, far more than the 8 million lost in the Great Recession.

Beyond the extractive industries, far bigger sectors like logistics, agriculture, and manufacturing would also face serious problems with intermittent and expensive “green energy.” These policies have already been tied to the persistent blackouts in California that forced the Golden State to depend on imported energy and even delayed its planned decommissioning of gas plants.

Consolidation, or Just an Episode in the National Soap Opera?

The strutting and authoritarian Trump persona may be gone, but, as the oligarchs and their allies take power, expect the emergence of a more permanent, corporate-approved authoritarian model. We already have calls for “truth and reconciliation” panels that would mete out punishment to those with discordantly “regressive” thoughts. The cancel culture so widespread in media and academia, despite plummeting credibility among much of the public, will now find allies throughout the federal apparatus.

Given that the Republicans will likely hold the Senate and made surprising gains in the House, it’s clear that Democrats have not yet entered electoral Nirvana. But a young population largely indoctrinated in woke politics and racial animosity, low rates of family formation, and declining religious attendance threaten to overwhelm the traditional GOP base of middle-class suburbanites and rural residents.

Yet at the same time an embrace of the current progressive agenda could further alienate voters in a broad swath of states that generally determine the country’s political future. Most Americans, as Sam Abrams has demonstrated, are neither Right nor Left; only 10% work at the extremes. This is likely even more true in areas like the Midwest. Republicans may still be able to count on the follies of the Democrats to attract centrist voters.

In the end conservatives will need to make a case for themselves, as they did in some states, notably Texas, where as many as 40% of Latinos went for Trump. The basic argument is simple: conventional blue politics, as we recently demonstrated in a new paper from the Urban Reform Institute, simply doesn’t work for key constituencies, notably minorities and millennials. Inner-city residents want good jobs and investment; relatively few want to “defund” the police.

Nor will the new administration’s embrace of the tech giants make them more popular; most Americans, notes a recent YouGov survey, endorse breaking them up. To be sure some conservatives, including the very rich and groups funded by Google, will (as the American Prospect recently suggested) oppose any attempt to reign in the oligarchs. But Biden and Harris will have to fight off a fledgling alliance between true progressives, like Elizabeth Warren and some members of the House, and conservatives like Missouri’s Senator Josh Hawley, who seek to curb oligarchic power.

Similarly most Americans favor environmental action, but generally not with the costs associated with the Green New Deal that seems, in modified form, likely to emerge under Biden. A spate of green zealotry could divide the Democrats from their minority and working-class base, as we are beginning to see in California. As more minorities and millennials vote with their feet, per a recent Heartland Forward study, to red regions and states, settling largely in suburbs and exurbs, they may find the Biden Administration pushing against their preferred lifestyles, from control of local zoning and schools to the ability to buy houses, gas stoves or affordable cars. If post-Trump Republicans can govern with intelligence and communicate some empathy, they could experience a surprising rebirth far wider than their surprisingly strong appearance this year.

The American Mind presents a range of perspectives. Views are writers’ own and do not necessarily represent those of The Claremont Institute.

The American Mind is a publication of the Claremont Institute, a non-profit 501(c)(3) organization, dedicated to restoring the principles of the American Founding to their rightful, preeminent authority in our national life. Interested in supporting our work? Gifts to the Claremont Institute are tax-deductible.

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