Menckens Ghost

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Trump Territory Then and Now

If you want to understand why President Trump is popular in some quarters, then join me for a recap of a recent visit to Trump territory.  Along the way, we'll go back in American history to see that there is nothing new about fake news, populism, a mercurial president, or rapid technological and social change. Then we'll end with a thought about making America great again.

The visit was my semi-annual trip to the hometowns of my in-laws—a pilgrimage that I've been making for over 30 years, a period in which the towns, like so many towns in the industrial heartland, have experienced declining fortunes and corresponding social problems.

The towns are in northwest Pennsylvania, and, specifically, about 85 miles to the northeast of where oil was first discovered in the late nineteenth century, a discovery that accelerated America's industrialization and launched John D. Rockefeller Sr. and his Standard Oil Company. 

My father-in-law lives in his very modest boyhood house in Westline, Penn., a small hamlet of about 75 homes in a bucolic valley in the middle of the Allegheny National Forest.  He didn't have central heat until ten years ago.

The dense hardwood forest that surrounds the valley is dotted with oil pumpers, some of which are rusting and idle while others continue to pump a meager amount of oil.  Many of the clapboard homes and cabins in the hamlet are hunting camps used by hunters from Pittsburgh, Erie, and Cleveland. The distinct aroma of sweet crude permeates the air in places.  At one time, other industries in the hamlet were timber and a charcoal/chemical plant. 

The town got its name from the western spur of a railroad line that ran along a stream through the town.  Another railroad line used to run several miles to the east, where one of the highest trestles in the nation had been built in a matter of months across a wide gorge to transport coal from the coal mines of southern Pennsylvania.  (My immigrant grandfather was a coal miner in southern Illinois upon immigrating to America.)

To build such a trestle today, it would take years just to complete an Environmental Impact Statement, which in turn would make legions of environmental lawyers and consultants wealthy at the expense of the incomes of working stiffs.  But don't expect today's reporters and academics to make this connection when bemoaning income inequality.

In a sign of our post-industrial times, both railroad lines have been turned into hiking trails, thanks to the work of local volunteers.

It wouldn't be a surprise if dogmatic free-market economists were to say that the trails are a good example of the concept of comparative advantage in action—that since the region has a comparative advantage in making hiking trails, and since China has one in making low-value manufactured goods, the region is better off economically by specializing in hiking trails and forfeiting its manufacturing to China.  As silly and callous as this may sound, it's not any sillier or more callous than when economists use the concept to try to mollify those who have lost their jobs to China.  They essentially say that comparative advantage makes the collective nation better off over time, so individuals should suck it up, shut up, and give the concept time to work its magic.

Strangely, free-marketers normally preach the value of the individual over the collective, but when it comes to the downsides of trade, they value the collective over the individual.

Is it any wonder that when those hurt by globalism are given a choice of siding with heartless economic purists who ignore their predicament or a tweeting president who acknowledges their predicament, they side with the latter?

  

Speaking of losing manufacturing to China, my sister-in-law lives in Bradford, Penn., which is about 15 miles north of Westline and has a population of about 8,300.  Bradford is where she taught third grade for 37 years and where her husband recently retired from the Zippo manufacturing company, one of the few surviving manufacturers in the town.  The company does not know how long it can survive in the face of China producing cheap knockoffs of its Zippo lighter and other products, in violation of trademark and copyright laws.  This may not matter to the denizens of D.C., New York City, or Silicon Valley, but it sure matters to the locals.

Bradford's prospects were far better at the dawn of the twentieth century.  After oil production began declining in the original Pennsylvania oil fields to the southwest of the town, Bradford was the site of a major oil discovery.  Photos from the time show that a forest of wooden oil derricks had replaced the forest of trees.  A refinery formerly owned by Kendall Oil is still in operation in the center of town.  After oil began to decline in the Bradford field, the town turned to manufacturing.

This is not to suggest that life was idyllic.  The region had to absorb thousands of immigrant workers, many of whom were single men who lived in work camps in the woods, where they cut timber and sawed logs—and drank, gambled and fought.  In fact, as with most of America, life was hard for the first 50 years of the twentieth century, a century marked by two world wars, the Great Influenza that killed millions, the Dust Bowl, the Great Depression, and the social upheavals brought by violence between labor and capital, by the extremism of anarchists and Wobblies, by the mass migration of Southern blacks who escaped Jim Crow for work in Northern factories, by women's suffrage, by the establishment of the Federal Reserve, and by the Sixteenth Amendment's establishment of an income tax.

The century began with a new president who was similar in some respects to Donald Trump. Teddy Roosevelt was a mercurial populist and nationalist who railed against the excesses of the Gilded Age and took on the establishment of the day, especially the industrialists and their monopolistic trusts.  Unlike Trump, though, he prided himself on speaking softly and carrying a big stick.  Trump tweets loudly and obnoxiously and carries a stick that he uses on both friends and foes.

Prohibition was ratified in 1919, a mistake that was repealed in 1933.  It has been so maligned that it's forgotten that the temperance movement was in response to serious problems with alcohol abuse, just as drug abuse is a serious problem today.  Many men who toiled like beasts of burden for six days a week in dangerous mines, oil fields and factories would indeed drink their pay at the corner tavern and come home and knock their wives around, adding to the hardships endured by women.  Some women would take in boarders to bring in extra income, and almost all but wealthy women would toil sixteen hours a day in the backbreaking work of doing the laundry, cooking, stoking the furnace or pot-belly stove, and raising children—if the women didn't die during childbirth.

Medical care was iffy, and the pharmaceutical industry was in its infancy. Until the development of penicillin, people would die of simple infections.   And until the development of vaccines, children and adults would be inflicted with diseases that have since been eradicated, such as polio.  Americans had such poor nutrition and medical care that approximately a third of volunteers at the start of the Second World War were initially rejected for being in poor health.

Today's college students who think they have a tough existence are spoiled brats by comparison.

Fake news was prevalent in the era and was called muckraking and yellow journalism.  Publications stoked populist anger at the trusts, adding to the smoldering resentment and unease of Americans over the rapid pace of industrialization, urbanization and immigration, as well as over the widening income gap between rich and poor.  Father Coughlin's reactionary radio show was also very popular.  Sound familiar?

McClure's Magazine was the CNN of the day in terms of audience and impact.  Its star writer, Ida Tarbell, wrote a serial expose of Rockefeller and Standard Oil.  Though well-written and based on extensive research, the series was a hit-piece, focusing on the negatives of her target and ignoring the positives, including his business efficiencies that brought light and lower kerosene prices to consumers, his support of women's suffrage, and his astonishing philanthropy, such as his establishment of schools for blacks, his endowment of medical schools, and his elimination of hookworm in the South. 

Tarbell's motive was personal.  Her father, an oil man in Oil City, Pennsylvania, had been bought out by Rockefeller.  Tarbell thought that her father was a model businessman who got a raw deal from Standard Oil.  Actually, he was a poor businessman and was paid more by Rockefeller than his business was worth.

Unlike today's corporate chieftains who wear their sanctimony on their sleeve and spout platitudes about giving back to the community (with shareholder money, not their own), Rockefeller kept his philanthropy from the public eye until his later years, engaging in charity because he felt it was the Christian thing to do, not because it was good for business.   He also didn't venture into the news and information media, unlike billionaire Warren Buffet and his purchase of scores of newspapers, or billionaire Jeff Bezos and his purchase of the Washington Post, or billionaire Mark Zuckerberg and his thousands of left-leaning censors who screen Facebook postings, or the billionaire founders of Google and their foray into news, or more accurately, biased news.

The social upheavals of the first fifty years of the century tend to be overlooked, because the post-WWII years were so good.  From about 1950 to 1970, the USA was the king of the hill, due to the former king of the hill, Great Britain, losing its empire, and to much of the industrial world being destroyed by the war.  It was a time of rapidly rising incomes, a shrinking income gap, and a balanced federal budget.  This is the period that many Americans tend to think of when they speak of the good ole days.

Social upheavals began anew in the 1960s and early 1970s, with the divisive Vietnam War; the rise of the counterculture; the assassinations of JFK, RFK and MLK; the War on Poverty and the Great Society; the passage of Medicare and Medicaid; the Civil Rights movement; the feminist movement and women entering the workforce in record numbers; the rise of homegrown terrorists groups, such as the Weather Underground and Black Panthers; the Arab oil embargo; the Japanese auto industry securing a beachhead in America, followed by other foreign imports and by American companies outsourcing to foreign countries; the decline in industrial unions as companies moved operations to right-to-work states; the corresponding rise in public-sector unions; and the financialization of the economy, as mergers and acquisitions skyrocketed and the nation's best and brightest gravitated to Wall Street instead of Main Street.

Politics changed accordingly and became the roots of today's divisiveness.  Southern Democrats gravitated to the Republican Party while the Democrat Party attracted radicals and got a firmer lock on minorities and government employees.  Segregationist George Wallace left the Democrat Party and ran for president on the ticket of the American Independent Party, in response to the Great Society and Civil Rights movement.  H. Ross Perot then ran for president as an independent, with a platform of saving American industry.  Later, Republican Ronald Reagan attracted the historically Democrat white working class with his promise of better economic times after Jimmy Carter's stagflation, with his standing up to the Soviet Union, and with his selective implementation of tariffs and import quotas.

The balanced budgets of the 1950s became an anachronism with the demise of the deficit hawks of both parties.  Entitlements and social spending would begin to consume more and more of the federal budget.  Any social benefits resulting from this spending were offset by an increase in dependency and single parenting, which of course resulted in lower household income compared to two-parent households.

As I've calculated, over 60% of households now have at least one member who is dependent on the government in some way, either as a recipient of an entitlement or welfare check, or as a government employee, or as a worker or manager in the private sector whose occupation exists because of government regulations, such as the tens of thousands of coding clerks in doctors' offices and hospitals who have to submit records to the government.  So many people are now on the dependency side of the political teeter-totter that it's doubtful that it will ever again be brought into balance.

   

Let's return to Bradford to see how these forces affected the town and surrounding region.     

As with most of America, the post-war period was a good time for the town, a time of optimism and community spirit.  Parents believed that their children would have it better than they did, and in a small-town version of noblese oblige, the better-off helped those who didn't have it so good, through their volunteer work with such organizations as the Rotary, Kiwanis, Knights of Columbus, Legion, and, of course, churches.

Workers tended to work for one employer for all of their working lives and retired with a pension and retiree medical benefits.  For example, my wife's immigrant maternal grandfather was so thankful for his job as a pump-hand for Kendall Oil and for the company's paternalism that he chose a gravesite for himself and his wife in a cemetery on a hill that overlooks the refinery.

Will any Amazon employees select a gravesite that overlooks a company distribution center?

Then, beginning in the seventies, Bradford became a textbook case of the social effects of the welfare state and the economic effects of de-industrialization and offshoring.  Main Street has empty storefronts while the Walmart on the outskirts of town is busy, especially after welfare payments hit recipients' bank accounts at the beginning of the month.  Amidst a lot of homes in disrepair, there are pockets of nice homes, especially near the hospital, where well-paid medical personnel depend on Medicare and Medicaid money; and near the satellite campus of the University of Pittsburgh, where faculty and staff depend on state funding and student indebtedness from student loans.  A federal prison that was built outside of town a couple of decades ago has proved to be a mixed blessing.  While it has provided some jobs, it also has attracted a criminal element from Buffalo—people who come to town to visit their incarcerated friends and family members.

To a large extent, government has become the new industry in Bradford and much of America.  All levels of government now consume about half of national income, versus about 10% of national income in the early twentieth century.

An anomaly sits a few miles outside of Bradford:  a five-star resort that caters to wealthy guests from around the nation who come to enjoy hunting, fishing and other outdoors activities.  It used to be the estate of an oil baron.  Depending on season, daily rates run between $600 and $1,300.  One wonders if the guests see the ramshackle homes along the road to the resort, and if they do, whether they give a damn.

Bradford is literally flyover country for passenger jets.   The only airline service is a small commuter airline that has about five roundtrip flights a day between Pittsburgh and Bradford.  The planes are single-props that carry a maximum of nine passengers.  The last time I flew out of Bradford, there were five TSA agents at the airport to put five passengers through security. 

It's a safe bet that reporters from the New York Times have never set foot in Westline or Bradford.  The same for Facebook's Mark Zuckerberg.  Or Amazon's Jeff Bezos.  Or Google executives and their legions of software scribes.  Also noticeably absent are emasculated, bicoastal, urban hipsters and software scribes with scraggly beards, wooly hairdos, and soft hands, who clutch their iPhones and Starbucks the same way that Linus clutched his security blanket in Peanuts cartoons.

The rural area has a different type of "clutcher."  According to Barack Obama, it has "bitter clingers" who cling to their Bibles and guns, the same people that Hillary Clinton referred to as "deplorables."  It's true that many of the locals wear orange caps and camouflage and clutch their hunting rifles with calloused hands during hunting season.  But unlike Chicago, where Obama got his political start and where Clinton was born and raised, the locals don't shoot each other. 

Nor are they obsessed with race, class and self-image, as urbanites are.  In fact, I've never heard any of them make a racist remark.  Nor do they drive Priuses and Teslas to signal their environmental pieties while living in 4,000 sq. ft. homes and flying around the world on carbon-belching jets to go to some exotic locale for vacation.

The so-called yokels are also much more community-minded and certainly not as snooty as urban sophisticates.   An example is how the neighbors of my elderly father-in-law go out of their way to help him.  One neighbor even changed the dressing on his leg wound and drove him multiple times to Erie for medical appointments, a five-hour roundtrip.

Judging by what they publish, social scientists and economists from Harvard, Yale, Georgetown, Stanford, or the University of Chicago also have never set foot in the towns.

The absence of scholars from the University of Chicago is ironic for three reasons:  first, because the University of Chicago was founded by John D. Rockefeller Sr., initially as a Baptist college; second, because Rockefeller's wealth and thus his funding of the university was based on oil, a substance that is to college students what garlic and a crucifix are to werewolves and vampires; and third, the Chicago School of Economics was the academic home of free-marketer Milton Friedman and is considered a bastion of free-market economics.

It's hard to think of a better laboratory to test economic theories than Bradford and western Pennsylvania, as this is where such industrialists and financiers as Rockefeller, Vanderbilt, Carnegie, and J.P. Morgan crossed paths; and, more recently, where deindustrialization and global trade have left their mark.  Yet economists tend to reside in faculty dens that are insulated from the downsides of global trade and Schumpeterian creative destruction.  Like the groundhog Punxsutawney Phil, they come out periodically to sniff the air and make nonsensical sounds before retreating to their dens.  Then the media try to impart some deep meaning to their gibberish, not seeing that the economists have about as much insight as Punxsutawney Phil.

   

Harsh?  Yes.  Justified?  Yes.

Economists and other social scientists—as well as resident intellectuals in think tanks—in spite of their PhD's, can't figure out how to constructively ameliorate the social and economic problems caused by market forces and rapid technological change, although they've been at it ever since the dawn of the Industrial Revolution.  Many on the right still say that the market would be self-correcting if the government were to get out of the way; many on the left still try to solve the problems by making people dependent on welfare.  And both sides continue to debate whether capitalism inexorably leads to monopolies and concentrated wealth in the absence of the counterbalance of a centralized regulatory state.

Now some on the right and left have come up with the notion that a guaranteed basic income will solve the problems and bring the added benefit of allowing people to have the financial wherewithal to pursue their dreams and become self-actualized.

They're hallucinating.  This notion is just as contrary to human nature as Marxism was, but for different reasons.  Self-worth, self-respect, self-actualization, and a sense of community don't come from handouts from a faceless government.  Moreover, what will keep people from spending the income at the local casino?

In any event, a pilot test of the idea has been conducted for years in Alaska, where each resident gets a cut of the state's revenue from oil.  Yet The state continues to rank near the top in crime and welfare per capita, a problem that can't be blamed on Latin immigrants or blacks, as Hispanics comprise only 2.6% of the population, and blacks, only 3.6%.

   

Bradford's problems also can't be blamed on Latins or blacks, as it is 96% white.  This makes it whiter than Sweden, which is interesting given that Swedes were one of the major immigrant groups that settled in Bradford in the early twentieth century, along with Italians and Scots-Irish.  Ironically, the income gap between rich and poor has widened considerably in Bradford, to an extent not seen in Sweden. Income per capita in Bradford is about $17,000, or about $10,000 below the average for Pennsylvania.  And nearly a fourth of residents live below the poverty line.

Note:  As I've detailed elsewhere, government income and poverty statistics are misleading, for they don't count all of the government transfer payments, subsidies and tax credits that go to lower-income citizens, a statistical error that understates income and overstates poverty. 

Still, when this error is corrected, it is clear that Bradford and towns like it have seen an increase in poverty and a wider income gap.  They've also seen a rise in obesity and associated diseases, in single-parent households, and in substance abuse, most recently from meth.  Conversely, there has been a marked decline in civic-mindedness and membership in fraternal and social organizations and charities.

   

As government has grown, community spirit has shrunk; as TV and social media have grown, sociability has decreased; and as industry has departed, so has industriousness.

Which brings us back to Trump.

There is a good sentiment behind his slogan, "Make America great again!"  But what period in history is considered great? 

To older residents of Bradford and similar sections of America, the immediate post-war years were great.  To today's progressives in the media and academia, the Progressive Era of the early twentieth century was great.  To ageing flower children and radicals, the sixties and early seventies were great.  To free-market economists, the laissez faire Gilded Age was great.  To those on the far left who hate the idea of America and think that all white people come from privilege and all men are brutes, America will never be great. To urban sophisticates (in their own minds), America won't be great as long there are bitter clingers and deplorables in places like Bradford who vote for politicians like Trump.  To young college graduates who don't know history, such a question is too deep for them; but they do think that tattoos, iPhones, Google, and Starbucks are great.

Then there are recent immigrants who had lived elsewhere in poverty under despotism, corruption and socialism.  To them, America is already great.

Actually, what makes America great is that people with such different perspectives can live together without killing each other—at least for now.

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