The path to defeating Donald Trump next November, in my opinion, does not lie in foreboding warnings of an imminent economic washout. It lies in connecting the corruption at the heart of the family occupying the White House to the broader economy, and showing how this rigged system confines the spoils of growth to those wealthy and connected enough to get in line for the payoff, while everyone else treads water.
The first option can be tempting. The idea that Trump is causing the economy to burn is easier to get across than the idea that Trump’s stewardship of an economy that looks good in aggregate masks the essential strains for much of the country. But inequality has given the latter idea resonance: It’s actually what Trump ran on, in fact, speaking about scenes of “American carnage” that sounded ridiculous to those who tally up the economy in aggregate but made sense to those in the industrial Midwest living amid the rubble. Trump hasn’t pulled those regions out of the rubble: Just ask the autoworkers at Lordstown.
The candidate most able to express this distinction, because it’s the animating force behind her politics, dismayed me with her unconvincing Chicken Little rendition last week. As she takes the stage tonight in Detroit, Elizabeth Warren needs to return to what sets her candidacy apart—the story she can tell about the economy in the Trump era.
Warren’s Medium post about the coming economic crash throws together a bunch of theories for how the next recession might unfold without explaining why any of them would be consequential enough to trigger it. The case fails to excite much alarm because it steps outside her standard frame of an economic system designed to benefit elites.
For example, household debt, while a personal depression for those affected, is lower than it has been since the 1980s, and low interest rates to service that debt are about to dip lower this week. Like Senator Warren, I’ve been tracking corporate debt for several years, and certainly how private equity uses debt to pull value from corporations has damaged the real economy. But there’s not enough debt out there to create a housing collapse–style event. Again, low interest rates soften the blow here. Warren asserts that manufacturing is in recession, but even if it were, it is lamentably too small a segment of the economy to drag the whole thing down.
What’s strange is that Warren could have presented a more plausible story about how economic crises manifest. History shows us that financial crises occur on a pendulum swing: Crisis leads to regulation, which leads to a loosening of those regulatory bonds, which triggers higher risk-taking and eventually the conditions for another crash.
We’re on the deregulation/lack of enforcement swing right now. Not only has Trump signed bills that loosen oversight of finance, but his bank regulators have downshifted to give Wall Street relief. The regulators have also all but ignored enforcement of existing rules. In a remarkable memo earlier this month, white-collar defense lawyers Wachtell, Lipton, Rosen & Katz begged their corporate clients to keep them on retainer because the lack of fraud enforcement has made them irrelevant. There’s a great purging going on within white-collar defense firms because the Trump administration refuses to enforce. (One could envision a mysterious pro-Warren super PAC exhorting her to take on Wall Street, financed by the lawyers who defend Wall Street for a living and are seeing their paydays dry up in the absence of any scrutiny.)
Now that could create the kindling for an economic shock, the way extreme deregulation normally does. And it better fits with Warren’s overall story about the economy: that it’s set up to reward a small group of winners, while the rest languish. It’s puzzling why she would depart from this frame to lunge at recession talk.
Indeed, the narrative of corruption denying workers the gains from their productivity, denying families the security that should result from prosperity, can be told through the machinations of Trump and his family. The Trump Organization has made its money through penny-ante scams: a fake university that ripped off students, a tax fraud family patriarch Fred Trump used to stake his kids while boosting rents on tenants, a multilevel marketing scheme that fleeced aspiring real-estate wheeler-dealers. Trump’s signature interaction with the working class prior to becoming president involved stiffing contractors for work done on his hotels and resorts.
The personal corruption only continued in office: Trump has made mutually beneficial deals with Saudi Arabia while vetoing bipartisan attempts to stop them. The approval of the appalling Sprint/T-Mobile merger could have something to do with T-Mobile executives spending lots of time staying in Trump-branded hotels. Trump’s campaign rents high-priced Trump Tower office space, transferring donations directly to Trump’s pockets.
Trump’s fervent supporters claim to appreciate his venality; it shows that he’s willing to color outside the lines on behalf of forgotten men and women. But Trump family corruption connects to how the economy has fared under his watch. The Trump economy has followed the traditional Republican script of tax cuts for the rich and deregulation, enriching elite business interests and doing nothing for working people, if not actively harming them. You only get ahead in Trump’s America through status or tribute, and there are side effects to such corruption. Aiding Big Oil creates dirtier air; aiding Big Pharma kills insulin patients; aiding Big Finance robs people of savings. Even the racist horrors at the border benefit the bottom lines of corporate predators. The whole thing is another con, claiming to boost the broad middle while catering only to those at the top.
That seems to me far more fertile territory to discuss the stakes of the election, rather than a speculative story about an economy tipping into ruin. Gross domestic product is trundling along, and revised economic data finally show that a tight labor market—one of the best on unemployment in 50 years—is finally moving profit shares back to workers. But the recovery is wildly uneven, and shot through with corruption. The average person cannot get ahead because the system is wired to frustrate their progress and boost the executive and financier class.
Bernie Sanders tells this story through the accessible frame of the one percent. Warren has traditionally told it through the frame of corruption. Her 2012 DNC speech, from before she was an elected official, explained how “the game is rigged,” how “our middle class has been chipped, squeezed, and hammered.” She talked about how Americans welcome success but need a level playing field, an end to the corruption that prevents them from getting ahead.
This is a unifying message. Seven candidates from different wings of the party committed to an anti-corruption reform as the initial legislative effort of their presidencies, including Tuesday debate participants Pete Buttigieg, Steve Bullock, Amy Klobuchar, Beto O’Rourke, and Warren. The Massachusetts senator signaled this focus in February, as a necessary prelude to getting any substantive legislation through a Congress bought by special interests.
Warren’s latest proposal, on trade policy, returns to her natural turf by ending the scam of corporate advisers dominating dialogue on trade agreements and centering standards on workers and the environment as a precondition for any deal. Warren would also end the investor-state dispute settlement hijacking that gives corporations a special tribunal process to grab monetary rewards from countries they deem have passed regulations that violate trade deals. This fits the story: un-rigging the rules that have dominated the global economy, and putting citizens over corrupt deal-making that enriches the powerful.
This has been her narrative throughout this election campaign; the warnings of crisis were a rare misstep. Tonight, I’m looking for Warren to regain her framing of this election as about a con artist president and his corrupt economy.