Points of View

Rossoff & Company’s Points of View is a forum for industry experts, leading finance professionals and senior Rossoff & Co. professionals to provide insights and commentary on current news stories, financial market themes and industry dynamics.

  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Tags
    Tags Displays a list of tags that have been used in the blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
Posted by on in Points of View
  • Font size: Larger Smaller
  • Hits: 4732
  • Print

What's Wrong With Nationalism?

For more than a century, politics in the Western world has largely been a battle between liberals and conservatives. Now, that seems to be changing. Increasingly, the opponents are globalists and nationalists – and the groups cut across the old liberal vs. conservative lines. In the United States, Hillary Clinton and Paul Ryan are globalists; Donald Trump and Bernie Sanders (at least partly) are nationalists. In Great Britain, David Cameron and most of the Labor MPs were for staying in the EU (a globalist position), while certain Labor leaders and many of the Conservative MPs were for leaving and reasserting national sovereignty. Globalists have been ascendant in the West for decades and thus dominate our current global elite. But nationalists are rising in France, Holland, Austria, Hungary and Poland and are gaining ground throughout the rest of Europe. Most Western leaders, particularly in the media, bemoan the nationalist phenomenon and attribute it to growing racism, xenophobia, the refugee crisis and economic insecurity. Is that all there is to it? A nationalist conquered the Republican Party in the U.S. and nationalists have yanked Britain out of the E.U. What’s really going on?

There is no doubt that nationalism has a bad reputation. In pre-World War II Europe, nationalists were right-wingers and often fascists – at that time in opposition to communism, which was the globalist ideology of its day. In the U.S., Charles Lindbergh led an anti-Semitic nationalist movement called “America First,” which opposed our entry into World War II. When Trump uses the phrase “America First,” many make the association with Lindbergh and shudder. Nationalists favor a range of policies that run counter to what have been, for many years, the settled positions of informed and ethical people; nationalists are anti-immigrant, anti-free trade, pro-gun, oppose climate change measures and oppose America’s global peace-keeping role. Further, those who favor the nationalist ideology are mostly less educated and almost entirely white. And, oddly, nationalist politicians like Trump and Marine Le Pen in France, are generally well disposed towards Vladimir Putin and Russia.

Our globalist commentators, when not condemning the outright ignorance and racism of nationalists, attribute their waywardness to a wave of economic anxiety that has befallen the working and middle classes, at least since the financial collapse of 2008. All will be well eventually, we are told, and in the meantime government programs (spending and re-education) will help those who are left behind. Unfortunately, the left-behind group seems to be growing; Western economies are increasingly mired in weak-to-no-growth patterns and what little income expansion there is goes mostly to a narrow elite. 

Look at who the winners and losers are in the globalist world: Free trade, free movement of capital and open borders have made the labor markets global and, following basic economic logic, investment in labor-intensive industries has moved to low-wage, low regulation countries, especially China. Corporate executives, financiers and investors have benefited mightily. Not only are labor markets now global, but consumer markets are as well, particularly for technology-related products. Hence, owners of intellectual property – software, copyrights, entertainment assets – have also gotten rich. The US has run massive trade deficits for decades and the excess American dollars we send abroad come back, not to buy American manufactured goods, but to purchase securities and other financial services on Wall Street. As we know, the bankers and hedge fund managers have done very, very well. Globalism has boosted the 1% -- Wall Street, corporate executives, technology entrepreneurs, media moguls and all the professionals who serve them, including politicians of both parties. Not enough of this new wealth has trickled down and, in fact, these fortunes seem increasingly to be trapped at the top. And so the demand for securities, where excess wealth is stored, has exceeded the available supply, leading to near or below-zero interest rates. The globalist world requires a policeman, a role that the U.S. military has filled; our vast national security apparatus has been another beneficiary as a result.

Where are the losers in this picture? Blue collar workers, obviously. Their factories have been shut down and moved to China and Mexico. Increasingly, traditionally middle class administrative jobs are moving abroad as well. Not only do the jobs leave, but those that remain must be paid less, or they will leave, too. A large percentage of the jobs created since the last recession have been in retail service industries, which are typically low-paying and often part-time. And, as we know, many Americans have dropped out of the labor force altogether. Consider also the 2.5 million Americans who have served in our wars in Iraq and Afghanistan and the many who have died or returned with serious injuries.  Most of these men and women were from our working and middle class groups. We can now add to the losers those who are retiring or near retirement and must look to their savings, which now earn very little, for financial support. This group is largely middle class or upper-middle class. When you add up all of the above, it is not hard to understand how so many could vote for Trump, Sanders, Brexit and potentially, Le Pen and other nationalist European politicians. 

No doubt there is a lot wrong with and disturbing about nationalism – the rhetoric and positions of nationalists are especially threatening to minorities. But the movement didn’t materialize out of thin air or simply spring from our worst instincts. It is also a product of an economic structure that is badly out of balance and may not be self-correcting. Our globalist leaders should do some rethinking.     

Rate this blog entry:


  • No comments made yet. Be the first to submit a comment

Leave your comment

Guest Wednesday, July 17, 2024