- Time and Date: 10:30-11:45, Wednesday, September 11, 2019 (Registration desk and seminar room open at 10:15)
- Venue: 1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo, RIETI's seminar room #1121 (METI Annex 11th floor)
American public opinion
I would like to start by making the argument that Americans and observers of America underestimate the degree of stress that the American public feels. I ran across a quote just two weeks ago from Erik ERIKSON, a prominent child psychologist in the United States in 1950. Americans are subjected to "more extreme contrasts and abrupt changes during a lifetime or a generation than is normally the case with other great nations." This leads to "polarities as: open roads of immigration and jealous islands of tradition; outgoing internationalism and defiant isolationism; boisterous competition and self-effacing cooperation…" This sentence could have been written today. If it was true in 1950, it is true today to a much greater degree, and here is why.
This is the change in the United States in the last 50 years. The percentage of non-white people and foreign-born people has tripled. 50 years ago, less than half of women were in the workforce, while today, more than half are in the workforce. Church membership is down by a third. There are a variety of changes taking place and individuals in society are seeing incredibly rapid and accelerating change in their lifetime.
If you had said to me 10 years ago that a majority of Americans would believe gay marriage was correct or just before that that an African-American would be elected President, I would have said you are out of your mind. I think most of these changes are good, and most of us think of them as progressive. However, if you think they are not good or progressive, they unsettle you. There is a minority of the American population that wants to go back to a simpler time to when women stayed at home, men had good jobs in manufacturing, and there were no blacks on their street or foreign-born people in their school. That is not the world they now live in, and those people voted for Donald TRUMP.
The way I try to emphasize this is through the county that I was born in, in western Pennsylvania. If economics explained TRUMP, he should have lost. 67% of the people in that county voted for Donald TRUMP, even though the unemployment rate was below the state average, and median income and the employment rate was above the state average. This county had a lot of things going for it in purely economic terms. They still voted overwhelmingly for TRUMP, more so than the rest of the state. I think we have to accept the fact that TRUMP's strength has to do more with fear of cultural and social change than it does with the economy.
The economy and remaining anxieties
55% of Americans say the economy is doing well, and it is doing well, but the growth is not what TRUMP promised. Remember, TRUMP said we were going to have 10 years of 4% growth. He was wrong, but it is steady and good growth. Unemployment is 3.7% which is very, very low, and unemployment among African-Americans is the lowest on record. Also, wages have begun to go up. Wages are now going up faster than inflation, which was not the case for most of the last forty years. What is surprising is that many Americans still say that the economy is not doing well.
Look at the polarization. 79% of Republicans say the economy is doing well, but only 33% of Democrats. Are they really telling you how they feel about the economy or how they feel about the President? In October, 2016, 30% of Republicans said the economy was doing well, but by February, 2017, that doubled to 60%. The economy did not get twice as good in three months. This was all about, my guy is in the White House now so everything is okay. Whereas in October, the other guy was in the White House and I did not like him. I think part of the explanation of why Democrats think the economy is not doing well is because it is TRUMP's economy so it must be bad, rather than thinking about it objectively.
When you ask people about the future, the percentage of Republicans that say the economy will be better is actually going down. It is about half, but it is down from a peak of much higher. Only 15% of Democrats say the economy will be better next year. When you ask people about the direction of the country, people have been dissatisfied since about 2004. That may well explain why Barack OBAMA got elected and it may well explain why Donald TRUMP got elected, even though they were polar opposite politicians. People in America seem to be dissatisfied with the direction of the country and when they get a chance, they want change.
There is always an election going on. Every two years, we elect the House of Representatives and a third of the Senate, and then every four years, we elect the President. In the last 20 years, we have changed power in either the House, the Senate, or the White House, eight times. In the 20 years before that, it was four times. In the 20 years before that, it was three times. American politics is becoming more and more volatile and people are dissatisfied. It is a volatility we have not seen in the last 60 years. You want change in a democracy because that is what a democracy should be about, but when you increase the rapidity of change this much in a short period of time, is that good or bad for the country? I do not know, but I personally think it is a sign of weakness.
Support for trade and opposition to TRUMP
What about trade? This is a Wall Street Journal poll that came out in August. 64% of Democrats say free trade is good for the country. It was 51% in 2015, and it is 64% now. The change has really taken place among Democrats and independents. Republicans kind of feel the same way that they did in 2015. About half of them say it is good. Independents have gone up 28 percentage points and Democrats have gone up 17 percentage poionts, so there has been an improvement among people who are not in power. There was a 21 percentage point increase in support of trade in just two years with white independents. Interestingly, CLINTON supporters have gone up 11 points and middle-aged people have gone up 17 points so it is across the board. This is not just one small group driving the numbers. Everybody in society, for the most part, feels better about trade now than they did even two years ago.
But, I would like to emphasize that Americans do not really think trade is that important. Every January, the Pew Research Center asks people what they think is the most important issue facing the country. For the last 19 years, trade has either been the least important or the second least important after climate change. We are one of the least integrated into the global economy of any major economy. The percentage of the U.S. Gross Domestic Product (GDP) that is traded has gone up dramatically, but it is still low compared to other countries, so it does make sense that we do not place as much importance in this issue as others do.
When the American public was asked if other countries take advantage of us, 80% of Republicans said yes, while only 28% of Democrats did. There is a sense of victimization among TRUMP supporters that we are somehow being taken advantage of. I think you can interpret many of the things that he does and says as him actually believing the United States to be a victim. "You have a trade surplus with the United States. You must be taking advantage of us." "You do not pay enough for the military. You must be taking advantage of us." What is interesting is that his supporters believe that. They believe they are being taken advantage of and that is part of Donald TRUMP's appeal.
Gallup periodically asked people if various countries are fair or unfair traders. In 1993, only 24% of Americans said Japan was a fair trader. Now, 55% of Americans do. The animus towards Japan is just not there anymore. China is the boogeyman. Only 30% of people think China is a fair trader. Interestingly, in 1993, Gallup did not even ask about China, because China was such an irrelevant player in the world economy at the time.
To give you a sense of the importance of the presidential rhetoric about these attitudes, look at the change in attitude towards Canada, especially among Republicans. 8 in 10 Republicans in 1993 said that Canada was a fair trader. Now, only 5 in 10 Republicans say so. What has Canada done to us in the last years to justify this? We have always had problems with Canada on salmon and lumber and the Canadians actually are in many ways more difficult to deal with than you are with us, but nevertheless, this is about presidential rhetoric. This is about the President going after Canada and his followers following him.
As you know, the President has raised tariffs. The views on tariffs are highly partisan. Republicans believe they are good for the country, whereas Democrats believe they are horrible for the country. There was a report by a respected think tank in America recently that said that the tariffs have probably cost 300,000 manufacturing jobs, and the International Monetary Fund (IMF) and the Federal Reserve say that the tariffs have slowed the economy.
If you look at attitudes towards the China tariffs in particular, it is highly partisan. The Democrats think they are a bad idea, and Republicans think they are a good idea. I think all of us who are not farmers say that the farm economy in America has been hurt by the trade war with China. Interestingly, according to a survey done by Purdue University of 400 farmers, almost 8 in 10 farmers say that this will ultimately be resolved in a way that benefits U.S. agriculture. They believe in what he is doing, even if it is costing them a lot of money in the short-run. The assumption people often make is that this is hurting farmers. However, this data would suggest that is not the case and they are willing to stick with him on this, at least in the short-run.
The changing concerns of Americans
58% of people in America believe that we are seen favorably in the rest of the world. 67% of Japanese last year said they had a favorable view of the United States, as well as 80% of South Koreans. Look at the numbers in Europe: 30% of Germans, 38% of French, 34% of Dutch, and 44% of Swedes have a favorable view of the United States. On the American continent: 32% of Mexicans and 39% of Canadians. These are the people who know us the best, yet you and the South Koreans are the only people who like us, but Americans do not understand this.
Concern about China has gone up about 8 percentage points in the last two years and concern about the North Korean nuclear program has gone down 22 points. I think this helps explain some of the support for the President. Most Americans do not think about this stuff and they do not understand it. All they see is the President of the United States acting like a president. "He is out there and he met with the leader of North Korea, so I guess that problem is solved." Frankly, I think large portions of the American public would say, "It is their problem and not our problem." So I think the fact that people are less concerned about North Korea today than they were just two years ago is a number we need to watch, because if people aren't concerned about it, the President is going to be less motivated to do something about it, especially going into an election year.
There is a huge partisan gap on the perception of these problems. Republicans are more worried about Iran. Democrats and Republicans actually feel about the same about North Korea. Democrats are much more worried about climate change and Russia than Republicans. There is a slight difference between Democrats and Republicans on China, but it is not a statistically significant difference. 57% of people in a recent Gallup survey said they have a negative view of China. This has been fairly consistent over time. Americans have never really felt that good about China. The Pew data is roughly the same number at 60%. The people who are the most critical of China are Republicans, but it is people with a college education who are the most critical.
As for climate change, the percentage of U.S. adults who say that climate change is a major threat has gone up 17 points since 2013. There is a growing awareness in the United States that this is a major problem. Overwhelmingly, while 9 in 10 liberal Democrats say it is a problem, only 1 in 5 conservative Republicans do. This is a highly partisan issue in American politics and has been for many years. It is getting worse, not better.
Perception of TRUMP, a year before the election
We are a year out from the election. In a survey done by the American Values Survey group in 2018, people were asked if the American way of life needs to be protected from foreigners. 76% of Republicans said we need protection from foreign influence, while only 39% of Democrats said so. People were asked if America has gone from better to worse since 1950. Two-thirds of Republicans and only one-third of Democrats agreed that America has changed for the worse. As for the U.S. becoming a non-majority White population, 6 in 10 Republicans said it is a bad idea, while only 2 in 10 Democrats said the same, so cultural change is a real problem.
This is another question Pew asked. What about America's openness to the world? Is it essential to who we are as a nation or is it a risk that we will lose our national identity? In 2019, 57% of Republicans said it is a risk that we are going to lose our national identity. 86% of Democrats said it is not a risk to our national identity.
This one is profound. Among White Republicans, only 16% said that there is a lot of discrimination against Blacks, while 66% of White Democrats said so. When talking about discrimination against Whites in the United States, 21% of White Republicans said there is a lot, while only 4% of White Democrats said so.
How is TRUMP doing? A recent Gallup survey goes back to his first full month of his presidency in February, 2017, and shows his support among Republicans is incredibly strong and unwavering. Among support for TRUMP among Democrats, it was 9% in February, 2017, and it is 10% today. It has not changed. The only change has been among independents which is up and down. A new CNN survey showed that 39% of the Americans approve of TRUMP, which is actually relatively low nationwide. He has been in the low 40s and has kind of dipped down, but I predict he will go back up. There have been dips before and he goes back up.
The one really strong thing he has going for him is that people believe the economy is better under Donald TRUMP; 44%, compared to 23% who do not. However, it is overwhelmingly partisan between Republicans and Democrats. If you compare his approval rating on the economy, with his approval rating overall, his approval rating on the economy is better every time. It is what keeps his numbers up, which is why he is so worried about the economy. I think he intuitively understands that if the economy were to turn south sharply, his support might collapse. In a Pew survey, 49% of people liked the way he handled the economy and the way he handles trade.
Finally, I think the outcome of the 2020 election will depend on turnout. I am embarrassed to say only 55.7% of Americans voted in the 2016 election. Whites vote at a much higher rate than Blacks, Hispanics, or Asians. Even though in the 2018 election, there was a dramatic increase in turnout from 2014, Whites still outvoted minorities. In the 2016 election, minorities did not turn out at the same rate they did for Barack OBAMA. They were less enthusiastic about Hilary CLINTON, so enthusiasm is another big issue. Through surveys, what you find is that enthusiasm among Democrats is way up. That should be good for the Democratic candidate, but enthusiasm among Republicans is also up.
One big point is the youth vote and getting young people involved. Of course, they should be involved. Historically, young people in America have always voted at a lower rate than older people. The current young population in America is less engaged than my generation was when we were young. In the first three elections in the United States where the millennials could vote, they voted 20 percentage points less than my generation did at the same age. This is a significantly lower participation rate and it should be a troubling sign about democracy. While millennial participation went up 20 points between 2014 and 2018, which is a huge jump in one election cycle, they still voted 22 points less than baby boomers, so they still have a long way to go. So if young people turn out and minorities turn out, Donald TRUMP is in trouble.
Q1: Presidential approval ratings generally fluctuate, so how do you explain the stable approval rating of President TRUMP?
The short answer is that we do not really know. My sense and I think the sense of most people is that there has always been partisanship in politics, but that partisanship is worse today than ever in modern times. For reasons that we cannot fully explain, people seem to increasingly derive a sense of identity through their party affiliation.
In modern American society, church participation is down. One in two marriages fail. There is great mobility in the United States and many people do not die in the community they were born in. Economically, that is good, but psychologically, that may not be so good because you lose your sense of community. Jobs are no longer stable, and you can expect to have roughly 15-18 jobs in your lifetime. So one way to describe the American psyche is that it is kind of rootless.
Some people believe that human beings need to have a sense of identity. What happens if you can no longer say, "I am a Catholic" or "I am a Jew." 40% of all Americans change their religion in their lifetime, but when you look at the numbers, it is not that you are born a Methodist and you die a Presbyterian; that is not change at all. But today many Americans are born a Jew and you die a Buddhist, or you are born a Catholic and you die an Atheist. Even if you do not practice your religion, it helps define who you are.
Some people believe that politics has become a source of identity. Unlike in the past when we might have believed, "I am against abortion and I am for low taxes, so I guess I had better vote Republican." Now, it may be increasingly, "I am a Republican and I derive my sense of identity from being a Republican, so I guess I am against abortion and I am for low taxes." It is the flipside of what we might have expected in the past. I think there is some power to that argument and it helps explain why TRUMP, no matter what he does, has supporters. "He is my guy so I have to vote for him." That seems to be more entrenched today than it has ever been. If you are a Republican because you are for low taxes, maybe I can have a discussion with you and convince you that we need to raise taxes this year. However, if I am asking you to change your identity, it is a much harder thing to do and much less likely to succeed. As a result, I think this polarization may continue in the long-term.
Q2: If identities are needed for communities, I think we should look at the trend in urbanization separately with people who are living in rural areas, small cities, suburbs, and big urban areas.
You hit on a very important issue. In the U.S, there is a growing divide between values and attitudes of people in rural areas and people in urban areas. If you ask a series of values questions, the difference in values between people in rural areas and urban areas is enormous in the United States. It is not just "Who are you going to vote for?" but "How do you feel about abortion?", "How do you feel about immigrants?", "How do you feel about gay marriage?", and "How do you feel about climate change?" It goes on and on and on.
Steve BANNON, who advised the President, would make speeches about globalists versus nationalists or whatever term he preferred. The reality is that it reflects levels of education. People in urban areas are more educated. They tend to be richer and have a better income. They are exposed to more. Their surroundings are likely to be more diverse and they are more likely to see women in the workplace.
You also cannot underestimate the growing influence of conservative media. I would bet money that FOX News viewership is higher in rural areas than it is in urban areas. So "Where do you get your information?" and "What do you hear?" are important questions to ask. I was born in a small town in Pennsylvania and I left when I could and did not go back. People who are better educated, more ambitious, and worldlier left. The people who stayed, voted for TRUMP.
Just to give you a personal aside about the mentality of the people in these little towns, my father fought in World War II in Europe in the frontlines. When I was a junior in college, I said, "I want to go and study in Paris." Well, my father looked at me and in all seriousness said, "Why would you want to go there? I was there and I did not like it." I said, "Dad, they were shooting at you." He said, "Yeah, but I still did not like it." The U.S. is much more worldly than it was in the 1920s or 1930s, but there is still that divide.
Part of it is explainable by the fact that we are a continental economy. We are one of the least integrated in the global economy, even though our exposure to the world ohas increased dramatically. You can travel 3,000 miles and still stay in the United States, so I think it is very easy to not be a globalist in the United States. The reality is, if you are sitting here listening to me, you are a globalist. You would not come and listen to some boring person talk about trade and foreign policy unless you were a globalist, which means that you have a real difficulty understanding these other people. It is hard to understand the people who stayed in the little town. Then you have Donald TRUMP in the United States saying, "I can fix this for you. I can take you back to a time when you were successful." TRUMP has even said in his speeches, "When the Democrats come after me, they are coming after you." Think of that. It is us versus them. All politics is to a certain extent that, but this is an extreme. And yet he is NOT one of them. He is a billionaire that grew up in New York City. That is one of the more inexplicable things, but he is a good politician and we should not underestimate him.
Q3: I am very interested in America's view on climate change. Why is there such a strong partisan divide? Are the people that do not care about climate change not affected by hurricanes, floods, and droughts? It is basically red states versus blue states. Is it a reflection of the damage of real climate change or is it that red states are dependent on gas, coal, and other fossil fuel industries. What are the reasons?
I think it is all the things you cite. For example, a coal-producing state like Kentucky being worried about coal jobs makes some sense. Although, I think it is probably best explained as a purely partisan identity. The leaders of the Republican Party tell [them] that climate change is not true. If [Republicans] believe it is true, then [they] have to deal with the dissonance in [their] brain because [that person] is going against tribal allegiance and [they] have to think about doing something about it. In a way, I think it is just easier, psychologically, to say, "No, it is not happening."
TRUMP says the weather always changes, but it isn't just the weather, it's the climate that is changing. Weather and climate are two different things. Whether this dissonance can remain once the evidence of climate change continues to grow, I do not know. Let us assume the Democrats win and the Democratic base says we have to do something about climate change. Remember that the Paris Agreement, as important as it was, was insufficient. We would not slow the warming enough, so we have to do more. Paris was a first step and we should not have pulled out. We have some really tough choices to make about carbon taxes. Do we have to have at-the-border carbon taxes if stuff is produced in China? It is carbon-intensive and now we are buying it and we have just exported our carbon production somewhere else. The reality is that the TRUMP administration is going to make it harder for climate change if the Democrats get into power. The Republicans have announced that they want to stop improvements to fuel economy for automobiles, for example.
Fuel economy in automobiles has gone up dramatically. Even though the automakers all say they want to continue to do this, the TRUMP administration just announced recently that they want to stop the improvement of fuel economy in automobiles, and to roll back environmentally friendly regulations for lightbulb production, etc. There is going to be a lot of things to undo before you can start to do new things, and the things that he has undone were not sufficient in the first place. That is just one of the challenges around climate change. Frankly, people say it is a huge problem and that we have to do something about it. However, I predict that when we finally begin to address it, support for doing something about it will go down because people will say, "Oh, you meant that? You meant that I have to take public transit now instead of drive?" Then you get into trouble.
Q4: I am very interested in the sort of movements in terms of trade and investment. You mentioned that American people dramatically fear social changes rather than trade or investment. You also mentioned that TRUMP was or has been the trigger for this. Have you seen any previous sort of movement like this?
If I left the impression that he triggered this; no, Trump did not. Although, I think he kind of understood it in some way. Remember, he was a real estate salesman. You would come to him if you want to buy a house or an apartment or something. He then kind of tries to figure out if you want a bigger bathroom or if you want two bedrooms, and tries to give you want you want and tell you it is the best thing ever. I think that is his skill as a salesman; understanding the customers' inner needs and desires; in this case the voters. These concerns have been going on for a long time. He just kind of crystallized all of it.
There have been American candidates for president in the past who tried to take advantage of this. Ross PEROT tried to take advantage of the concern about the North American Free Trade Agreement (NAFTA). Patrick BUCHANAN was a right-wing Republican who was very worried about immigration and religion and things like that. It did not catch on but it was there before. Donald TRUMP was the first one to put it all together in a way that would allow one to actually win the nomination and then win the presidency. I think he was the one who kind of understood the world had changed in a way that Jeb BUSH, who was the third BUSH to run for president, did not understand it, and many of these other guys did not understand it.
The question is, how does the Democratic candidate appeal to some of that without appealing to its worst aspects? I do not think you will see a Democrat being a demagogue the way TRUMP has been, but certainly Elizabeth WARREN and Bernie SANDERS are both populists; anti-establishment, anti-Wall Street, and anti-big business. If one of them is the nominee, that is going to be part of the Democratic program and appeal. Joe BIDEN is more of a centrist and more moderate. His idea is that we can go back to the OBAMA era when everything was fine. The problem is everything was not fine then. The World Trade Organization (WTO) was broken before TRUMP made it worse. We had a problem with China, even though TRUMP has arguably made it worse. The Paris Agreement was not enough and we are going to have to do more. I am not sure that going back to the status quo ante is adequate, although it might be enough to get elected. It seems to be Biden's strongest appeal that he will go back to the calm days of the OBAMA administration, so we will see.
Q5: You mentioned that trade and investment issues are still the issues with the least interest among American people. That is interesting to me because whenever I talk to American people, they are very much concerned about trade and investment, for example with China and cyber espionage which is the trigger for this. Also, the Office of the United States Trade Representative (USTR) has started to be dramatically and aggressively involved in this.
Cyber is the biggest international concern of the American public today. It has shot up dramatically and you are right, it has a lot to do with China. I understand why foreigners think that trade is an important issue. You are getting beaten up by the President and beaten up by the USTR. It is not that Americans are against that; they love to be tough with foreigners. 80% of Republicans think foreigners are ripping us off, but when you give people options and tell them to rank this in relative importance, cyber is high. It is also Russia, but it is mostly China. However, domestic issues are still far more important in the U.S.
The interesting thing about the cyber issue is that the question is always phrased as cyber security. What does the average person mean by that? Are they afraid that the Chinese are going to turn off the lights in New York City or is it that the North Koreans stole their credit card information? My guess is that it is the latter, that you had a number of very big breaches of security. When people have their credit card information stolen, it is very personal. It has nothing to do with the broader world and dangers, it is just, "Oh my god, I had to get a new credit card and I had to worry that somebody was charging things on my credit card." That is why I think cyber security has become such a big issue in the United States. It is a threat, but nobody has turned off the electricity in New York City, yet millions of Americans have had their credit card information stolen and the assumption is that it was by foreigners.
Q6: What do you think about the tragedy of the Doha Round in the WTO, regarding global rules such as monopoly policy and anti-monetary policy, including anti-bribery corruption? The origin of the tragedy is that the U.S. and Japan pushed for the inclusion of anti-bribery, corruption and monopoly issues by authoritarian, dictator countries led by communist parties. China and Russia urged that it is the conspiracy of Western nation states. What do you think about that?
On the issue of anti-bribery and anti-corruption issues, I think it is hard to say that they do not exist. They obviously exist to a huge degree and we should have rules. Can those rules or that effort be used to create preferred advantage for one country over the other? The reality is that the corruption is linked to the politics of countries. You are asking countries to crack down on some of the base of their own power, and I do not know how we can get past that. Clearly PUTIN's power is intimately linked with the corruption of the system, and to a certain extent, I think it is the case in China as well. So while we are right intellectually, morally, and economically to demand an end to corruption or at least a limitation of corruption, why in the world would PUTIN crack down on corruption? That means cracking down on his own source of power. We should fight the good fight but I think we would be successful at the margins and at the edges, but not at the core, because it is too entrenched.
On a broader scale, what the TRUMP administration is asking the Chinese to do is change the Chinese economic system. Do I think they are actually going to do that? We had the Structural Impediments Initiative with you folks in the 1990s. Part of it was we wanted you to change your system to be more like us. You changed some things because it was in your self-interest to change, but you did not change as much as we wanted you to change because what you did worked for you and it was part of your culture. I think we have to be very humble. It raises the broader question of how do we have an integrated global economy when systems can be so different. Can we just live with the differences or at some point can we not? I am sure all of you are in favor of integration and globalization, but are we running into the limits of globalization? Are there things that we just cannot integrate because they are too deeply rooted in the culture or history of a country? Maybe they will change over 100 years, but they are not going to change over the cycle of one administration or one negotiation.
Q7: Two out of three cyber-attacks in Japan in the field of technical attribution are from China. The rest are from Russia, North Korea, and the Islamic State. What do you think about that?
We are all more vulnerable because we are so dependent on data and the internet. The question is can we stay ahead of the hackers. I think that is very hard to do.