The Anger of the Forgotten Americans

by Tor Dahl

Anger is prelude to courage. When a population rise in anger, rules are broken, change happens, and elites are moved aside. To quell anger, its root causes must be found and addressed.

Economists look to history to learn when anger points the way to positive change.

In my home country of Norway anger drove half the population to leave a country that was fiercely loved by all who left. They mostly landed in the United States, and they came in order to be free, to be safe, and to be justly treated.

It has been said that no rich Norwegian ever arrived at the shores of The Promised Land. But those who came, did as well, or better, than those who chose to stay behind. The causes of the anger that drove my ancestors were addressed by the new country, where land with more than six feet of fertile top soil replaced the six inches of top soil they had left behind. When they were disdained by the citizens for they lack of education they built their own schools and colleges. When they had difficulties entering big business, they formed their own cooperatives that became large and successful. When healthcare became an urgent need, they build hospitals and clinics. When they needed spiritual help, they built their own churches.

Like the immigrants who left Norway, a similar anger is affecting a large number of Americans who are left behind in their own land. The roots of their anger are the same. Here is a list.

1. They have not been justly treated.

If you read the US Tax Code, you will learn that the wealthier you are, the less taxes you pay as a proportion of your income.

The poorer you are, the more taxes you pay as a portion of your income. 

In The Old Days workers' pay increased whenever workers became more productive. That ceased to be the case when workers lost much of their influence: Their unions were decimated, their productivity improvements were redirected to the owners, and wages stagnated. Income inequality grew, health care bills could no longer be paid in full, college education was no longer affordable, and the GI Bill that created the American Middle Class was no longer available.

Could this have been avoided? Of course. Most developed countries stopped these trends from taking hold, but the forgotten Americans were left behind.

2. They no longer felt safe in their lives and work.

Stagnating wages combined with trade agreements and lower foreign wages. It resulted in exporting American jobs to developing countries.

Could this have been avoided? Certainly. Other developed countries invested in retraining and education for their workers that would lead to higher productivity and better wages. But the forgotten Americans were left behind.

3. They felt that they have lost their freedom.

How do you lose your freedom? When one wage is not enough to pay for The American Dream, and two jobs are needed, maybe even three. You may be making a living, but you don't have a life. You only have time for work.

Could this have been avoided? Of course. It is not possible to hire anyone in Norway for less than $25.00 per hour. In addition all education is free for everyone, so is healthcare, and you would have added to both your freedom and safety if this had happened in the US as well. But the forgotten Americans have been left behind.

Freedom, safety and justice are what attracted my ancestors to come to the United States.

As an economist I always look for what we can do to add value. 

If we can predict what would create the highest incomes, that might help raise the stagnant wages.

I asked Loretta Hazlett who heads our staff if she could predict what would produce the highest income within about 100 countries, and I asked her to start with how free, safe and justly treated their inhabitants were.

She found the data for all the countries when it came to justice and freedom. There was no index for measuring safety, so she developed one. It included life expectancy.

She inserted the data for for the 100 countries, describing how free, safe and just their inhabitants were. Then she ran what is called a multiple regression analysis to see if this could predict, with precision, how high the average income would be for each country, and see if that was statistically related to freedom, safety and justice.

The analysis produced what is called "the R-squared", a measure that tells us how well these data could predict on a scale of 0 to 1. Economists usually would be happy if a regression would show an "R-square" of .30. BUT THIS REGRESSION SHOWED AN R--SQUARE OF .96!

It is possible that we may have caught the sources of the anger of the forgotten Americans. And it is possible that the most important ways to address them is to take steps that will increase their freedom and safety and treat them more fairly. Doing that will also increase their income maximally.

I think it will work. In fact I am sure of it! Or, 96% sure to be more precise.

It could make this country the greatest country on earth; the most free, the safest, and the most just country in the world, and with prosperity for all to boot.