Opinion

Trumponomics: Time to Cry for America

If you are searching for a precedent for the kind of politics and economics of the next White House, look to Argentina’s Juan Peron.

Juan Peron
Wikimedia Commons

Donald Trump has been compared to Hitler and a host of other figures from history’s rogue gallery, but his policies and political style probably most closely resemble those of Juan Peron, who ruled Argentina in the 1940s and ’50 and briefly again in the 1970s.

Outside of Argentina, Peron is best remembered as the husband of Evita, the heroine of the hit musical. The fictionalized account of Mrs. Peron portrayed her as gutsy, glamorous and tragically dead by age 33. But the fact is, the years her husband ruled were nothing to sing about. They were a disaster from which the country has never quite recovered.

Let’s start with Peron’s political style. There, they differ. Peron was a military man, not a realty developer and reality-TV star. But like Trump, he was an outsider who obtained power and kept it by taking advantage of the media revolutions of their day – Trump by bypassing mainstream media in favor of Twitter & Company to reach voters directly, and Peron, through the new-fangled television. His 1951 re-election was the first covered by television in Argentina and his inauguration was broadcast live.

Both have glamorous wives and in Peron’s case, Evita took on a high-profile political role.

Loathed by the establishment

The media component of their politics is critical because both men were loathed by their country’s establishment even though they both arose from it. Trump is a billionaire and businessman but he’s hated and feared by Wall Street and America’s business class, not to mention the chattering class. Peron was a military man who was eventually overthrown by the army. He was initially backed by labor unions and the church but eventually alienated them, too. The rich always despised him.

Peron stayed in power as long as he did by appealing directly to the people with big rallies and the deft use of a cowed press, launching tirades against his and Argentina’s enemies, which meant anyone who opposed him. He usually eschewed real violence, but he didn’t spare his enemies his rhetorical violence. Does this sound familiar?

Both men’s populism extended to their economics – and that’s the real danger of a Trump presidency.

White horse in the White House?

America’s democratic institutions are stronger than Argentina’s were 70 years ago. The media, the courts and Congress should be able to weather four years of a Donald White House. The economy is another story.

Argentina today is regarded as a place of perpetual economic crisis, with chronic slow growth and unpaid debt. But it wasn’t always that way: From the last decades of the 19th century until the Great Depression, Argentina was growing quickly and was among the world’s wealthiest nations on a GDP per capita basis. But the trauma of the 1930s created an atmosphere of economic and social distress that led to military coups and finally to the rise of Peron.

Ordinary Argentineans had had enough of the rich and powerful and adored Peron as the man on the white horse who would right the wrongs that had been inflicted on them – raise wages, reduce social gaps and guarantee them the good life they felt had been unfairly snatched away from them.

Trump has played on the same kind of fears to the equivalent social class in 21st-century America – the working class whites who have seen their income and social status diminished, or so they think, by immigration, free trade and the greedy rich, over the last decades. They also want change and a powerful leader who understands their grief, takes no guff and will sweep away their problems.

What Peron did: Keep his promises

And this is how Peron did it. He actually did invest in social programs, forced employers to raise wages, expanded health care and education, and oversaw a big increase in industrial production; likewise, he was anti-trade, and created an autarky that discouraged imports.

For a while it worked. Argentina’s economy grew 25% in his first two years in office. Wages climbed 22% in four years and the workers’ take of national income climbed from 41% to nearly half.

Then it all fell apart. Rising wages and the decline of competition from imports drove inflation, which reached 50% in 1951 and made Argentinian industry uncompetitive in world markets. By 1955 Peron had been chased out of office by the army, but he left a legacy of brainless intervention in the economy, class warfare and a dysfunctional political culture that last to this day.

Still beloved by the Argentinean masses, Peron was invited back in 1973 and though he died shortly afterwards, Peronism remains a political force in the country today.

How Trump will actually go about addressing the grievances of America’s masses in the hyper-charged political environment he helped to create is less clear. His economic program, such as it is, mixes Republican capitalism with populist ideas that would please Bernie Sanders, if not Juan Peron.

I suspect he’ll drop the Republican bits of free markets and low taxes for the populist side of his agenda. Not because it’s good economics but because it’s good politics for a man who wants to be adored by the public, and gets his jollies from sticking it to the establishment and wreaking revenge.

In this case, the establishment happens to be his own party, which controls both houses of Congress and will be loath to do things like renegotiate trade treaties or end tax breaks for the super-wealthy on carried interest. What better way of showing them who’s boss than going over their heads Peron-style with an agenda that makes them cringe, but wins him the adulation of the cheering masses?

The U.S. economy does face serious problems. Inequality is growing, the standard of living for most Americans is stuck, productivity growth – the key to economic growth – is stagnant, and technology is creating upheaval in the job market. But the prescriptions Trump is offering are mostly wrong, and as Peron discovered wrong prescriptions can make the patient sicker. Four years or eight years of Donald-nomics could easily turn out to be lost years for America, and perhaps irretrievably lost.

Worse still, the angry and irrational political culture Trump has had such a big hand in making may survive him, as did Peron’s in Argentina. Picture a half-century from now a Chinese audience – smug and satisfied knowing they are citizens of the world’s No. 1 economic power – enjoying the hit musical Melania, a fanciful story about a glamorous woman who with her husband presided over the ruin of her country. It’s enough to make you cry for America.