Does the United States Have A “Poland Problem”?

It certainly looks like it.

Again, for anybody not having seen one of these, a “Poland problem” involves an apparent disconnect between economics and politics, nations with reasonably well performing economies where the populace becomes unhappy and supports opposition, especially “populist” nationalist authoritarian candidates, with 2015 victory in Poland of the Law and Justice Party the poster boy for this, even though Poland has been one of the best performing economies in Europe for quite some time.

The funny thing is that we may be seeing two separate rounds of this in the US. Thus we had Trump defeating Hillary even though the economy had been steadily growing for many years, unemployment steadily falling, and the stock market rising.  Now that Trump is in he has been trying to assert all this that has been going on for some time is due to him, which is silly apart perhaps from some of the upward stock market moves thanks to his pro-corporate profits policies.  But his popularity has fallen and is at lows not seen in many decades for a recently installed president.  Indeed, increasingly columnists of various stripes have begun to notice this disjuncture, alrhough they have not been providing a name for the syndrome as I have with “Poland problem.”

Of course it can be argued that things have not been and really are still not all that good economically.  We all know that that the widely touted unemployment rate overstates the strength  of the labor market given so many having dropped out of the labor force, and upward pressure on wages has remained weak, despite some improvement on that front recently.  Of course, Trump, having heard the story about labor force participation claimed at one point while running that the UR was really 42% and also  accused the BLS of cooking the unemployment numbers for political reasons, only to turn on a dime after getting in office to tout the low and falling standard UR numbers.

As it is, there are major problems in the US economy, deep inequality that has steadily worsened, entrenched poverty, especially in some regions and among certain groups.  But these are phenomena long in place.  Thus it is well known that supposedly the swing to Trump came from long building unhappiness in the rust belt Midwest, hollowed out by import competition, something that has been going on since at least the late 1970s.  It is unclear why that unhappiness has exploded now to support a racist authoritarian nationalist, but it has, and so  far it looks like Trump may be hanging on to this group better than some others, such as suburban women, even as he has done little for them.

More broadly internationally one can attribute much of this sourness to the long and slow recovery from the Great Recession.  Global growth has simply been slower, so that even in nations that have done well relative to others in the past decade such as the US, Germany, and Poland, people compare what has gone on with their own pasts, not with what is going on in other nations.  So a relatively good performance is not perceived as such, and a long building sourness rises to the surface.  We have not seen the end of this.

Barkley Rosser