The resonance of Trumpism is a product of neoliberalism – people who have been harmed most by policies like trade liberalization believed the system was rigged, and started to support a political outsider

Joseph Stiglitz, “Introduction,” in People, Power, and Profits: Progressive Capitalism for an Age of Discontent, Penguin Books Limited 2019, non-paginated pdf.

The failure of our elites

While it’s hard to understand why so many support the attacks on the very institutions that are at the core of our economic progress and democracy, it is actually easy to understand why large parts of the country would turn against the “establishment” and their views on globalization and financialization, and more broadly on the economy. The elites (in both parties) made promises about what the reforms of the past four decades would do—and what they promised was never delivered.

The elites had promised that lowering taxes on the rich, globalization, and financial market liberalization would lead to faster and more stable growth from which everyone would benefit. The disparity between what was promised and what happened was glaring. So, when Trump labeled it “rigged,” it resonated.

No wonder that in the aftermath of the economic failures we have described—liberalization and globalization brought wealth to a few but stagnation, insecurity, and instability to the rest—there developed a skepticism of the elites and of the knowledge institutions from which they had supposedly derived their wisdom. That was a wrong conclusion: good academics had pointed out that globalization could actually lead to lower wages of unskilled workers, even adjusting for the lower prices of the goods they purchased, unless the government took strong countervailing measures. They had pointed out that financial liberalization would lead to instability. But the cheerleaders of globalization and financial market liberalization drowned them out.39

Whatever the reason,40 we neglected those who suffered as the country went through the process of deindustrialization. We ignored the stagnation of wages and incomes, and the growing despair. We thought that the “coverup”—a housing bubble that created temporary jobs in construction for some of those who had lost industrial jobs—was a real solution. =