That Cross of Gold

In the wake of the Great Recession, I had been charting employment growth/decline monthly on LaMarotte. I’d started in March 2011. For years after that, I used to wonder why I saw almost no sign of a popular upheaval over the sluggishly-performing economy. But the upheaval did finally came with the nomination/election of Donald Trump in 2016. And suddenly everyone is using the word populism.

To be sure, it is a euphemism. In a country where one may only refer to the population as “middle class,” it is painful for pundits to speak of the lower class. To call something a “populist revolt” is more acceptable than calling it a “lower class revolt.” But one thing is certain. William Jennings Bryan’s famous Cross of Gold plays a major role every time that populism rises to the surface. If you ask Google NGram (the word-usage application) to chart “populism” and, say, “tea party,” you’ll discover that until 1962 “populism” was much less used than “tea party”; beginning that year, however, “populism” began to soar in printed mentions so that by 2008 it was used five times more often than “tea party”; and since then (NGram only goes up to ‘08), it must have had an even more sharply rising usage.

I note that until 1962 indices of productivity and real hourly compensation were essentially the same (since 1947). They begin to diverge in 1962, with productivity higher (and higher, and higher) as time advances. The 1960s mark the start of an economic divide—which grows and grows…and grows. And so does the use of the word populism.

Bryan said, in a speech at the Democratic National Convention of 1896, “you shall not crucify mankind on a cross of gold.” The context here was monetary policy, specifically money supply. The United States, operating on the gold standard, had an insufficiency of money. Bryan advocated bimetallism, meaning the use of silver along with gold to increase the supply—which would have benefitted the agricultural producers, a vastly larger segment of the population then than it is today. The subject of bimetallism deserves its own entry; for now, let’s just say that the gold standard favored East Coast money interests; bimetallism would have helped (let’s call it) the middle class.

Many parallels mark the 2016 and the 1896 elections. Little-known Bryan emerged as a very popular figure and won the Democratic nomination. But he lost the election (no Putin helped him, I suppose; Nicholas II ran Russia then). The gold standard was kept in place. William McKinley won the election. (We disclose here voluntarily that our last address was 259 McKinley.) Another parallel was that a large but little-heard portion of the population—the red states of that time—were disaffected but not as successful as the voters of the same type that managed to capture the presidency in 2016.

Populism? The lower classes in revolt against elites—after long stagnation and suffering. The Golden Cross just got too heavy. Amazing how much 1% can weigh. The ultimate outcome? Who can foretell the future?  One of the interesting observations for me is that the “rage” you expect to see by studying statistics is not necessarily visible until some voice starts shouting it to mobs. Then we have populism. And it can win even without the majority of the popular vote.