In late February a new book by journalist Paul Waldman and University of Maryland professor Thomas Schaller called White Rural Rage hit the bookshelves. The book was a compendium of Hee Haw! caricatures of hayseed America mixed with a blunt diagnosis: rural Americans are disproportionately racist, conspiratorial, authoritarian, and supportive of political violence, key culprits in the rise of Donald Trump. "Rural Americans," Waldman and Waller wrote, "are overrepresented among those with insurrectionist tendencies."
Media response was instantaneous and ecstatic. Morning Joe hyped White Rural Rage as if it were a cross of What Happened and The Grapes of Wrath; Mika Brzezinski sat rapt as Schaller described rural voters as "the most racist, xenophobic, anti-immigrant, anti-gay geo-demographic group in the country." Echoing one of the book's constant refrains, Paul Krugman at the New York Times wrote about "The Mystery of Rural White Rage," complaining about the illogic of rural white disdain for Democrats, while Salon's Amanda Marcotte after reading it felt emboldened to take off the "kid gloves" and pop rural America's "racist, sexist, homophobic bubble."
I was grumbling about this book when author Chris Hedges connected me with Les Leopold, director of the Labor Institute, who'd just written an opposite sort of book called Wall Street's War on Workers, which turns out to be a thorough deconstruction of most of White Rural Rage:
Leopold has spent much of his career agitating for union causes. and though he's persistently criticized the Democratic Party, it's because he's chiding them for too often advancing interests of wealthy donors over workers, which he sees both as a moral problem and bad electoral strategy. Wall Street's War on Workers goes further, however, penetrating one of the chief media deceptions of the 21st century, namely that working-class voters are driven by racism and xenophobia, and not by a more simple, enraging motive: they've been repeatedly ripped off, by the wealthy donors to both parties.
As we discuss below, Leopold is going to have a hard time getting booked on Morning Joe or receiving shout-outs in Paul Krugman columns when his book features sections like "The Mischaracterization of White Working Class Politics" and "The Continued Mischaracterization of Populism." The book is in the tradition of Thomas Frank's seminal history of anti-populism, The People, No, which described the original Populist Party clashing with New York banking interests on issues like free silver, and quickly found itself caricatured, forever, as bigoted, stupid, and dangerous. Leopold is telling a similar story, but is more focused on the idiosyncrasies of the current clash, which he sees as rooted in competing narratives about a number: 30 million, his estimate of the number of laid-off Americans since 1996:
As for where he got the number, he explains in a footnote that the "Bureau of Labor Statistics' mass layoff database records 20.2 million layoffs for the years 1996-2012," 2012 being the last year the stat was calculated. "If layoffs continued at that rate through 2022, the total number of layoffs would be 32.8 million." Even 20 million in 16 years is a huge number. But it's the often unexplained reasons for those layoffs that illustrate the enormity of the gulf of political misunderstanding between college urbanites and rural America.As Wall Street has routinized the financial strip-mining of productive enterprises, more than 30 million of us have experienced mass layoffs. And even more have felt the pain and suffering as our family members lost jobs.
Middle America has been screwed over in a hundred ways since the mid-nineties and even before. An even partial list of the scams I had to cover in the post-'08 period would turn this review into a novel, but a lot of investment schemes targeted middle-class, suburban and rural Americans (elderly urban minorities were also common marks) with a little bit of savings, and/or the institutional investors that held their retirement monies. The passage of NAFTA led to a lot of job losses, but a bigger cause is a phenomenon I've covered here and which Leopold tackles: stock buybacks.
Buybacks happen when big companies use cash or borrow funds to buy their own stock on the marketplace, then retire the shares. Both the buying and the retiring tend to drive share prices up, which is a good thing for executives compensated in company stock, but less advantageous for those not privy to the company's plans. For this reason, the SEC barred buybacks as manipulation until 1982, when the administration of Ronald Reagan instituted rule 10b-18, creating a "safe harbor" for such transactions. Leopold, examining a Department of Defense study of what contractors did with excess cash when they had it, writes:
The implications of this are crucial. As Leopold notes below, most people assume layoffs are just cold hard economic reality, the unavoidable result of market forces taking their toll on uncompetitive businesses. But it's not always true. Healthy companies will cut jobs just to up share prices for executives, who increasingly are compensated in company equity. Leopold cites a stat saying 85% of executive compensation comes in the form of stock awards, creating massive incentives to spend on buybacks. I've seen both higher and lower numbers, but even the low end (Harvard Business Review put the number at 59% globally and 75% in "the Americas") is significant.Defense contractors increased their stock repurchases and dividends to shareholders by 73 percent in the last decade... Where to get all that money? For defense contractors it's a no-brainer — take it from our tax dollars.
For the business sector, it is often extracted from the troubled companies through cost-cutting — including mass layoffs, wage and benefit cuts, shifting production to low-wage areas, and cutting spending on things like health, safety, environmental safeguards, and research and development.
In the end, Leopold posits that while Democratic voters believe they need to shift to more illiberal positions to win working class voters, they'd more likely need to emphasize mass layoffs as a root of rural anger, which would force them to choose between Wall Street donors and rural votes. Survey findings turned up the following two conclusions, for instance:
- Some 10 to 25 million white working class people are liberal on social issues but don't identify as Democrats.
- These non-Democrats are extremely worried about trade deals and imports, which likely reflects their concerns about job loss and job insecurity.
This book prompted some additional thoughts for me which I'll publish separately, but I'll give way here to Leopold himself, with whom I had a long discussion:
MT: What prompted you to write the book?
Les Leopold: It's almost embarrassing. I'm a graduate of Oberlin College and in the middle of the pandemic they decided to lay off like 105 UAW blue collar workers that worked in the cafeteria and then cleaned after the students. I just couldn't figure out why they did it. A bunch of us got involved in trying to stop it, and of course we failed, but we raised a lot of money for the workers. But what struck me was their stories when they started to talk to me about what they went through and the disappointment, the hardship and the crushing depression that they had.
And it was totally needless. I mean, I don't even think they're going to save any money. They went to some subcontractor, they had some sort of bullshit argument. So it caused me to start thinking: how big is this mass layoff problem? It turns out it's a huge thing and it's metastasized all through the economy. I can't think of a sector that isn't going through mass layoffs —
MT: Sorry to interrupt, but wasn't a key element of the surprise of that story was that Oberlin is like the cradle of progressivism, and the justification didn't seem to be there?
Les Leopold: We couldn't come up with any motive. They had this whole thing about how they're going to have to tighten their belts and all that, and they had this thing called "One Oberlin," and it included everybody in Oberlin, students, the faculty, etc., except the workers. In other words, it was going to be collective austerity, but what we're going to do is tighten our belts by screwing the workers. We happened to have a reunion at that point and I was out there and tried to asked them: "Well, how the hell can you do this?" They said, "Oh, they have contracts. They're not allowed to make any concessions." Well, give me a break. What planet are you guys on? Anyway, it just got me going. If this liberal college could do it - and they were really behaving just like every other corporation - then forget about it. That's what got me to start looking at mass layoffs. What is that process?
MT: What's the biggest misconception about layoffs?
Les Leopold: Most people think that mass layoffs are inevitable, right? They're the result of technology, globalization. You can't do anything about it, and that's why nobody cares about it. Oh, AI is going to come in, something else is going to come in. We're going to lay off workers. You can't do anything about it. And all you have to do is open the hood a little bit, and what you'll find behind most mass layoffs is a stock buyback and/or a leveraged buyout. They've taken a shitload of loans using a company as collateral and now to service those loans, you lay off a couple thousand workers and you're all set. It's remarkable. And then the BS that they tell working families is, "don't worry, your kids, they're going to get educated. They're going to get high-tech jobs." But last year, the high-tech industry laid off 262,000 workers, and so far it's 57,000 this year.
MT: Yikes.
Les Leopold: These are booming, highly profitable industries. They're also the leaders in stock buybacks. The best way to pay for stock buyback is just lop off a bunch of workers. Of course you probably know that better than I do. This has been ripping through the news industry, all kinds of consolidations that go on where a private equity company comes in and the first thing they do is cut costs. Right? Lay off workers.
MT: That happened a ton of that in the years leading up to the pandemic. I think it was $2 trillion in the three years preceding the CARES Act.
Les Leopold: You think we would've all learned a lesson from the Carrier air conditioning company. Because it's a double story. First part of the story is that the reason Carrier was going to move to Mexico in 2017 was that 12 hedge funds took a position in the parent company, United Technologies. They told UT they wanted a stock buyback, so they decided to move Carrier to Mexico and that would save them like $50 or $60 million a year, and that would help finance the stock buybacks. Then Trump jumped in, stuck his foot in his mouth, but he ended up with Pence keeping most of the jobs. The polling on that turned out to be wildly popular.
You would think liberals would've learned the lesson that if you stand up and stop a plant from closing, you'll gain a lot of popularity with the voting population. Now the other interesting thing is, why did the CEO go along with this? The president of United Technology said this is his code: "I was born at night, but I wasn't born last night." They get 10% of their money from the federal government and contracts, so there's about $700 billion worth of federal contracts put out every year. Imagine if they were just told, guess what? You can't do mass layoffs if you want that.
You can try to buy people out, use some of your stock buyback money and basically entice workers to leave. But if the taxpayers are paying for this federal contract, you can't be laying off taxpayers. Can this be done? Can capitalism function this way? Well, that was the other discovery when we worked on the book. I hated to go after Bernie. Bernie and Biden did not distinguish themselves on these mass layoffs. Bernie did a beautiful ad about a mass layoff at Siemens in Iowa. I think it was during his 2019 election run. It's a Facebook ad and he just says, "Not on my shift will this happen." We give Siemens $760 million in federal contracts, they're not going to be laying off workers. It's beautiful.
Two years later, Siemens, which is in upstate New York on that southern tier right above Pennsylvania, used to be a very industrial area, is hard hit. They decide to lay off their facility there. That's 500 union jobs, another 1,200 around the country for a total of 1,700, plus 3,000 in Germany. Schumer doesn't do anything other than try to find a new company to go in there. Bernie doesn't say anything, and this is when the Democrats are controlling everything. He doesn't say anything at all. It's not his state. What happens - this is the part that kind of breaks your heart - in Germany where they have co-determination, workers have half the board seats. They go through this long investigation and they finally convinced Siemens in Germany not to lay off anybody in a compulsory way, only voluntary layoffs. You have to buy 'em out. And there were six facilities that were going to go down. They decided to keep all six open and put out a different product. No plant closings, no compulsory layoffs. What happens in the States? The woman who is president of Siemens, USA gets invited along with 10 other people to the infrastructure signing bill at the White House, and she's got the nerve to say, while she's laying off 1,700 people, that this bill is going to be great for creating new green jobs for American workers.
This breaks your heart. And then there's another one. 1,500 USW members making $70,000 a year. It's an oil and chemical plant in Morgantown, West Virginia. Those have got to be among the highest blue collar paying jobs in all of West Virginia. They're going to shut down. This is in the middle of the pandemic. They're going to shut down this generic pharmaceutical plant, move it to India. Now, workers there got very mobilized. They had all these demonstrations. They went to the governor and they said, look, why don't you just take over the plant? We'll make generic drugs for Medicaid and for the VA. We'll have great audience. No, no, no. They go to Manchin. No, no, no. They go to Biden, ask him to use the Defense Production Act. This is the time to use it. You just used it on the baby formula. Why don't you use it on generic drugs? Nope. Bernie's organization gets involved, comes to their demonstrations, does a protest letter, then silence. The Democrats don't do anything. The plant goes down.
MT: You have a chapter in there about misperceptions of the White Working Class. Can you summarize the key points?
Les Leopold: In order to make this argument, I had to do one thing. I had to convince myself and then hopefully the reader, that the impact of workers turning away from the Democrats, the white working class in particular, wasn't people would come back at me like a Krugman say, "No, no, it's not all this economic instability. It's really their anti-wokeness, their deplorableness," that it was their resentment against elites and all that stuff. I had to prove to myself that wasn't true. So there are these very large voter surveys, with 50, 60, 70,000 people, three voter surveys that track voters over time. We created a cohort of white working class people, not just based on education, but also based on income.
We looked at 23 social issue questions that were really divisive, and the white working class in fact got more liberal, not more conservative over that period. Should gay couples be allowed to adopt in the last 20 years? It's gone from 38% approval to 76% approval. They have a question there about legalizing illegal immigrants who've been here three years, paid their taxes, and have no felonies. That went from 32% support of that 15 years ago, now it's 62% support. And we compared the white working class versus white working class management on a whole slew of questions. There's hardly any difference, so you can't put it on them. And then of course for me, I couldn't help but dive into Mingo County, West Virginia.
MT: A famous place in the history of labor struggle.
Les Leopold: It's a story where the Democrats just gave the state to the Republicans. Bill Clinton got 69.7% of the vote in West Virginia, and Biden got 13.9%. What happened? So this is a white county. It's where the United Mine Workers started, home of Mother Jones, so neglected that in the 70s it took a visit from a Soviet journalist to get a bridge fixed. In the early 20th century it was under military occupation for about 10 years because there was such violence. The company goons versus the workers. And then of course, the New Deal came in. Roosevelt liberated them. They became staunch Democrats all the way really. But after Clinton, it kept going down, down, down, down. What happened between 1996 and 2016? That county of 25,000 people lost the most coal jobs of any county in the whole country. You went from 3,300 to 300. That's 3000 lost jobs out of a population of 25,000. So what in fact did the Democrats do?
They were in power for all but eight years of that period. Well, what they could have done is they could have easily gone from location to location, ask what needs to be done in this area... You want your schools redone, roads redone, mine reclamation, Internet, clean up the rivers, the whole nine yards. They could have hired 3000 people probably, and good paying jobs, put them to work. What did they do? Well, they went to the free market. They let the free market take care of it. The opioid prescription industry came in. Two small drug stores decided to go into the opioid prescription business. One of them, a guy who just got out of jail in Washington DC, came down and they got a doctor to just write prescriptions, and they were putting out a prescription per minute. Cars were lined up from a five-state area to get their prescriptions filled that they could easily get. That's what the free market brought. Imagine if you live in this county. You think, this is what government has done for me.
So this whole issue has just been swept under the rug. It's hard for me to get it out from under the rug. We estimate 30 million people have gone through a mass layoff since 1996.
MT: That number is amazing. It would explain almost the entire shift in American politics.
Les Leopold: I hate to be so focused on one force, but it's a powerful force. I mean, think about it. Look, you and I are lucky. We have skills where we can move around. It's not devastating, but can you imagine if you just go from one unstable situation to another? I saw it in these Oberlin workers. A couple of them got very anti-liberal. They used to respect this liberal college and its values, but now they've been treated like this for no reason and goodbye. They don't respect them anymore. I asked the question at a steelworkers' workshop with about 50 people in there. I said, how many people here have gone through a mass layoff. It was 48.
I just tried to put myself in the position of somebody in rural Pennsylvania, a thousand people working at a plant, and it goes down. Now you and all your neighbors are looking for a job at the same time, you're having trouble making your payments. Maybe you finally get a job at the dollar store or at the local prison or whatever, orderly at the hospital, who knows? And then something else happens and you get laid off again. The whole world seems economically unstable. How can you not blame the government for that?
MT: Let's cut to the political aspect of this. Trump in 2016 went to a lot of places that were struggling. He visited devastated areas and people would come down from the hills to watch. It wasn't so much that he had convincing solutions to anything that they were going through. He was just paying attention. Then he started adding bits to his stump speech. "Don't you see how bad it is? The jobs are going everywhere. Opiates are a disaster, right?" And then people would look up and see stories in the media saying, "Well, it's really not economics that's driving this, these people are just racist." It felt like a double whammy, a double insult. Isn't that a pretty easy political cycle to break just by talking? By listening?
Les Leopold: Yes and no. Yes, I think that you're seeing the Democrats trying to do that, but I think you actually have to be willing to take on Wall Street, and I think that's hard for Democrats to do. And I think you've got to remember Trump also had the trade issue. He out-flanked the Democrats on the trade issue, the first Republican to ever do that. The way he basically said, look, you're losing your jobs. The company would tell them, "We're moving to China, we've got to shut this plant down," or "We're moving to Mexico" or something. This had been going on for 20 years with the Democrats on the wrong side of the issue, refusing to deal with it. So paying attention I think is important. What I found interesting, this is almost embarrassing. I look at Ohio and Senator Sherrod Brown, and somebody sends me this piece that he did. Get this, it's called "Wall Street's War on Workers: Stock Buybacks."
I'm going to make sure that every government contract the company gets, they won't be able to force you out. They'll have to buy you out. Why not do that? Because they'll blow away their Wall Street support and they actually don't believe, except for maybe a handful of them, that you should interfere with the prerogatives of capital. And hiring and firing seems almost sacred to them. So if you touch that, they're going to be accused of being anti-corporate and basically ridden out of town, and they're more worried about that than they are about doing what you suggest, which is going out there and talking to people, and giving them a sense of hope about job stability. That if you elect me, I'm going to fight for this so that you don't go from job to job to job. I'm going to take on Wall Street.
MT: To conclude, I just have two really quick questions for you. First, you mentioned pundits like Paul Krugman, how they don't really believe this is an issue. Are there a lot of people in Washington who think this issue is fictional? Is it possible that it's a problem of an informational bubble?
Les Leopold: I might be more cynical than you are here. I think there's some of that bubble, but there are also certain political people who, at least in my experience with them, know there's a fair amount of job insecurity there as well. So my cynical side says they want that Wall Street cash and they want the door open for a job in the future. There are a lot of lobbying jobs, political congressional staff, members of Congress themselves. They can get a job on Wall Street. If they get a big job or they can get smaller job, a well paid job, a lobbyist, earning way more than they were earning before. So why would you want to offend these people?
I also think the other side of it is that there's a certain awe, I'm sure you saw this when we were both writing books about the crash. I mean, there's an awe of how smart these people are. So I think there's an intimidation factor: I don't really want to go to war with these people. They're very well armed, but also they're smart and they have all the best lawyers. And so I think that's one part of it.
MT: The other question is how receptive people in media have been to this book. I just can't even imagine what the Morning Joe interview would be like if you tried to say any of these things. I think it's a message that people have to hear, but is there any way to get past the Current Thing attitudes on this, which insist the entire story is racism, bigotry, etc?
Les Leopold: You hit it on the head. It is not a story. People want to hear what the media wants them to hear. That book White Rural Rage that came out. That book drove me crazy at first. It also starts in Mingo County, but the way they tell the story was that when Obama got elected, that's when they lost the vote.
MT: Is that true? Obama did really well in a lot of these places.
Les Leopold: Obama got in his second term, right? Obama got three times the percentage that Biden got, but they ignore that. So what they do is they create a new group of people called white rural people, not even working class. It's white rage of the white rural people. It's like if you don't live in an urban or suburban area, you're part of this white rage. That sells, that gets them on all the talk shows. So we're struggling. And that's why I really appreciate getting an opportunity with you because it is very hard to break through. I don't fit in there. This story doesn't fit in. I'm hoping though, if I were talking on the Morning Joe show, I'd be saying, Hey Joe, I'm not going to talk to you about this. But there are a lot of people that work in your network here worried about a mass layoffs.
MT: I think they still have a NABET contract.
Les Leopold: And what protection do they have against it? I mean, why so much insecurity all over the place? And if you can get them to just admit that it's a big problem, then you can have an argument about the proper solutions.
MT: Les, I appreciate it. Good luck with the book.
Les Leopold: Thank you!
We are dealing with crime families of the uniparty. Are there human values involved? No. Is there an agenda? Yes. Clearly the Wite Rural Rage is a propaganda piece seen by how the media promoted it. What is the intent? Civil war, divide and conquer, round up the white supremacist domestic terrorists.