Our political party-based election system fails to qualify candidates based on their character. Historically effective groups like the League of Women Voters and the bar association have lost support from the public. A self-appointed nonpartisan grass-roots organization in each of America’s 3,000 counties could re-establish this core function for the benefit of both parties and our country.
Proposal
Create a county level “Candidate Appraisal Board” as an independent not-for-profit organization. Nonpartisan. 100 members. 4-year terms. 2 groups of 50 join every other year.
Evaluate primary and general election candidates. Not issues, party convention delegates or judges.
Focus on character, constructiveness, community and service as qualifiers for the honor and duty of holding office as a representative of the people. Not evaluating political views. Not evaluating professional qualifications. Seeking to qualify candidates. Multiple qualified candidates per office is possible and expected. Not discounting candidates based upon their personalities, strong views, extreme views, communications styles or strategies.
Board member candidates randomly selected from November registered voters list. Maximum 55% from any one sex. Maximum 40% from one party that voted in the previous primary election. Maximum 25% from any single municipality or township. Rolling nomination and acceptance rounds until seats are filled.
For the first group of 50 board members, ask 5 local Rotary clubs to nominate 10 politically diverse founding members each.
Candidates are deemed “qualified” if they get positive votes from at least two-thirds of the voters with a minimum quorum of 80 voters. Positive qualification votes require “yes” answers on all four dimensions of the evaluation form.
The independent organization seeks small dollar donations from citizens and community groups. It does not accept support from commercial organizations, interest groups, candidates or their families.
The organization defines its own procedures and elects its own officers: president, vice president, secretary and treasurer.
Evaluation Form
Is candidate John Q. Smith fully qualified to hold public office and serve our community?
This candidate displays high character in speech and deed
Personal integrity, trustworthy, responsible, reliable, diligent
Honest, transparent, forthcoming
Respectful, trusting, patient, courteous
Emotionally stable, mature, wise
Uses power responsibly and fairly
Acts and communicates ethically
Honors truthful communications; not stretched, shaded, misleading, false or fake claims
This candidate values our community
Supports our democratic system, including its election laws and processes
Upholds the “rule of law” for all citizens
Obeys laws, regulations, administrative and judicial rulings
Thinks, acts and speaks in terms of “the common good”
Pursues actions that are supported by a large majority of citizens
Respects the equal rights and interests of all citizens and minority groups
Represents all citizens
Considers moral standards such as “the golden rule” when making political choices
Puts the public interest ahead of self-interest and supporters when required
Daniel Bell was a sociologist and public intellectual throughout the post WW II era. His views on the emergence of the “Radical Right” as exemplified by Joseph McCarthy’s unexpected influence and impact are worth quoting extensively. Their pointed relevance to recent history is apparent. The quotes are from chapter 6 of “The End of Ideology”, 1960 which republished the first chapter of the earlier book.
America in mid-century is in many respects a turbulent country. Oddly enough, it is a turbulence born, not of depression, but of prosperity. … brings in its wake new anxieties, new strains, new urgencies.
One important reason is the restraining role of the electoral system. These factors of rigid electoral structure have set definite limits on the role of protest movements, left and right, in American life. [until the Tea Party]
The “common man” is the source of ultimate appeal if not authority. Harrison won [in 1840], and the lesson was clear. Politics as a skill in manipulating the masses became the established feature of political life. The upper classes withdrew from direct participation in politics. The lawyer, the journalist, the drifter, finding politics an open ladder for advancement, came bounding up from the lower middle classes.
But while sectional politics has somewhat diminished, class politics has not taken its place. Instead, there has been the spectacular rise of pressure groups and lobbies. The multiplication of interests and the fractioning of groups … make it difficult to locate the sources of political power in the United States. … Does not mean, however, that all interests have equal power. This is a business society.
These lines of thought do not help us … to explain the emergence of the new American right wing, the group that S. M. Lipset has dubbed the “radical right” — radical because it opposes traditional conservatism, with its respect for individual rights, and because it sought to impose new patterns in American life. All this is dramatized by the issue of McCarthy and the communists. … It is difficult to explain the unchallenged position so long held by Senator McCarthy. It still fails to take into account the extensive damage to the democratic fabric that McCarthy and others were able to cause. … Reckless methods disproportionate to the problem. … compulsive Americanism … loyalty oaths … wild headlines … the suspicion and miasma of fear that played so large a role in American politics.
Calling him a demagogue explains little. McCarthy’s targets were intellectuals, especially Harvard men, Anglophiles, internationalists, the Army. Important clues to the right-wing support … a strange melange … soured patricians … whose emotional stake lay in a vanishing image of a muscular America defying a decadent Europe … the “new rich” — the automobile dealers, real estate manipulators, oil wildcatters — who needed the psychological assurance that they … had earned their own wealth, rather than (as in fact) through government aid, and who feared that “taxes” would rob them of that wealth … the rising middle class strata of various ethnic groups.
The central idea of the status politics conception is that groups that are advancing in wealth and social position are often as anxious and politically feverish as groups that have become declasse. … Seek more violently than ever to impose on all groups the older values of a society which they once represented. This rise takes place in periods of prosperity. These political forces, by their very nature, are unstable.
There are several consequences to the changed political temper in American life, most notably the introduction on a large scale of “moral issues” into political debate. By and large, this is new. Throughout their history, Americans have had an extraordinary talent for compromise in politics and extremism in morality. In matters of manners, morals and conduct – particularly in the small towns – there has been a ferocity of blue-nose attitudes unmatched by other countries. The sources of the moralism are varied. There has been a middle class culture. Moral indignation … characteristic of religions that have abandoned otherworldly preoccupations and concentrate on thisworldly concerns. Piety gives way to moralism.
This moralism, itself not unique to America, is linked to an evangelicalism that is unique. … the peculiar evangelicalism of Methodism and Baptism, with its high emotionalism, its fervor, enthusiasm, and excitement, its revivalism, its excesses of sinning and high-voltage confessing, has played a much more important role. The revivalist spirit was egalitarian and anti-intellectual. The evangelical churches wanted to “improve” man, whereas the liberals wanted to reform institutions. This moralism … would be imposed with vehemence in areas of culture and conduct – in the censorship of books, attacks on “immoral art”, etc., and in the realm of private habits; yet it was rarely heard regarding the depredations of business or the corruption of politics.
The moralizing temper had another consequence: the reinforcement of the “populist” character of American society. While in American culture the small town has been “defeated”, in American politics it has still held sway. So long as world experiences could be assimilated into the perceptions of the small town … the dichotomy of politics and moralism could prevail. But with the growth of international ideologies, the breakdown of market mechanisms, the bewildering complexities of economic decisions … the anxieties of decision-making became overwhelming.
Americans, in their extraordinary optimism, find it hard to stand defeat. The cry of betrayal and charge of conspiracy is an old one in American politics. These men were “terrible simplifiers”. All politics was a conspiracy, and at the center of the web were the “international bankers” and “the money changers”.
An unsettled society is always an anxious one and nowhere has this been truer than in the United States. In an egalitarian society, where status is not fixed … the acquisition of status becomes all important, and the threats to one’ status anxiety provoking. The socio-psychological attitude that [Gunnar] Myrdal discerned in the South has been equally characteristic of the immigrant pattern in American life. As each successive wave of people came over, they grouped together and viewed the next wave with hostility and fear. In the 1890’s …there was an effort to create a ‘high society’ with its own protocol and conventions.
But the fact that the arena of politics [1950’s] was now foreign policy allowed the moralistic strains to come to the fore. While domestic issues have been argued in hard-headed, practical terms … foreign policy has always been phrased in moralistic terms.
Political debate, therefore, moves from specific clashes of interest, in which issues can be identified and possibly compromised, to ideologically tinged conflicts which polarize the various groups and divide society. The tendency to convert concrete issues into ideological problems, to invest them with emotional color and high emotional charge, is to invite conflicts which can only damage a society. It has been one of the glories of the United States that politics has been a pragmatic give-and-take rather than a series of wars-to-the-death.
Democratic politics means bargaining between legitimate groups and the search for consensus. This is so because the historic contribution of liberalism was to separate law from morality.
1955 Recap
American politics between 1870 and 1950 mostly focused on classic economic interests and ideologies. Mainly conservative dominance in the 19th century, interrupted by some “progressive” reforms at the turn of the century, a return to business rule and then two decades of FDR’s “New Deal”. Americans embraced democracy and modestly regulated capitalism, rejecting socialism/communism and totalitarianism/fascism. Bell argued in the 1950’s that we had reach the “end of ideology”, much like Fukuyama argued we had reached “the end of history” 40 years later. The Soviet communist option had been discredited in many ways. Politics and intellectuals would adapt to find new dimensions of differences. The “radical right” was one option that Bell described as new, different than the core conservative politics of the last 75 years but clearly leveraging existing factors in American politics.
Bell’s key insight as a sociologist is that groups of people have social, political and economic interests and pursue them. Marx’s simplistic economic determinism had proven to be unfounded, and his solutions had been disasters. Yet … individuals and groups of individuals are often driven by “status” first, not power or wealth. He highlighted the role of groups with new, unstable, threatened or declining status as very important.
The international economic competition revolution of the 1970’s and the “greed is good” cultural revolution of the 1980’s reflect the transformation of America into a meritocracy. Firms and organizations felt great pressure to perform so they did a much better job of defining needs, recruiting, socializing, retaining and compensating those who add the most value. They also gave up on their paternalistic roles and embraced the need to make economically rational decisions even when they conflicted with other factors and stakeholders. These changes obviously effected blue collar workers, but they also challenged supervisors, professionals, managers and executives. Job security and status security were shredded.
We now have a much, much more anxious society. This is obvious in rural America, the rust belt, and “fly over” country. But it is nearly as important on the coasts, in the growing Sunbelt cities and in the suburbs. The relative winners are preserving their gains. The modest middle-class winners are very insecure. The bottom one-third have largely lost hope, are angry and easily prodded to take a “victim” perspective.
Bell says that unstable groups can be manipulated by politicians. He describes the playbook. Populism, emotions, morality, religion, polarization, targets, anti-elites, anti-intellectuals. He notes that these factors apply to individuals at all economic levels of society. Individuals want to have a solid social status so that they can enjoy their wealth, power and lives. Trump’s offer to “make America great again” is a promise to provide this security against the various threats. Bell doesn’t think this approach is effective in the long run because mere promises will not deliver the promised results.
Big Picture Thoughts
Individuals require an ideology or a religious belief in order to be relatively secure within a true meritocracy. A revival of mainstream religious belief and participation is overdue in America. A purely secular worldview that provided security from pursuing one’s talents and rejecting economic and status goals might help some individuals.
The Trump coalition of bottom two-thirds social concerns with top 5% economic concerns is unstable in the long-run. “We won’t get fooled again”. “Meet the new boss, same as the old boss”. There are inherent, deep divisions between these two groups. The top 5% can thrive in a world with very limited public services, the bottom two-thirds cannot. The top 5% cannot allow the extreme Trump policies which threaten their wealth and status (anti-trade, lost allies, anti-universities, anti-media, irrational immigration policies, deficit spending/inflation, huge industrial policy investments, imperial president, undermined rule of law). They support human rights, globalism, DEI, minority interests, global health, global environment, global finance. Trump has managed to combine judge appointments, deregulation and tax cuts to maintain his minority coalition. It is only the weakness and strategic incoherence of the Democratic Party’s policies that has allowed this to succeed.
America has continued to grow wealthier. Its economy continues to be the envy of the world. The pie may be large enough to promise the 5% that they can keep their share while also promising the bottom two-thirds that we can run a society with a true safety net and some sharing of incremental income and wealth.
Americans may be ready to “take back” their government. Require civility. Prioritize real issues. Neutralize election policies. Set minimum character standards. Reward compromise and results. Require real majorities
1981 Oldsmobile 98. The “Main Street” Republican party of 1981. Practical, shiny, powerful, white walls, chrome trim, leather interior, accessible, landau roof, 4 doors, large, American, fender skirts, superior, a known and consistent item.
The 2024 Trump organization has few remaining connections to the 1981 Reagan Republican Party, or that of Eisenhower in the 50’s, Nixon in the 70’s or the Bushes in the 90’s or 00’s. Let’s highlight some of the big differences.
Fiscal conservatism. Balanced budget. No debt. Trump used debt throughout his career, ran record deficits during his presidency and is now trying to eliminate the debt ceiling.
World-class agriculture exports. Trump accepts that US agriculture might take some hits from his “trade wars” approach. He uses various subsidies to partially offset the damages.
Industrial policy. Trump has an activist approach, promoting individual industries and firms that support him and penalizing those who oppose him. Republicans have historically concluded that the market alone is best positioned to invest for growth and the national government role should be minimal, preserving the institutional context.
Competition policy. The Republican party has supported a “hands off” approach. Trump prefers to intervene in the media, high technology, electronics, manufacturing, energy and banking industries. Manufacturing and extractive energy are preferred industries!
Rule of law. Republican investors and owners have relied upon a stable legal environment. Trump asserts that all laws and regulations are subject to his review and interpretation.
Imperial presidency. Republicans pushed to restrain presidential power during decades of liberal activism. Trump has permanently expanded the “rights” and powers of the presidency. Hayek’s “Road to Serfdom” was an early warning.
Fair play. Republicans traditionally sought to build citizen support for core institutions. Trump undermines the FBI, DOJ and IRS.
Free trade. Republicans supported free trade for 70 years as a way to benefit American multinational corporations and citizens. Trump takes a 1920 mercantilist approach to trade, believing that individual country trade deficits are harmful to the US. He believes that the “wins” from individual negotiations are greater than the net benefits of a free trade system for America’s strong world leading economy.
Military strength. Republicans have typically been hawks. Trump views defense spending as an optional investment which should be minimized as possible. He believes that a “strong enough” military and economy, combined with strong deal making and threats is “strong enough”.
Limit military strength. Republicans supported the WWII agreements that limited the military strength of Germany and Japan. Trump sees no reason to limit their military strength.
Alliances. Republicans have supported American alliances with Europe, Japan and other supporters of the “American Way”. Trump views these alliances as “welfare” for other countries. The U.S. is providing military, economic and institutional support without extracting tributes from the allies.
NATO. Republicans have always supported this counterweight to threats from Russia. Trump sees Russia as a “reasonable” adversary which is not interested in threatening the US. Europe should protect itself from Russia.
Global international order. Republicans have generally supported the various global organizations supporting the Western-defined economic and political systems following WWII. UN, associated organizations, WTO, IMF, World Bank. Trump views these organizations as an extra investment for the US and a threat to US interests. He prefers one-to-one negotiations rather than this universal approach to defining and enforcing US interests.
Institutions. Republicans have supported the main US institutions which have supported the American way. Trump questions all government departments, public education, universities, the mainstream media, journalists, and Hollywood.
Science. Republicans have historically supported American science and scientists, based on military, social and economic results. They have believed in professionals and objective reality. Trump believes that many scientific views are really political views, subject to political control. The contrast in medicine/public health is greatest.
Conservative philosophy. Starting with William F. Buckley, conservatives developed a consistent “conservative” world view that linked together social, political, military and economic dimensions. Trump has no conservative philosophy. He is purely transactional.
National Leaders. The Republican Party was based in the Northeast and Midwest. It dominated the country from 1860-1930 and again in the 1950-80’s. Traditional large metro areas provided intellectual and political leaders. Trump has abandoned the east and west coasts.
Conventional. Republicans embraced the preservation of history and convention. Trump is a revolutionary, seeking to overturn the “modern” FDR, LBJ “new deal” consensus on economic, social and political issues that he opposes. Judicial overturn of abortion rulings is “exhibit one”.
States rights. Republicans have supported “states’ rights” to preserve conservative social positions. Trump seeks to enforce national decisions.
Separation of Church and State. Republicans quietly accepted the need to preserve religious rights and allow the state to be “neutral”. Trump and religious conservatives question this solution. They worry that secular interests are indoctrinating students.
Anti-communist, anti-fascist, anti-totalitarian. Republicans generally embraced the “American Way” and opposed alternate views. Trump is purely transactional.
Western culture. Republicans believed that the post-war consensus of democracy, human rights, mixed market capitalism and international order was effective and right. Trump does not believe that the US should promote its ideals. All international relations are purely transactional.
Fixed monetary policy. Republicans have pushed for a “rules based” monetary policy to limit the risks of an “active” monetary policy. Trump wants to control the Federal Reserve Board to promote low interest rates.
Character. Republicans have highlighted “character” as an essential trait of any national leader. Trump dismisses “character” as irrelevant.
Russia. Republicans fought the cold war against Russia. Trump sees Russia and Putin as just another global competitor, no better or worse than many others.
Special relations. Republicans have supported historical US relations and agreements. Trumps sees everyone as transactional. NATO, Japan, Korea, Australia, Canada, Mexico, UK, France, Germany.
Summary
Republicans, like all political parties, have shuffled their coalition partners through time. The Reagan coalition was not the Eisenhower coalition, but the differences were minor. The Bushes generally embraced the broad “conservative” Reagan tent. Trump is clearly not a “philosophical” conservative. He is not trying to conserve a culture and its main institutions. He believes in a radical individualism closer to libertarianism and realpolitik. The world is dangerous. It is only win/lose. Only great deal makers can deliver results. The whole is the sum of the parts. “Trial and error” is an essential approach. There are very clear differences between the historical Republican Party and Trump’s views. I think they will become more apparent as Trump tries to implement his views.
Trump’s 2017 inauguration crowd was only one-third the size of Obama’s in 2009. I was there in 2009. The wind chill was around 10 degrees. Trump’s REAL and deep foreign policy support among Republicans is similarly quite small.
Trade wars, attacking allies and driving an active industrial policy all undermine the US economy, resulting in lower GDP, lower tax revenues, higher spending, a greater budget deficit and higher inflation. Fiscal conservativism was recently the hallmark of the Republican party. It helped to unify the various flavors of conservatism. Everyone could agree on a balanced budget amendment, no trade-offs of higher taxes for increased spending, and threatening a government shutdown and possible debt default in order to force congress and the president to address the budget deficit and the growing federal debt. The real situation is worse today, with larger debt as a share of GDP, a forecast increase and a large annual budget deficit during a time of 4% unemployment. Trump’s headline foreign policies threaten the economy. Despite the Federal Reserve Bank’s reduction to the benchmark federal funds rate, long-term interest rates have drifted upwards. Will a Paul Ryan re-emerge?
(2) Corporate America
US based multinational corporations have thrived in the 75-year post-war era. They benefit greatly from the opportunities that free trade provides. Tariffs, trade wars, restrictions, industrial policy and presidential interference all reduce profits and increase risks. Trump may reduce corporate taxes and regulations, but international tariffs and regulations will hurt corporate bottom lines. The net benefits may quiet some corporate leaders. Others will incur greater harm and work to protect their interests.
(3) Agriculture/Rural America
American agriculture is a world class exporter. It thrives under consistent patterns of free trade. Trade retaliation is a big threat to agricultural revenues, profits and land values. Production agriculture is just 1% of US GDP, but it exceeds 5% of GDP in 1,130 American counties, averaging 14.11% of the value of production in this one-third of America geographically. In the other two-thirds of the country, agriculture accounts for just 0.36% of GDP, so it’s politically irrelevant. American agriculture has always been disproportionately effective in politics. Trade wars may soon have one-third of American counties up in arms.
(4) Philosophical Conservatives
Proven cultural and institutional frameworks are best. If it ain’t broke, don’t fix it. Support countries with similar cultural institutions and values. Protect the interests of the wealthy and powerful against the claims of the fringe interests. Isolationism, protectionism, and “do it yourself” foreign policy are unproven and risky strategies. The philosophical conservatives enjoyed a nice run from William Buckley’s 1950’s through the rise of the “tea party” in response to the Great Recession. They were amongst the first and strongest opponents of Trump’s views and have led the “never Trump” movement. They were never a large share of the party, but they provided a mental framework that allowed the components to work together and the conservative think tanks and media to earn a degree of respectability in the court of intellectual public opinion. Trump’s character challenges and blatant transactionalism and individualism cannot be reconciled with their views.
(5) Wall Street/Banking
America dominates international finance and banking. Raising capital, making markets, advising firms, and making risky investments. The global financial system works for Wall Street. Rapid and unpredictable changes to the “rules of the game” increases risk levels and makes global investments harder to plan, finance and execute.
(6) Hawks/Neoconservatives
Might makes right. Don’t fall for ideals. This group agrees with Trump on basic principles but can’t understand why anyone would undermine the highly valuable postwar alliances that the US has developed with NATO and individual countries because “they don’t pay enough” or “they win too much in trade”.
(7) Economic Free Marketers
True believers in capitalism and free markets see it as the best way to create and preserve value with the added side bonus of protecting individual liberty. Tariffs and active industrial policy are the traps that idealistic Democrats fall into. Republicans know that only the market, in the end, will deliver prosperity and liberty. Trump’s preference for a very active foreign economic policy and a relatively active and intrusive domestic economic policy does not match this group. They can embrace his general low tax, low regulation, only results matter views.
(8) Libertarians
Same as above on economic policy issues. There is a huge risk of the empowered centralized state, stripped of checks and balances, turning around and threatening individual liberties. A centralized totalitarian or fascist state is a huge threat that must be avoided at all costs. Trump has a libertarian streak, but he does not embrace libertarian principles.
(9) Main Street Republicans/Professional Class
This group wants to ensure that the hard-working professionals, managers and small business owners that add value for Americans overall continue to receive their fair share of the rewards. Trump’s “activist” foreign policy puts these rewards at risk. Firms and investors, large and small, will win or lose based upon imposed tariffs, regulations and industrial policies. The economic churn will be much faster, greater and random. A significant number of previously secure upper middle-class professionals will incur significant losses in a much more dynamic Schumpeterian age of creative destruction. The general demonizing of the elites, bureaucrats, experts, intellectuals, scientists, universities, teachers, media, economists, military leaders, pundits, market researchers, pollsters, high-tech leaders, foreign policy community, NGO’s, public health, etc. is a big negative for this group which naturally found a home in the Republican party in the post-war era. Trump’s belief in the “great man” theory of history is at odds with the mildly progressive culture of suburban, upper middle-class America.
(10) American Patriots/Neoconservatives
The US fought the “cold war” against communism for 50 years. Trump thinks that Putin is just another global competitor. Trump’s claim that “Putin’s actions are no better or worse than America’s historically” sounds like something Bernie Sanders might claim! He’s not worried about the communist views of China, North Korea or Vietnam. He’s ready to negotiate. He opposes the “communist” dictators in Cuba and Venezuela. There is no defense of the American values of democracy, equality, free markets or human rights in Trump’s approach. It’s simply America versus all other nations. Tactically and politically, Trump has repositioned China as the new great enemy. Historically, Americans fought the world wars, and the cold war based on the principles of democracy, liberty, freedom, individual values, capitalism and human rights. Trump wants to disengage from Europe and the Middle East while increasing assets to address China, just like Obama. Some patriots just need an enemy, others want to defend principles.
Many cultural conservatives have deep, fundamentalist religious beliefs. Their views are “right” and other views are “wrong”. Trump’s foreign policy is purely transactional. It doesn’t assert that the western or Christian world view is better, preferred or right. He’s not following Bush, Jr. to provide the world with the benefits of American political, economic and cultural systems. He just says that the American people, perhaps with their Christian/western opinions, are worth defending aggressively. It defends some dictators in Russia, Turkey and Hungary who do not share historical American values. Trump’s overall pragmatic, transactional, economics first views don’t square well with cultural conservatives who place moral and religious values first. Trump is delivering a set of Supreme Court and federal justices willing to overturn activist liberal judge rulings and to support legislation passed by culturally conservative states and the US Congress. He’s willing to poke at other cultures, races and nationalities as being “others”, not as good as the true Americans. Younger evangelicals seem less willing than their parents, who have been fighting the “culture wars” for 50 years, to embrace Trump at a transactional level and give up their ideals. Trump’s anti-immigrant posture, protecting America from the threat of the “others” does resonate with some cultural conservatives. Net, net, Trump is not losing support from this group due to his international policies.
(12) Victims of Economic and Social Change
This group clearly supports Trump’s populist diagnosis and prescriptions. The loss/decline of American industry was due to international traitors and coconspirators who undercut the owners and workers. It was all avoidable. Economic, banking, university, media and political elites conspired to undermine the domestic virtuous workers and owners in order to benefit “others”: other countries, religions, races, cultures, classes and interests. The story is just like Hitler’s description of the Weimar Republic leaders. The country was sabotaged by traitors. This is a very powerful story. Many Americans today buy this story. For how long?
Summary
Politics is all about telling a story and managing coalitions. Ronald Reagan told a very attractive story that wove together the various strands of conservatism into a coherent narrative. This story reframed American politics. Presidents Clinton and Obama confirmed the core conservative story, just like Eisenhower and Nixon confirmed the core New Deal story earlier. Newt Gingrich triggered both parties to adopt a polarized world view.
Trump leveraged this situation to attract economically and culturally disadvantaged individuals to embrace a greatly reformulated conservative, Republican, red, populist world view. Trump’s international relations policies don’t really fit well with the historical views of the Republican party. It remains to be seen if these mental conflicts will undermine his political support as he is able to implement them and deliver results. He is “riding on the coat tails” of broad popular support for “conservative” solutions to our many challenges.
International affairs have been secondary priorities for the last 50 years. They were top priority in the quarter century after WWII. Trump’s emphasis may make them top priority once again!
The world faces five issues that require global solutions.
Risk of global war, including nuclear war
Risk of a pandemic that kills billions of people
Risk of global warming accelerating out of control
Risk of China and the US unintentionally destabilizing all global systems
Risk of the international economic order breaking down, impoverishing billions
The world has found a variety forums, agreements, institutions, relationships, indirect promises, incentives and threats that have “managed” such risks for 80 years. Unilateral bargaining has not been the best solution.
Some Trump Approaches to Consider
International relations, economics, military and migration are very important and should be treated as top priority by the USA.
The US has a variety of power bases that could be more actively used. Military power, nuclear power, dollar as the reserve currency, tariffs and trade restrictions, soft cultural powers, SWIFT currency system, immigration laws and enforcement, educational systems, regulation of major global corporations, treaties, global military bases, market size to allow protectionist policies/threats, leading universities, intellectual property, strategic asset reserves, technology leadership, flexible/dynamic economy, small expected role for government, low tax rates, trusted economic institutions, support for the rule of law, independent and effective central bank, extended track record of innovation and economic growth, younger population, global economic and cultural connections, multi-cultural, multi-racial, multi-religious society. Trump emphasizes some advantages more than others, but the basic point that the US has the resources to pursue a more “active” set of foreign policies and negotiations is clear and worthy of consideration.
Pragmatic, transactional, realpolitik approaches should be balanced against idealistic, principled approaches. Win/lose and win/win frameworks should both always be considered and re-assessed based on the current situation in each area of application.
Making automatic value judgements about dictators, authoritarians, fascists, socialists, cultures, races, religions, human rights, capitalism, free trade, globalism, isolationists, and globalists is not the best approach. Countries and leaders resent this presumptuous approach. They oppose the inevitable shortcomings, inconsistencies and self-dealing of the winning post-war coalition. East vs. West. North vs. South. Emerging markets. BRICS. Everyone thinks that they are “right”. Relating at a neutral level has many advantages.
Some situations can be addressed on a purely transactional level without making them more complicated by considering all of the potential issues between the parties.
The US has leverage in specific one-on-one situations where it holds the overall advantage or a single trump card.
Other countries have internal political situations which can be exploited.
Single country deals are easier to reach than regional or global deals.
The views of America’s foreign policy elites, including the military, are relatively similar. They and we could benefit by considering alternative approaches in many situations.
Some degree of inconsistency, deception, changes, flexibility, bluffing, fakes, misdirection, multiple paths, opportunism, threats, espionage, bribes, breaking the rules, etc. are valid components of making and breaking deals.
Less powerful states should not automatically be elevated to “most favored nation” or “sovereign equality” status.
The economic, diplomatic, military, communications and polemical responsibility for maintaining the “global economic order” must be shared by all of those who benefit and not upwardly delegated to the US.
Where Trump Goes Too Far
Soft power is quite valuable for the US. Don’t undermine it on principle.
Alliances multiply the power of the US. Don’t discount or undermine them.
Global bodies and principles can support US interests.
The US is a smaller share of global population, cultural, military and economic power. Going it alone is a risky strategy.
There are very significant advantages of global free trade, especially for the most competitive US based multinational corporations.
Direct pursuit of pure power politics is not supported by many Americans.
The US benefits greatly from maintaining the existing international system of trade and finances.
Sovereign nations and politicians do not automatically respond rationally. They are willing to take “irrational” steps to protect and promote their sovereignty.
There is a value with allies and opponents of maintaining some belief or trust that the US will uphold its commitments, even in the face of adversity or opportunities.
Some results (nuclear annihilation) are so bad that they must be avoided at all costs.
Maintaining long-term allies is quite valuable.
Public criticism of allies undermines their incentive to cooperate.
Trade deficits “come and go”, no real reason to oppose them on a country-to-country basis.
Very successful countries incur trade deficits without harm for many decades.
Embracing or engaging with authoritarian leaders undermines the support of traditional liberal leaders of allied countries.
A consistently transactional approach undermines the expectation that a nation will do “whatever it takes” to pursue its big picture goals and ideals.
There are significant long-term benefits from developing and maintaining allies.
Trade wars are inherently unpredictable, but historically they have devolved into a race to the bottom, greatly reducing valuable trade.
Summary
Trump overemphasizes a win/lose perspective, leverage and direct negotiations. Individuals, firms and countries since WWII have learned that there are win/win strategies and tactics to be considered even when the stakes are highest. Actors have used these strategies because they deliver sustainable results. The best negotiators use all of the tools which are available. They don’t use a hammer as their only tool.
This 2017 bestseller was applauded by the WSJ, The Economist, Harvard sociologist Robert Putnam, JD Vance (as a complement to Hillbilly Elegy) and Barrack Obama. It tells the story of Janesville, Wisconsin as a General Motors assembly plant with 3,000 workers was permanently closed in the turmoil of the Great Recession. It focuses on the impact on real people and the community’s response. The author concludes that neither the liberal response of job training nor the conservative response of economic redevelopment incentives was adequate to meet the community’s needs. What could work?
The Core Issue
The US economic and legal system protects the property rights of investors, corporations, and banks. It doesn’t protect or promote the property rights of the other actors in society quite so well: workers, suppliers, local governments, charities, retirees, and children. It is the fundamental discrepancy between different groups that is highlighted in this book, catalyzing the last 15 year’s populist reaction against our system, and begging for a practical solution.
The Core Challenge
Financial interests are flexible. They can be bought, sold and mortgaged. They are geographically mobile. Money and financial instruments are fungible. They can be exchanged with zero to small loss of value.
Other interests are much less flexible and mobile. Labor assets are tied to an individual. Individual labor assets may be tied to a specific situation OR broadly applicable. Real property is tied to a local and regional location. Local governments and charities are tied to a geography. Families are emotionally tied to a location.
The historical political conflict was between the wealthy and the non-wealthy. Landed aristocracy and peasants. Capitalists and workers.
Wealth still matters. The advantages of financial wealth have multiplied in the modern world. Financial rates of return are higher. International opportunities exist. Financial markets are effective and efficient. Risk can be managed through portfolios and derivatives. The shear amount of wealth, and wealth per person, is large enough to be scientifically managed. Generational wealth is preserved. Wealthy interests have effectively “captured” the political system to ensure they are not over-taxed or over-regulated. Network effects from neighborhoods and elite colleges accumulate. The network effects from large metropolitan areas accumulate.
As the advantages of financial wealth have compounded in our society, the distribution of income and wealth has become more and more unequal. For the good of our whole society, it’s time to take some steps to “level the playing field”. This is not strictly about protecting the poor or “fairly” taxing the rich. It is about providing “roughly” equal protection to the various property interests in our society.
The Pinches
In a meritocratic, capitalist society, there will be an unequal distribution of income and wealth. It is difficult to find an obvious “rule of thumb” to limit this dispersion. The higher income and wealth individuals are sure that they have “earned” their returns. Many libertarians and conservatives believe that the “job creators” and “value creators” in society are under rewarded, even before progressive taxation claims a greater share. Most working, middle and professional class earners are sure that they are underpaid compared to their value-added and that the tax system is designed to benefit “others”. Many vote for the conservative political party because they accept this as unavoidable, see disincentives and unintended consequences from attempts to change this, or aspire to become one of the winners. Economists and psychologists report that individuals are much more motivated by economic losses, taxes, risks or takeaways than gains. Hence, any kind of straightforward income or wealth redistribution system is difficult to achieve or maintain. The incentives to pull towards one end or the other are very strong. The philosopher John Rawls’ argument that everyone can, should, will agree to a set of reasonable policies pointing towards limiting income and wealth inequality has been applauded by the left, criticized by the right and ignored by most everyone. We need to find a different framework aside from the “tug of war”.
A dynamic capitalist economic system will include Schumpeterian “creative destruction”. There is enough new wealth to be made and captured that competitors will disrupt and compete with existing leaders in all markets. Firms will grow and die. New firms will be founded. Some will succeed. The real and financial capital within some firms at some times will be destroyed. For some firms this will be part of the portfolio of growing, stable and dying components. For some firms, this will be death. Capitalists will focus on the core goals of value creation, value capture and value preservation. They will do whatever is required to meet these goals. As Milton Friedman argued, at the extreme times they will not look out for the interests of other stakeholders. In good times, perhaps, a little. Based on social pressures, in good times, perhaps, a little. We need to clearly separate “what is” from “what should be”.
Financial investors do not have geographical responsibilities. They have financial responsibilities to owners and lenders. They have secondary interests in maintaining positive relations with suppliers, customers, key employees, key executives and regulators. Large organizations will close low performing assets as required, be they small stores or 3,000 employee factories. New and existing businesses locate plants, offices and distribution centers based on expected costs and benefits, risks and rewards. They are also guided by the convenience and views of their senior executives who generally prefer to live in cosmopolitan surroundings. Firms will decentralize and decentralize to meet various needs. For most firms, local economic incentives are a very minor factor.
Employees, suppliers, governments and charities are fundamentally local. They live real lives with a small number of interactions. They stay in place and appreciate the familiarity of their home, church, school and community. They might move when they finish college or before they have children in school or to meet an extreme need. The move from the east coast to the Midwest to the west took centuries. The move from the farms to the cities has continued for more than a century. The consolidation of the population into less than 100 metro areas has accelerated in the last 75 years. The move from the Midwest, northeast and Middle-Atlantic states to the sunbelt has continued for 75 years. Individuals move based on circumstances and incentives. A fair society provides support for individuals who do not wish to move because economic situations have changed.
The Solution: Protected Assets for All
Individuals who honestly review the growth of incomes, wealth and standards of living in the US for the last 75 years must celebrate the amazing 6-fold increase in real per capita Gross Domestic Product (GDP). Labor productivity and overall productivity have improved similarly. Median incomes rose with GDP and productivity until 1975, stalled for 25 years and have since slowly resumed their climb. Quality of life, including health, economic choices, economic security, leisure, safety, product quality, entertainment, and product choices has continued to improve, even when income growth lagged behind output growth. The US economic system produces great wealth and benefits. There is an inherent tendency for the owners of financial wealth to capture an increasing share. We need to find a balanced solution, not undermine the economic system through misguided taxation or regulation.
Health Assets
The US is an outlier in the developed world in not managing health care as a public good. Liberals see health care as a human right. A majority of Americans disagree. We will not soon adopt “socialized health care”. We can work together to adopt policies that reduce the total cost of health care, and which prevent health care costs from bankrupting our fellow citizens.
Provide catastrophic health care coverage for all, covering single event expenses exceeding $25,000.
Provide payroll contribution funded ($200,000 max) annual income catastrophic family medical insurance (>$100,000/year) to all citizens. (alternative to $25K government provided fund)
Invest in nominal co-pay front-line mental health screening, intervention, listening, training, group sessions and counseling services for less critical conditions.
Allow any group of 10 states to create a “medicare for all” health care program as a substitute for the Affordable Care Act.
Allow any group of 10 states to create a private insurance-based (qualify in 2 states, qualifies for all states to ensure competition) health care program as a substitute for the Affordable Care Act.
Pay-off all student loan debt for professional degree medical professionals serving 5 years in non-metropolitan county or metropolitan county with less than 300,000 population.
Require states to provide tuition free medical care and residency spots for one doctor per 10,000 citizens each year.
Reduce medical school preparation requirement to 3 years.
Offer reciprocal medical licensing arrangements with 30 leading countries and expedited review and specific qualifications training and experience requirement defined for all others within 90 days of application.
Family Assets
Provide an annual $10,000 childcare funding source for up to 4 children aged 0-6.
Provide home childcare volunteer refundable tax credit up to $100 per week.
Offer a supplemental 5% Earned Income Tax Credit for two-income families with combined family income below $60,000, phased out to zero at $90,000.
Exclude the first $100K of owned homestead property from taxation and prohibit property taxes on first $250,000 for those aged 70 or above.
Community Assets
We live in a society that prefers to support communities locally and not rely upon government support. We can fine-tune our laws to encourage local support.
Provide a $15/hour volunteer hour tax credit for up to 200 hours annually, including service with religious organizations.
Remove the limits on charitable donation tax deductions for gifts made to public charities and local governments (not private foundations).
Allow large employers to setup new employees with default 1% contribution to local United Way/Community Chest umbrella funding services.
Determine paternity for all births, set and enforce child support agreements, provide basic level support from the state as required.
Subsidize high-speed internet for rural counties.
Offer 10 year T-bill interest rate financing for qualified “low cost” retailers to build stores more than 15 miles away from any existing qualified store.
Levy a $500 per employee annual “closing costs” fee on large employers (250+) for a maximum 20 years to fund local redevelopment programs starting with $5,000 per discontinued employee.
Levy a 0.5% of annual rentals fee on landlords to fund local redevelopment of abandoned properties and areas.
Limit state and local economic development incentives to no more than $10 million per project or location.
Offer a 50% federal tax credit for first $10,000 of cross-state moving expenses.
Offer workers up to $5,000 for relocation or temporary housing as an alternative to up to 2 years of unemployment benefits. (alternative to tax credit for moving expenses)
Restrict issuance of new building permits in counties that do not have one-third of affordable housing permits proposed for units below the existing median unit property value.
Greatly expand availability of 1-2 year National Service programs for young adults and senior citizens.
Invest in prison to work transition programs.
Increase the minimum foundation endowment spending from 5% to 6% to provide more current social benefits and limit the accumulation of assets by universities and other not for profits with $100 million plus of invested assets. Provide an option to pay a 0.5% of assets annual fee to keep 5% or a 1% fee to only spend 4%.
Financial Assets
In our modern world we have to ensure that all individuals are financially prepared for 30 years of retirement. Early and constant savings. Wise investments. Good advisors. For everyone.
Provide a 50% federal 401(k) match on the first $5,000 of savings. Offer a federally backed guaranteed return fund for 401(k) accounts with an after-inflation return of 3%.
Make social security employee tax payments optional after age 62.
Remove social security payment offsets from earned income after age 65.
Auction to private firms the right to offer standard 401(k) financial advisory services for 0.5% of asset value with 100% federal match below $50,000 and 50% federal match below $100,000.
Create voluntary 5% of income home down payment savings program that accumulates to $50,000 after 10 years of full-time employment contributions.
Financial Security
Lifetime employment is gone. Fixed benefits pensions are gone. We live 20 years longer. We need a more robust unemployment insurance system. Individuals may secure a position that pays 25% – 33% – 50% more than their “second best” alternatives. When individuals lose their jobs, we need to buffer their losses and nudge them towards their “next best” options in a timely manner.
Reform unemployment insurance to provide 75% of historical income for 6 months and 50% of income for 12 months. Limit coverage to $60,000 of base income.
Provide a 50% “bridging subsidy” for individuals whose income has dropped by more than 25% for up to 3 years. This would handle the effects of international trade and firm bankruptcies.
Overhaul the “welfare system” to combine various programs into a single program combining a universal basic income (UBI) and the earned income tax credit (EITC).
Create a self-funded unemployment lump-sum payment system based on prior 5 years earnings. 4 months award available after 10 years. 6 months after 15 years. 8 months after 20 years. (Alternative to higher benefits and bridging option)
Maintain a present value of future social security benefits asset balance for each participant. After age 35, allow once per decade 10-year term loan at 10-year T-bill plus 2% for up to 20% of balance, maximum of $50,000 loan balance. Repayment through social security system earnings.
Set a $15/hour adult minimum wage, indexed to 70% of the median income.
Consumer Assets
In the modern world, consumers face sophisticated marketers and professional services firms. They can benefit from centralized support.
Set all import tariffs at zero percent, eliminating the effective tax on purchases.
Eliminate all specific import tariffs but levy a 3% tariff on all goods to “protect” domestic producers and help fund government programs. (alternative to 0%)
Set maximum prices per service and per hour for home and auto repair firms.
States contract for metro and area multiple listing services and limit total real estate commissions to 4% of transaction value.
Require financial advisors to meet the fiduciary standard of professional care, putting the client’s interests first.
Certify public advisors to provide general advice on consumer economics, budgeting, banking, investing, real estate, insurance and health insurance for $100/hour to citizens, with a $50/hour, 8-hour maximum annual refundable tax credit.
Staff state professional licensing boards with a minority of regulated active professionals. Reduce licensing requirements to meet public safety standards.
Set a national cap on individual and class-action lawsuits at $2 million per person, adjusted for inflation.
Auction regional licenses for private firms or states to offer low annual milage limit used car leases to low to medium credit score individuals using federal funding for the inventory.
Education/Human Capital Assets
It looks like our economic system is going to require one-thirds college educated and two-thirds less than college degreed adults. Economically and socially, we need to support all individuals to serve in their roles and for all of us to support the various roles. Think “essential workers” during the pandemic.
Offer $10,000 for 2 years for high school graduates for their education and training, including “career and technical” training.
Create German-style public-private partnerships for broad range of vocational training opportunities.
Offer career and technical training grants for up to 2 years equal to state subsidy of college education.
Provide alternate sets of courses and experience to meet minimum requirements for standard level high school diploma, rather than requiring gateway courses like Algebra II.
Offer an all-industries state administered “career skills” certification program that can be earned in 3 years of employment and classes, including some classes for academic credit in high school.
Require governments and large employers to justify any strict “BA needed” job requirements versus “education and experience” options.
Tax university tuition income above $15,000 at 25% rate to fund public colleges.
Expand veterans hiring preferences to state and local governments, government suppliers and large employers.
Increase the minimum foundation endowment spending from 5% to 6% to provide more current social benefits and limit the accumulation of assets by universities and other not for profits with $100 million plus of invested assets. Provide an option to pay a 0.5% of assets annual fee to keep 5% or a 1% fee to only spend 4%.
Government Services Assets
The corporate world reduces costs and improves valued results by 1-2% year after year after year. We need to set the same expectations for local, state and federal governments.
Sunset laws requiring reapproval of substantive changes after the first 10 years.
Bipartisan staff recommended simplification and clean-up laws, one functional area per year, package approval, no amendments.
Independent staff recommendation of lowest 10% benefit/cost ratios for regulations by agency every 10 years, package approval, no amendments.
Implement balanced budget across the business cycle law that considers unemployment rate and debt to GDP levels.
Require offsetting spending cuts or funding sources for new spending programs.
Require federal programs to have a minimum 20-year payback from investments.
Migrate to minimum 80% federal funding of all federal programs assigned to states.
Outsource the USPS by region, maintaining 3 day per week delivery minimums.
Tax Fairness
Set a separate 10% income tax rate on hourly earned overtime income, excluding it from regular “adjusted gross income”.
Limit corporate type taxation to 10% for revenues below $1 million and 20% for revenues below $5 million.
Limit combined state and local sales taxes to 5% of purchase values.
Revise the “independent contractors” social security law to require the 12.4% self-employed contribution to be identified and deposited for all income.
Eliminate the “carried interest” loophole benefit for investors.
Limit the reduction of “capital gains” taxes versus labor income to a maximum of 20%. Increase the minimum period for long-term capital gains to 3 years. Provide a 50% of annual inflation above 4% credit in the detailed calculation.
Require income earners to pay social security taxes on $1 million annually.
Eliminate the mortgage interest deduction on second homes.
Increase the IRS audit budget by 50%.
Levy a 20% tax on inherited assets above $5 million, allowing a 10-year tax payment plan.
Funding Sources for “Everyone Has Assets”
Levy an annual 0.25% of assets tax on banks and financial institutions.
Levy a 0.25% financial transactions tax on stock and bond investors and traders.
Set a 10% “luxury tax” on all transportation asset transactions worth $1 million or more.
Set a 0.25% annual federal “luxury” real estate tax on all residences worth more than $2 million.
Levy a 0.25% of deal value fee on all “mergers and acquisitions” transactions of $100 million or more.
Levy a 0.25% excess profits tax on earnings above a 5% real, inflation adjusted return on assets (ROA) for firms with revenues of $100 million or more.
Reduce the depletion allowance base on mineral assets by 10% of the acquisition cost.
Starting with the 35% tax bracket ($462,501 married filing jointly), reduce allowable itemized tax deductions to 0 at $2 million of income.
Add a 40% tax bracket at $2 million of income.
Levy a 5% of excess price paid on personal vehicles sold for more than $50,000, boats for more than $100,000 and recreational vehicles for more than $100,000. (alternative to 10% above $1M)
Add a 10% surcharge to property tax rates for residential properties larger than 5,000 square feet. (alternative to surtax above $2 million)
Setting Firm Limits on Taxes
I have separately proposed a set of constitutional amendments that limit taxation of the wealthy, allowing them to support steps like those above without fear of being fleeced.
Our society hasn’t found a clear organizing principle to guide it between the claims of the people and its leaders. We tend to lean towards the individual, liberty and freedom. This has led to a large number of modest initiatives. We have an opportunity to help our community embrace and support the political steps required to achieve our goals.
On a personal note, I grew up in Fairport Harbor, Ohio, a small village of 3-4,000 people. The Diamond Alkali chemical plant once employed 5,000 people. It shut down in 1976. My dad was a pipefitter and union leader. My uncle Joe was also an employee and a union and political leader. The negative community impact was very large. The negative impacts described by Amy Goldstein in Janesville were exactly the same in Painesville 40 years earlier.
The president-elect’s tariff threats are rejected by all professional economists and almost all business leaders. They are mistakenly intended to provide international relations negotiating leverage, force firms to build US factories, and increase domestic manufacturing employment employment. They are based upon the misguided belief that the US economy is broken. It is ironic that Democrats and liberal have trumpet the amazing condition of the US economy.
May 4, 1970. The world changed when 13 student protestors were shot and 4 killed by Ohio State National Guardsmen at Kent State University following the escalation of the “Vietnam War” into Cambodia.
Cleveland had experienced civil disorder in the hot summer of 1966 with the “Hough Riots”.
Governor Rhodes, who oversaw the state guard actions at Kent State, served for 16 years as the governor of Ohio from 1963-71, interrupted by constitutional limits, and then from 1975-83.
Like most major cities, Cleveland had two major daily newspapers, many radio stations and 3 network tv stations in the post-war era. Dorothy Fuldheim was a pioneering woman journalist who served throughout this period. She challenged the Kent State shootings.
I grew up in a small town of 4,000 people about 30 miles east of Cleveland, dominated by the Cleveland media. As a youngster, I delivered newspapers for the 2 big Cleveland and 2 local printers. Cleveland saw itself as a very major US city. 5th largest nationally in 1920. 8th largest in 1960. Cleveland was a major industrial supplier of the WWII war effort. It’s corporations greatly benefited from the post-war global industrial expansion. They struggled to face the 1970 challenges from international (Japanese) competition, environmental regulations, labor power/regulations, technological changes (IT, process), and consumer/retailer power changes.
The Cleveland economy was stagnant in the 1960’s and declining in the 1970’s. Locals supported the civil rights movement but recoiled from the Hough riots. The world was changing faster than the local economy and thought leaders could digest in 1969. With Kent State, the population and political leaders turned inward. The students were wrong. The guard did its job. A majority agreed. A substantial minority disagreed.
As a country we remain very divided, 54 years later.
The film “Network” expressed this passionate viewpoint in 1976. Economic and cultural changes were so great that people could not digest them. The difficulties of the 1960’s revolution continue 50 years later. Left and right both struggle with our situation today.
Donald Trump won. He improved in many demographic segments. The Republican Party won. The Democratic policies, politicians and messages lost. Democrats seems to be in denial.
Most are blaming someone or something: Biden’s late withdrawal, Kamala’s tight link with unpopular Joe, American sexism, Trump’s magnetic hold on the country, the media’s unwillingness to hold Trump and Republicans accountable for lies, plainly inaccurate or misleading claims, an uninspiring centrist platform, too many far-left positions that can be exploited by the opposition, billionaire dark money, Trump’s undermining of any normal frame of reference for character or policies through his years of speaking and acting that would have never been accepted before him, the thumb of the Supreme Court on political activities that benefit Republicans, Trump’s reassembly of the Republican Party into a personality cult where no opposition exists to provide options, discussion or pressures, the Republican news media’s amazing power to shape beliefs of Republicans, independents and Democrats, the undercutting of all institutional frames of reference (media, universities, FBI, DOJ, courts, churches, intellectuals, movies, civic organizations, business, schools, government), Republican manipulation of the state election systems to create a built-in advantages, the lack of a charismatic Democratic leader, polarized politics turns out politicians and their party every 4 years, a lack of belief in any politician or political party, a “what have you done for me lately” transactional politics from many voting blocs, the transition of minority groups from being solidly Democratic to better reflecting a normal distribution of left to right views, the global embrace of populism in a post Western, capitalist, democratic, human rights, global trade and development consensus, the inherent disadvantage of progressive parties who must deliver on their promises rather than oppose and check the misguided, unrealistic opposition. The list is unlimited.
There may be important content in many of these explanations. But, overall, they fail to focus on the two core issues. What policies, politicians and messages COULD be attractive to persuadable voters, either from the base or the middle? How does the Democratic Party reestablish itself as a credible voice to be considered?
The Center or the Edge?
This election once again confirmed that the US is an individualistic, capitalist, local, independent, freedom loving, patriotic, culturally moderate society. Economics and culture both matter. A supermajority of Americans wants moderate policies. They don’t really want revolution. This is a real problem for the idealistic wing of the Democratic Party which has grown from 5% to 20% of the country and 10% to 35% of the party. The national American electorate does not support policies that can be framed or challenged as extreme, costly, risky, uncertain, elite, cosmopolitan, global, socialist, irrational, idealist, utopian, etc. Whenever these more progressive policy options are promoted, the Republican Party wins at the national level. To have a chance of winning, the Democratic Party needs to have the discipline to frame policy options that deflect Republican counterattacks yet motivate the base to support the party goals. This is difficult, requiring creative development and communications.
First, take a firm stand as a center-left party and consistently reject “far left”, “new left”, “socialist”, “green”, and “postmodernist” policies that are so easily defeated. Second, focus on pragmatic policies that clearly benefit middle Americans economically. Focus on equal opportunity, rather than redistribution. Focus on basic economic fairness rather than demonizing the rich, the billionaires, the bankers, Wall Street, the 1%. See my RESPECT proposals. Focus on the middle class, not “the poor”. This strategy maximizes consideration from the persuadable voters at all income levels, in all locations.
What Do Citizens Really Expect from Politicians? Not Much.
There was a time when Americans required presidential candidates to meet high standards. Goldwater was thrashed because he was considered unstable by many. McGovern could not recover from his association with “acid, amnesty and abortion”. His running mate Eagleton’s mental health history was a big issue. Muskie could not recover from his public crying about one of Nixon’s dirty tricks and withdrew from the campaign. Bush Sr’s broken “no taxes” promise was fatal. Dukakis could not overcome the “Willy Horton” released prisoner crimes or the comic picture of him in a tank as a military leader. Kerry could not overcome the “swift boat” attack on his military career. Most importantly, Bill Clinton was elected because he convinced Americans that “I feel your pain”. His impeachment raised questions about presidential character that still resonate today. Democrats argued that personal matters are not all that important. This opened the door for Newt Gingrich and a purely “ends justify the means” approach to politics.
In a “postmodern” world, we’ve lost objective knowledge, truth or morality. We are wrestling with the loss of this agreed upon reality among our citizens and leaders. The 1960’s opened the door for a radically “relative” world view. The shift was jarring. As commentators noted about the Clinton campaigns in 1992, 1996 and 2016 we were still arguing about the 1960’s cultural revolution and the politics of the Vietnam War. The bottom line is that many citizens, left, right and center, no longer believe in a fixed, objective world defined by science, religion or natural law.
Hence, our expectations of politicians are very low. Solid truth, honesty, and objectivity are no longer required. I think what we see from Trump is that “authenticity” has been elevated to become the premier value. “I don’t agree with him but at least he is authentic. He does what he says. He is not a phony”.
We may be at a place where all we can expect is for them to keep “most” of their “largest” promises.
Political Grey Zone
We have a complicated situation regarding political ethics. We either believe there are core objective ethical values or not. In general, I see most Democrats of both left and center perspectives as ethical idealists. There is an ethical standard. We know what it is. We ought to follow it. I agree with respect to personal decisions. I’m not sure this is the best practical rule for politicians and political parties. I think that there is an element of “the end justifies the means” that applies to real world politics. We see the same tension between idealistic and pragmatic politics at the international level (real politic). I think that pragmatism must compete with idealism in real world politics.
One Very Important Hillary Clinton Debate Question
I’ll never forget when Hillary Clinton was asked what was either a “softball” or a “gotcha” question in a 2016 debate. “As president or secretary of state, are there times when you must lie or ‘manage the truth’?” Hillary gave the George Washington response, “I can never tell a lie”. I screamed at the television. Really? As Secretary of State? Our chief international negotiator? As a leader? As a motivator? As a communicator? As a politician? Trying to appeal to diverse coalition partners? As a presidential candidate, trying to engage both the base and the undecideds? As president, trying to lead the whole country? I think that my “in-authenticity” button was pressed.
I thought about salespeople, negotiators, purchasers, supply chain managers, account managers, marketers, persuaders, speakers …. The whole capitalist system is driven by these kinds of communications that blend facts, history, relations, cultures, promises, implied threats, incentives, short-term and long-term, risks and rewards, opportunities, possibilities. It’s complicated. That’s why we collectively invest so much in managing these relationships.
Politics is the same. International politics is the same. Why do we want to claim that our politics are perfect, pure, above board? They are not. They cannot be. They should not be. When political leaders pretend to be “holier than thou”, they lose credibility with a majority of the electorate.
We’re stuck in a moral grey area. We want to think of ourselves as ethical. But, to achieve our desired ends for society we cannot be perfectly ethical. I don’t have an answer as to where the line is, or the exact tradeoffs, or a perfect example of what to do. I am sure that there is a need to consider ethical ideals and political reality when making political decisions.
Don’t Compromise on Core Values
Don’t hold the country hostage to approve an increase in the deficit ceiling.
Don’t manipulate the election process to win.
Don’t embrace special interest groups to attract funding and votes.
Don’t use the judicial and administrative regimes to win political battles.
A party that can establish credibility here will possess a major asset.
Political Parties Must Deliver on Their Promises
LBJ as senator and president is exhibit #1. Whatever it takes.
Laws are like sausages, it is better not to see how they are made.
Ideals are “nice”, but I elected you to deliver. In a pragmatic, transactional world, results matter more than ever.
Some “Delivering Results” Examples
Inflation was growing rapidly in 2021. Biden needed to address it. Lower government spending. Pressure the Federal Reserve Board to raise interest rates. Apply “bully pulpit” pressure on corporations to not raise prices. Implement excess prices or excess profits controls under emergency presidential authority.
Immigrant volumes increased after Biden took office. Engage the military and national guard to “secure the borders”. Reallocate federal appropriations to “solve the problem”. Use the finances and political power of the US to intercept immigrants at the southern Mexican border.
Aggressive antitrust reviews and enforcement, given expressed Republican support.
Consolidate all welfare spending into a single bill to increase benefits while “solving” the problems of earned benefits and equity. Invest in “welfare fraud” investigators together with IRS agent funding.
Make a $15/hour minimum wage bill a top priority. Organize strikes to support it. Engage corporate supporters. Fine-tune the details to deal with teenager and agriculture exceptions.
Israeli PM Netanyahu wishes to wage war in Gaza and expand West Bank settlements. Provide a clear set of support and limits. Enforce the limits up to complete withdrawal of military support.
Create a “blue ribbon commission” on Social Security funding structured to ensure that the compromise recommendations will be approved.
Engage with Republicans to support policy proposals that benefit middle Americans.
Biden followed this “deliver results” strategy to cancel many varieties of student loan debt. A majority of Americans opposed this. it is only effective if most Americans agree. Delivering for the base or individual constituencies is inherently suspect.
Rapidly deliver visible “pilot project” results from the 2 large infrastructure bills that were passed.
Resolve the “temporary” status of the 2 federal home mortgage guarantee agencies.
Determine a long-term solution for the US Postal Service that provides some local mail delivery and reduced costs and employment.
The key to providing credibility is proactively finding solutions that meet the needs of the general public even when party supporters must incur some of the costs or risks of the solutions.
Summary
Democrats need to take a hard look in the mirror. They have lost the support of the American people. To recover, they need to refocus their policies on the economic opportunity needs of “middle America”. They must convince “middle America” that they have no extreme economic or cultural policy agendas. They need to deliver results that match their promises. There are no “moral victories” in politics. Parties must win elections in order to deliver results. When in power they must use all of the levers of power. Pragmatic means for progressive ends.
According to some on the left (and some on the right), the “wealthy, capitalists, billionaires or 1%” are evil, irredeemable, “vampire squids” only interested in making, keeping and growing wealth, power and influence. They say that the only solutions to this situation are to tax, regulate and publicize their finances and influence. Any number of laws should be enacted to fight against this force against the public good.
History shows …
The wealthy and powerful actively invest to protect and expand their wealth. In the United States, they have repeatedly “captured” the political system with two interludes of effective opposition during the progressive era and the New Deal from FDR to LBJ. Their tools include political contributions, network influence, legal actions, administrative agency capture, media control, social influence, lobbying, contracting, funding political parties and thought influencers. They can easily hire the most effective professionals to pursue their goals in all areas.
Wealth Will Find a Political Way
The American political system generally undermines centralized governmental power. [Although the imperial presidency under Trump with possible Supreme Court support will be a big test]. Federal agencies, the Senate, Congress, the President and the courts jockey for federal power and compete with state and local governments. Focused investments by a relatively small group of wealthy individuals have a strong chance of finding the weakest spots in “the government of the people, by the people and for the people”. If this group makes good choices in setting goals, investing in politics, selecting strategies and showing that they are willing to do “whatever it takes” to win, they attract political supporters and greatly leverage their relatively small investments and very small voting numbers.
Repeated Failures of Their Opponents
Progressives have tried to legislate their way to victory. The wealthy have fought back and reversed many of the gains in limiting their power to pursue greater wealth without limits placed upon them by other stakeholders: labor, consumers, investors, nations, nature, religion, or local communities. There have been some permanent gains in labor conditions/rights, consumer safety, environmental protection, progressive taxation, public education, public infrastructure, monopoly regulation, anti-discrimination, etc. There are some real changes between 1850 and 2020. No one wants to turn back the hands of time.
Yet, on the enduring core political issues, the wealthy have successfully pursued counter-offensives. Lower taxes of all kinds. Undermined support for government and government services. Judicial challenges and rulings. Weakened regulations.
They have maintained effective control of the Republican party for 175 years. They have partnered with middle America, urban elites, WASP America, industry, corporate America and small business/entrepreneurial America, mainstream and fundamentalist religion, anti-slavery and states’ rights groups, Main street America, rural America, southern America, sunbelt America, isolationists and pro-traders, anti-communist hawks and America firsters, assertive neo-conservative foreign policy wonks and inherently defensive thinkers, promoters of American power through international relations and doubters, international free traders and mercantilist tariff warriors, libertarians, the professional class and the working class, skeptical protestants and conservative true believers, farmers and bankers, philosophical conservatives and political pragmatists, fiscal conservatives and political idealogues, preserving and restoring American culture, separation of church and state versus promoting one religious group, liberal and conservative social policies, the mainstream media is authoritative or fake. The end justifies the means. Some coalition of voters and interests can always be assembled to support their core financial interests.
The defenders of wealth have effectively shaped political debates by prioritizing issues, framing positions and policies to be considered, crafting favorable and unfavorable language and stories, shaping debates against extreme strawman positions, and polarizing positions. Democrats have attempted to use the same techniques but have been much less effective. Democrats have also shifted their positions on issues and reassembled their coalitions through time but been unable to secure a solid base of support in the last 50 years. They repeatedly point to a demographic “emerging majority” and the “rightness” of their causes and hope for more success soon.
Root Cause Analysis
Why does a small group of wealthy individuals consistently capture one political party and oppose efforts to reduce their wealth and power? Are they unusually evil? Is there a “class interest”? Don’t they care about our country and those less fortunate? I think there are two key factors. First, we have lived in an individualistic, relatively equal opportunity, relatively meritocratic economy for two centuries in the US. The economic winners can honestly look in the mirror and say, “I earned this”. [note the Obama buzzsaw around “you didn’t build this”]. Like each of us, they exaggerate their own merits and discount chance, privilege, inherited assets, opportunities, and ethical choices. Second, they have such great assets that they must protect them. The scale of accumulated wealth in the US is almost [or actually] beyond comprehension. Current GDP is nearing $23.4 Trillion, up 10 times in real terms from $2.2 Trillion in 1947. Stop for a minute to let this sink in. The US was truly the savior of the world in 1947. We now have 10 times as much wealth, resources, assets, power. Real $ GDP in 1850 was only $62 Billion. Real GDP increased 35 times in that century, perhaps the most amazing century of growth in world history, despite the Great Recession and WW II.
America has grown its population, its productivity/per capita GDP, and its corporate profits by at least 350 times in the last 175 years. A million here and a million there, and pretty soon you have real money. This is the power of compound interest. Wealth begets wealth. This is Thomas Piketty’s point.
A well invested portfolio provides 3-5% real returns per year. It accumulates to infinity sooner than you might imagine.
So … America has 350 times more annual economic output than in 1850. The wealthy have captured more than an equal share, so their wealth per person has grown 500-fold. Digest this ratio. There are more wealthy individuals. The winnings are divided across a larger population. Wealthy individuals control 500 times more assets per person than they did in 1850.
Average incomes have also increased. The reported $144/month for farmhands with board in 1850 becomes $5,800 today with 40X inflation. The current median income is $37,600, so the “typical” worker is 6.5 times better off today than in 1850.
The bottom line is that wealthy individuals or families have tremendous wealth to “manage” or protect. Some will highly value the other factors that produced their wealth and their obligations to society. Others will discount them and be the leading investors in political actors to preserve their wealth even though they too will face the “free rider” dilemma. Why should I invest to protect my wealth if others will do so for my benefit? As wealth has grown, a greater share of wealthy individuals has rationally invested in the political system to protect their wealth.
What is the Greatest Risk?
Wealthy individuals and families have much to worry about. If you have a billion dollars of assets, there are many risks and obligations, duties and responsibilities, social obligations, political interests, generational interests, black swan risks, portfolio effects, opportunities, and legacies. I would argue that the greatest risk is posed by democracy. Plato, Socrates and Aristotle all pointed to pure democracy as a threat to the wealth of the ruling class. This was clear when extreme wealth was a mere 1/1,000th of the level today. The individuals with the lowest incomes and wealth could use the power of the state to capture a greater share. Everyone thinks that they deserve more. This is human nature. The many outnumber the few. In a pure democracy they will “take from the rich”. They might reduce the top quintile by 20% to benefit the bottom 3 quintiles. They might flatten incomes. They might confiscate wealth. They might confiscate ALL wealth. This is the greatest fear of the economic winners in our society. The political system might “take” more than half of their income and all of their wealth. Wealthy individuals are “highly motivated” to prevent these outcomes. This is not spoken of “in polite company”.
Removing the Greatest Risks
Although most Democrats, liberals, leftists and progressives have an intuitive sense that they must fight wealth and power because it is right and fair, I argue that we ought to agree to permanently remove the risk of significant confiscation of wealth and income from the economic winners in our society. As those who claim to look at the big picture and the long run, we should set limits on how much income and wealth redistribution is required to meet our goals of a fair and prosperous society.
We should agree to set permanent structural limits on these areas. Enact constitutional amendments to clarify the redistribution limits of our society. We are so much wealthier today as a society.
JK Galbraith in 1958 was way ahead of the people in 1958 with his Affluent Society argument.
The wealthy can “make do” with a lesser share of our continually growing wealth. But no one wants to lose or give up what they have. This is human nature. I think the time has arrived to stop fighting the economic redistribution war that has never been won and find a solution that can gain support from a majority of wealthy individuals.
Federal marginal income tax rate shall not exceed 50%.
Combined wealth or property taxes shall not exceed 3% of value per year. Zero tax rate on the first $50 million of assets.
Any inheritance tax rate shall not exceed 15% of net assets received. First $5 million of assets is tax free. 10-year interest free period provided to pay inheritance taxes in excess of $100,000.
The tax rate on long-term capital gains shall not exceed 75% of the tax rate on earned income. Any long-term capital gains tax must include a deduction for at least 50% of the inflation rate during the asset holding period.
Any tax on financial transactions shall not exceed 0.5% of the transaction amount.
Fix the independence of Federal Reserve Board to pursue its joint goals of minimizing inflation and unemployment.
Limit the federal workforce to no more than 1% of the US population.
Require Congress to pass a budget each year that reduces any prior year budget deficit by one-third whenever the unemployment rate is 5% or lower.
Require the Treasury to pay any legally incurred debts of the government in a timely manner (no government shutdown crisis risk).
Limit federal government net spending to no more than 25% of prior year GDP, which restriction may be waived by the President with concurrence of at least 50% of the Senate in times of war or national emergency.
No limit on charitable deductions for donations to governments as an offset to earned income for federal taxation purposes.
Maximum corporate income tax rate of 30%.
Corporations are not considered persons. They do not have “free speech” rights with respect to political contributions.
State and federal election campaign communications shall be funded solely by the government and the active period of campaigning and voting shall be limited to 6 months or less.
If citizens do not agree with 100% government funding of political campaign communications, then individual or corporate contributions to any political organization shall be publicly reported each quarter.
Summary
Wealthy individuals and families have great wealth to protect. As a nation and society, we have an obligation to eliminate this concern from being a primary role in our political decisions. We can set reasonable limits on the maximum contributions required from prosperous individuals in our society. Many left-leaning individuals are focused on increasing the share of taxes paid by wealthy individuals on an equity basis. I argue that the nation would be best served by setting maximum taxation limits. Wealthy individuals might prefer lower tax rates, but they will be able to relax knowing that there is a limit on what political groups might choose to extract. Fewer would be highly motivated to invest extraordinary amounts in our political system if their greatest risks were already protected.
Good News 