Listen. Time for New Thinking.

One thing I have noticed in this political environment is that people do not listen to political views that diverge from their own. They believe what they believe, and that’s the end of it. Then they project bad intentions on anyone who disagrees. It makes for useless, though necessary, conversations.

This writer makes a good case for some rational reasoning through the imperative of listening to our politics rather than shouting them. We need to chart the correct path forward and it’s not by turning to the recent or distant past. Those mostly provide warning signs for the consequences of foolish mistakes.

History tells us that populist waves can lead to disaster or to reform…So how might we tilt the odds from disaster to reform? First, listen.

It’s Time for New Economic Thinking Based on the Best Science Available, Not Ideology

A new narrative for a complex age

By Eric Beinhocker 

If 2008 was the year of the financial crash, 2016 was the year of the political crash. In that year we witnessed the collapse of the last of the four major economic-political ideologies that dominated the 20th century: nationalism; Keynesian Pragmatism; socialism; and neoliberalism. In the 1970s and 80s the center right in many countries abandoned Keynesianism and adopted neoliberalism. In the 1980s and 90s the center left followed, largely abandoning democratic socialism and adopting a softer version of neoliberalism.

For a few decades we thought the end of history had arrived and political battles in most OECD countries were between centre-right and centre-left parties arguing in a narrow political spectrum, but largely agreeing on issues such as free trade, the benefits of immigration, the need for flexible efficient markets, and the positive role of global finance. This consensus was reinforced by international institutions such as the IMF, World Bank, and OECD, and the Davos political and business elite.

In 2008 that consensus was rocked, last year it crumbled. Some will cling on to the idea that the consensus can be revived. They will say we just need to defend it more vigorously, the facts will eventually prevail, the populist wave is exaggerated, it’s really just about immigration, Brexit will be a compromise, Clinton won more votes than Trump, and so on. But this is wishful thinking. Large swathes of the electorate have lost faith in the neoliberal consensus, the political parties that backed it, and the institutions that promoted it. This has created an ideological vacuum being filled by bad old ideas, most notably a revival of nationalism in the US and a number of European countries, as well as a revival of the hard socialist left in some countries.

History tells us that populist waves can lead to disaster or to reform. Disaster is certainly a realistic scenario now with potential for an unravelling of international cooperation, geopolitical conflict, and very bad economic policy. But we can also look back in history and see how, for example, in the US at the beginning of the 20th century Teddy Roosevelt harnessed populist discontent to create a period of major reform and progress.

So how might we tilt the odds from disaster to reform? First, listen. The populist movements do contain some racists, xenophobes, genuinely crazy people, and others whom we should absolutely condemn. But they also contain many normal people who are fed up with a system that doesn’t work for them. People who have seen their living standards stagnate or decline, who live precarious lives one paycheque at a time, who think their children will do worse than they have. And their issues aren’t just economic, they are also social and psychological. They have lost dignity and respect, and crave a sense of identity and belonging.

They feel – rightly or wrongly – that they played by the rules, but others in society haven’t, and those others have been rewarded. They also feel that their political leaders and institutions are profoundly out of touch, untrustworthy, and self-serving. And finally, they feel at the mercy of big impersonal forces – globalization, technology change, rootless banks and large faceless corporations. The most effective populist slogan has been “take back control”.

After we listen we then have to give new answers. New narratives and policies about how people’s lives can be made better and more secure, how they can fairly share in their nation’s prosperity, how they can have more control over their lives, how they can live with dignity and respect, how everyone will play by the same rules and the social contract will be restored, how openness and international cooperation benefits them not just an elite, and how governments, corporations, and banks will serve their interests, and not the other way around.

This is why we need new economic thinking. This is why the NAEC initiative is so important. The OECD has been taking economic inequality and stagnation seriously for longer than most and has some of the best data and analysis of these issues around. It has done leading work on alternative metrics other than GDP to give insight into how people are really doing, on well-being. It is working hard to articulate new models of growth that are inclusive and environmentally sustainable. It has leading initiatives on education, health, cities, productivity, trade, and numerous other topics that are critical to a new narrative.

But there are gaps too. Rational economic models are of little help on these issues, and a deeper understanding of psychology, sociology, political science, anthropology, and history is required. Likewise, communications is critical – thick reports are important for government ministries, but stories, narratives, visuals, and memes are needed to shift the media and public thinking.

So what might such a new narrative look like? My hope is that even in this post-truth age it will be based on the best facts and science available. I believe it will contain four stories:

  • A new story of growth [see this post]
  • A new story of inclusion [see this post]
  • A new social contract
  • A new idealism

This last point doesn’t get discussed enough. Periods of progress are usually characterized by idealism, common projects we can all aspire to. Populism is a zero-sum mentality – the populist leader will help me get more of a fixed pie. Idealism is a positive-sum mentality – we can do great things together. Idealism is the most powerful antidote to populism.

Finally, economics has painted itself as a detached amoral science, but humans are moral creatures. We must bring morality back into the center of economics in order for people to relate to and trust it. All of the science shows that deeply ingrained, reciprocal moral behaviors are the glue that holds society together. Understanding the economy as not just an amoral machine that provides incentives and distributes resources, but rather as a human moral construct is essential, not just for creating a more just economy, but also for understanding how the economy actually creates prosperity.

In short, it is time to forge a new vision that puts people back at the center of our economy. To paraphrase Abraham Lincoln, it is time to create an economy that is “of the people, by the people, for the people.” We are truly at a fluid point in history. It could be a great step backward or a great step forwards. We must all push forwards together.

Based on remarks originally delivered to the OECD New Approaches to Economic Challenges workshop, December 14, 2016, Paris.

Why I Shorted Hillary Clinton

Six months before the election.

In the six odd weeks since the Nov. 8 election, the news media has presented a chaotic post-mortem of what exactly happened in this election. Mostly, they are focused on the unfathomable: how did Hillary Clinton lose? Sexism? Comey? Russian hackers? Putin?

But a number of election analysts saw the problems of a Clinton candidacy from afar. In the spring of 2015, I personally told a group of Silicon Valley liberals that Clinton was probably the weakest candidate the Democrats could choose in the current anti-establishment political climate. Democrats and Republicans alike were openly lamenting even the idea of another Bush-Clinton election.

More damning was the hard electoral evidence already out there on the Democratic agenda under Obama: the loss of the House and Senate, and more than a dozen governorships and state legislatures. How could these facts be ignored? I have discovered in our polarized politics that people don’t really listen to reason, they merely believe. And then they are faced with disbelief at the outcomes. (Scott Adams calls it cognitive dissonance.)

For most of 2015, the primary season was unclear, though most expected the party choices of Clinton vs. Rubio, Walker, Christy, or Bush would play out. Certainly very few–neither myself nor anybody I know–gave Trump even a remote chance of gaining the nomination. The GOP field of intended candidates became a parlor joke of seventeen dwarves crowding the stage. Liberals could not believe any of these could match up to Hillary on the national stage. They reverted to praising her extended political resume, as if that mattered. (Obama, for instance, probably had the shortest resume in modern presidential history.)

I maintained that Hillary had the highest negatives of any possible Democratic nominee and that after this became apparent following the DNC in August, panic would set in. I was off by a month because of someone nobody saw coming: Donald Trump.

After the first few primaries, Trump’s success gave new life to the fantasies Democrats were spinning. After all, Trump had the highest negatives of any candidate in modern history. At the time I tended to agree that a face-off between Clinton and Trump was a bit of a wild card and that by conventional politics, Clinton would seem to be favored. On the Republican side, opinion pollsters and media pundits all discounted Trump’s chances, but his primary wins rolled on. It was about March when I had the epiphany that past history was no guide to the future – this time was different. The anti-establishment wave that had been building since 2000 had finally begun to crest over “politics as usual.”

Ignoring this anomaly, liberals actually began to desire Trump to be the Republican nominee and conservatives secretly wondered if he wasn’t a Clinton shill. But still, I suspected none of what Trump did would accrue to Clinton’s benefit in this election cycle. It was in March, after observing the odd traction of Bernie Sanders, that I laid some wagers betting against a Clinton presidency (note, not FOR Trump or any other nominee, but solely against Clinton for the Democrats). Part of the reason was I felt the confidence of Clinton supporters was emotionally driven, so I got incredible odds that made the bet a no-brainer: 10 to 1, when the betting lines were closer to 4 to 1. I could have laid off this bet on the other side and enjoyed a riskless arbitrage, but I was fairly convinced, as a political scientist who had studied the data on the last 4 presidential elections, that any Clinton-Trump contest would be pretty much a toss-up and I liked the risk-return payoff.

When Trump’s support seemed to be bleeding working-class union voters from the Rust Belt, I was more convinced. But not my liberal Democrat friends. They cited endless poll numbers to support their beliefs, trusting in data from 538. I merely asked that since the polls, including those by 538, had been wrong for almost 9 months, why exactly should they be accurate now? Then they resorted to Electoral College math, but I replied that swing states with slim margins can flip rather easily. A month to two weeks before the election, with Clinton enjoying a 3-6 point lead in the polls I offered to double-down on my wagers against Clinton but got no takers. Apparently, confidence was growing a bit shaky. Trump support never seemed to go away despite the bashing he received in the media.

On Nov. 7, a friend who trusted my objectivity asked me who I thought would win. I said, although traditional measures point to a narrow Clinton win, traditional measures have failed and thus the outcome was still a 50-50 toss-up in my mind. I definitely liked my bet. On Nov. 9, we woke up to a new political reality, but the point is that we should all have seen it coming.

Here is a quote from the Economist assessing the election:

Republicans have long held the edge in America’s wide-open spaces, but never has the gap been this profound: a whopping 80% of voters who have over one square mile (2.6 square km) of land to enjoy to themselves backed Mr Trump. As the scatter plot below demonstrates, as counties become increasingly densely populated, fewer and fewer vote Republican. American politics appear to be realigning along a cleavage between inward-looking countryfolk and urban globalists.

The problem here (see italics) is that this tension in American politics is nothing new. In fact, it’s more than 200 years old. Regional differences have always existed but have become acute at certain times in our history. The urban-rural polarization is particularly sharp today because the parties have divvied up the polity with targeted policies: Democrats target identity groups that mostly live in urban areas and Republicans target everybody else (see this 2006 op-ed on the 2000/04 elections). The divide is compounded by urban media that targets political biases to its main audience: urban liberals. So urban media elites told their liberal urban audiences what they wanted to hear, rather than objective truth. I’m sure liberal reporters like E.J. Dionne, Juan Williams, Meet The Press, the NY Times op-ed page, etc., believed it themselves.

So, now the disillusioned are catching up with reality. Here’s Conan O’Brien stating the obvious:

“I really believe nobody knows anything right now,” says Conan O’Brien. “I really think the whole mantra that everyone must have, not just in this medium but in the world in general, is that no one knows anything.” Trump’s victory has landed a blow to the country’s notions of certainty. “I would say we’re not seeing the death of certainty,” O’Brien said. “But certainty has taken a holiday right now.” Plenty of certainty, now discarded, was generated in 2016. Our cozy silos of belief and customized group assumptions gave us our most brutal campaign in years. “Everyone has their own street corner,” O’Brien said.

As I stated above, partisan preferences have become less about reasoned policies and compromises and more about pure belief systems. Facts that don’t fit beliefs get tossed aside. If you believe Hillary lost because of Putin, or Comey, or sexism, or racism, or Electoral College math, you’re sinking into quicksand of your own making. Winning a majority of almost 85% of the 3141 counties across the nation is a significant statistical feat that can’t be explained by any single factor. From where I sat it had little to do with Trump, who merely road the wave. Rural and suburban America can never be dismissed by either party. Hillary Clinton was the weakest candidate in the post-war era, by far. If I could see it, so could you.*

*BTW, I’m not clairvoyant or particularly gifted with political genius. Using traditional electoral measures I bet on Romney over Obama for an easy win in 2012. But we can learn from our mistakes.

 

 

 

 

 

 

 

How to Get Beyond Our Tribal Politics

Long-winded, but worthy enough for a reprint (from the WSJ):

Whether Hillary Clinton or Donald Trump wins Tuesday, understanding the psychological causes of our national rift can help us bridge it

By JONATHAN HAIDT and RAVI IYER

Nov. 4, 2016 11:05 a.m. ET

The most-watched made-for-TV movie in American history is “The Day After,” a 1983 portrayal of life in Kansas and Missouri in the days just before and after an all-out nuclear war with the Soviet Union. If you’ve had even fleeting thoughts that Tuesday’s election could bring about the end of the world or the destruction of the country, you might want to find “The Day After” on YouTube, scroll to minute 53 and watch the next six minutes. Now that’s an apocalypse.

It’s an absurd comparison, of course, but the absurdity is helpful. It reminds us that no matter how bad things seem, we have a lot to be grateful for. The Soviet Union is gone, and life in America has gotten much better since the 1980s by most objective measures. Crime is way down, prosperity and longevity are way up, and doors are open much more widely for talented people from just about any demographic group. Yes, we have new problems, and the benefits haven’t been spread evenly, but if you look at the big picture, we are making astonishing progress.

Watching “The Day After” also might help Americans to tone down the apocalyptic language that so many have used about the presidential race. On the right, some speak of this as the “Flight 93 election,” meaning that America has been hijacked by treasonous leftists who are trying to crash the plane, so electing Donald Trump to rush the cockpit is the only sane choice. On the left, some think that a Trump victory would lead to a constitutional crisis followed by a military coup, fascism and dictatorship.

Nearly half the country will therefore wake up deeply disappointed on the morning of Nov. 9, and many members of the losing side will think that America is doomed. Those on the winning side will feel relieved, but many will be shocked and disgusted that nearly half of their fellow citizens voted for the moral equivalent of the devil. The disgust expressed by both sides in this election is particularly worrisome because disgust dehumanizes its targets. That is why it is usually fostered by the perpetrators of genocide—disgust makes it easier for ordinary citizens to kill their neighbors.

Suburban neighbors in the swing state of Pennsylvania have managed to preserve their friendship and sanity throughout a long and bitter election season. WSJ’s Shelby Holliday reports. Photo: Heather Seidel for The Wall Street Journal

In short, the day after this election is likely to be darker and more foreboding than the day after just about any U.S. election since 1860. Is it possible for Americans to forgive, accept and carry on working and living together?

We think that it is. After all, civility doesn’t require consensus or the suspension of criticism. It is simply the ability to disagree productively with others while respecting their sincerity and decency. That can be hard to do when emotions run so high. But if we understand better the psychological causes of our current animosity, we can all take some simple steps to turn it down, free ourselves from hatred and make the next four years better for ourselves and the country. Three time-honored quotations can serve as guides.

“Me against my brother, my brothers and me against my cousins, then my cousins and me against strangers.” —Bedouin saying

Human nature is tribal. We form teams easily, most likely because we have evolved for violent intergroup conflict. Our minds take to it so readily that we invent myths, games and sports—including war games like paintball—that let us enjoy the pleasures of intergroup conflict without the horrors of actual war.

The tribal mind is adept at changing alliances to face shifting threats, as the Bedouin saying indicates. We see such shifts after party primaries, when those who backed a losing candidate swing around to support the nominee. And we saw it happen after the 9/11 attacks, when the country came together to support the president and the military in the invasion of Afghanistan.

But with the exception of the few months after 9/11, cross-partisan animosity has been rising steadily since the late 1990s. This year, for the first time since Pew Research began asking in 1994, majorities in both parties expressed not just “unfavorable” views of the other party but “very unfavorable” views. Those ratings were generally below 20% throughout the 1990s. And more than 40% in each party now see the policies of the other party as being “so misguided that they threaten the nation’s well-being.” Those numbers are up by about 10% in both parties just since 2014.

So what will happen the next time there is a major terrorist attack? Will we come together again? Or will the attack become a partisan football within hours, as happened after the various lone-wolf attacks of the past year? Something is broken in American tribalism. It is now “my brothers and me against my cousins” all the time, even when we are threatened by strangers and even when there is no threat at all.

Democracy requires trust and cooperation as well as competition. A healthy democracy features flexible and shifting coalitions. We must find a way to see citizens on the other side as cousins who are sometimes opponents but who share most of our values and interests and are never our mortal enemies.

“Why do you see the speck in your neighbor’s eye, but do not notice the log in your own eye?… You hypocrite, first take the log out of your own eye, and then you will see clearly to take the speck out of your neighbor’s eye.” —Jesus, in Matthew 7:3-5

Our tribal minds are equipped with a powerful tool: shameless and clueless hypocrisy. It is a general rule of psychology that “thinking is for doing”: We think with a particular purpose in mind, and often that purpose isn’t to find the truth but to defend ourselves or attack our opponents.

Psychologists call this process “motivated reasoning.” It is found whenever self-interest is in play. When the interests of a group are added to the mix, this sort of biased, god-awful reasoning becomes positively virtuous—it signals your loyalty to the team. This is why partisans find it so easy to dismiss scandalous revelations about their own candidate while focusing so intently on scandalous revelations about the other candidate.

Motivated reasoning has interacted with tribalism and new media technologies since the 1990s in unfortunate ways. Social media, hackers and Google searches now help us to find hundreds of specks in our opponents’ eyes, but no technology can force us to acknowledge the logs in our own.

“Nature has so formed us that a certain tie unites us all, but…this tie becomes stronger from proximity.” —Cicero, “On Friendship”

Humans are tribal, but tribalism can be transcended. It exists in tension with our extraordinary ability to develop bonds with other human beings. Romeo and Juliet fell in love. French, British and German soldiers came out of their trenches in World War I to exchange food, cigarettes and Christmas greetings.

The key, as Cicero observed, is proximity, and a great deal of modern research backs him up. Students are more likely to become friends with the student whose dorm room is one door away than with the student whose room is four doors away. People who have at least one friend from the other political party are less likely to hate the supporters of that party.

But tragically, Americans are losing their proximity to those on the other side and are spending more time in politically purified settings. Since the 1980s, Democrats have been packing into the cities while the rural areas and exurbs have been getting more Republican. Institutions that used to bring people together—such as churches—are now splitting apart over culture war issues such as gay marriage.

Ever more of our social life is spent online, in virtual communities or networks that are politically homogeneous. When we do rub up against the other side online, relative anonymity often leads to stunning levels of incivility, including racist and sexist slurs and threats of violence.

So are we doomed? Will the polarizing trends identified by Pew just keep going until the country splits in two? Maybe John Adams was right in 1814 when he wrote, “Democracy never lasts long. It soon wastes, exhausts and murders itself.”

But we have lasted 240 years so far, and both sides agree that America is worth fighting for. We just have to see that the fight isn’t always against each other; it is also a struggle to adapt our democracy and our habits for polarizing times and technologies.

Some of these adaptations will require changes to laws and institutions. Some will come from improving technology as we fine-tune social media to reward productive disagreement while filtering out trolling and intimidation.

And many of the changes must come from each of us, as individuals who have friends, co-workers and cousins who voted for the other side. How will we treat them as customers, employees, students and neighbors? What will we say to them at Thanksgiving dinner?

If you would like to let go of anger on Nov. 9 without letting go of your moral and political principles, here is some advice, adapted from ancient wisdom and modern research.

First, separate your feelings about Donald Trump and Hillary Clinton from your feelings about their supporters. Political scientists report that since the 1980s, Americans have increasingly voted against the other side’s candidate, rather than voting enthusiastically for their own, and that is especially true this time. So don’t assume that most people on the other side like or even agree with their candidate on any particular issue. They may be voting out of fears and frustrations that you don’t understand, but if you knew their stories, you might well empathize with them.

Second, step back and think about your goals. In the long run, would you rather change people or hate them? If you actually want to persuade or otherwise influence people, you should know that it is nearly impossible to change people’s minds by arguing with them. When there is mutual antipathy, there is mutual motivated reasoning, defensiveness and hypocrisy.

But anything that opens the heart opens the mind as well, so do what you can to cultivate personal relationships with those on the other side. Spend time together, and let the proximity recommended by Cicero strengthen ties. Familiarity does not breed contempt. Research shows that as things or people become familiar, we like them more.

Emotions often drive reasoning, so as our hearts harden, our thinking also calcifies, and we become dogmatic. We are less able to think flexibly and address the social problems that we claim to care about. As John Stuart Mill wrote in 1859, “He who knows only his own side of the case knows little of that.” So cultivating a few cross-partisan friendships will make you smarter as well as calmer, even if polarization grows worse.

And if you do find a way to have a real conversation with someone on the other side, approach it skillfully. One powerful opener is to point to a log in your own eye—to admit right up front that you or your side were wrong about something. Doing this at the start of a conversation signals that you aren’t in combat mode. If you are open, trusting and generous, your partner is likely to reciprocate.

Another powerful depolarizing move is praise, as we saw in the second Clinton-Trump debate. After more than 90 minutes of antagonism, a member of the town-hall audience brought the evening to a close with this question: “Would either of you name one positive thing that you respect in one another?”

Mrs. Clinton began with weak praise by saying that she respects Mr. Trump’s children. But then she made it strong and generous by noting how “incredibly able” those children are and how devoted they are to their father, adding, “I think that says a lot about Donald.” Mr. Trump responded in kind: “I will say this about Hillary. She doesn’t quit, and she doesn’t give up. I respect that.”

That brief exchange was emotionally powerful—the only uplifting moment of the night for many viewers. Had it been the opening exchange, might the debate have been more elevated, more constructive?

This has been a frightening year for many Americans. Questions about the durability, legitimacy and wisdom of our democracy have been raised, both here and abroad. But the true test of our democracy—and our love of country—will come on the day after the election. Starting next Wednesday, each of us must decide what kind of person we want to be and what kind of relationship we want to have with our politically estranged cousins.

Dr. Haidt is a social psychologist at New York University’s Stern School of Business, a fellow at the Martin Prosperity Institute and the author of “The Righteous Mind: Why Good People Are Divided by Politics and Religion.” Dr. Iyer is a social psychologist and data scientist at the website Ranker and the executive director of CivilPolitics.org.

The Degeneration of Political Discourse

If there’s one thing I’ve learned this election season, it is the increasing degeneration of political discourse in our society. Probably everyone in America these past few months has experienced this phenomenon, and either jumped into the mudpit or turned away in disgust. Unfortunately, there is nowhere to turn.

Democracy, as an institution of social choice and self-governance through voting, relies on compromise to resolve divergent interests. This compromise, or middle ground, is often depicted as serving the interests of the “median voter” in election models. Our electoral system seeks to reward candidates or parties who can appeal to this median “center.” The idea of the centrist is one who moves away from the extremes to find common ground. The problem is that we have obliterated the center in our national politics.

How did this happen?

Some have blamed the two-party system that has divided us into red vs. blue and subsequently conquered us as we squabble over ideological trivia. Others have decried our lack of choice between the parties of Tweedle-Dee and Tweedle-Dum, sometimes using the catch-all term the Republicrats for the political class. Still others blame the systemic bias of the media in their desperate bid to remain politically and economically relevant in the digital world.

All of these factors have contributed to our political degeneration. However, I would say the problem is less about only having two parties than about how the parties abuse the system to divide us. I’ve written repeatedly about how the parties and the media benefit from our dysfunction and promote it every chance they get. It is true of Obama, as it is true of Congressional leaders of both parties. It is true of the mainstream media as it is of FOX News and Talk Radio. If we’re looking for relief, it won’t come from these sources.

It will come from us, and there’s the rub.

My own experience as a political commentator illustrates my point. A few weeks ago I wrote that I will vote Neither…Nor in this presidential election for reasons explained here.

Immediately I was accosted by partisans of both sides claiming I was really favoring the opposing candidate. So Democrat liberals accused me of essentially supporting Trump and Trump Republicans of putting Clinton into office. Obviously both can’t be true, but that seems beside the point.

What’s going on here is the desire to paint the issue in black and white and castigate one for joining the wrong side. Identity politics, the growing cancer on democracy, almost forces this dynamic. The tactic is truly the last resort of dirty, rotten scoundrels, but let me explain. What I’m referring to is a typical debating tactic of winning the debate by delegitimizing your opponent (not the argument, but the person). This tactic can take several different forms.

The most extreme way is to simply condemn your opponent’s moral character: a racist, a bigot, a crook. A related way is to impugn your opponent’s motivations: greedy, power monger, predator. Next up is to question one’s intelligence: ignorant, uneducated, low IQ. A more subtle, less aggressive method is to accuse one of being a willing victim of misinformation and propaganda. Sometimes this can be accurate in this corrupted media world, but it’s often used as a blanket dismissal of opinions, views, or facts one disagrees with: I see, you listen to FOX News or read the New York Times.

So, I call this the last redoubt of a scoundrel because it is a feint away from the issue that must be resolved or compromised, and the scoundrel merely realizes that the just compromise with the stronger rationale is not the one they favor. Hence the desire to intimidate and throw one’s opponent on the defensive in order to win an argument. It tosses  democratic compromise into the lion’s pit of do or die.

I’ve written here how this silly finite game of winning an election is overwhelming the more important infinite game of democracy founded on the principles of liberty and justice. Scoundrels do damage to justice and to liberty. Yet too many of us have succumbed to the emotional appeal of winning at all costs. Unless we stop this and start to legitimize our fellow citizens’ preferences (we’re really not debate opponents), our discourse will continue to degenerate and lead to ever increasing dysfunction with disastrous results.

The politicians won’t do this for us. Heaven help us on November 9, because this election is merely the canary in the coal mine.

 

 

 

The New Old World Order

I cite this article because it is quite insightful of the failed political culture in the modern democratic West and particularly the failures of US party elites. It also exposes the larger historical forces at work that suggest the road forward may be rather rocky.

For me this 2016 moment resonates with historical analogies such as the Savonarolan episode in Renaissance Florence that I wrote about in The City of Man, the dissolution of the Weimar Republic in 1930s Germany, and the Iranian Fundamentalist Revolution in 1979. We haven’t reached those precipices yet, but all arrows point in that direction unless we come to grips with our current failures of both modern liberalism and neo-conservatism.

Donald Trump Does Have Ideas—and We’d Better Pay Attention to Them

The post-1989 world order is unraveling. Here are 6 ideas Trump has to replace it.

Politico, September 15, 2016

Ideas really don’t come along that often. Already in 1840, Alexis de Tocqueville observed that in America, “ideas are a sort of mental dust,” that float about us but seldom cohere or hold our attention. For ideas to take hold, they need to be comprehensive and organizing; they need to order people’s experience of themselves and of their world. In 20th-century America, there were only a few ideas: the Progressivism of Wilson; Roosevelt’s New Deal; the Containment Doctrine of Truman; Johnson’s War on Poverty; Reagan’s audacious claim that the Cold War could be won; and finally, the post-1989 order rooted in “globalization” and “identity politics,” which seems to be unraveling before our ey.es.

Yes, Donald Trump is implicated in that unraveling, cavalierly undermining decades worth of social and political certainties with his rapid-fire Twitter account and persona that only the borough of Queens can produce. But so is Bernie Sanders. And so is Brexit. And so are the growing rumblings in Europe, which are all the more dangerous because there is no exit strategy if the European Union proves unsustainable. It is not so much that there are no new ideas for us to consider in 2016; it is more that the old ones are being taken apart without a clear understanding of what comes next. 2016 is the year of mental dust, where notions that stand apart from the post-1989 order don’t fully cohere. The 2016 election will be the first—but not last—test of whether they can.
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If you listen closely to Trump, you’ll hear a direct repudiation of the system of globalization and identity politics that has defined the world order since the Cold War. There are, in fact, six specific ideas that he has either blurted out or thinly buried in his rhetoric: (1) borders matter; (2) immigration policy matters; (3) national interests, not so-called universal interests, matter; (4) entrepreneurship matters; (5) decentralization matters; (6) PC speech—without which identity politics is inconceivable—must be repudiated.

These six ideas together point to an end to the unstable experiment with supra- and sub-national sovereignty that many of our elites have guided us toward, siren-like, since 1989. That is what the Trump campaign, ghastly though it may at times be, leads us toward: A future where states matter. A future where people are citizens, working together toward (bourgeois) improvement of their lot. His ideas do not yet fully cohere. They are a bit too much like mental dust that has yet to come together. But they can come together. And Trump is the first American candidate to bring some coherence to them, however raucous his formulations have been.

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(Blog Note: It’s Not about Trump.)

Most of the commentary about Trump has treated him as if he is a one-off, as someone who has emerged because of the peculiar coincidence of his larger-than-life self-absorption and the advent of social media platforms that encourage it. When the world becomes a theater for soliloquy and self-aggrandizement, what else are we to expect?
But the Trump-as-one-off argument begins to fall apart when we think about what else happened in politics this year. First of all, Trump is not alone. If he alone had emerged—if there were no Bernie Sanders, no Brexit, no crisis in the EU—it would be justifiable to pay attention only to his peculiarities and to the oddities of the moment. But with these other uprisings occurring this year, it’s harder to dismiss Trump as a historical quirk.

Furthermore, if he had been just a one-off, surely the Republican Party would have been able to contain him, even co-opt him for its own purposes. After all, doesn’t the party decide? The Republican Party is not a one, however, it is a many. William F. Buckley Jr. and others invented the cultural conservatism portion of the party in the 1950s, with the turn to the traditionalism of Edmund Burke; the other big portion of the party adheres to the free-market conservatism of Friedrich Hayek. The third leg of the Republican Party stool, added during the Reagan years, includes evangelical Christians and Roman Catholics of the sort who were still unsure of the implications of Vatican II. To Burke and Hayek, then, add the names John Calvin and Aristotle/Thomas Aquinas. Anyone who really reads these figures knows that the tension between them is palpable. For a time, the three GOP factions were able to form an alliance against Communism abroad and against Progressivism at home. But after the Cold War ended, Communism withered and the culture wars were lost, there has been very little to keep the partnership together. And if it hadn’t been Trump, sooner or later someone else was going to come along and reveal the Republican Party’s inner fault lines. Trump alone might have been the catalyst, but the different factions of the GOP who quickly split over him were more than happy to oblige.

There is another reason why the Republican Party could not contain Trump, a perhaps deeper reason. Michael Oakeshott, an under-read political thinker in the mid-20th century, remarked in his exquisite essay, “Rationalism in Politics,” that one of the more pathological notions of our age is that political life can be understood in terms of “principles” that must be applied to circumstances. Politics-as-engineering, if you will. Republicans themselves succumbed to this notion, and members of the rank and file have noticed. Republicans stood for “the principles of the constitution,” for “the principles of the free market,” etc. The problem with standing for principles is that it allows you to remain unsullied by the political fray, to stand back and wait until yet another presidential election cycle when “our principles” can perhaps be applied. And if we lose, it’s OK, because we still have “our principles.” What Trump has been able to seize upon is growing dissatisfaction with this endless deferral, the sociological arrangement for which looks like comfortable Inside-the-Beltway Republicans defending “principles” and rank-and-file Republicans far from Washington-Babylon watching in horror and disgust.

Any number of commentators (and prominent Republican Party members) have said that Trump is an anti-ideas candidate. If we are serious about understanding our political moment, we have to be very clear about what this can mean. It can mean Trump’s administration will involve the-politics-of-will, so to speak; that the only thing that will matter in government will be what Trump demands. Or, it can mean that Trump is not a candidate who believes in “principles” at all. This is probably the more accurate usage. This doesn’t necessarily mean that he is unprincipled; it means rather that he doesn’t believe that yet another policy paper based on conservative “principles” is going to save either America or the Republican Party. In Democracy in America, Tocqueville was clear that the spirit of democracy is not made possible by great ideas (and certainly not by policy papers), but rather by practical, hands-on experience with self-governance. Ralph Waldo Emerson’s mystical musings in his essay, “Experience,” corroborate this. American democracy will not be rejuvenated by yet another policy paper from the Inside-the-Beltway gang. What I am not saying here is that Trump has the wisdom of an Oakeshott, a Tocqueville or an Emerson. What I am saying is that Trump is that quintessentially American figure, hated by intellectuals on both sides of the aisle and on the other side of the Atlantic, who doesn’t start with a “plan,” but rather gets himself in the thick of things and then moves outward to a workable idea—not a “principled” one—that can address the problem at hand, but which goes no further. That’s what American businessmen and women do. (And, if popular culture is a reliable guide to America, it is what Han Solo always does in Star Wars movies.) We would do well not to forget that the only school of philosophy developed in America has been Pragmatism. This second meaning of being an anti-ideas candidate is consonant with it.

If, as some have said, Trump’s only idea is, “I can solve it,” then we are in real trouble. The difficulty, of course, is that in this new, Trumpean moment when politics is unabashed rhetoric, it is very difficult to discern the direction a Trump administration will take us. Will he be the tyrant some fear, or the pragmatist that is needed?

It’s not unreasonable to think the latter. This is because, against the backdrop of post-1989 ideas, the Trump campaign does indeed have a nascent coherence. “Globalization” and “identity politics” are a remarkable configuration of ideas, which have sustained America, and much of the rest of the world, since 1989. With a historical eye—dating back to the formal acceptance of the state-system with the treaty of Westphalia in 1648—we see what is so remarkable about this configuration: It presumes that sovereignty rests not with the state, but with supra-national organizations—NAFTA, WTO, the U.N., the EU, the IMF, etc.—and with subnational sovereign sites that we name with the term “identity.” So inscribed in our post-1989 vernacular is the idea of “identity” that we can scarcely imagine ourselves without reference to our racial, gender, ethnic, national, religious and/or tribal “identity.” Once, we aspired to be citizens who abided by the rule of law prescribed within a territory; now we have sovereign “identities,” and wander aimlessly in a world without borders, with our gadgets in hand to distract us, and our polemics in mind to repudiate the disbelievers.

What, exactly, is the flaw with this remarkable post-1989 configuration of ideas? When you start thinking in terms of management by global elites at the trans-state level and homeless selves at the substate level that seek, but never really find, comfort in their “identities,” the consequences are significant: Slow growth rates (propped up by debt-financing) and isolated citizens who lose interest in building a world together. Then of course, there’s the rampant crony-capitalism that arises when, in the name of eliminating “global risk” and providing various forms of “security,” the collusion between ever-growing state bureaucracies and behemoth global corporations creates a permanent class of winners and losers. Hence, the huge disparities of wealth we see in the world today.

The post-1989 order of things fails to recognize that the state matters, and engaged citizens matter. The state is the largest possible unit of organization that allows for the political liberty and economic improvement of its citizens, in the long term. This arrangement entails competition, risk, success and failure. But it does lead to growth, citizen-involvement, and if not a full measure of happiness, then at least the satisfactions that competence and merit matter.

Trump, then, with his promise of a future in which the integrity of the state matters, and where citizens identify with the state because they have a stake in it rather than with identity-driven subgroups, proposes a satisfying alternative.

This is also why it would be a big mistake to underestimate Trump and the ideas he represents during this election. In the pages of the current issue of POLITICO Magazine, one author writes: “The Trump phenomenon is about cultural resentment, anger and most of all Trump. It’s primal-scream politics, a middle finger pointed at The Other, a nostalgia for a man-cave America where white dudes didn’t have to be so politically correct.”
I have no doubt that right now, somewhere in America (outside the Beltway), there are self-congratulatory men, probably white, huddled together in some smoky man-cave, with “Make America Great Again” placards on their John-Deere-tractor-mowed lawns.
But do not mistake the part for the whole. What is going on is that “globalization-and-identity-politics-speak” is being boldly challenged. Inside the Beltway, along the Atlantic and Pacific coasts, there is scarcely any evidence of this challenge. There are people in those places who will vote for Trump, but they dare not say it, for fear of ostracism. They think that identity politics has gone too far, or that if it hasn’t yet gone too far, there is no principled place where it must stop. They believe that the state can’t be our only large-scale political unit, but they see that on the post-1989 model, there will, finally, be no place for the state. Out beyond this hermetically sealed bicoastal consensus, there are Trump placards everywhere, not because citizens are racists or homophobes or some other vermin that needs to be eradicated, but because there is little evidence in their own lives that this vast post-1989 experiment with “globalization” and identity politics has done them much good.

The opposition to the post-1989 order is not just happening here in America; it is happening nearly everywhere. The Brexit vote stunned only those who believe in their bones that the very arc of history ends with “globalization” and identity politics.
The worry is that this powerful, growing disaffection with the status quo—both within Europe and elsewhere—will devolve into nefarious nationalism based on race, ethnicity or religion. To combat this, we are going to have to find constructive ways to build a new set of ideas around a very old set of ideas about sovereignty—namely, that the state and the citizens inside it matter. If we don’t find a way to base nationalism on a healthy understanding of what a liberal state is and what it does and expects from citizens to make it work well, dark nationalism, based on blood and religion, will prevail—again.
Nothing lasts forever. Is that not the mantra of the left? Why, then, would the ideas of globalization and identity politics not share the fate of all ideas that have their day then get tossed into the dust-bin of history?

***
Of course, when new ideas take hold, old institutional arrangements face upheaval or implosion. There is no post-election scenario in which the Republican Party as we knew it prior to Trump remains intact. The Republicans who vote for Hillary Clinton will not be forgotten by those who think Trump is the one chance Republicans have to stop “globalization-and-identity-politics-speak” cold in its tracks. And neither will Inside-the-Beltway Republicans forget those in their party who are about to pull the lever for Trump. One can say that Trump has revealed what can be called The Aristotle Problem in the Republican Party. Almost every cultural conservative with whom I have spoken recently loves Aristotle and hates Trump. That is because on Aristotelian grounds, Trump lacks character, moderation, propriety and magnanimity. He is, as they put it, “unfit to serve.” The sublime paradox is that Republican heirs of Aristotle refuse to vote for Trump, but will vote for Clinton and her politically left-ish ideas that, while very much adopted to the American political landscape, trace their roots to Marx and to Nietzsche. Amazingly, cultural conservatives who have long blamed Marx and Nietzsche (and German philosophy as a whole) for the decay of the modern world would now rather not vote for an American who expressly opposes Marx and Nietzsche’s ideas! In the battle between Athens, Berlin and, well, the borough of Queens, they prefer Athens first, Berlin second and Queens not at all. The Aristotle Problem shows why these two groups—the #NeverTrumpers and the current Republicans who will vote for Trump—will never be reconciled.

There are, then, two developments we are likely to see going forward. First, cultural conservatives will seriously consider a political “Benedict Option,” dropping out of the Republican Party and forming a like-minded Book Group, unconcerned with winning elections and very concerned with maintaining their “principles.” Their fidelity is to Aristotle rather than to winning the battle for the political soul of America. The economic conservatives, meanwhile, will be urged to stay within the party—provided they focus on the problem of increasing the wealth of citizens within the state.

The other development, barely talked about, is very interesting and already underway, inside the Trump campaign. It involves the effort to convince Americans as a whole that they are not well-served by thinking of themselves as members of different “identity groups” who are owed a debt that—surprise!—Very White Progressives on the left will pay them if they loyally vote for the Democratic Party. The Maginot Line the Democratic Party has drawn purports to include on its side, African-Americans, Hispanics, gays, Muslims and women. (Thus, the lack of embarrassment, really, about the “basket of deplorables” reference to Trump supporters.) To its credit, the Democratic Party has made the convincing case, really since the Progressive Era in the early part of the 20th century, that the strong state is needed to rearrange the economy and society, so that citizens may have justice. Those who vote for the Democratic Party today are not just offered government program assistance, they are offered political protections and encouragements for social arrangements of one sort or another that might not otherwise emerge.

But where does this use of political power to rearrange the economy and society end? Continue using political power in the service of “identity politics” to reshape the economy and society and eventually both of them will become so enfeebled that they no longer work at all. The result will not be greater liberty for the oppressed, it will be the tyranny of the state over all. Trump does have sympathies for a strong state; but correctly or incorrectly, he has managed to convince his supporters that a more independent economy and society matters. In such an arrangement, citizens see their first support as the institutions of society (the family, religion, civic associations), their second support as a relatively free market, and their third support as the state, whose real job is to defend the country from foreign threats. Under these arrangements, citizens do not look upward to the state to confirm, fortify and support their “identities.” Rather, they look outward to their neighbor, who they must trust to build a world together. Only when the spell of identity politics is broken can this older, properly liberal, understanding take hold. That is why Trump is suggesting to these so-called identity groups that there is an alternative to the post-1989 worldview that Clinton and the Democratic Party are still pushing.

Now that Trump has disrupted the Republican Party beyond repair, the success of the future Republican Party will hang on whether Americans come to see themselves as American citizens before they see themselves as bearers of this or that “identity.” The Very White Progressives who run the Democratic Party have an abiding interest in the latter narrative, because holding on to support of entire identity groups helps them win elections. But I do not think it can be successful much longer, in part because it is predicated on the continual growth of government, which only the debt-financing can support. Our debt-financed binge is over, or it will be soon. The canary in the coal mine—now starting to sing—is the African-American community, which has, as a whole, been betrayed by a Democratic Party that promises through government largesse that its burden shall be eased. Over the past half-century nothing has been further from the truth, especially in high-density inner-city regions. While it receives little media attention, there are African-Americans who are dubious about the arrangement by which the Democratic Party expects them to abide. A simultaneously serious and humorous example of this is the long train of videos posted on YouTube by “Diamond and Silk.” To be sure, the current polls show that Trump has abysmal ratings among minorities. If he wins the election, he will have to succeed in convincing them that he offers an alternative to permanent government assistance and identity politics consciousness-raising that, in the end, does them little good; and that through the alternative he offers there is a hope of assimilation into the middle class. A tall order, to be sure.

These observations are not to be confused as a ringing endorsement for a Republican Party that does not yet exist, and perhaps never will exist. But they are warning, of sorts, about impending changes that cannot be laughed off. The Republicans have at least been given a gift, in the disruption caused by Trump. The old alliances within it were held together by a geopolitical fact-on-the-ground that no longer exists: the Cold War. Now long behind us, a new geopolitical moment, where states once again matter, demands new alliances and new ideas. With the defeat of Bernie Sanders in the primaries, Democrats have been denied their gift, and will lumber on, this 2016, with “globalization-and-identity-politics-speak,” hoping to defend the world order that is predicated on it. If Sanders had won, the Democrats would have put down their identity politics narrative and returned to claims about “class” and class consciousness; they would have put down the banner of Nietzsche and taken up the banner of Marx, again. And that would have been interesting! Alas, here we are, with, on the one hand, tired old post-1989 ideas in the Democratic Party searching for one more chance to prove that they remain vibrant and adequate to the problems at hand; and on the other, seemingly strange, ideas that swirl around us like mental dust waiting to coalesce.

 

Why I Will Vote Neither…Nor…

Halfway through the presidential primary season I decided I would not and could not conscientiously vote for either Donald Trump or Hillary Clinton in the 2016 election. As a political scientist, this was not an uninformed decision. I have been observing, and studying, the degeneration of American party politics for the past two decades and nothing has reversed this trend.

Today, faced with the reality that these are the two major party nominees, I have carefully reconsidered my position but have come to the same conclusion. I do not believe Trump has the temperament, nor do I feel Clinton has the integrity, while neither display the requisite political skills to lead this nation.

So what is one to do? Flip a coin and hold one’s nose? However, as I will argue here, there is a meaningful alternative.

My decision to vote neither-nor is based on several assumptions which all voters may not share. First, I equally disapprove of both presidential candidates offered up by the Democrat and Republican parties. You may not share that sentiment and thus should vote your conscience. (BTW, if you are truly enamored of the status-quo, perhaps you should cast a write-in vote for Ben Bernanke. Our current economic fate has little to do with Obama, Clinton, or the Congress. In geopolitics it seems we’ve just blindly bumbled along.)

Second, I live in a state where the Electoral College votes are not really in contention. More simply, I live in CA. Thus whether I vote for Trump or Clinton will have no impact on the outcome and thus can be considered a wasted vote. Unless you live in a closely contested swing state, such as FL, PA, or OH, your vote for either candidate is also a meaningless vote.

But do neither-nor voters really have a meaningless say in this election? Only if you hold your nose and vote for one of the above. If you are dissatisfied with the choices presented, this may be the first time in our lifetimes that an alternative vote has meaning – and it matters not which alternative you prefer. An abstention, or a vote for Gary Johnson, or Jill Stein, or a write-in for Mickey Mouse or Bernie Sanders is a protest vote – a vote that neither major party can count on and must respond to as the tally grows. What is the signal sent if Clinton and Trump both get 30% of the vote and 40% is captured by a neither-nor protest? How will either President-elect govern with such a dearth of public support? It’s political suicide to ignore upwards of 70% of the country.

This strategy is a slightly different argument than support for a 3rd party. A 3rd party can’t win unless it displaces one of the two major parties. Thus it’s success depends on the failure of one of those parties. However, a protest vote is different in that left and right anti-establishment groups coalesce on their dissatisfaction with the status quo. In other words, Sanders and Tea Party voters can combine as a force to influence the two major parties.

Others may apply a different logic. Some will claim a protest vote is an irresponsible waste of a vote, but I consider voting against one’s conscience while knowing better is the true irresponsible action. (A more erudite exposition of my sentiments was written by Jonah Goldberg at National Review, but his is an internecine conflict on the right. One wonders what the leftist Bernie Sanders voters are thinking at this point.)

Our society’s future is more important than an emotional partisan showdown. Things won’t change unless we change from the ground up. With enough protest votes, perhaps the Washington establishment will finally have to respond to a majority of Americans voicing dissatisfaction with the political status-quo.

Failed Paradigms

From The American Interest

The problems of a small state college point to the weakness at the heart of liberal society—a weakness that undermines the strength of our republic at home and endangers world peace. And neither political party has the answers.

Debate? What Debate?

I can’t imagine a more sophomoric attempt at moderating a Presidential primary debate than what occurred last night under the direction of CNBC. Apparently there was no clear winner as much as an overwhelmingly clear loser: CNBC. One wonders when the media elites will address the real challenges and issues the American polity faces. I won’t hold my breath.

The last fiscally responsible adult we had in public service in Washington was Paul Volcker, and he was a Democrat. And elites wonder why the average American is fed up with national politics. Kudos to Cruz.

David Stockman eviscerates the pathetic performance in his blog reposted below:

The Fed’s elephantine $4.5 trillion balance sheet represents the greatest fiscal fraud ever conceived.

The fact is, the monetary madness in the Eccles Building is destroying free market capitalism by systematically and massively falsifying the prices of financial assets, and fueling a relentless, debilitating accumulation of debt throughout the warp and woof of the American economy and the rest of the world; and it’s simultaneously extinguishing political democracy by deeply subsidizing our crushing $19 trillion national debt.

Yet not one of three moderators during the entire two hour period asked a question about the elephant in the room.

The Debate: GOP Candidates Elevated, CNBC Eviscerated

by  • October 29, 2015

Well now. We actually got our money’s worth last night.

Almost with out exception the GOP candidates conveyed a compelling message that the state is not our savior, while the CNBC moderators spent the night fumbling with fantasy football and inanities about which vitamin supplements Ben Carson has used or endorsed.

But this was about more than tone. The interaction between the candidates and the CNBC moderators revealed the yawning gap between the bubble world at the intersection of Washington and Wall Street and the hard scrabble reality of economic stagnation and political alienation on main street America.

Yes, the CNBC moderators engaged in a deplorable display of gotcha journalism punctuated by a snarky self-righteousness that was downright offensive. John Harwood is surely secretly on the payroll of the Democratic National Committee and it was more than obvious why Becky Quick excels at serving tea to blathering old fools like Warren Buffett.

So they deserved the Cruz missile that came flying at them mid-way through the debate.

At that point the Senator from Texas had had enough, especially from Carl Quintanilla. The latter has spend years on CNBC commentating about the “market”, but wouldn’t know honest capitalism is if slapped him upside the head, and has apparently never meet a Washington intervention that he didn’t cheer on as something to help the stock averages go higher:

Let me say something at the outset. The questions that have been asked so far in this debate illustrate why the American people don’t trust the media. This is not a cage match. And if you look at the questions—Donald Trump, are you a comic book villain? Ben Carson, can you do math?… Marco Rubio, why don’t you resign? Jeb Bush, why have your numbers fallen? How about talking about substantive issues?”

Nor did the Texas Senator let up:

“Carl, I’m not finished yet. The contrast with the Democratic debate, where every thought and question from the media was ‘Which of you is more handsome and wise?”

As one pundit put it afterwards, “given the grievous injuries inflicted on Team CNBC”  by Cruz and the rest of the candidates, the only thing left to do was “to shoot the wounded”.

Actually, there is rather more. Last night was billed as a debate on domestic issues and the economy and CNBC is the communications medium of record about the daily comings and goings of the US economy and the financial markets at its center. Yet not one of three moderators during the entire two hour period asked a question about the elephant in the room.

They had to bring in from the sidelines the intrepid Rick Santelli to even get the Federal Reserve on the table. Its almost as if the CNBC commentators work on the set of the Truman Show and have no clue that it’s all make believe.

In the alternative, call this condition Bubble Blindness. It’s a contagious ideological disease that afflicts the entire corridor from Wall Street to Washington, and CNBC is the infected host that propagates it.

The fact is, the monetary madness in the Eccles Building is destroying free market capitalism by systematically and massively falsifying the prices of financial assets, and fueling a relentless, debilitating accumulation of debt throughout the warp and woof of the American economy and the rest of the world; and it’s simultaneously extinguishing political democracy by deeply subsidizing our crushing $19 trillion national debt.

The GOP politicians appropriately sputtered last night about the bipartisan beltway scam rammed through the House yesterday by Johnny Lawnchair, but they were given no opportunity by their clueless moderators to explore exactly why this kind of taxpayer betrayal happens over and over.

Well, there is a simple answer. The Fed’s elephantine $4.5 trillion balance sheet represents the greatest fiscal fraud ever conceived. Last year it paid the Treasury approximately $100 billion in absolutely phony profits scalped from its massive trove of Treasury debt and quasi-government GSE paper.

That is, over time Uncle Sam has purchased $4.5 trillion worth of real economic resources——in the form of goods, services, salaries and transfer payments——from the US economy, which were paid for with IOUs. These obligations to be redeemed in equivalent goods and services were eventually purchased by the Fed, but with merely fiat credits it conjured out of thin air.

And then the monetary charlatans behind the curtain at the Fed send back to the US treasury the coupons earned on these airballs, causing the politicians to think the national debt is no problem; and that they can buy aircraft carriers and GS-15 salaries indefinitely while booking a “profit” on their borrowings.

Folks, this is just plain madness. Back 1989 when the real median household income first hit its current level of about $54,000, this entire monetization scam would have been considered beyond the pale by even the inhabitants of the Eccles Building, and most certainly by everyone else in Washington——from the US Treasury to the Congressional budget committees to the summer interns in the Rayburn Building.

But after 25 years of central bank induced financialization of the US economy, there has developed a cult of the stock market and a Wall Street regime of relentless financial gambling in the guise of “investment”. Consequently, the massive aritificial inflation of financial asset values is not even recognized by CNBC and its fellow travelers in the main stream financial press—to say nothing of the gleeful punters who inhabit the casino.

But here’s the thing. How did the real median household income stagnant at $54,000 while the real value of the S&P 500 soared by nearly 4X? market cap of US debt and equity issues soared from 200% to 540% of GDP, and now weigh in a $93 trillion?

Real Median Household Income Vs. Inflation Adjusted S&P 500 - Click to enlarge

Likewise, how did the aggregate “market cap” of US debt and business equity soar from 200% to 540% of GDP when main street living standards were not rising at all? Could it be that something rotten and deformed has been injected into the very financial bloodstream of American capitalism—-something which the CNBC cheerleaders dare not acknowledge or even allow conservative politicians to explore in a public forum?

Total Marketable Securities and GDP - Click to enlarge

Worse still, this entire Fed-driven regime of Bubble Finance has inculcated in the casino and its media megaphones the insidious notion that the arms and agencies of government exist for one purpose above all others. Namely, to do “whatever it takes” to keep the bubble inflated and the stock market averages rising—–preferably every single day the market is open.

There was no more dramatic demonstration of that proposition than after the Wall Street meltdown in September 2008 when the as yet un-house broken GOP had had the courage to vote down TARP.

But when they were dragged back into the House chambers by Goldman Sachs and its plenipotentiaries in the US Treasury, the message was unmistakable. On one side of the CNBC screen was the House electronic voting board and on the other side was the second-by-second path of the S&P 500.  And delivering the voice-over narrative were the same clowns who could not even mention the Fed last night. The US Congress not dare to vote down TARP again, they fulminated.

It obviously didn’t. Yet right then and there the conservative opposition was broken, and the present statist regime of Bubble Finance was off to the races.

During the coming decade the nation will be battered and shattered by a monumental fiscal crisis and the bankruptcy of the bogus “trust funds” which now pay out upwards of $2 trillion per year to 70 million citizens. At length, the bearers of pitchforks and torches descending on Washington will surely ask how this all happened.

But they will not need to look much beyond last night’s debate for the answers. The nation’s fiscal process has been literally shutdown by the Fed and the Wall Street gamblers and media cheerleaders who insouciantly and relentlessly demand of Washington that it do “whatever it takes” to keep the bubble inflated.

As a result, we have had the absurdity of 82 months of ZIRP and a orgy of public debt monetization that has driven the weighted average cost of the Federal debt to a mere 1.75%.  And when a few courageous remnants of fiscal sanity like Senators Cruz and Rand Paul have had the courage to resist still another increase in the public debt ceiling, they have been treated as pariahs by Wall Street and the kind of snarky financial media types on display last night.

The fact is, the President has clear constitutional powers to prioritize spending in the absence of an increase in the debt ceiling. That is, he can pay the interest on the debt, keep the Veterans hospitals open, send out the social security checks and prioritize any other category of spending that he chooses from the current inflow of tax revenues, and for as long as it takes to legislate an honest fiscal retrenchment.

Needless to say, that would create howls of pain from the Federal vendors who wouldn’t get paid, the state and local governments which would have to wait for their grant payments and the Federal employees who would be put on furlough.

But that is not the reason that Mitch McConnell and Johnny Lawnchair have capitulated every time a debt ceiling crisis has reached the boiling point. That kind of action-forcing circumstance was managed by Washington innumerable times in the pre-Bubble Finance world, including upwards of a dozen times during my time in the Reagan White House.

But back then no one thought that Wall Street would have a hissy fit if the government shutdown for a few days or if the fiscal gravy train was temporarily put on hold; nor did politicians much care if it did.

My goodness. Paul Volcker had taught Wall Street a thing or two about the requisites of financial discipline in any event.

No, what is different now is that the establishment GOP politicians are petrified of a stock market collapse, and have been brow-beaten into the false belief that a government shutdown will create severe political costs.

Baloney. Even the totally botched affair in October 2013 created no lasting damage—-as attested to by the GOP sweep in the 2014 elections.

At the end of the day, all the hyperventilation about the political costs of a government shutdown or the forced prioritization of spending in the absence of a debt ceiling increase is pure Wall Street propaganda; and its an untruth amplified and repeated endlessly, loudly and often hysterically by its financial media handmaidens.

At least last night some GOP politicians gave it back to them good and hard.

Maybe there is some hope for release from the destructive pall of Bubble Finance, after all.

2016: Bernie vs. The Donald? Missing the Message.

SandersTrump

Most Americans are reduced to the passive role of spectators, fans, groupies. Or they are persuaded not to bother with politics. An elaborate class of professional technicians has taken charge of electoral politics—campaign managers and advertisers, pollsters, fundraisers, crowd organizers. These professionals, one could say, manage the passions or passivity of voters. They shape the content of what citizens know—and shape their ignorance too.

The ongoing circus of the presidential partisan primaries has voters fretting that our choices may whittle down to a contest between the bombastic Donald Trump vs. the radical socialist Bernie Sanders. I wouldn’t worry so much about that. Instead I would worry more about the underlying message regarding American “politics as usual.”

Below is an essay written by the journalist and author William Greider published in The Nation that reviews a book by Lawrence Goodwyn, Democratic Promise: The Populist Moment in America. Greider correctly applies this history of American populism to the modern movement that is the deeper current under the froth created by Trump and Sanders.

This movement, which is actually a gradual disenfranchisement of the American voter marked by the decline of party affiliation (as Greider points out, “Voters who stay home on Election Day are now by far the ‘largest’ political party”), is a real threat to the “politics as usual” of both the Democrats and the Republicans. And this is how it should be.

The resilience of American democracy is found in the pressures of the system to adapt to change or die. This does not imply the rise of third parties, except to displace one of the two major parties, either of which could easily suffer that fate. But the genius of our electoral two-party system has turned out to reinforce this need to adapt or die.

Multi-party systems fracture into uncompromisable positions that lead to instability in national government and over-dependence on fragile coalitions that often empower narrow interests at the margin. A two-party winner-take-all system forces parties to the center of voters’ demands in order to capture a majority. This is a good thing in a large pluralistic polity like we have in the U.S.

But, as Greider clearly points out, that doesn’t mean that democratic system cannot breakdown under this electoral design. American politics has become unresponsive to voter demands and needs for a variety of reasons. This gives rise to the anti-establishment tenor of modern movements such as the Tea Party and Occupy groups. These anti-establishment groups have more in common than in opposition, but the establishment seeks only to divide and conquer its opposition in order to continue to enjoy the spoils.

Goodwyn also wisely points out that for democracy to work, voters do not need to be perfectly informed, they only cannot be misinformed with a systemic bias. Unfortunately, the media today can promote that systemic bias, which is why it is failing us. This applies to mainstream as well as alternative media. In other words, we’re not getting the unvarnished objective truth from ABC, CBS, NBC, or FOX; and not from the NY TImes, Washington Post or The Wall Street Journal. And certainly not The Huffington Post or TownHall. We’re getting what appeals to each media channel’s targeted political audience.

On an optimistic note, the party “establishment” candidate that first discovers how to appeal to the disaffected and brings them back into the party fold by adapting to their demands and compromising the establishment party’s platform will be successful in future elections. And this is how it should be. Greider suspects we’re not quite there yet, but the momentum has been building for about 20 years now (maybe 40+). But it’s highly unlikely we will be led into the future by the likes of an angry Donald Trump or Bernie Sanders.

Bernie, Donald, and the Promise of Populism

Both candidates have been mislabeled as populists. The movement of that name was a genuine people’s rebellion that reinvigorated democracy. We can do it again.

By William Greider

September 21, 2015

The New Yorker recently attempted to explain two “populists” running for president, the only candidates generating huge and enthusiastic audiences. Instead, the article’s snide tone reflected the nearsightedness of cosmopolitan elites. Both candidates were mislabeled as “populist.” Bernie Sanders is a democratic socialist; Donald Trump is a trash-talking billionaire. But the magazine also mangled the true historical meaning of populism.

The writer seemed to be channeling Richard Hofstadter, the Columbia historian who back in the 1960s famously put down populism and other rebellious movements as “the paranoid style in American politics.” People are irrational, Hofstadter explained, driven by delusional fears and conspiracy theories. Not to be trusted with governing power.

Class condescension is as old as American democracy and is back in vogue this season, thanks mainly to the plutocrat with big hair. Only, Donald Trump turned “populist” anger upside down. He’s a super-rich guy ridiculing the “stupid” people in government and bragging about how he and his fellow billionaires buy politicians to get free stuff from government. Sanders, meanwhile, is plowing a parallel furrow of dissent—a substantive and serious program for reform.

But neither fits the label “populist” because they are both working within the established order. By definition, populism requires plain people in rebellion, organizing themselves to go up against the reigning powers. Major pushback from fed-up people is not present—not yet anyway—but the great disturbances already roiling party politics suggest that the political status quo is vulnerable to more upheavals, particularly if timidity and stalemate continue to suppress meaningful change.

It depends, first, on whether the 2016 results promise real changes in economics and social equity and/or convince people they have to dump both parties and attempt power-seeking politics of their own. This is a tender moment for the two-party system.

Elites naturally fear popular uprisings, but rebellion can be good for democracy. Even if they fail, self-generated citizen insurgencies can ventilate the musty corridors of government and compel governing parties to change or die. A century ago, the original Populists provoked fright and ridicule in establishment circles on a far more threatening scale. We are not there yet. But don’t count it out if timidity wins the election next year and politics continues to run away from fundamental questions.

The People’s Party in the last decades of the 19th century was self-organized by scattered groups of distressed farmers. It grew rapidly across the South and West to oppose the powerful forces—banks, railroads, industrial corporations—destroying small, independent producers. The farmers realized the federal government was an active accomplice in their economic destruction. There was nothing delusional about their alarm and anger. It was driven by a ruinous deflation of farm prices for three decades—hard money that rewarded capital and crushed producers.

The agrarian revolt set out audaciously to win power by winning elections—electing Populist governors, representatives, and senators—hoping ultimately to elect the People’s President. They failed, of course, but their legacy was profound. These self-taught citizens developed original ideas for governing the economy, business, and banking. They envisioned a central bank to regulate money and credit that would advance equality, serving people and producers rather than the fortunes of New York bankers. The Populist vision was the road not taken.

The New York Times called them “slime.” (This magazine was pretty bad too, as The Nation’s 1896 attack on William Jennings Bryan shows.) It denounced their proposal as “one of the wildest and most fantastic projects ever seriously proposed.” Yet years later, John Maynard Keynes saluted the American Populists as “a brave army of heretics.” They failed to gain power, but Keynes recognized that their economic analysis anticipated his own. Many of the original Populist proposals were eventually enacted as New Deal reforms.

For the true history, read Lawrence Goodwyn’s Democratic Promise: The Populist Moment in America. The book profoundly altered my understanding of American history and democracy (the excellent shorter version, widely available in paperback, is titled The Populist Moment: A Short History of the Agrarian Revolt in America). Goodwyn’s account provides powerful rebuttal to pessimism and resignation. His unsentimental narrative keeps alive the possibility of deep structural reforms in politics and government.

Democratic Promise puts people back at the center of the story—ordinary people who tried, against all odds, to act like self-directed citizens, actively participating in self-government. Goodwyn suggested that authentic democracy remains possible—not easy or assured, only possible—if people rediscover their voice and potential power.

In modern political culture, the idea of this deeper democracy has been hollowed out, obliterated. The promise endures, insofar as we have regular elections to select officeholders, but that ritual normally does very little to alter actual power relationships. And people know this.

Most Americans are reduced to the passive role of spectators, fans, groupies. Or they are persuaded not to bother with politics. An elaborate class of professional technicians has taken charge of electoral politics—campaign managers and advertisers, pollsters, fundraisers, crowd organizers. These professionals, one could say, manage the passions or passivity of voters. They shape the content of what citizens know—and shape their ignorance too.

The process of manipulating the electorate is enormously expensive, and mostly paid for by private donations. Donors naturally expect to influence the content of the messages, so campaigns are nearly always biased in favor of moneyed interests and affluent citizens. The ultimate purpose of campaigns is thus not educating citizens; it is electing or defeating politicians. The result of this narrow-form democracy is the steadily shrinking electorate. Voters who stay home on Election Day are now by far the “largest” political party.

The critical claim in Goodwyn’s analysis is that ordinary people are both capable of participating more directly in self-government and that their engagement is necessary for a genuinely functioning democracy. Otherwise, politics produces a closely held management system with control concentrated at the top. It makes distant decisions too opaque for ordinary citizens to understand or influence, much less control. This deformity roughly resembles our current conditions. Governing elites typically fault the people for their ignorance, and many discouraged citizens internalize the blame.

But Goodwyn insisted that ordinary people, though discouraged from active citizenship, have essential knowledge—knowledge they haven’t learned from books or newspapers. Their knowledge is crucial for balanced self-government. Because ordinary Americans, regardless of status or education, know things the authorities did not teach them. They frequently know things that contradict the governing experts, and they learn them before elected representatives do.

Where do people get this distinctive knowledge? From life itself, as Goodwyn explained. Of course, people are fallible and prone to error, false enthusiasm, and fears. But so are elected politicians. So are the corporate CEOs and investment bankers, including the ones who led the country over a cliff in 2008 and crashed the middle class.

The popular anger exploding in the run-up to 2016 baffled press and political leaders. They would not have been surprised if they had listened more respectfully to the broad ranks of citizens during the past three decades. Working people knew the “American dream” was falling apart. They knew because it was happening to them. They told their stories in great detail to anyone who would listen (as a young reporter I heard those stories from auto workers, steel workers, machinists, debt-burdened families, and other victims, trying to hang on and losing the struggle).

With brave exceptions, politicians in both parties turned their backs on the cries of distress. Learned economists assured political leaders that what working people saw happening in their neighborhoods wasn’t the real story. Over time, they predicted, prosperity would reach everyone and people would agree that deindustrialization was a good thing, a necessary evolution in the economy. It didn’t happen, and neither party has come clean on its failure.

I think that’s where the anger comes from. There is widespread feeling across ideological and partisan divides not only that government failed to ensure economic prosperity and security but also that both political parties denied or ignored what average working stiffs knew and were trying to tell the politicians. Many believe they were betrayed, that the politicians lied.

Modern government lost its sense of balance and credibility for many reasons, but partly because authorities distanced themselves from the common-sense and popular knowledge of ordinary Americans. This disconnect permeates government and politics, and it’s not always due to corporate greed or corruption. Sometimes, it is due to plain ignorance.

It’s true that we have not arrived at a new “populist moment”—not yet. But the political situation looks combustible, and perhaps more promising than the usual cynicism and resignation will recognize. Could citizens come out of their passivity and restart the fight for authentic self-government? Sounds fanciful, I know, but consider this: If the original Populists could organize millions to overcome their handicaps, people should be able to do the same now. After all, the Populists didn’t even have telephones, much less e-mail.

We are already deep into a stormy new era of democratizing technologies—people are getting the power to control their own communications—and inventive new channels are flowing freely from citizens themselves.

This new condition potentially destabilizes the old politics. I think it is a major factor in generating the dizziness of this election season. Among other things, it drastically reduces the cost of making political connections, of organizing across long distances and social divisions. That itself could become an insurrectionary virtue. It might even dilute the political domination of the 1 Percent, the corporations and billionaires.

I see possibilities for meaningful unrest ahead.

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The Politics of Polarization

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I watched an interesting debate aired by PBS over political polarization in American politics. The debate actually focused solely on the partisan/ideological divide as it pitted “right against left” in its panels and choice of participants. You can view the debate here.

I found some truths and falsehoods presented on this issue. First, I would agree with George Will that partisan opposition is fundamental to the design of the US electoral and governing system. We have two parties so that issues can be reduced to simple dichotomous choices where the choice that prevails can be said to represent a majority of the nation’s citizens and thereby claim a mandate, whether that be weak or strong. Polarization today is evenly matched in a 50-50 nation, which makes elections highly contentious and volatile. It also makes it hard to claim a mandate, and rightly so.

The left-liberal argument seems to be that electoral polarization causes government dysfunction, but this is exactly the purpose: to challenge one side’s view of “good” government by forcing majorities and supermajorities in elections and governance. One discussant claimed that gridlock did not express the “will of the people” because of large scale disenfranchisement of minority groups. Whether disenfranchisement is salient or not, this is not what the data show to be driving polarization. In fact, if one controls for race, for instance measuring only white people, we find the same polarization patterns exist.

Matt Kibbe argues that the system is experiencing upheaval due to information technology that opens the political process in many ways that challenge the old guard. In other words, the political and media elites no longer control the show and are understandably upset with their loss of hegemony. This paints our political dysfunction as an insider-outsider, populist-elite conflict that has tilted toward the outsiders. I’m not sure it has, beyond informing the outsiders just how outside the process they are. The apparent result has been widespread dissatisfaction with the governing status quo, but that doesn’t drive polarization as much as blame-gaming.

But the debate focused on the narrow ideological differences between left and right, whereas most of the polity does not adopt pure ideological or partisan identities. The fastest growing group of voters identify as independent and non-affiliated. So, we are still left with the question of what is driving polarization and we need to answer that question before we have a chance of understanding it. One problem is that the proffered answers usually support one’s political agenda rather than truth.

One need only to look at the correct maps of election results to understand that polarization exists and it is largely a geographic phenomenon. 2004countymap-final2The Red State-Blue State narrative is not quite accurate as the real divide is obviously urban-rural, as illustrated by county election maps. This is confirmed with robust statistical results from recent presidential elections. As one moves from the urban core to the rural periphery, the share of the vote by county moves monotonically from Democrat to Republican. This fact has given rise to those bizarre and amusing subcultural characteristics of opposing voting groups: Republicans own guns, go to church, drive pick-up trucks, and listen to country western, while Democrats drink lattes at Starbucks, drive hybrids, and listen to rap and hip hop. There’s some truth to these stereotypes that feed our amusement, but these lifestyle choices do not drive political preferences, they coincide with political preferences. There’s a big difference, because when identity drives politics, there is little room for compromise.

This coincidence has become salient because both parties have tailored their party platforms to appeal to rural or urban voters. In other words, the parties have created political identities, not voters. We can observe the reality in the suburbs, where cultural caricatures are harder to apply. The true divisions in American politics these days are pretty much the same as those divisions that have existed over the past two hundred plus years: rural regions have different policy preferences than urban, metropolitan regions. The data show that these preferences also correlate with household and family formation, specifically marriage vs. singles and single heads of household. Population density of the county along with the share of married and female heads of households explains roughly two-thirds of party voting preferences in elections today. These differences in preferences have existed in societies throughout history and across countries, so they don’t present any different challenge to our democracy today. The real problem lies in the final third of the explanation for polarization, which is ideology or political philosophy.

Unfortunately, this conflict is usually misrepresented by self-interested parties. So the real challenge we face are the myths promoted by those elites who study and propagandize politics. This would include both parties, the political class, and most of the mainstream media elites. It would also include self-interested parties that exert great influence over the funding of politics, such as major corporations, the banking system, and public unions. This PBS debate exposes the tendency of experts to perpetuate these myths for reasons best known to them.

Mr. Will is correct that the driving force of the polarization we speak of today is ideology over the proper role of government in democratic society. I would have to say that the burden of proof on this rests with the pro-government advocates on the left, as the status quo ante for the US has been limited government that is constitutionally proscribed. The burden of small government proponents has been to meet the demands of democratic society without shifting the sphere of private life to the public sector. One cannot merely say such demands are illegitimate because legitimacy is a function of what a democratic polity demands within the constraints of constitutionalism. If voters demand economic security, the task is to help meet that demand in the most efficient and just manner possible, which usually doesn’t mean creating another universal entitlement program. An old Chinese proverb illustrates this perfectly: better to teach a hungry man to fish than give him a fish to eat.

Eric Liu seems to understand this, though he also appears too willing to fall back on the default of government-driven solutions by expanding public goods. Instead of really addressing the issue Mr. Will presents, the opposing discussants resort to claiming the question of bigger or smaller government is a false dichotomy. Intellectually, perhaps, but practically it seems to be the simple dichotomy that our political system was designed to distill and resolve. The petty and personal nature of our political conflict is merely a manifestation of this inability to reconcile these opposing positions. Personally, I am convinced it can be done, but it starts with understanding the true nature of our politics that puts to the test many of the belief systems we hold so dear.

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