February 27, 2016

First the positive–yes, there is more than a little of that, believe it or not! Here’s what I like:

• He says the war in Iraq was a huge mistake, and George Bush failed the American people. No other Republican dares to admit that.
• He acknowledges the good work Planned Parenthood has done for women, objecting only to their small segment of abortion work.
• While he does oppose Obamacare, he (sometimes) acknowledges the value of the individual mandate.
• He says the government should not leave the underprivileged without health care.
• He may be less hawkish than most of his Republican Presidential competitors–probably would not be inclined to interfere in new conflicts abroad.
• He feels we should talk with our “enemies,” rather than stonewall them–e.g., Putin.
• He is a “dealmaker.” This means he’s likely to be more willing to compromise and get things done. Cruz and Rubio clearly are both extremist in dogma and probably would not concede any of their extremist principles.
• He is not beholden to big money (other than his own).
• He says he will remove the tax advantage given to hedge fund managers.
• He is not slavishly dedicated to Israel, seems to also respect the Palestinian side of the conflict, which open mindedness would be more likely to yield a solution there.
• He is not excessively dedicated to a document written in 1789. The Constitution needs to be updated for our times. Certainly Cruz would not and Rubio says he only wants a balanced budget amendment (with which I do not agree–too limiting of our fiscal tools in an emergency) and term limits for congressmen. There is much more which should be updated–e.g., the right to bear guns. Slavish adherence to the Constitution as if it is sacred is ridiculous. Many successful nations have updated their constitutions.

Essentially, Trump refuses to be controlled by Republican party rhetoric or agenda. He calls himself Conservative, but he doesn’t worry about whatever the litany is for the Republicans or the Tea Party. In a word, this is what is most appealing to me about Donald Trump. What difference does it make whether one adheres to principles developed by someone else–let’s have a President who will think for herself/himself.

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Is that enough to make Donald Trump a good Presidential candidate? No. Not even close. He’d be a HUGE risk to our nation if he should get the job. Why?

• His positions (see his website) reveal very little in the way of substance, and very few positions are even attempted.
• Some of his stances are absolutely crazy–e.g., believing his “wall” will solve all the illegal immigration problems, that Mexico will pay for it, not to mention the abhorrent brutality of deporting millions of parents and children.
• We don’t know who he would choose to advise him, whether he even listens to anyone, and it appears he is extremely vulnerable to those who fawn over him.
• He has no government experience and relatively little management experience, when examined. He knows little of foreign actors, world history, or foreign policy.
• He does not understand economics.
• He is quick to make a decision, and if he’s angry at the time, we don’t know how he would respond as Commander in Chief. If he is insulted or feels the US is insulted, he might pull the trigger.
• Joining all his Republican competitors, he feels he can raise GDP growth and solve all our problems. Growth alone doesn’t do that, and 6% is unachievable in a mature economy in these times.

The tragedy of our times is that the anger of the American people ends up vested in this bombastic business guy, whose accomplishments when examined carefully are not very great, even in business, littered with bankruptcies and questionable hiring practices, starting with a large inheritance–hardly a “self made” success story. Let’s see the tax returns–there’s probably food for concern there as well.

Trump is appealing to a lot of Americans because he channels their anger and he simply disregards political dogma of all sorts.  But along with that goes the reality that we can’t discern where his basic principles rest, and that’s frightening. But while we cannot know how he would respond as Commander in Chief, neither is it more comforting that we know how Rubio and Cruz would respond.

The anger Americans have is first around wages and jobs. Republicans cannot point to much they have done about all that. Causes are globalization, technology, financialization, but exacerbated by right wing extremist policies focused on downsizing government and more freedom to the private sector. It’s gone to an extreme. See my previous post briefly summarizing points in Robert Reich’s new book. While both parties have blame in the failure to properly address these problems, Republicans deserve the greatest blame, by far.

Yet, with rhetoric drawing in evangelical values, gun rights, nationalism, blaming immigrants, etc., Republican have pulled the wool over many Americans’ eyes.

The reality Republicans have forced upon our government is that they have frozen the legislative function, denying any fiscal tools to help deal with economic growth (See Mohammed El-Arian’s new book). Now that the Federal Reserve is almost exhausted of monetary tools,  the Executive arm and the Supreme Court are the only avenues to deal with controversial issues that arise as time passes in a dynamic time and a complex nation.

Where does this leave us? It looks like John Kasich, the only remaining Republican candidate who makes sense, will not make it to the nomination. So, unless Michael Bloomberg decides to run as an Independent, I’ll only have the choice of Bernie or Hilary.

Republicans, you opened the door to a Donald Trump with your stubborn extremist positions. Now, let’s see how you’re going to deal with it. And if he makes it, do you really think you can once again blame the problems on the Democrats?

February 23, 2016

Growing up in High Point, North Carolina, I had no concept of Asia or Asians, little of Europe (only from history class), and almost no exposure to recent immigrants in my small town.  In retrospect, it was as if America was an idyllic island and the problems of the world were remote. I knew there had been two world wars, but no one had really threatened us on our shores (aside from Pearl Harbor). “Foreign” was far, far away.

While my town has only grown modestly, it is not uncommon now to see Arab and Indian headdress or hijabs on the streets of High Point, and we have a beautiful Islamic Center. There are numerous Asian restaurants. Local furniture magnates have learned which of their stock is best supplied from China and how to use the unique woods of Tasmania.

In the meantime, between the 60’s and now, immense benefit and opportunity from globalization has arrived. But along with that,we are stumbling into a labyrinth of issues which cannot be solved by one country operating in only its best interest. These include the sharing of scarce global resources; concern for the global environment; proliferation of weapons of mass destruction; immigration; the complications and the winning and losing in global trade; and many others.

Unfortunately, we seem to have learned far too little about how to work collectively as a global world. It’s as if the race to expand capitalism pell mell globally has outrun our ability to anticipate the problems or to collectively agree on a set of rules, so that the results can be optimized and reasonably fair to all countries. Consider the struggle Europe is having over establishing an equitable sharing of the burden of refugees fleeing Syria. And, most of our “foreign” focus seems to be on which nation is a military threat, and how we can be strategically or militarily prepared and stronger than others. This seems true not only for the US, but for most other countries.

In our schools we teach listening, understanding others, collaborating, teamwork, compromise, sharing. In our universities, we often organize students into teams to work together to solve a problem. Such groups are now likely to include different races, religions, and nationalities. But such “teamwork” does not seem to extend to our foreign affairs. There is a resurgence of nationalistic and protectionist sentiment in many countries–Russia, England, Germany, France, and clearly also here in the US. Negative economic tides exacerbate such attitudes, as political leaders (e.g., Putin, Trump) are quick to blame our economic problems on another country. The stick is being wielded liberally and aggressively, and anyone suggesting a carrot is branded weak. “Leadership” is defined in terms of aggression and power, seldom in terms of collaboration and mutual concern.

The current issue of The Economist includes an example. The Mekong River runs through six countries, starting high in Tibet and reaching the ocean in Cambodia. China has 14 dams planned on the Mekong, to augment the 6 they already have. Laos has 9 planned, and Cambodia plans 2, all for the hydroelectric power they can generate. But dams restrict the flow of migratory fish, and restrain the flow of sediment which feeds the farm soil of the river basins. All of this means that there is desperate need for collaboration and restraint, but the Mekong River Commission is underfunded, understaffed, and is not subscribed to by all Mekong River countries. A major disaster is potentially in the making for the millions of people dependent on the Mekong, due to lack of collaboration, and absence of a comprehensive regional best outcome objective. Should China care what happens downriver? I think so.

The examples of damage are not all outside the US. Consider our attitude toward Mexican immigrants to the US. Most of our rhetoric is focused on building a bigger wall. Is there any room for political collaboration with Mexico to enable increasing the flow of law abiding immigrants and/or helping Mexico to create better opportunities for them there? Marco Rubio ducks the question by saying we cannot talk about better US/Mexico immigration policy until we have a better wall. Why not? If we had such a program, maybe we wouldn’t need a bigger wall.

I’m hoping for progress toward realization that we need to change our attitude. We’re not just Americans anymore. The US has spearheaded a rapid acceleration of globalization in support of our quest for profits, wealth, and economic growth. If that’s something we really want to happen, we can’t ignore the major consequences to our planet. We can’t ignore the plight of those who happen to be in the path of the raging torrent of economic progress we fuel.

Ian Brimmer and Nouriel Robini describe a “G Zero” world where the US has no longer the unilateral power nor the will to lead the world singlehandedly. Existing global organizations also lack the power and structure. Neither the G2, G7, G8, nor G20 seem capable of arranging order and fairness in the world. They forecast growing chaos and conflict if we don’t find a collaborative solution.

“Foreign affairs” doesn’t seem to capture it. Maybe “global affairs” doesn’t either. We need a change of attitude and maybe a new term. And, we can’t attach all the blame to politicians like Trump and Putin. We, the citizens of these nations are allowing, even encouraging, a myopic view. And we are the ones who will have to pay the consequences.

As to the US, it should be clear to all by now that we cannot and should not seek to unilaterally lead the world by making all the decisions. The balance of world power is defined by economic, military, and ideological comparison. Any ranking of those criteria shows its a very different world than it was in 1989. We have to collaborate with other nations. But if the US is the driver of globalization, trade, and financialization, we need to accept that along with our pursuit of such objectives must go responsibility to concern ourselves with the impact of our capitalistic campaigns on others.

“Foreign” is not as far away as we might sometimes hope, and it is getting closer every day.

February 11, 2016

About inequality, that is. I am arguing that inequality is the biggest problem facing America. My previous posts detail how extreme it has become. So much is written about the issue, but so little is offered in prescriptions–what can be done? Those who do offer solutions are venturing into the unknown and are subjected to a multiple of criticisms beyond those who just write about the problem. Here is a short opinion piece based on some of the few brave who dare to venture there.

As to the question above, it’s really two questions, isn’t it? What should be done is probably different from what can be done, considering today’s politics.

The Republican Presidential candidates often start by denying the problem, like what many of them do with carbon emissions. If any acknowledgement is given, their prescriptions can largely be boiled down to one: increase growth in the economy. They are only half right–it’s nearly impossible to reduce inequality without growth. But, they are wrong that growth alone is sufficient. Growth is necessary, but not sufficient. The “trickle down” theory has been disproved across several periods of strong growth since 1980, when Conservative policies began to dominate US economics. During such strong growth periods, inequality continued to steadily advance. That has also been true in another major economy where GDP growth was about 10% annually for 30 years–China. China’s inequality has increased steadily across that time, and now is about equal to ours. Poverty was dramatically reduced, but inequality rose.

And, not to mention just “how” do they intend to increase growth–in what is increasingly clearly a low growth global environment.

In his 800 page Capitalism in the Twenty-First Century, Thomas Piketty said the best prescription would be a global wealth tax. I like that, but even Piketty admitted it could not be done.

Bernie Sanders has some prescriptions. Here are a few that fall under Inequality, the #1 issue on his website:

• Increase taxes on the wealthy
• Prohibit US Corporations from sheltering profits overseas
• Raise the minimum wage to $15
• Putting millions of Americans to work in fixing our infrastructure

All of these make sense, provided we debate and negotiate exactly how they are done. For example, future increases in the minimum wage should be based on local cost of living in each city and state. Some places are much cheaper to live in than others. Increased taxes on the wealthy need not be raised to levels that would seriously affect motivation–e.g., from the US 39% max tax rate to Germany’s 47% seems a reasonable example.

Dr. Robert Reich has a number of prescriptions in his Saving Capitalism, an excellent new book:

• Turn back laws favoring business vs. labor
• Strengthen the rights of debtors vs. creditors (allowing bankruptcy for home loans and student loans)
• A broad series of measures intended to return corporations to an earlier era in which they sought to serve not only shareholders, but also customers and employees
• Reverse Citizens United, which allows big money to heavily influence elections
• Essentially, overhaul the rules governing these five foundations of the capitalistic system: property, contracts, bankruptcy, monopolies, and enforcement

Can policies such as these, enough of them, actually make it through the highly divisive US political process to enactment in some meaningful form? Would they collectively create a current version of FDR’s New Deal or Lyndon Johnson’s Great Society, which served sustain a period of relative equality and opportunity? It happened then, and made a huge positive difference.

It is clear now that inequality will not resolve itself. It will not be solved by growth alone. It will only be solved by some form of intervention by government. And Conservatives have established a formidable political objection to government. As Robert Reich makes clear in his excellent book, the Conservative message is that government is the enemy of freedom. In concert with that message, step by step, most of the mid century social support programs have been substantially weakened or eliminated.

Thomas Piketty agrees with Professor Chris Bramall, under whom I studied at SOAS 2012/13. Bramall is a China expert, and understands the costs and benefits of revolution. Piketty and Bramall agree–governmental intervention to reduce inequality is not going to happen without a cataclysmic event. To get to the Great Society, the world had to experience WWII and the US had to experience the Great Depression. Piketty and my professor were talking not only about the US, but looking at similar trends in inequality and similarly prohibitive political attitudes in many developed countries. They feel we must either await some similar cataclysmic event, or the reversal will only come with revolution.

Reich is more optimistic. He sees evidence in the criticisms on both sides of the aisle for Wall Street, hedge fund managers, and generally for anything identified as “the establishment.” He feels that it doesn’t matter that some of this is political necessity, lacking genuine commitment from the Right regarding the need to attack inequality. He feels this rhetoric reflects a growing awareness that the voters want change. I would add that the support Bernie Sanders is getting suggests growing strength at this time in support for upturning the halls of power and money.

As for me, I gave my first political contribution of the current cycle last week–$500 to Bernie Sanders. They said the 13th Amendment abolishing slavery could never be approved in 1865. It won by 2 votes. I gotta support what I think we should do, and later we’ll try to get what we can do as close to that as possible.

February 1, 2016

In this excellent book, Dr. Robert Reich addresses a major issue in the politics of our time: that Conservatives have created a powerful illusion of government as the enemy of freedom. In fact, he shows with clear logic and many examples, that without government, there is no freedom. There is only lawlessness, a dangerous place where none of us would feel safe.

Across the 30 years since Reagan, there has been a steady advancement of Conservative economic policies, favoring the free market over government, involving a steady erosion of worker rights vs. employer rights, and shifting corporate values from serving employees, customers and shareholders, to serving shareholders only. Exacerbating this are two other major factors: technology advancing rapidly through digitization, resulting in reduced need for workers in manufacturing and also moving into service businesses, such as legal and accounting; the third wave of globalization also advancing, supported by Conservatives–this is key to “free trade.” But, as jobs are lost to technology and to foreign countries with cheaper labor, there is no willingness of Conservatives to allow government to provide a safety net to 50 year old workers who need to be retrained or to enable them to move to cities where jobs are available.

Reich explains that the right issue for debate is not whether we need government, but what do we want government to do, how government is to deal with a wide range of options.  Most specifically, he illustrates how the role of government has been shaped by the wealthy, with squadrons of lawyers and lobbyists, so that government primarily serves the interests of capitalism and big money–“who has the power to set the rules of the game.”

Reich, currently at Berkeley and formerly Secretary of Labor under President Clinton, has been an ardent advocate for the middle class and the poor. He’s been consistent in calling for adjustment to the “rules of the game,” such that we can return to the kind of shared prosperity that we enjoyed for many years after WWII.

Reich’s argument is that where we’re going is not only tragic for the middle class and poor, but also for the wealthy. Start with the realization that supply side economics is not working–the idea that wealthy investors will drive growth by investing in production which hires people who spend the money. The investors simply have not been doing much  job creating investment. Instead, Reich reminds us that the middle class needs to have income in order to spend it to drive growth in the economy. That’s how the wealthy win from allowing a fairer distribution of wealth and income.

The siren song of “Conservatives” is small government. Usually there is little in the way of specifics as to what parts of government should be cut, just reduce government! Given that real wages have been stagnant across the last 30 years, while the 1% has seen astronomical increases in both income and wealth, the political dilemma Reich addresses in this book is easy to understand. Politicians offer to reduce taxes and struggling voters seize on the prospect for a little more money to spend.

Unfortunately, as this happens, with the limitation of politically unchangeable entitlements and Conservative support for military, the cuts end up in services that are critically needed to enable the middle class and the poor to advance and participate in our prosperity. Eduction is cut, social services are cut, and help for unemployed is cut. Those who are voting for a little more discretionary income lose out–they lose protection from job loss, they lose social services, they lose education support for their children, and they even lose in infrastructure, and transportation is critical to our workers.

Everyone agrees, both sides of the aisle, that government is terribly inefficient, that many of our compounding regulations are obstacles to business and consumers, that many of our agencies (e.g., Veterans Affairs) are poorly run. We all agree government needs a thorough makeover. When businesses discover that they are too inefficient, a scalpel is taken to focus in on the divisions needing to be terminated and those needing to be re-organized, and selective improvement is undertaken, swiftly. No one on either side of the aisle has come up with a proposal to re-organize government. All the talk from the right is simply to reduce government. Reich explains in detail why that won’t help.

So, consider that the wealthiest 400 in the US have more wealth than the entire bottom 50% of our population. Consider that CEO pay rose 978% from 1978 to 2013. If you want to understand how such dramatic and dangerous changes developed in what was once a relatively egalitarian country, please do read this book.

“Liberty produces wealth, and wealth destroys liberty,” wrote Henry Demarest Lloyd in 1894. Reich argues the only way to prevent this natural transition is for government to do its job, the right job, free of excessive influence from monied interests. Capitalism cannot function effectively without government functioning effectively.

More later on his prescriptions for how to reverse the dangerous trend.

A reviews you may want to read: Paul Krugman

February 1, 2016

Have you ever experienced this–someone made a a series of blunders–then cleverly accused others of being responsible for the mess, and succeeded in keeping his job and getting promoted? If you’ve spent 10 years or more in any sizable organization, private or otherwise, you may have witnessed something like that. Maddening, isn’t it?

That’s just what has happened to us in the US. The Republican party messed things up, and they may be headed toward succeeding in getting promoted.

Here is how it all happened: The George W. Bush administration took us into Iraq and Afghanistan, spending $6 Trillion, wars that have never yet ended, and have now spiraled into a new crisis with a terrorist group called the Islamic State in Syria. Then domestically, this Republican administration led us into a housing bubble which sparked a global financial crisis, costing 8.8 Million jobs and $19 Trillion in lost household wealth in the US alone. This is what President Barack Obama inherited when he took office in 2008.

In our President’s final year, we have finally recovered all the lost ground. We are producing an average of 220,000 jobs per month. Unemployment is 5%. The economy is growing steadily.

But, regardless of the current administration doing an outstanding job dealing with the mess the previous administration left, the US is not in good shape. Inequality and all that falls under that umbrella is the problem: A high level of poverty, wages stagnant or declining, jobs hard to find, except at the minimum wages, all the while the income and wealth of the 1% skyrocketing.

And why hasn’t the current administration been able to fix that too? In a brief oversimplification, the answer is globalization, technology, and the steady promulgation of conservative economics favoring capital and big money. These policies are called “neoliberalism” in economics. Key elements are free trade,  privatization, fiscal austerity, deregulation,  and reduced government spending. The emphasis is on strengthening the private sector and weakening the government sector.

In fairness, Democrats must also take a lesser part of the blame for the economics across the long period since Reagan in 1980, when neoliberal (Conservative) economics began to gain control of US economic policy. Bill Clinton also fell prey to Conservative economic pressures during his term. He backed off his promise to limit CEO pay.President Obama supported the Trans Pacific Partnership, a massive trade deal, without sufficient protections for American workers who might lose jobs as a result.

How have the Republicans made their case to the electorate that the current problems are the fault of Democrats, and across the 35 years since 1980, that we should continue to steadily advance neoliberal economics? First, without even acknowledging the mess the Democratic President inherited, they make these claims, (with my corrections to their falsehoods):

1. The recovery just wasn’t “good enough” under Obama. More Conservative policies would have made it better. But those conservative policies got us into the mess, and Conservatives in Congress made sure there was no fiscal stimulus, just more austerity. Conservatives are also the proponents of free trade and globalization, which has led to the loss of US manufacturing jobs, but Conservatives accept no responsibly on the part of government to provide for the job losses those policies caused.
2. Regardless of the House and the Senate being controlled by Republicans (in Obama’s 2nd term), any shortage of progress was the fault of Democrats. But there were no meaningful proposals sponsored by Conservative Congressmen. Obama has vetoed far fewer proposals than did his Republican predecessor.
3. Much of the economic problem is the fault of Obamacare. But, there has been no alternative proposed by Republicans. None whatsoever. Still a mystery what they would provide if Obamacare is repealed.
4. We need to continue to reduce government. Government is an obstacle to personal freedom. Tying continued tax reduction to reducing government has proven widely popular. But the reality is that without government there cannot be freedom. The question is what do we want government to do, not whether we need government.
5. Much of the remainder of the problem was the fault of immigration policies. But no alternative immigration proposal has been brought forward by Republicans, and studies continue to show our immigrants are net contributors to our economy.
6. As to the wars, the problem wasn’t that Republicans took us in there, but rather that Obama didn’t put more troops on the ground and keep them there. Chest beating is appealing to some. We have not achieved desired results in any wars since WWII. Why not try negotiating and global collaboration, for a change?
7. And, as to Foreign relations, the US failed to act tough with Iran, China, No. Korea, Russia, and Mexico. Weak politicians often turn to nationalism as a way to galvanize people. Two of the nations in 6 above have been great economic partners to us (China and Mexico) and Iran and Russia could be–if we stop berating them. We no longer need to be the unipolar leader of the world–it’s a shared opportunity now.
8. Then, Republicans spin their message to include Christian values, objection to gay marriage and objection to abortion. And they land on the 2nd Amendment and claim that Democrats are going to take away our guns. Evangelical values and gun rights have little to do with the economic malaise, nor are they rightfully singularly Republican values–but they do appeal to a large swath of Americans.

The underlying and greater fault by far lies with Republicans and Conservative economic policies, along with their stubborn refusal to provide remedy for the human damage caused (such as economic support and re-training for jobs lost). These policies, taken with globalization and technology have led to dilemma we currently find ourselves in.

Logic suggests as Americans we would recognize that these policies need to be changed. This is not likely to happen without voters seeing through the Republican rhetoric and voting in a different set of policies.