Our Political Polarization: If Only…

May 19, 2016

We are desperately in need of compromise, collaboration, and focus on common agenda. If we continue down this highly divisive path, nothing meaningful can get done.

If only the Republicans would stop trying to simply reduce government or abolish it, and present specific proposals to re-engineer and fix our government. And if only Democrats would acknowledge the faults of government and make their own proposals for reducing the cost and waste in government, and allowing certain responsibilities to be turned over to local governments.

If only Republicans would modify their opposition to all forms of redistribution and accept modest increases in taxes on the wealthy, with proceeds used for causes which will help both wealthy and the poor, such as infrastructure and education. And if only Democrats would acknowledge that entitlements (social security, medicare, and government pensions) need to be re-structured to reduce benefits to older citizens who do not need them so much, so as to improve the federal budget.

If only the Republicans would acknowledge that carefully designed additional government spending on real projects such as infrastructure can easily be financed and will pay back in future tax revenues stimulated. And if only Democrats would get serious about reducing, eliminating and sunsetting regulations that are ineffective in protecting us and are burdensome on businesses.

If only Republicans would get serious about eliminating tax breaks for hedge fund managers, loopholes for corporations, and schemes to reduce inheritance taxes. And if Democrats would collaborate to assure that fiscal revenue gains from these would be used in a manner benefitting all–such as partly to reduce the federal deficit and debt, and partly for enhanced earned income tax credit or equivalent measures.

If only Democrats would  mount programs to support those who lose jobs to globalization (re-train, re-locate, etc.) and to fossil fuel reductions. And if only Republicans would admit climate science is real and work with Democrats to find fair solutions to workers and companies to wind down the pollution of our planet. This, instead of both parties trying to solve the dilemma ineffectively–Democrats trying to abolish fossil fuel energy, and Republicans denying it, primarily to protect dying industry and the big money behind it. Isn’t the right common agenda the protection of our planet and the protection of workers? We can eliminate fossil fuels gradually and we can retrain the coal miners and move them if necessary to find work in solar and other emerging industries. Some businesses will gradually shut down, but that’s the nature of the evolution of industries–some gradually die and new born are born. Let’s just focus on helping the workers transition to the new ones.

If only both parties would make specific proposals as to exactly what they would do in Syria, Ukraine, and other global hot spots, so that we can stop battling just over words, like “being tough,” vs. “negotiating,” “leading from behind,” vs. “making America strong again.” No one really knows what these mean.

If only both parties would agree, with approval of Congress, to severe limitation of big money spent on elections, with companion media agreements to provide equal time to candidates to debate and present policy proposals.

If only both parties would realistically see the dilemma of our relationship with the rest or the world. We were the leader in pursuing globalization on behalf of our businesses. We sought freedom to invest throughout the world and for foreign companies to invest here. This has brought economic benefit to the US. Now we face strong nationalistic forces suggesting that foreign companies and foreign citizens (immigrants) have caused harm. The answer is neither to pull up the ladder and close our borders and punish foreign countries and companies, nor is it to continue without acknowledging and creating support for Americans whose jobs and wages are lost to foreign trade. We can have smarter foreign trade, and we can provide for the impact on US workers. We can do both.

And, we can then start to see that we should not, indeed cannot, turn back the clock on globalization. We can begin to treat the citizens of other countries with the same concern we give our next door neighbors.

There is much room for compromise before there is any violation of core beliefs. There is a vast lake of commonality available to us. Yet we stand on opposite shores of the lake hurling criticisms and insults at each other.

There are solutions requiring only a very modest amount of compromise. Two business people with disparate views usually can sit together for a short time and conclude a path to progress that serves both agendas to a  satisfactory degree. We have allowed our political leaders to hide behind political dogma as their excuse for lack of solutions.

Americans must shift the demand on their political leaders from being faithful to an empty political agenda, to getting problems solved and moving us forward. That is the leadership we need.



The Ultimate Test Cometh

It’s one thing to promise, and another to deliver. The time to deliver is approaching. Conservatives have now started to promise jobs and wage growth. What will happen if their promises are not delivered?

Conservatives have finally admitted that inequality is indeed a problem, a major problem. They tried for decades to say it was not a problem, that it is only fair that those who work harder or are smarter, or even by reason of inheritance or nepotism, have more income or wealth, get to keep what they have obtained.

And the rest of us…? Well, it’s a free country and I guess you just didn’t have the stuff, or you made bad decisions along the way. And that’s just how the ball bounces. I’m not responsible for your misfortune.

But while Conservatives may be self-oriented, they are not stupid. They now face a noisy and growing crowd of Americans demanding better jobs and better wages. Conservatives have discovered that about 1/3 of Americans are Liberal, about 1/3 are Conservative, but about 1/3 are somewhere in between, and that last 1/3 have yet to be persuaded that the Conservative agenda is good for them.  At this time, that 1/3 suspects the Conservative agenda is good only for the wealthy. And for that critical 1/3, the mixing in of gun rights, abortion bans, and no immigration is insufficient to  make the case for the Conservative agenda. They don’t see the connection to jobs and wages. There has been a steady rise in the income and wealth of the upper classes across the last 30 years, and only stagnant wage growth for the lower classes, along with employment becoming far more precarious.

Essentially, the sheer reality of inequality has been forced upon the Conservatives. If they don’t at least pretend to care about it, they will lose a lot of upcoming elections. And, if they only pretend and do not come up with real solutions, they will lose, just somewhat later, when broken promises come home.

So, now the Conservative message is being re-honed to broaden the appeal, trying to make the case that lower taxes, less government, and honoring the property and rights of the wealthy is in fact, good for the working class too. When asked just how all of this will benefit the middle and lower classes, the answer is the promise of a higher GDP growth rate. That alone will create the jobs and the wage growth that has been missing (and for which they blame the Obama administration).

Never mind that history shows the economy grew faster under Democrats across the last 50 years than under Republicans. This time around will be different, they say. Never mind that the supply side tax cut philosophy pioneered by Arthur Laffer has lost credibility. Savings from reduced taxes to the wealthy are not going into building businesses to create jobs. They are just going into the stock market or possessions of the wealthy. Never mind that “trickle down economics” has not trickled down–so far.

Whether we end up with Trump, Cruz, Clinton or Sanders, it seems inevitable that the Conservative agenda will prevail. It has prevailed and strengthened across the 8 years of the Obama administration, thanks to Citizens United and the explosion of “dark money.” That agenda claims that we will fix your frustration with jobs and wages. The prescriptions are reduced government, reduced taxes, reduced regulations, reduced immigration. These will bring you the jobs and the wages. Donald Trump claims we’ll get all these jobs back, “great high paying jobs,” by getting tough with China and Mexico.

Well…those prescriptions are not going to do it. There is more to it now. First, economic growth will be hard to stimulate in this global cycle. The proposed policies will not move it much. There are massive changes in technology and globalization that will not be countered by growth alone. Second, economic growth is necessary, but insufficient to achieve jobs and wage growth–i.e., to begin to move the inequality index slowly toward a more egalitarian country, like we had in the 60s and 70s.

And I imagine the smartest of the leaders of the Conservative movement are aware that this set of policies will not do it–will not create jobs and wage growth. But the promises will buy time.

There are approaches to the bad word “redistribution” which can be quite tolerable, even helpful to both ends of the economic spectrum. Among those are infrastructure improvement and education. Those will take a long time, even if we get political agreement, which in itself seems far away. The issues and broader prescriptions are laid out well by Joseph Stiglitz and Robert Reich, and also by Bernie Sanders.

Of course, the usual answer to failed promises, in business and in politics, is to blame it on something else or someone else. That is always tried. But, as time passes and it becomes increasingly evident that Conservative politics and economics are dominating, it will be more and more difficult to pull that wool over the voters eyes.

Two disclosures:

1-The opinions expressed in this blog are entirely my own and in no way should be attributed to any of the organizations with which I am affiliated.

2-There are good, intelligent, and capable leaders among both Conservatives and Liberals, among both Republicans and Democrats. I have friends across the entire spectrum. While it is not entirely fair to characterize any political group with a broad brush, time and space limitations preclude any attempt to be more granular. My apologies to all. My primary concern is with neoliberal economics and its impact in widening the inequality gap.