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The United States: The Emerging Banana Republic

Over the last couple of months, we have seen rather brutal displays of intolerance coming from left on college campuses. While this thuggish and fascistic (despite a label to the contrary) treatment of political opponents is alarming, it is not something that just happened overnight. The fact is that conservative (and Republican) thought has been expunged from campuses for over 40 years. Even 20 years ago, conservative speakers needed extra security because of the potential for violent protests. Although some are lamenting the fact that universities are supposed to be a place for free speech and the free exchange of ideas, the universities were not even close to that ideal 20 years ago when this author was in college. And the situation has only become worse.

Perhaps what is even more alarming than the protests is the fact that the college administration and law enforcement are simply unwilling (not unable, unwilling) to take the necessary action to uphold the rights of conservative students. Does anyone seriously think that if a bunch of skinheads were planning to disrupt and shut down a gay rights speaker that the university wouldn’t have mobilized all resources (including requesting the governor to call out the National Guard if necessary) to ensure that the speaker was able to speak? The university would be right to take these measures in the latter case and would have been right to take it in the former case as well. However, by not taking this action, the university is making a statement that they don’t feel conservatives deserve the same right to speak as other groups. In other words, conservative are second class citizens.

If this was confined to college campuses, perhaps it would not be so bad for the country as a whole. Conservatives have been second class citizens on most college campuses probably at least since the 1970’s. But like a cancer that metastasizes and kills the body, it would appear that these ideas are metastasizing and spreading beyond the confines of the ivory tower. The New York Times ran an editorial arguing that what is calls “hate speech” is not protected by the First Amendment. What is problematic isn’t that the author invents a category of speech that is not really legally recognized, but that he appropriates for himself (and presumably those that think like him) the power to define what is and is not “hate speech”. It would appear that “hate speech” is little more than “speech I don’t like and that makes me angry”. As this author hails from the left-wing side of the political spectrum, we can be pretty sure that conservative speech will somehow, and through tortured logic, always be the speech that ends up getting banned, or undeserving of police protection.

While some might cheer this relegation of conservatives to second class status and honestly believe that the country will be a better place because of it, the truth is that this simply cannot go on. The left (even those calling themselves moderates) have been willing to use the IRS and the courts to persecute people whose ideas they don’t like. And now the New York Times is all but implying that the center-right has, at best, a stripped down, watered down, sort of second class First Amendment protections.

Political systems of whatever stripe can either function, or not function. Monarchies can function. Fascistic states can function. Democratic republics can function. Communist states can function. But what all of these states need to remain stable as states over the long term is the buy-in from a large fraction of the population. These states can discriminate or persecute a minority, but that minority needs to be a very small percentage of the overall population. Either that, or the state needs a powerful suppression apparatus to keep the population in check (Think South Africa under Apartheid).

But what can’t happen is that you basically declare 40% to 50% of your population to be second class citizens and still have a stable, open society. That would require a large population to peacefully accept its status as second class. It seems that some on the left think that is exactly what will happen.

It won’t. So, we can expect either a break-up of the U.S. or an expansion of the security state-as-suppression mechanism to hold it together. Either way, it would appear that the golden age of the U.S. as a politically (and hence economically) stable entity may be coming to an end.

The Global Impact Of America First

Now that President Trump (it feels weird to write that) has entered the Oval Office and seems to have every intention of following through on an ‘America First’ platform, the paradigm that has governed the global political and economic order appears set to shift in ways that will be a significant change from what we have seen over the last generation or two.

One change is that it appears (based on what we know about Trump’s cabinet picks) that U.S. foreign policy is likely to have a more realist approach to it than in the past. The last three Presidents have engaged in foreign policy that was not interest-based, but rather based on their view of what America is or should be. Clinton used American armed forces in an altruistic manner to show that America is good. Bush used America’s armed forces to promote democracy (with the idea that would make us safer). And Obama basically tried to placate our enemies and disrespected our friends (with the idea that this would make us safer if our enemies didn’t hate us so much). All three of these approaches contain elements of simplistic, almost childish assumptions that either overestimates the capabilities of America (Bush trying to reshape foreign cultures in America’s image), or assumes that America needs to not be so “mean” or “pushy” or try to pursue its interests (Clinton and Obama).

Trump appears to recognize that America has the right to pursue its interests like any other country, that it should be willing to engage in alliances of convenience where necessary (i.e. with Putin if necessary), and that it shouldn’t try to make other countries be more like us or to like us at all. It appears that foreign policy under Trump will start with the world as it is, rather than how we would like it to be. By being based on realistic assumptions, Trump’s foreign policy has a better chance of success (from America’s perspective) than some recent Presidents.

Another aspect that will change is that economic policy (i.e. trade policy) is likely to be evaluated based on how it impacts America. While the Washington consensus over the last generation is that free trade is a good thing that leads to higher GDP growth (which it does, all things being equal, just in case you were wondering), the fact is that free trade has decimated certain sections of the country. In economic theory, free trade is good because not only does the economy get more stuff at a cheaper price, but the workers displaced out of the old inefficient industry (that gets offshored) can be used in more productive industries (which ultimately results in higher pay making them better off too). The fact of the matter is that this has not happened. Part of it is that the world that exists in economic theory doesn’t exist in reality. We don’t have a free market. Our economy is over-regulated. This hinders the formation of new businesses and new opportunities that might allow displaced workers to be absorbed at wages similar to what their old jobs were. What America has been doing over the last two generations with its promotion of free trade, increased globalization, and increased domestic regulation is that it has fostered the growth of middle classes in other countries, by decimating our own. While this (and the collapse of the Soviet Union) resulted in a world where America was at the single hegemon holding the world economic system together, it is also clear that many Americans are tired of paying the price for something where the tangible benefits accrue to other people. We can expect that as America begins to pursue its own narrow interests at the expense of others, the middle classes in other countries will weaken, perhaps leading to political change that lessens (not eliminates, but lessens) their ties to the United States. This will create an opening for our rivals China and Russia to begin to influence nations that they may not have been able to influence before.

 While many will decry Trumps policies (and some will undoubtedly deserve to be condemned), what we are getting is the natural result of multitudes of decisions that have been taken over the last 40 years. The world is moving towards a multi-polar international order because America has weakened (as nations and empires tend to do over time), without anyone noticing. In some ways, the forces that propelled Donald Trump to the Presidency can also be seen in other countries as well. Someone like Donald Trump does not become President because a country that is basically functioning pretty well gets drunk one night and wakes up to find that they have elected this man. Someone like Donald Trump becoming President happens because the system stops meeting the needs of a significant fraction of the country.

When a system stops meeting the needs of its people for a short time, the people simply vote the other party into office. When the system stops meeting the needs of its people for a long time, you get a Donald Trump. An ‘America First’ program will reshuffle the deck so to speak and redefine America’s place in the global order. While this may or may not end up being a good thing (it will depend on what policies are ultimately pursued), the shift is more due to a recognition as to how the world has shifted over time. The Trump Administration will not be inconsequential.

The Coming Trump Administration Looks To Remake The Economic Landscape.

This week, Donald Trump will take the oath of office to be the 45th President of the United States. While predicting the course of an Administration in advance is liable to make one look extremely foolish in hindsight, the idea that Trump could end up being one of the most consequential Presidents in at least one, maybe even two, generations is not as absurd as it may seem.

Firstly, the horrified (and if one is being honest, even occasionally unhinged) reaction of many to Donald Trump the candidate AND Donald Trump the President-Elect (and not only on the left) is an indication that much of what we have known as the institutions (political, economic, and cultural) throughout our lifetime feel under threat (for better or worse). As vilified as Mitt Romney was, one has a hard time imagining the vast protests, the hysteria, and the attempts at delegitimization such as we are now witnessing, would have occurred had he managed to beat Obama in 2012. As hated as Mitt Romney was on the Left, he was a man of the establishment, largely polite, and a go-along-to-get-along type who would likely only have changed things at the margin. But with Trump, you have someone who not only is a brawler, but also enjoys the fight. It is almost like General George Patton with a Twitter account. In other words, some change is coming to the established institutions (how much remains to be seen, but it is unlikely to be zero). Usually when change happens, it is to the disadvantage of the “in-crowd”, hence the fear is that it could be a lot.

Secondly, Trumps Cabinet picks largely (with a couple of exceptions) seem to be reasonably solid. True, they are not picks that Hillary Clinton would have made, which by itself is going to upset a lot of people. But contrary to the anticipation/worry of some (on both sides of the political aisle), Trump has not loaded up his Cabinet with a bunch of Sarah Palin-types (i.e. people who are extremely ideological with thin resume’s and limited knowledge of the world). In addition, many of these people are coming into their roles with the idea of reshaping (or even substantially curtailing) the agencies that they are heading up.

These factors indicate that a serious attempt is going to be made to make major changes, and that the regulatory state is likely in for a makeover. Over the last 80 years, the regulatory state has kept expanding. Sometimes the expansion has been quick, and other times it has been slower, but the direction has always been the same. Furthermore, periodic regulatory reform has almost always meant more regulations being piled on top of old regulations. While lack of regulation is not what is ideal, for the last 80 years, the phrase ‘better regulation’ has nearly always meant ‘more regulation’. With the Trump Administration, it is possible to imagine a partial rollback of the regulatory state as well as a modified regulatory structure that better reflects the realities of a 21st century global economy. With shifting regulation, the rules of the economic game will shift, and with it the winners and losers.

Four to eight years of a Trump Administration could see a fundamentally changed economic landscape from what we are used to seeing, for better or worse. It is time to get ready.

 

The Lessons Of 2016.

Well that was fun. Another year in the books and for once it was a year that probably won’t be soon forgotten in that it was a very historical year. The word ‘historical’ often gets thrown around too loosely, because many people (i.e. members of the media) don’t really have a historical perspective. They get caught up in the stories of the day and declare this or that to be of great historical significance because of how they feel about it. But for something to be of truly history book significance, it has to be an event (or series of events) that is either the culmination of some underlying heretofore unnoticed trends, or something that sends history down a completely different path. For example, the assassination of Archduke Ferdinand in 1914 that led to World War 1 was such an event, because without WWI, the world today looks completely different as to be unimaginable. The attacks on 9/11/2001 were also such an event. The collapse of the Iron Curtin in Eastern Europe in 1989 was the culmination of certain trends that had not been widely noticed before. The point is that as 1914, 1989, and 2001 came to a close, we knew at the time that we had experience an ‘historical’ year.

And so it is with 2016. The Brexit vote, along with Donald Trump’s election win (as well as Bernie Sanders primary challenge to Hillary Clinton), revealed a deep-seated disenfranchisement of large segments of the population with the political class. While Donald Trump ran under the Republican banner, his victory was as much a slap at the established Republican Party as it was the Democrat Party. And Brexit was led by the head of a minor British political party, although with some major support with the established Tory Party. But what makes these elections different from prior elections/referendums is that in one case a country is fundamentally trying to change how it is governed (i.e from the E.U. in Brussels with an assist from London, or just from London), as opposed to just who is doing the governing. In the other case, this isn’t simply a change from the standard established politics of the Democrat Party for the standard established politics of the Republican Party. What we have is a person who is effectively creating a different governing coalition, even if he himself really isn’t actually aware that he is doing it. It is basically a non-violent (at this point) rebellion that instinctively trying to tear down an existing system that a large fraction of the population on both the center-left AND the center-right don’t feel is benefitting them and is being run to their detriment. The point is that the election of a political novice with no experience to the most powerful position on the planet is the ultimate vote of “no-confidence” in the existing system. And the fact that he is appointing people to head up agencies that they personally have opposed is a sign that he is actually serious about changing the game.

In short, many assumptions that have governed the U.S. (and by extension the international system) for last 25 years in some cases, and since WWII in other cases, are being upended. The year 2016 is likely to go down in history as one that was extraordinarily impactful.

 

Why Trump Might Be Better Than Clinton

In a couple of weeks, two months will have gone by since the election and there is still much wailing and crying about the result. Even esteemed outlets like the Washington Post are running op-eds from individuals living in fear of a President Trump. The Left has tried recounts, threats against electors (to no avail), and even a bizarre idea to have the Democrats hijack the Senate on procedural grounds and install President Obama’s pick to the Supreme Court, to try and stop Trump or mitigate the perceived damage that his Presidency might cause (from their perspective). While these antics are disturbing in that many of these folks seem to think that they have the right to overrule an election result simply because they don’t like it (rather than that the result itself was caused by fraudulent activity such as voter fraud), it might turn out to be for the U.S. as a whole that Trump ends up being better than Clinton for the following reasons:

1.)    Trump didn’t NEED to be President. Clinton HAD to be President.

The fact is that it is dangerous to hand power to people who lust after it. Clinton had been running for President for 25 years. Everything in her life was done with an eye towards being the first female President. Trump, on the other hand, doesn’t appear to have really intended to be President until about 9 months ago. True, he was running for the Republican nomination, but his campaign (if you can call it that) seems to have largely been about promoting himself, having fun throwing rhetorical bombs, getting everyone stirred up, and perhaps putting some of his ideas into the national conversation. It doesn’t appear that he desired to actually get elected. It wasn’t until February or March of 2016 that something seemed to click inside of him and he realized that he might actually win the nomination in spite of himself. Once that happened, his competitive streak kicked in and he started going all-in to win.

The point is that we have a President-elect who, up until 9 months ago, would likely have considered his life complete without ever sitting in the Oval Office. Clinton, on the other hand, appears to feel that she was ‘robbed’ of something to which she was entitled. An entitled personality like Clinton is at least as likely (and probably more likely) to abuse the powers of the Office of the President as Trump.

2.)    Hillary Clinton just isn’t an effective leader. Donald Trump might be.

The fact is that we don’t really know what Donald Trump is going to be like as President. As President-elect, he has backed off some of his campaign rhetoric. He could be an effective President, or he could be a total disaster. We just don’t know at this time. However, Trump does at least have a history of making things happen. To put it charitably, Hillary Clinton does not. Clinton was an activist First Lady for 8 years, a Senator from New York for 6 years, a Secretary of State for 4 years, and a candidate for President twice. A what does she have to show for it? Not much. Even her most ardent fans couldn’t think of really any accomplishments beyond just reciting how many miles she logged traveling around the world as Secretary of State. The fact that her march to the Presidency was almost derailed by an aging socialist backbencher and that she needed some internal Party shenanigans to solidify her victory is a sign that she just isn’t effective.

3.)    Trump’s overreach will be opposed by Democrats and some Republicans. Clinton’s would have been opposed by some Republicans.

As strange as it may seem, Donald Trump is likely to be better long term for American unity than Clinton would have been. A lot of that statement is undergirded by the fact that Trump’s cabinet and judicial picks are likely to be within the legal mainstream, a mainstream that has protected certain rights that American’s have enjoyed for over 200 years. The fact is, whether one wants to admit the truth of it or not, that there is a concerted attack coming from the Left on rights like religious freedom and gun rights, just to name two. Left-wing activists have been using the court system to force private businesses to engage in activity that they find morally reprehensible as a condition of being allowed to stay in business (in contrast to singers and entertainers refusing to perform at Trump’s inauguration, who have faced no calls to have them put out of business for refusing to engage in activity that THEY find morally reprehensible). The same is true for gun rights, against which the Left is trying to use the legal system means to remove those from responsible gun owners as well.

The point is that explaining to people that rights which they thought that they had (and which generations of American before them had) are now no longer valid is not something likely to lead to a stable society. The Left thinks that once it gets something declared the law of the land by a court, then they have won and the question is settled for all time. The problem is that it is one thing to use the courts to grant rights (like same-sex marriage), and it is something else to take established rights away (or to explain how no, you silly person, you don’t SERIOUSLY have those rights your parents/grandparents told you that you did). A Clinton Administration would have been more likely to push certain large segments of the country to the wall. The result would have been a loss in legitimacy for the government and long-term instability.

Conclusion:

In conclusion, America had a choice between a couple of unappealing options. While the Left and media focus on Donald Trump’s incendiary comments, the fact is that Clinton, with her “basket of deploreables” comment along with the Democrats and the media’s defense of that comment, means that Hillary Clinton likely sees roughly half of the country as deserving of being second-class citizens and would likely have continued (or intensified) the institutional attack (see IRS and Tea Party) on those segments. If one looks at Donald Trump (erratic personality aside), one sees someone who appears to have no problem with same-sex marriage, transgendered bathrooms, is perhaps flexible on abortion, and seems to be more of a traditional center-left person on trade (for better or worse). While his rhetoric may be uncouth, most of his other positions, including border enforcement, are largely within the conservative Republican mainstream. In short, those on the Left are more likely to come out of a Trump Administration unscathed that those on the Right would have fared under Hillary Clinton.

If this turns out to be the case, then Trump will turn out to have been better for the U.S. than Clinton.  

The U.S.: Not As Stable Or Reliable As Before

So, we are now done with the electoral challenges in Pennsylvania, Michigan, as well as the recount in Wisconsin (nearly), and it appears that Donald Trump has slates of Republican electors totaling 306. However, in the time since the election on November 8, the U.S. has resembled more unstable former Soviet Republic than the United States that has existed for most of our lives.

While there was much wailing and courtroom maneuverings in the aftermath of the 2000 election, at least that had the virtue of being an election where it was A.) extraordinarily close, and B.) where there were legitimate questions of who voted for what. In the aftermath of the 2004 presidential election, there were some who claimed that rigged voting machines cost John Kerry the election in Ohio, and thus, the Presidency (although nobody disputes that George W. Bush won the popular vote). And in both cases, the inaugurations were marred by protests.

Today, since the election, there have been protests, cry-in’s on university campuses (not to mention unhelpful tweets from the President-elect himself), attacks on people for their political views, media claims of a vicious racist undercurrent, recounts demanded in 3 states by someone who received 1% of the national vote, harassment of the electors themselves to change their votes from Trump to (preferably Hillary, but another Republican if they must), yelling about co-called ‘fake news’ (including a member of the White House press corp intimating that the government should crack down on it) and now claims that Russia has ‘hacked’ the election (coupled with assertions that the Electoral College should make sure that Trump doesn’t become President).

While none of these gambits is likely to be successful in preventing Mr. Trump from taking the White House (nor should they), the fact is that the employment of these tactics reminds one of the banana republics that we like to deride for their backwards and corrupt political systems. None of these actions is remotely legitimate, nor are they likely being employed for altruistic or public-spirited reasons. In other words, the folks doing this would not be doing this if the election had gone the other way. In addition, the fact that they have gone here increases the likelihood that they will be used in future elections as a method of delegitimizing the new President (whoever he/she might be).

The fact is, what this election is revealing is that we have a large segment of the center-left that only accepts a system as legitimate if it gives them what they want. The Electoral College is illegitimate if it elects Bush or Trump, but legitimate if it were to elect John Kerry (in which he lost the popular vote). The Supreme Court is illegitimate if it sides with the center-right on the Citizen’s United case, but legitimate if it requires same-sex marriage or upholds Obamacare. In order to maintain a democratic-republic, you have to stand up for the system, even if it does things that you disagree with. By and large, the center-right has done this (I don’t recall any protests being organized against either Obama election). The center-left, on the other hand, doesn’t seem willing to follow this philosophy. Consequently, they will engage in destabilizing actions when they don’t get their way.

Expect a U.S. that will look more and more like unstable political systems around the world going forward, with predictable negative consequences for investment and economic growth.

Who Killed The Industrial Working Class?

Although the election is all over but the shouting (of which there is more than normal), one question that seems to have outsized importance this election season is that of the fate of the industrial (white) working class. The election of Trump seems to have focused minds on this segment of the electorate, although Bernie Sanders and others on the left had been talking about this forgotten group for some time. The fact is that jobs have been being outsourced for a generation, rates of private sector unionization (something of specific concern to the left) have been steadily declining to the point of being almost microscopic, and working class wages have been stagnating for a generation or more. So what has been causing this economic decay that has been largely invisible to those outside of the major metropolitan areas where culture and public policy are produced?

The first cause that should be highlighted is increasing environmental regulation. At the time that the EPA was founded in 1970, it was responding to real environmental problems. Pollution was visible in the air in many places, rivers were catching fire, and even littering was something of a problem. However, as the EPA has expanded, the air has become cleaner, as have the rivers. The EPA has focused on less visible concerns such as ozone holes and global warming/climate change. However, the regulatory burden on the overall economy has steadily increased over time, along with compliance costs. As this happens, industrial firms have been offshoring production to countries with less stringent environmental compliance regulations. While some environmental regulation was and is still necessary, the steady increase over the last 45 years or so is one factor that has driven good factory jobs off shore.

The second cause is that the U.S. has been the indispensable player in the international system which has been in place since WWII. As part of this, the U.S. has been encouraging expanded trading relationships as a way of managing a peaceful world order. The idea is that if countries are fully integrated into the international trading system and have a stake in the continued existence of a stable trading system, then they are less likely to engage in warfare that would upend the system. During the Cold War, the U.S. used its influence and economic might to bind countries to it in order to oppose the Soviet Union and China. After the fall of the Soviet Union, the international trading system managed by the U.S. simply expanded to include many former Soviet Bloc countries. One part of the strategy is to lower trade barriers and create free (or freer) trade areas. The result of this is that a company could offshore its production to say, Mexico, and then reimport those goods back into the U.S. for a fraction of the cost. This increases employment in Mexico and makes it less likely to engage in activities that would result in its access to the U.S. markets getting closed off. The U.S. consumers would win too, as these products would show up in the stores at a lower price. However, the cost of these gains, as real as they are, has been the American industrial worker.

The third cause is automation. In the industrial sector, the ability to automate has meant that it takes fewer workers to produce the same amount of output than it did at earlier periods in history. This is called productivity and is what is responsible for higher standards of living in society. However, in economic theory this should be a good thing because the displaced workers will move into other, more labor-intensive sectors and produce even more goods (and services) making the citizens in the economy even better off. And in a perfectly free economy that might actually happen. But no economy is perfectly free, and the displaced industrial workers are not finding jobs that pay as well or better because they don’t exist. Consequently, you have many communities where the best days are in the past.

The fourth cause is declining unionization of the private sector workforce. With a significant fraction of the working population unionized, this raises the overall wages in the economy. However, this also raises the cost of doing business. With the U.S. opening up its markets over the last 2 generations, the competition faced by the American worker has increased. This leads to lower (i.e. stagnating) wage demands as the workers rightly fear that their jobs could be outsourced. In fact, it is not hard to see that the one area where unionization is still relatively strong is in government and utilities, two industries that don’t lend themselves to being easily outsourced.

Increased immigration (legal and illegal) has also had a negative impact on the industrial worker. While many immigration advocates have argued that illegal immigrants only take jobs that Americans won’t do, this is misleading. For one thing, anyone who remembers the real estate boom a decade ago won’t forget the crowds of migrant workers (of questionable legality) standing in Home Depot parking lots waiting for someone in the construction industry to show up an hire a few of them on the spot for a day. These fellows, as industrious as they may have been, were in competition with American workers for the same job. While it is hard to tell how many illegal aliens are currently working in the U.S., many are employed in industries in which there are also Americans working. These folks are increasing the competition for jobs faced by those at the lower end of the scale. In addition, they are also helping to hold down wages in those sectors, thereby contributed to stagnating American wages.

In short, the economic decline of industrial working class has been caused by a combination of factors over a long period of time. While new jobs that didn’t exist in 1970 have risen to take the place of ones that have disappeared, it is clear that one segment of the U.S. population is doing worse off than it was a generation ago. The fact that many Americans feel that their children will be worse off than they are is a pessimistic feeling uncharacteristic of the historical American experience. Because much of this decline has occurred outside of the major metro areas, it has largely gone unnoticed and unlamented by the cultural, economic, and policymaking elite of this country. In the last election, this class asserted itself in rather spectacular fashion. Until a policy mix is found to help reverse this decline, we can expect this demographic to continue to vocal in politics for some time to come.

The Impact Of Trump On The Economy

So now that Donald Trump has secured the Presidency (albeit despite continued attempts to wrest it from him via the Electoral College) the big question on everyone’s mind is, what about the economy? Despite an expansion getting long in the tooth and despite the likelihood that Trump will have a significant recession on his watch, the fact is that he could have a significantly positive impact on the U.S. economy.

Firstly, he seems to be indicating that he is serious about cutting regulation and reducing the number of civil servants. Those excited and/or fearful that the country is about to change are right to be so. In the postwar period, the federal regulatory state and the federal civil service have grown. Rather than restructure regulations to reflect a changing economy, regulations have been piled on regulations. If we were starting from scratch today, we would not design a regulatory state like the one we currently have. Also, the federal civil service has grown to administer the increasing amounts of regulation. The point is that government functions largely as it did in the 1950’s, whereas the private sector has had a couple of retoolings during that period. All of these regulations not only add to the cost of doing business and inhibit growth, but they foster industries designed to help the private sector manage through these regulations. These jobs are effectively non-economically productive jobs, thereby depriving the economy of productive workers. By dramatically reducing regulations and even shutting down some government departments, Trump can expand the productive capacity of the American economy.

Secondly, Trump is looking to decrease the corporate tax rate. While there is a case to be made that perhaps Trump will lower it too far, the fact is that the U.S. has one of the highest corporate tax rates in the industrialized world. Businesspeople have been complaining about this for many years. By lowering the tax rate, Trump can make the U.S. more competitive in attracting investment, and by extension, jobs.

Thirdly, international trade has been the one area where Trump has received most of his serious economic criticism. For those like myself who have been trained in neo-liberal theory, the idea of erecting trade barriers seems tailor made to reduce economic growth, possibly through the start of a trade war. The problem with the theory in the real world is that it assumes that people who are displaced in one industry can easily move over and be employed in another industry. At the time that theory was birthed in the first half of the 19th century, that was a reasonable assumption. A laborer with a strong back and average intelligence could be tasked with many of the jobs then available. However, today most jobs are highly specialized meaning that if you lose one, going into another industry means that you will likely have to start all over at the bottom and work your way up to a similar position. This is one of many reasons that while jobs have gone overseas, they have not been replaced by equal or better jobs. The trade agreements that have been signed over the last 30 years have taken away jobs (and lowered prices), but those jobs haven’t been replaced. By renegotiating the deals with an eye on obtaining a better deal for America’s workers, Trump can bring some jobs back to the U.S.

In short, Trump’s economic plans, might perhaps, help the U.S. economy in the long run. Whether it will help or not really depends on what regulations are eliminated, to what extent they are eliminated, and what the new trade deals look like. It is possible that these moves could leave the U.S. worse off, if they are not handled right. But if handled right, they could leave the U.S. even better off. We have been told over the last few years that a low growth world is the best that the U.S. can do, and that we had better just get used to it. A massive reduction in the corporate tax rate, a massive reduction in the regulatory state, and fair (rather than free) trade deals would remake the U.S. economic landscape. The impact on the U.S. economy, if these policies are implemented, could be huge.

America’s Transition And What It Means.

So, while Donald Trump is beginning to name people to his Cabinet, protests are ongoing and Trump Electors are reporting that they are being harassed and threatened to get them to change their vote in the Electoral College. Despite this, Washington and the elite seem to be preparing for a transition of power. While the handover may end up being peaceful (if protested), the fact is that America as we have known it has changed in ways that it is not clear that we fully appreciate and in ways that we were not even aware of until this election season. Some of the ways that this change is manifesting itself are as follows:

1.)    Trump Electors are being harassed to change their votes.

The system that we have had for over 200 years is being called into question because some people don’t like the result. While they may say that they are doing this because “Hillary won the popular vote and should be President”, it is doubtful that they would be taking this action if Trump won the popular vote but lost the Electoral College. The lack of condemnation from the media & Democrats means that they approve of what amounts to terrorist tactics to try and overturn the results of an election conducted under an Electoral College system. This attitude appears to indicate that at least the Left only accepts the legitimacy of a system if it produces the result they want (i.e. the ends justify the means). If this attempt were to succeed (assuming that the country survived geographically intact), one could expect these tactics to be used after each election, and from both sides. The country would be sliding towards a literal shooting war.

2.)    The traditional media has been revealed, in large part, as a partisan operation, and a vicious one at that.

While conservatives have been complaining about “media-bias” for decades, this election season revealed (thanks to Wikileaks) that the media is/was coordinating with Democrat campaigns. While people instinctively understood this as evidenced by the low esteem in which the media was generally held, I think some were shocked by the revelations which vindicated talk-radio’s hyperbolic description of the “Democrat Media”. In addition, some in the media, far from engaging in sober and reasoned analysis, are defaming all 60 million voters as deplorable people whose very vote for Trump forfeits their right to be treated humanely. Whatever chance there was for the media to play a role in bringing the country together is now gone forever, as is their credibility to effectively oppose the Trump Administration. Conservatives, centrists, and even some liberals of goodwill will be questioning reports of Trumpian excesses, even if the media complaints are wholly justified. Furthermore, the behavior of the old media and their attitude towards Trump supporter means that they have few willing to stand up for them if Trump decides to infringe on their First Amendment rights.

3.)    Universities may be a large waste of taxpayer dollars.

While it has long been known and well-documented by conservatives, centrists, and liberals of goodwill, the academy has been known to discriminate against conservatives and their views. On some campuses, it isn’t even physically safe to openly hold conservative opinions. However, the collective meltdown in academia with safe-spaces and safety pins and protests indicate that campus society has reached a terminal stage. That this reaction isn’t being laughed off of campus with jeers and suspensions means that many of our elite colleges have become little more than daycare centers and ideological incubators for one side. The lack of respect for the rights of others to think differently, as well as no longer being a place for people of all ideological stripes to come and try and persuade people with reasoned and dispassionate argument, means that the case for taxpayer funds going to universities is weakened. The social good of producing an elite that is well-versed in reasoned argumentation as well as respectful of the rights of other is not happening in America. Consequently, expect those on the right and center to be indifferent when university funding is cut and howls of protests start.

In conclusion, these three are but three examples that illustrate that the United States as we have known it is not long for this world. The reactions to Trump’s election, and their underlying causes, means that we have a large fraction of the population that simply doesn’t believe in the ideals of this country. They clearly don’t believe that the rules should be followed regardless of the outcome in any specific circumstance. They don’t really believe that the other side should have the right to have their votes respected (they can vote, as long as they don’t actually win). And many of them don’t believe that their opponents should even be granted humanity. This view appears to permeated the elite college campuses, and the media as well, institutions that should be standing up for the ideals, even if they don’t agree with a specific outcome.

A country cannot survive when its institutions and large fractions of its population won’t support the system if that system doesn’t give them everything that they want all the time. A country cannot survive when its institutions see the political opposition as inhuman and deserving of all of the abuse that they throw at it, especially when that ‘deplorable’ part of the population is roughly 50% of the country.

This is not to say that there won’t be another Presidential election in 4 years, but the fact is that we are likely to see the U.S. go the way of the Soviet Union within our lifetimes. That is to say, the U.S. will still exist (as does Russia), it will still be relevant on the world stage (as is Russia), but it will be geographically smaller than it is currently. That process will be unstable and will move markets. It will have negative economic effects and will not be conducive to growth and prosperity.

We are living in interesting times.

Why The Center-Left Lost The Election

So you consider yourself part of the center-left. You might even be a Republican who voted against Trump. You are highly-educated, well-traveled, and you can’t fathom how you can be looking at a Donald Trump Presidency. It is a complete shock to you. You are depressed. While you might console yourself that your fellow Americans are just hopelessly emotional, stupid, racist, homophobic, etc., the truth is that Donald Trump is the culmination of many factors, many of which you helped to create. In other words, if it hadn’t been Trump, it would have been someone else. If it hadn’t happened now, it would have happened later.

So what did you do that has brought us here?

1.)    Many of you, deep down, don’t think Republicans should have a right to pursue their agenda, and it shows.

The Republican Party has complete control (both houses of the state legislature + the governor’s mansion) in 24 states (and 2/3’s of all of the state legislatures). They have now, after the recent election, 33 governors. They have control over the Senate and the House of Representative, as well as 3 solidly conservative Supreme Court Justices. And yet you don’t really believe that Republicanism (whatever that may be) is a legitimate political philosophy. When you win elections, Republicans are supposed to fall in line and let you do the agenda that the American people voted for. Maybe they are allowed to offer some token resistance to your agenda, but they should eventually cave in to your demands if they are to be considered reasonable. When Republicans win elections, they are being unreasonable if they should actually govern like they mean it. There seems to be an expectation from many of you that the Republican legislators should betray their constituents and pursue a lighter version of your agenda. You don’t understand the Republican thought process and you can’t believe that anyone would take that agenda seriously.

2.)    Because you don’t understand it, you assume it must be driven by some sort of evil.

Many of you are not truly religious folks, but you do tend to frame much in moral terms. If one supports cutting taxes, they must be evil/racist. If one thinks that immigration laws should be enforced until changed by Congress, then one must be evil/racist. If one’s moral convictions dictate that there should be some restrictions on abortion, one must be evil/racist/anti-woman. If one holds a traditionalist view of marriage, one must be homophobic/evil/racist. If the U.S. really is as you appear to see it, then there would be many no-go zones for minorities, and these areas would be well-known. Gay people would know not to travel to certain areas for fear that they might be attacked or murdered. Many of you make it difficult to have an honest debate on issues with you, because you simply resort to name-calling, which shuts down discussion.

There really is an appropriate level of immigration in this country. There really is an appropriate amount of government spending. Not every government program is effective, and some should be shut down, etc. etc. There can be an honest discussion of these issues, but it can’t happen with people like you. Remember years ago when people accused you of not be patriotic because you didn’t support the war in Iraq? Remember how frustrating that was? You didn’t feel you could have an honest debate? That’s what you do to your opponents on issue after issue. And you take people who haven’t murdered anyone, they haven’t stolen anything, they haven’t committed any crime at all, and you make them out to be caricatures of idiots or Hitler.

3.)    And you don’t understand it, because you live in a solid, albeit high class, bubble every bit as thick as what you think conservatives do.

Imagine that you grew up in a liberal household, went to public school, on to an elite university, and now live in San Francisco, Los Angeles, New York, or any of several metro areas around the country. You watch the cool T.V. shows, see the cool comedians, and hang out with hip people. Chances are that you may never had your world view seriously called into question.

The same is not true for someone who grew up in a conservative household who has taken the same path I just described. There may be proportionally more atheists in the Vatican than center-right faculty on college campuses in this country. In other words, the popular culture, urban areas (as opposed to rural areas), and the education system are at odds with the center-right world view. Because the center-left world view is so dominant, it is highly more likely that a center-right person comes into contact with the left-wing world view than the opposite.

The result is that roughly one-half of the country (say Team R) has to come to terms personally with the other half of the country (say Team D), but Team D never has to personally come to terms with Team R.  

 4.)    Which means that you simply don’t come into contact with the “other side”, and don’t believe that the center-right should have any rights. And they have figured this out.

The fact is that Hillary Clinton’s description of Trump supporters as ‘deplorable’ and ‘irredeemable’ should have been roundly condemned by the major media outlets, but it wasn’t. In fact, much of the analysis was whether it was a wise thing to say, not that it was untrue. If you see people like this, you can’t possibly stand up to defend their rights when they are trampled. You, who would (rightly) scream from the rooftops over stereotypes of Muslims being terrorist sympathizers, are willing to stereotype, demean and condemn literally millions of people who you have never met. People who might not feel comfortable with same-sex marriage are to be put out of business (or told that they must violate their consciences) if they won’t provide services for gay weddings, because they are just awful people and awful people deserve to be punished. Pharmacists whose religious objections to contraception make it uncomfortable to sell it are told that they must do it, or else. Conservative groups can be harassed by the IRS and basically effectively denied participatory rights in the political process, and you are okay with that. The center-right has figured out that you don’t see them as full citizens.

5.)    And you really don’t care anyway that they are struggling economically.

Many of the regions that voted Trump are the economically depressed regions of the country, and they have been for some time. In these regions, America’s best days are behind it. Some on the center-left (Bernie Sanders) get this and have tried to craft a message to appeal to the economic angst of the American middle class. Apart from the ideological differences, many American rural conservatives appreciated Bernie because although they didn’t really agree with him on much, they sensed that he got it and that he didn’t view their struggles in a dismissive manner. Also, they sensed that he genuinely believed what he was saying. And then the Democrat Party went and appeared to rig the primary process against him. The American economy isn’t working for a huge swath of hard working people. Your candidate didn’t really seem to care, nor did you.

6.)    And because of all of this, you nominated a cold, corrupt, crooked, candidate, and dismissed the Republican as a misogynistic, racist buffoon.

But because you see any Republican as misogynistic (Mitt Romney’s War On Women), racist (George W. Bush failing to approve hate crimes legislation in Texas), or buffoonish (John McCain), the idea that you would have seen some other Republican as a reasonable alternative to Hillary Clinton is something that nobody believes anymore. Screaming that Donald Trump is a threat to the Republic when you have said the same thing about every Republican presidential candidate going back to at least Bob Dole, while also saying the same thing about Nixon and Reagan, has destroyed your credibility. It is not a stretch to say that while we don’t know what issues will be animating the country in 8 years, and  while we don’t have any idea who will be running for President, we can be reasonably sure that the Republican will be vilified by you as misogynistic, and/or racist, and/or buffoonish, even if that nominee is Condoleeza Rice.

In addition to the credibility problem (as strange as that sounds given that we are talking about Trump, after all), you also nominated someone who had ethical problems unlike anything anyone has seen before. Is the center-right really supposed to think that a center-right candidate with this baggage would have gotten a pass that you gave Hillary Clinton? Do you even believe that?

If you wonder how anyone could vote for Trump, remember that you didn’t nominate a JFK, a Ronald Reagan, or an FDR. You nominated Hillary Clinton. Or to put it another way, in the election between Hillary and Trump, they were each other’s best argument.

 

Conclusion:

So Mr. and Mrs. Center-Left, if you want to know why Donald J. Trump is President today, look in the mirror.

Let’s recap.

You have dismissed half of the country for a long time.

You haven’t thought for a long time that half of the country should have the same rights as you.

You don’t think accommodation should be made for their views.

You attack and mischaracterize their other non-Trump candidates.

You dismiss their struggles and their grievances.

You make honest debate impossible.

You don’t care to make an honest effort to try and see things from their perspective.

 And so they did what human beings tend to do in such situations: they threw a huge middle finger at you.

And the country will have to live with the results.