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High Court Ruling Shows Elite Contempt And Intolerance Of Democracy

Earlier this week, a 3 judge panel in U.K. took it upon itself to attempt to overturn the votes of 17.5 Britons who voted in June to leave the European Union. While ostensibly making a ruling (which is being appealed) that says that only Parliament can begin the process of formally exiting the E.U., this appears to be an attempt to slow down the exit process, perhaps postponing it indefinitely.

This action, taken as it was by the elites, appears to be just the latest attempt to push forward with an E.U. project that was already suffering from a democratic deficit. Time and again over the last quarter century, the political class in various E.U. countries have sought to push the E.U. integration process forward, by hook or by crook. In cases where E.U. treaties have been rejected, the people have been “invited” to vote again on treaties that were at best, marginally revised. Or in other cases, the treaties haven’t been submitted for a vote at all due to fear that they would be rejected by the voters. In the case of the Lisbon treaty (effectively the E.U. constitution), the Irish were the only country to put the treaty to a popular vote, which they rejected. The abuse heaped on the Irish voters by the E.U. elite was stunning, and they were graciously given a “second opportunity” to “correct their mistake” (which they did).  

In the case of the Brexit vote, the governing class and elite opinion were all on one side. Brexit voters were abused and disparaged as racist idiots, even before the first votes were cast. After it was clear that the British had dared to vote the “wrong” way, the initial reaction in certain circles was to float ideas about ignoring the vote, to complain that it was invalid because the other side lied, or demanding another vote, or claiming that many people had changed their minds, etc. etc. The problem in Europe is that these tactics and attitudes only seem to cut one way. If the Brexit side had lost, it is highly questionable that there would have been calls for a re-vote.

What has been clear for quite some time is that elites in Europe (and even in the U.S.) don’t really believe in democracy as a system. The system that was taught to many of us in school was that the people vote for representatives and then those representatives decide. Or in the case of a referendum, the people vote and whatever gets the most votes wins. Now nobody says that the people will always get it right every time, but the idea is that they will in the majority of cases. And where they don’t, the system is flexible enough to allow them to change course over time. But what is not questioned is that the decision of an election (assuming that there was no fraud involved) should be hindered, frustrated, ignored, or overturned just because a class of people doesn’t like it, or that it massively inconveniences groups of people who have been powerful and have had things largely their own way up to that point.

It is the system I just described that the governing class of Europe in general and of the U.K. in particular have no use for. The system that they believe in is one where the people can vote, but that they (the governing class) has the right to question, declare illegitimate, frustrate and/or overturn decisions with which they fundamentally disagree. The system that they believe in (voting until you get the result that you want, putting hurdles in the way of executing the election decision in the hopes that you will derail it, etc) is the stuff of light dictatorships. The court’s attempt to force another vote, albeit in Parliament, does it no credit at all.  That it would do this calls into question whether the court can consider itself a legitimate part of a government that considers itself a democracy.

Culture, Personal Economics And Voting

As America goes to the polls shortly to complete the most contentious election season in anyone’s lifetime, it is good to reflect on perhaps why people are voting for the candidates that they are. While much has been made of Trump’s failings, with the baffled media wondering how anyone could possibly vote for such a person, the simple fact is that elections are a binary choice and Trump isn’t exactly running against a JFK or Ronald Reagan. Although the press won’t admit it, Trump was probably right when he said that Hillary belongs in prison for corruption. Think about it. Has there EVER been a candidate for President running while also under FBI investigation? So why are people lining up behind ‘their’ candidate? Largely for the same reasons that they always line up behind either the R or the D. So to ask why people will vote Trump or Clinton, you need to ask what makes them vote ‘R’ or vote ‘D’.

With all of the ways that pollsters divide people into certain groups, we have a pretty good idea of who tends to vote which way. For example, single women tend to prefer the ‘D’, while married women tend to prefer the ‘R’. Why? African Americans overwhelmingly prefer the ‘D’ (90%), even when there is no black candidate at the top of ticket. Why? Latinos generally prefer the ‘D’ to the ‘R’ by roughly a 3 to 1 margin. Why? White men generally vote the ‘R’. Why? White folks with a high school education tend to vote ‘R’. While those with higher education tend slightly to vote ‘D’. Why?

The answer to these questions often involves looking beyond simplistically satisfying narratives. For example, some would explain that the overwhelming 90% African American support for Democrats is due to vicious Republican racism. While a certain political party might not be the choice for 9 out of 10 African Americans, it is hard to argue that they are shunning a Party that forced desegregation in the South in at least one case in 1950’s, implemented affirmative action in the civil service, appointed an African American to the Supreme Court, appointed two African American Secretaries of State, was headed less than 4 years ago by an African American, and recently elected the first black Senator in the history of South Carolina, because of racism.

More than likely, the something that causes people to vote the ‘R’ or the ‘D’ is which Party’s platform offers them something or makes sense in the context of how they live their lives. For example, the perennial Republican offering of “tax cuts” makes sense to people who A.) are actually paying federal income tax (Mitt Romney’s infamous 47% comment notwithstanding, nobody said that he was factually incorrect) and/or B.) feel that they aren’t getting their money’s worth in government services. Many of these folks undoubtedly feel that they are in control of their lives, and that things are going reasonably well for themselves AND people who they associate with. I am not saying that these folks are getting rich, but they likely have stable lives and stable jobs.

On the opposite side, you have the Democrats with their perennial offering of “more government programs”. For people who don’t feel in control of their lives, this can offer a comfort. The fact that married women tend to vote ‘R’ while unmarried women tend to vote ‘D’ should come as no surprise. For a married woman, she has a partner there helping (more or less) and so the Democrat offering of more government programs is not going to have as much of an appeal to her (all things being equal) as it likely will to the struggling single mother.  In another case. more government spending is going to appeal to the government worker class (that overwhelmingly votes ‘D’) because they get more money and more job security.

Still another factor that can influence a person’s vote can be cultural conditions. For example, the African American experience with the police has often been an unhappy one, and this has led to a general suspicion of police in many parts of that community. In addition, the lock em’ up and throw away the key law and order policies of the ‘R’ (and the ‘D’ too to some extent, but the ‘R’ is more associated with law and order) probably can feel like an attack on the community itself. On the other side, the fact that many ‘R’’s don’t have run-ins with the law in the same way can likely cause them to be dismissive of complaints against police practices. In other words, the policies championed by the ‘R’s and the ‘D’s make sense in the context of how the ‘R’s and the ‘D’s live their lives.

To continue with cultural factors, the view of guns and gays is going to be influenced by how much interaction ones has with them. If you are living in rural America with limited police presence and a feeling that you have to protect your own home and family because the police are nowhere nearby, you will resist attempts to ban guns because A.) you will see a ban as threatening your personal safety and that of your family, and B.) your likely familiarity with guns is going to mean that you won’t fear them. But if you live in a highly urban, safe neighborhood, with heavy police presence, you might not see the need for a gun and might not understand why anyone would need it (because you won’t know anyone in your social circle who needs one). Consequently, you might be more receptive to a gun ban.

Or take the case of gays. If you have extensive contact with such folks, you are likely to see that they are normal, everyday guys and gals going about their lives the best that they can, just like all of us. But if you don’t have contact with such folks and the picture you get of the “gay lifestyle” is what goes on in gay clubs in San Francisco, you are likely see just a bunch of wierdos who have nothing in common with you and who you certainly wouldn’t want anywhere near your children. Consequently, you are not likely to be sympathetic to gay marriage or any other such issues.

In conclusion, people vote for the ‘R’ or the ‘D’ because the programs offered by these two parties make a lot of sense. They just make a lot of sense in different contexts. How people live their lives, the conditions they operate under, and the situations that they find themselves in are going to determine which program makes sense. It does no good to berate people as stupid or dismiss large minorities of the country as moochers as one candidate for President did a few years back, or as irredeemable and deplorable as another more recent candidate for President did.  Whatever factors drive their vote, the Party that offers a policy program that makes sense in the context of their lives is going to get their support, and the Party that offers a policy program that doesn’t make sense in the context of their lives (or that might make their lives more difficult) is going to earn their opposition. For most people, the corruption of one candidate or the volatility of another candidate simply doesn’t make any difference. They just don’t care.

So if you want to understand why people could possibly vote for Trump or Hillary, understand that they represent the ‘R’ and the ‘D’ (whatever else they may be, including the fact that Trump used to be a Democrat). Which Party’s platform makes sense in the context of an individual’s life will, in the majority of cases, explain why someone will go ahead and vote for Trump or Hillary. And honestly, whether you will admit it to yourself, you are probably choosing your candidate in the same manner as the person voting for the other awful candidate is doing. And if you aren’t, then you almost certainly know someone voting for your candidate who is.

When Will Things Return To Normal?

Eight years after the financial crisis, many are still asking, “when will things return to normal”. In this case, the normal that they are referring to is largely the period from 1982 to 2007 when solid economic growth, punctuated by 2 short recessions, was the norm.

Often in periods of fundamental historical change, people are tempted to see the shift as a short, transitory, departure from the status quo and the historical order of things. At that time, it is simply seen as a matter of just muddling through this, or winning the next election and reversing the programs of the other side, and then we will be back where we want to be. People at the time thought that once WWI was over, things would go back to the way that they had been. Undoubtedly Republicans in the 1930’s thought that the New Deal could be reversed. The South thought that in time, it would rise again and reverse the verdict of the Civil War. All of these brief short periods, fundamentally and irreversibly altered the dynamics of society and the world.

Today, we too are living through a historically altering time period. While some may speak of a “New Normal” with permanently lower economic growth, most of these folks seem to imagine that Western societies will continue on the current trajectory that they have been on since the end of WWII, except that they will have lower economic growth. In the U.S., these folks seem to think that once this Donald Trump foolishness is dispensed with and Hillary Clinton is safely in the White House, then the world will continue on the way that it is supposed to; the way it is has largely gone on for 3 generations.

Unfortunately for this view, the expression “New Normal” is a declaration that economic growth will never return to the 1982-2007 trajectory. It is also a declaration that people should get used to this. However, this view as it is currently expressed appears to ignore the shifting of the political landscape that has taken place in countries across the West. From the Tea Party movement in the U.S., to the National Front in France, The Freedom Party in the Netherlands, the UK Independence Party in Great Britain, and others, nationalist & populist parties are, where they are not actually setting the agenda, at least asserting themselves as political players to be taken seriously. Fifteen years ago, many of these parties didn’t even exist, and those that did were largely considered jokes. The fact that these parties have the influence that they do, never mind the fact that someone like Donald Trump could get as far as he has, means that the current political-economic structure that has existed over the last 70 years or so is no longer meeting the needs of a significant fraction of the population. While “New Normal” adherents may delude themselves and think that they can return to the “good old days” with a regulatory tweak here, a tax cut there, or an increase in a government program over here, the rise of these parties says that they are not likely correct in this belief.

In the last 20 years, communications technology has changed the game. Today, people can connect with like-minded people in ways that they couldn’t before. The internet has allowed us to compose playlists to each of our specific tastes quickly, custom order automobiles with the specific features that we want (and without having to pay for those we don’t), check out multiple restaurants on a device in our hand, etc. In short, the power to have what we want, when we want, and how much we want, is greater than ever before in human history. The idea that a regulatory/governing structure, the foundations of which were constructed 80 years ago before anyone had televisions and that specializes in dispensing slow, one-size-fits-all solutions with a take-it-or-leave-it attitude, is going to be acceptable to the Western population over the next few decades is, frankly, probably wishful thinking. The idea that we have to just “shut up and take it” is something that fewer and fewer people are going to be willing to accept.

So when will things return to normal? Probably Never.

 

 

The Coming U.S. Crack-Up

Whatever way the U.S. Presidential election is ultimately decided a month from now, it is becoming increasingly clear that this is likely to be an historic election. This is not because we are likely to be looking at the first female U.S. President, but because historians 100 years from now may actually look at this election as the moment when certain realizations dawned on various segments of the population making the ultimate break-up of the U.S. inevitable. Some of the things that have become apparent are:

1.)    The media and major political figures literally hate an entire segment of the U.S. population, and view them as unredeemably awful.

Although Hillary Clinton’s comment about half of Donald Trump’s supporters being deplorable was walked back a bit by her, the fact that many media figures jumped to assure us that she was in fact correct shows us that they don’t really believe that a large fraction of the population deserves anything but being kicked. While Democrats and the media likely have felt this way for a long time (and it is possible that the ‘deplorables’ sensed this), the fact is that this sentiment is now out in the open. The ‘deplorables’ know that the political left doesn’t really see them as human and being deserving full political rights. This makes political accommodation between the groups difficult as there can no longer be a presumption of good faith.

2.)    The political left doesn’t believe that certain laws should be enforced. As an aside, the left also doesn’t believe in national sovereignty.

Part of the case against Donald Trump was that he was going to get serious about border enforcement (that was also coincidently part of the limited case for him). But for all of the howling on this subject that implied that he was some sort of nativist/Nazi, what was forgotten is that most of what he was proposing was in effect to simply enforce existing law. He really wasn’t talking about laws that he wanted to pass. He was largely saying he was going to do what any President is supposed to do: enforce laws whether he personally likes them or not (this being Trump, however, he was unable to articulate that). The fact that the very definition of sovereignty is being able to control a border and have the say over who gets to live within that border along with the fact that the left denies this right to the U.S., and it is now very clear that a large segment of the population doesn’t believe that laws should be enforced if they don’t like them, and that the U.S. has no right to exercise national sovereignty.

3.)    The political left believes that it is naturally superior to certain other groups, with a natural right to rule over those other folks.

 

To go to the previous point, when one side thinks that it should be exempt from laws it doesn’t like (like immigration laws), while their opponents should be subject to laws that THEY don’t like (like gay marriage requirements), this a presumption of superiority. It has become abundantly and undeniably clear that many on the political left believes this to be the correct order of things.

 

4.)    The Department Of Justice and the FBI have become political tools and can no longer be trusted to conduct investigations or dispense justice impartially.

With all the revelations regarding Hillary Clinton’s emails, it is abundantly clear that she should at least be facing charges. It is now undeniable that FBI and Department of Justice did what they could to help cover up the scandal and avoid doing their duty simply because of who Hillary Clinton is. There is no way that this doesn’t seriously degrade the legitimacy of these federal agencies in the eyes of a substantial portion of the American electorate.

5.)    The political class doesn’t have answers, nor does it have an interest in finding answers, to the troubles afflicting the American middle class.

Looking at the mainstream (aka not Donald Trump) wing of the Republican Party, and the mainstream (not Bernie Sanders) Democrat Party, the stated policies of both parties (tax cuts/less regulation/strong national defense on the right and more regulation/more government social spending on the left) haven’t really changed much for roughly 20 years. The problem is that the middle class is hurting and all the political class seems able to do is to pretend that the problem doesn’t exist (through misleading unemployment numbers) or to heap abuse on the voters.

Overall, this election has revealed fissures in American society that are now blindingly clear even to people who don’t really follow politics. That something is horribly wrong and has shifted is not something anyone but the most deluded can miss. The corruption in the federal agencies (FBI, DOJ, IRS, and VA) and the inability of the system to hold anyone accountable (note that nobody appears to have even faced criminal charges) is not something that can go on forever. People have not yet lost complete faith that one man can go in and clean up the mess, hence the support for Donald Trump. When they lose faith that this is even possible……………….then the process of breaking up is likely to start.

A Growing Economy Requires Political Stability

As we get further and further into election season, the economy as always, continues to be a campaign issue. Sure, there are claims that the economy is growing with unemployment under 5%, and there are counterclaims that the economy is stagnant and isn’t working for most people. Underneath everything, however, is the sense that while economic arguments are important (they always are), that this election involves issues that are more fundamental.

In recent elections, to the extent that there was anger and frustration (with whatever issue was there), that anger was directed at politicians (sometimes of both parties, or sometimes largely just at one party). And in this election, some of that is still there on both the left and the right as is evidenced by both Donald Trump and Bernie Sanders. However, what is relatively new is the anger directed at voters of one party, as a basket of deplorables.

Although some might argue that  the practice of writing off a large segment of the electorate was started by Mitt Romney and his infamous 47% comment, the difference is that his comment was a statement regarding the economic incentive of half of the electorate. In other words, he was saying that 47% of the population had no economic incentive to vote Republican. What Clinton was saying is that half of Trump’s support (roughly 25% of the population) are just God-awful human beings and that is why the will vote Trump. At least Romney left open the possibility that if and when the 47%’s economic situation changed, their economic incentive and vote might change. Clinton argued that “the 25%” were ultimately irredeemable, and this is ultimately problematic for economic stability.

The reason is that in addition to Clinton, much of what is colloquially known as the mainstream media rushed to defend (albeit with a few caveats) the assertion that a large fraction of center-right voting population is awful (not misguided, not misinformed, not possessing a legitimate point of view, but awful). Viewing a quarter of your population this way basically means that you don’t see these folks as legitimate human beings deserving of the same rights as everyone else. In short, it means that a significate fraction of the American elite, sees a significant political minority as deserving second class citizen status. To the extent that these folks don’t get their needs met or are abused by governmental infrastructure (think the IRS scandal), the center-left elite will simply judge that these folks are getting what they deserve.

I can think of nothing else that would inflame opinions against the elites more than this attitude. Not only does it guarantee that there will be more Trump-like candidates (assuming he loses) in our future (with all of the instability that will bring), but it also means that resistance to the elite agenda (whatever that is seen to be) will take on a much more dark and sinister tone. When a government is mobilized against a significant fraction of the population (25% in this case) to abuse them, it will very often provoke a “resistance by any means necessary is legitimate” attitude. In a country with roughly 300 million firearms, this is a recipe for IRA/Northern Ireland style actions, with all of the economic damage that would go along with it.

The reason that countries engaged in civil wars are not usually found at the top of many “the best of” economic lists is that a country with instability isn’t usually an attractive destination for investment. When countries become unstable, wealth flees. Thinking that you can shove ¼ of your population’s face in the mud forever, treat them as second class citizens, in a country that is armed, and continue to enjoy the fruits of economic stability is not an idea that is likely to be proven correct over the long run. And once an idea takes hold (resistance by any means necessary is legitimate), it is very hard to dislodge. Simply passing a law, or firing a couple of bureaucrats won’t do it. Instead of simply dismissing people who disagree with you as awful people, perhaps opening the mind and trying to understand them might be more productive. Otherwise, the people of the United States will find themselves learning that the country is rich, because it is politically stable, not the other way around. Countries around the world have been forced to re-learn this lesson the hard way. It would be a shame if the U.S. ended up joining their ranks.

Elite Deception

Whatever else may be going on with this election season, it is becoming increasingly clear that something in the West is fundamentally shifting, and that historians in the future will likely be looking at the times through which we are living as time before massive upheaval. We have been here before. Usually, before massive change that fundamentally upends the status quo, there are rumblings that may go unnoticed at first, and it is only in hindsight that we can understand their meanings. For example, the Solidarity Movement in communist Poland presaged the ultimate collapse of communism in Eastern Europe, even though it took 10 years. The fact that far-right political parties in Europe have gradually been gaining political clout and that the Tea Party in movement in America broke out and is now a faction of the Republican Party are rumblings that suggest something is changing.

One major factor that has shifted is that faith in the institutions of government are low, especially in America. The reasons are varied, but one factor is that many people have lost trust in the fundamental honesty and good faith of the governing class (i.e. political, media, and academic establishments).

For example, with Greece being in periodic crisis and never actually meeting the conditions to qualify for Eurozone membership, the Euro elites have been desperate to continue to bailout Greece (with German money) to keep them in the Eurozone. They have consistently implied to the taxpayers (German) that if Greece is allowed to exit the Eurozone, then there will be a massive economic downturn. The more hysterical among the political class have assured us that such an outcome might have provoked a global economic downturn. If country whose GDP accounts for 2% of the total E.U. GDP can by exiting the Eurozone provoke even a European political crisis let alone a global economic crisis, then the global economy is extremely fragile and will be knocked down by anything. The point is that this hysteria is absurd, to the point that anyone can see it.

Or another example was the recent Brexit vote. While the ultimate impact (positive or negative) for the British won’t be known for many years, the hysteria in some elite quarters implied that a Brexit might lead to a Soviet-style economic collapse. Anybody with any sense could conclude that Britain had not become a world economic power only after it joined the E.U. While a Brexit might ultimately not be economically beneficial for Britain in the long run, that it would lead to bread lines and empty store shelves was simply not something that was plausible. And the fact that the British stock market is now higher than before the vote makes many of those formerly respected elites look very foolish.

Yet another example is the government “shutdown” a few years ago in the U.S. As a result of Congress and Obama’s failure to agree to a budget, the government supposedly ran out of funding and had to shut down for a bit. Except that it didn’t. A more accurate description would have been a government with reduced staff. The disagreement between Obama and Congress was a reduction in government spending that ultimately would have reduced discretionary government spending (roughly about 15% of the total budget) back to 2010 levels. The hysteria from the media regarding the proposed minor cuts was such that one would have thought the Republicans were proposing a wholesale repeal of the New Deal. When the “shut down” happened, the bureaucracy deliberately responded by making sure that cuts were painful and impacted as much of the public as possible. In other words, the bureaucracy had choices as to which functions that they could keep going during the “Shut Down” and which ones that they could continue, and they chose to cut the ones with maximum public impact. The claim that “there just isn’t enough money” was credible, only if one believes that government agencies are 100% efficient. A budget that was enough to provide these services in 2010 suddenly wasn’t going to be enough a couple of years later. To many non-elites, the U.S. government came to appear more as an extortionist racket than a true government trying to do its best with what it had.

What these examples, and many others, do is reinforce the perception that government (and government policy) is being run for the elites and that common people are left paying for a system that benefits them only tangentially (or actually works against their interests in some cases). The fact that elites and their media enablers propagate fiction that is visible and obvious gives credence to the notion that the system is rigged in favor of the elites and that they are willing to say anything to try and maintain this system. Furthermore, the fact that they seem to scheme to avoid making the hard decisions (i.e. ones that won’t be in their best interests personally, but might be what the country as whole needs) undermines respect for them and the legitimacy of their leadership.

In short, the political-economic system that has been in place over the last couple of generations in the West is being challenged, and the mainstream political/media establishment doesn’t seem to have a good answer for it, especially since the reality has evolved to the point that their institutionalized solutions are no longer adequate. Trying to engage in deception with the population does nothing but undermine the elites position further. By undermining their leadership position, they open the door to demagogues whose solutions are likely to result in less than optimal outcomes for everyone.

Explaining The Appeal Of Donald Trump

As we begin to move further into election season, it is becoming increasingly clear that presidential race is becoming a choice between Corrupt and Crazy. While the mainstream media leans left and typically tries to portray the Republican candidate as mean and/or stupid no matter who it is (even Ronald Reagan was considered ‘stupid’), in this case it is looking increasingly like they have a point.

However, even before the most recent indications that Donald Trump may be mentally unbalanced, the media, the left, and even some on the right have scratched their heads wondering how someone like Donald Trump could appeal to so many people (I mean, no matter what, he is likely to get 40% of the national vote). Some of the predictable accusations center on the supposed racism of the American people, or the anger of ‘white males’ and their ‘loss of power’; accusations that reveal the accuser to be very shallow and superficial in their analysis. When someone like Donald Trump or something like the Tea Party arises, it is not because a large segment of the population has decided that their grandfathers had made a colossal error in going over to Europe and crushing Nazis in the 1940s. Rather, it is an indication that something has gone wrong in society and that there is a segment that feels that its needs are not being met. So what are the reasons that Trump is popular.

#1 Immigration:

Normally, when people are voting for a person, they want him/her to act to change (or create) certain laws to deal with a perceived problem. In this case, Trump supporters are voting for someone who promises to enforce already existing law. While certain analysts are dismissing Trumps people as ‘nativists’ (some probably are), you don’t have to be a nativist to believe that laws are meant to be enforced until changed. But the reason that that enforcement has its fans is that the burden of illegal immigration is falling on them, from long lines in the ER, to larger class sizes, to competition for jobs, to perceived consumption of “goodies” forcibly extracted from the taxpayer, there is anger that the government (of both political parties) seems indifferent or hostile to the experiences and needs of a significant segment of the population. Add to this the perception that those who looking down their noses at their fellow Americans AREN’T having to deal with the fallout of these policies, and the anger isn’t hard to understand.

#2 International Trade (Globalism):

While the benefits of international trade for an economy overall has been well documented, the fact is that it hasn’t been good for everyone. For a significant fraction of the population, they have seen their jobs (and economic security) disappear and nothing comparable has taken its place. There have been vague promises of retraining programs, but like the DMV, it doesn’t really seem to work. The fact is that both political parties have really abandoned the white working/middle class to its fate. For the last generation, the Presidents of both parties have been largely committed to free trade. Finally, the people who feel that government has forgotten about them have a (admittedly imperfect) voice.

#3 Political Correctness

Over the better part of the last 15 years, political correctness has seeped into our culture from the universities and has constrained what can be said in polite company. As the politically correct culture has become stronger, it has strangled honest debate about a whole range of problems. You can’t want immigration restrictions, or you are a racist (and might lose your job). If you think that marriage should be restricted between a man and a woman, you are a homophobe and a Nazi (as opposed to being like every human from 100 million B.C. through 1995) (and you could lose your job). If you think government should spend less, then you hate poor people. If think that people should be allowed to own firearms, then you are in favor of, and maybe tangentially responsible for, the recent spate of mass shootings. Political correctness really only cuts one way, and it is somebody telling you to shut up every time you open your mouth. If someone were to do that in real life, it would not be long before you would want to assault that person. Donald Trump is highly politically incorrect, and his fans love it. They love that he gets the politically correct crowd so angry. The angrier they get and the more Trump bugs them, the better his fans like it. The reason that many of his gaffes don’t seem to hurt him is that his fans like that he is pissing off people, even if they don’t necessarily agree with the statements. Donald Trump is a big F.U. to the politically correct establishment, and that is part of his popularity.

#4 Change You Can Believe In.

Currently, roughly 2/3’s of the country believe that we are on the wrong track. What is worse, since the economic downturn 8 long years ago, the right track/ wrong track number has rarely been positive. Obama promised “Hope and Change”, but very little has been delivered. The fact roughly half the country still feels like the country is in a recession tells us that the Obama Administration has been a failure at some level. However, the Republicans haven’t offered a vision, and in fact often seem more concerned with maintaining their power. If you are someone who believes that the government has grown too big, you have watched over the last 10 years as the government has grown under Democrat & Republican Presidents as well as under Democrat & Republican Congresses. If this is you, then you don’t really have much to lose with a Donald Trump. The existing establishments of both parties seem to have failed, and the fact that Trump scares the elite in both parties is part of his appeal.

While there are probably some other reasons Trump supporters might give, I think that that these 4 are the primary reasons for a major part of his supporters. The fact that someone like Trump can make a serious run at the Presidency, far from being an argument against democracy, is a strong indication that the political system is failing. If Trump’s coalition consists largely only of racists and homophobes, why weren’t these folks able to nominate someone like Trump in 2012 and 2008 against a black man running for President? I mean, Trump’s voters (and those who will hold their noses and vote for him) didn’t suddenly become racist and homophobic over the last 4 years. The fact is that Trump’s supporters once had faith that the political system could produce the change that was needed. They won elections in 2010 and 2014, and then watched as their representatives appear to have done very little. They watched as the country still seems to stay on the wrong track. They don’t see any possibility of moving out of this rut that the country seems to be in. They don’t feel that the government cares about them or their needs (and in some cases they feel that it is in fact hostile to them).

And so they back a man who appears to have mental problems. Because while they are not crazy, he drives the political establishment nuts. They believe that he can deliver change, even if they don’t know exactly what that change might be. The fact is that they know that Corrupt will keep a bad system in place, and that they are guaranteed bad results with her. Crazy might also create a bad or worse system, or he might accidently create a better system. As difficult as it may be to imagine, there are a lot of people who don’t think that they really have much to lose by going with a roll of the dice like Donald Trump.

And that is why, despite everything, a person like Donald Trump still has a shot at being President

The Politics Of Failed Central Banking

Over the last couple of years, people have been questioning whether the Fed is “running out of ammunition” to use when it needs to combat the next economic downturn. Over the last 60 years or so, it has been taken as an article of faith that the Fed has the power, ability, and mandate to act to “steer” the economy. If the economy is overheating, increase interest rates to slow it down. If the economy is starting to stall, lower interest rates to encourage lending and fuel economic activity. Money could be created if the economy needed a jump start, or removed to reduce inflation. It all seemed so easy and simple, and indeed has been thought to work by central banks all over the world.

However, looking back on the history of the last 20 years or so, it is worth asking whether politics has had a lot to do with Fed decision making rather than hard economic analysis. I am not suggesting that politics has been the only factor, but one would be remiss not to consider the possibility that the Fed has been trying to stabilize an economy and an economic system that simply hasn’t been working for a large swath of the country.

In the mid-1990s, the Fed under Alan Greenspan seemed ready to lower interest rates every time the stock market started to tank. Basically, the idea developed that the Fed would (and could) step in and save the day if the market got too bad. This idea, and the fact that the Fed didn’t act to stop the stock market bubble in 2000, makes it worth asking whether politics (i.e. letting the stock market crash would not have been good optics) made the Fed timid.

 As the economy started to deteriorate in 2000, in part due to the stock market bubble popping, Greenspan did act aggressively to lower interest rates and the economy eventually started to recover. But the low rates fueled a real estate bubble, and even Greenspan concedes that he left rates too low. The popping of the real estate bubble and the resulting economic are legendary. And while the economic numbers have recovered, the economy for many people really hasn’t. Meanwhile, the Fed stands there, reluctant to raise rates, and perhaps “out of ammunition” as some assert.

In taking the last 20 years in total and looking at the present instability, it almost seems like the Fed and the government in general, has been trying to manufacture some artificial prosperity because the economy hasn’t been able to provide it for a large swath of the electorate. This is not to say that there has been some secret cabal in Washington and New York that has been working nefariously behind the scenes. However, politics and maintaining the status quo (i.e. stability) is certainly a goal, and not necessarily a bad one. But the fact is that most Americans with an average household income of $50,000 are not going to be able to save enough for retirement. If you are going to need between $500,000 and $1,000,000 in liquid assets (depending on where you live in the country), you are talking about having to save 10 to 20 years of pre-tax income in order to accomplish this. You throw in taxes and kids and a house and there is simply no way this is going to happen without some help from the stock market or your house appreciating. In many ways, Fed action with the benefit of hindsight can be seen as effort to try and help the middle class to overcome the fact that wage growth and job opportunities haven’t been as plentiful as they were at an earlier time.

Today, however, the Fed really doesn’t seem to have the power to steer the economy any longer. Seven years into an economic expansion, people think that the country is on the wrong track (and have for a long time) and many people have effectively been shut out of the labor force due to being unemployed for so long. There is an expansion, but many of the people who felt the last economic expansion aren’t feeling this one. The political result of this failure is that people are willing to try anything to get an economy back that works for them. The political result is Donald Trump.

Explaining Donald Trump

Now that the Donald Trump IS, against all expectations, the Republican nominee for President, many people (including many Republicans) are wondering how it all came to this. One Ezra Klein of Vox says Donald Trump’s nomination scares him. He clearly isn’t alone. But as surprising and unexpected as the Donald Trump rise has been, people have been falling all over themselves to try and explain it. Many of the explanations have ranged from the dismissive (racism, loss of white male power) to the more thoughtful (stalled economy, feeling of being left behind).

So what has happened?

When something disruptive like a Donald Trump happens, it is usually an indication that something is wrong in society. It means that a significant fraction of a population has become alienated from whatever system we are talking about. Browbeating the population, as some center-left media outlets are currently attempting to do, won’t get anyone to change their mind. A more useful exercise is to examine why people feel alienated (in this case on the center-right).

Personally, I believe that there are several reasons.

1.)    Government doesn’t function well on a day to day basis.

While the left will talk about Ted Cruz and shutting down the government, I am talking about the fact that so many people experience the government (and government regulations) as useless B.S. that adds no value to their lives, wastes time, and hinders them from being productive. During the heyday of “Big Government” (1930 to 1970), people supported it (to the dismay of small government conservatives) because it visibly made life better than it had before. If you took someone through a time machine from 1930 to 1970, they would be amazed at how much better everything was. The schools were better, the roads were better, the cities functioned better, there was more electricity, etc. Government was bigger, and things obviously functioned better.

But today, government doesn’t function. It doesn’t secure the border as it is surely obligated to do. Education is a joke. Tax forms are byzantine, and the roads & infrastructure are falling apart. With the Democrats touting largely the same things that they have for 30 or 40 years, and the Republicans afraid to actually make significant changes, the stagnation has reached a point that people are willing to try anything that might have a chance of making things better.

2.)    Government is corrupt.

There is a feeling that people in government get special treatment. People are supposed to be equal under the law, but it has become increasingly apparent that this is not actually the case. People who break the rules, as long as they break the rules in a left-wing direction, suffer no serious consequences. Whether Lois Lerner using the IRS to target Tea Party groups (more on that later), or people falsifying records at the Veteran’s Administration and getting away with it, people feel that they are ending up on the short end of the stick and that the existing rules that would correct this injustice won’t be applied. The most significant example is the lack of an indictment for Hillary Clinton. The FBI director started out by say that “no reasonable prosecutor” would bring charges in this case, and ended by saying that other people in similar situations would likely face charges. Translation: You little people would face charges, but Hillary Clinton to too important a person to be held accountable for her actions.

3.)    Government/Media Abuse Of The Center-Right.

Since Barack Obama was sworn in as President in 2009, the national media has treated opposition to his agenda as illegitimate. The media won’t stand up for the rights of conservatives/Republicans; the groups who would naturally oppose the agenda of a Democrat President. When the IRS abuses ordinary citizens trying to exercise their rights to participate, the media says nothing. When there is a mass shooting, the media tries to slander center-right groups of citizens by immediately implying that they might be responsible (and then are visibly disappointed when this turn out not to be the case). The media says nothing when the government effectively forces people to violate their consciences if they want a certain job. They say nothing when the government forces religious groups to violate their principles (such as paying for birth control). The media didn’t really come to the defense of Fox News when the Obama Administration tried to declare that it wasn’t a legitimate media organization, something a government has no right to do. Whether the right to free speech, the right to practice one’s religion (not just in church on Sunday, but also in one’s daily life), a free press, and the right to own a firearm: the government has been abusing these rights at various times, and the media is remarkably tolerant of these abuses. Consequently, the government AND the media have lost legitimacy in the eyes of the center-right.

4.)    Government Ignores The Feelings Of Large Swaths Of America.

The economy is stagnant. Manufacturing has been outsourced. The middle class is shrinking. Economic insecurity is growing. Illegal Immigrants are impacting social services and competing for blue collar jobs. And the government refuses to do anything. It cuts trade deals that disadvantage American workers. It tells Americans that wanting to reduce or eliminate illegal immigration makes them a bad person. It has actively opposed state governments (who are dealing with the fallout of illegal immigration) from taking actions on their own to enforce existing immigration law. This is not necessarily to say that America should have less immigration or that freer trade has been a net negative for America as a whole. But the fact is that these policies DO produce losers as well as winners. And the people who feel unsettled and disadvantaged by the economic shifts of the last 30 years are being ignored and not being addressed.

In short, these four factors, broadly speaking, have provided an opening for someone like a Donald Trump to run and actually become the nominee for President of a major political party. And given that his opponent is so unpopular too, he actually has a chance of winning. A government, and their media allies, can’t continuously abuse a certain (significant) segment of the population and expect to continue to have legitimacy in that population. A government can’t continue to ignore the needs of a significant fraction of its people and expect to maintain legitimacy. Someone, or some organization, will rise to stand up for that forgotten and ignored portion of the population. Donald Trump is a warning. Win or lose, something will have to change. Otherwise, the U.S. is in for a prolonged period of, dare I say it, political instability.

The Art Of The Military Coup

This week in Turkey, some members of the military tried to stage a coup to remove what they say is an increasingly authoritarian President Recep Erdogan. It appears to have failed. When launching a coup, one must be mindful of the fact that successful or not, you are going to create economic instability (and lower economic growth). Businesses won’t want to invest until they know what the revised “rules of the game are”. If you are successful, people are going to want to see what your policies are going to be before they commit money. If you are unsuccessful, people are still going to view your country’s government as unstable and that will reduce investment and economic growth too. But if you are still committed launching a military coup, here are some general principals to follow:

1.)    Remember that time is not on your side.

The key to a successful coup is to get yourself into power before anyone knows what the heck is going on. The longer the coup goes on, the less likely it is to be successful. You must convince the opposition quickly that the battle is over, you have won, and any further resistance would be in the service of a lost cause.

2.)    Make sure that a significant majority of the Army AND the Air Force are on your side.

Or at least that they are not opposed to you. The more opposition you have within the armed forces, the more effective resistance you can expect. If the military is split 50/50, you might even end up with a civil war on your hands. If you care about your country and not just your own power, you shouldn’t launch a coup where this is a likely outcome. In any case, it would help if there were a respected military person on your side to at least keep military opposition to you to a minimum. The Turkish Coup Plotters (TCP) did not do this. There doesn’t appear to have been any major military figures lending support. Capturing generals and holding them hostage (as the TCP appears to have done) may be necessary to prevent them from issuing orders and coordinating resistance to you, but other officers are likely to take up the slack and oppose you anyway. Also, not having the Air Force on your side will result in you not having air superiority, without which you won’t win a conventional conflict. You may even have your helicopters getting shot down, which is what appears to have happened.

3.)    Make sure that at least some level of the political opposition to the existing regime is on your side.

Erdogan may be increasingly authoritarian, but it is telling that everyone of all political stripes seems to have come out against the coup. I don’t mean that they just stayed silent and didn’t support it, they actually came out strongly against it. If you can’t get a fraction of the political opposition on your side, your coup really doesn’t have much of a chance.

4.)    Have someone of some stature ready to begin the task of governing that day.

Your men may love you. They may follow you anywhere, including into a coup. But outside of the men under your command, you are probably a no-name. To get the population to at least tacitly accept your coup, it takes more than that just showing up at the palace with a beret and a pistol and announcing that you are the big head cheese. It takes somebody with some stature to reassure the population that there is a steady hand guiding what will likely be a very uncertain transition and that the country is not about to collapse into chaos. Otherwise, you might end up chaos as everybody freaks out and opportunists launching their own rival bids for power. I am guessing that this isn’t really what you are going for.

5.)    Launch your coup at night.

This was one smart thing the TCP did. By launching the coup at night, the population is inside where you want them to be and not out on the street where they might get killed (or resist your coup). Ideally, the people will go bed, wake up to a new government (yours), get up and go about their day as if nothing had happened.

6.)    Take control of the major traffic choke points.

The TCP appears to have attempted to do this. Blocking the bridge over the Bosporus for example , and taking control of the airports, if done right, restricts movement of your opposition and hinders their ability to mount an effective response to you.

7.)    Launch the coup in the political AND economic centers of the country at the same time.

Kudos to the TCP for getting this right (or at least attempting to get this right). Nothing takes the fun out of a coup more than to capture the presidential palace, have control the political capital, broadcast from the President’s chair (now your chair) to the world telling them that you are in charge, only to find that the economic center of country is in full rebellion against you and you have done nothing to control that city. In a county like Turkey where the political capital and economic capital are not the same city, it is imperative that you grab control of both cities at the same time.

8.)    Take control of the major communication outlets.

Part of a successful coup is making the country think you are in full command, before you actually are. Having control of the T.V. & radio stations and blocking the internet are key both to project an image that you are in charge, but also to prevent your opposition from mobilizing support against you. The TCP, in the beginning, appears to have done all of these things.

9.)    Make sure the President doesn’t have FaceTime on his phone.

Otherwise, he might be able to call into the one TV station you didn’t get off the air and exhort his followers to take to the streets to oppose you. Once the followers are in the streets, either your coup is over (and you are at best looking at a long and painful prison term) or you need your troops to massacre them, which they may be reluctant to do given that your stated reason (probably) for the coup is to save the country from the bastard currently in charge. You don’t want to project the image (yet) that in fact you are the bastard that the country needs to be saved from.

10.)  Capture (or kill) the President.

If you do this, he can’t organize resistance to you. If you think killing him will inflame his supporters and generate violent resistance to you by making a martyr out of him, then capture him, hold him (and his family) in a secret place, and make sure he can’t communicate with anyone (like via Facetime or something). The TCP didn’t do this. They should have.

Launching a successful military coup is a lot harder than it looks. But if you follow these 10 rules, you greatly increase your chances of a happy outcome (for you anyway). Once you have deposed your opposition, you can spend the rest of your life building out your base of support through patronage (giving your wonderful, virtuous, non-corrupt friends access to enough wealth that they and their families are sure to support you) and through coercion (those awful, horrible, corrupt individuals who oppose you need to be made to forcibly enjoy your benevolent hospitality at one of your luxurious “resorts”, if you know what I mean).