Archive for September, 2015

The Empire Strikes Back

Tuesday, September 15th, 2015

There are plenty of frightening things about Trump’s campaign.

What is most frightening is his xenophobic appeal to nativism. It has given voice to an ugly white bigoted segment of society that has always been there, but was not discussed in polite company. These are the neo-nazi white supremacist racists who have enjoyed resurgence over the past eight years because a black man was in the White House. They were able to scream their bigotry in the public square because conservative Republicans claimed it was all politics. The worst stuff imaginable was suddenly fashionable among those who opposed the President because of his politics AND his race.

While they weren’t looking, however, conservatives have discovered that Trump is not just a racist, which they understand. He is also a populist. Worse yet, he is a rich populist, which seems an oxymoron, but doesn’t seem to disturb his followers. Even more terrifying to the conservative Republican establishment, his populism hasn’t just targeting illegal immigrants. It has also targeted bloated corporations who have had their way for too long and CEO’s who have been packing it in at the expense of their workers.

This is a very interesting turn of events. Ever since Reagan coopted the evangelical political movement awakened by Carter, Republican candidates have run on a whole platform of social issues. Once elected, however, they only delivered on the fiscal issues that were most important to their big money backers. Over the years everyone assumed that social conservatives actually cared about all of these fiscal issues too. Turns out that those supporting Trump don’t really care about the reducing taxes, expanding federal programs, and state’s rights. They understand the impact that big money has had on politics and are just as unhappy about large corporations and high income CEO’s as they are about illegal immigrants. Trump, running as a conservative Republican, hates free trade deals, loves Medicare and Social Security, wants to punish big companies that ship their jobs overseas, wants to tax CEO’s with cushy comp packages, and pledges to hold boards more accountable for their crony capitalism. In that regard Trump is MUCH closer to Bernie Sanders than he is any other candidate on the Republican ticket.

As Paul Krugman points out

The influence of big-money donors meant that nobody could make a serious play for the G.O.P. nomination without pledging allegiance to supply-side doctrine, and this allowed the establishment to imagine that ordinary voters shared its antipopulist creed.

But Mr. Trump, who is self-financing, didn’t need to genuflect to the big money, and it turns out that the base doesn’t mind his heresies. This is a real revelation, which may have a lasting impact on our politics.

The empire has inevitably begun to strike back.

The Club for Growth, that mainline supply side shill for political big money, is raising money to start running ads against Trump because of his tax policy.

Their hope is that they are going to be able to convince enough conservative Republicans that Trump is not their friend. This is going to be really interesting because the moment those ads begin to run I predict his poll numbers will improve. Rather than vilify Trump, these attacks from the conservative Republican establishment will validate what Trump has been saying all along. Those that have been sitting on the sidelines not sure that Trump is the real deal will realize that the Republican establishment, whom they also don’t trust, DOES take him seriously. They believe that he is dangerous. They recognize that he isn’t going to succumb to their influence. And finally, the establishment is terrified of what will happen to them if Trump is elected. This attack will be the sort of endorsement some of those on the sidelines have been waiting for. Trump will use these attacks to double down on his message of change. He will say, “If you really want to see changes, rather than the same old three card Monty that the Republican Party has been running, vote for me”.

If Trump is able to prove that these sorts of attacks will backfire and that organizations like the Club for Growth no longer have the weapon they claimed, the Republican Party will enter a brave new world. They will be required to really debate fiscal policy on the basis of what is best for the voters rather than what is best for their big money interests. If that occurs, we could really see a Presidential election where Bernie Sanders and Donald Trump both agree that the wealthy should pay more taxes, corporations should be penalized when they ship jobs offshore, trade pacts should benefit US workers, the social safety net should be strengthened because it benefits those that depend on it, and healthcare should be available to all at a cost that all can afford.

Compare this to the tax plans of the rest of the clowns on the Republican candidate bus.

Cruz, Paul, and Carson all favor a flat tax. Easy math says that the flat tax has to be somewhere around 25% in order to fund the government at current spending levels. Paul is at 14.5%. Carson at is 10%. Cruz hasn’t said. Beyond that, the flat tax is a huge give away to the wealthy who are paying significantly more in taxes today.

Huckabee is proposing a consumption tax. This federal sales tax would add $.23 to ever $1 spent on anything or an effective rate of 30%. The problem is that economic think tanks across the political spectrum say that it wouldn’t even come close to funding the government at its current level of spending.

Bush’s tax plan is the most interesting just because it is so weird. He has already promised that supply side economics will produce 4% growth for as far as the eye can see. But the details of the plan make that naïve prediction seem rational. Here are some quotes from a good article on the subject from fivethirtyeight.com

Bush’s plan offers an unlikely combination of solutions to the problem of slow growth.

He wants to cut the income tax rate and eliminate the estate tax and the alternative minimum tax — all policies that would benefit mostly the wealthiest Americans. At other times, he sounds like a populist, calling for the closing of loopholes that benefit corporations and hedge fund managers. And at others, he sounds like a policy wonk, arguing to shift tax policy in a way that encourages companies to build rather than borrow.

There’s no way to calculate yet what impact Bush’s proposals would have on the federal deficit, for example, or exactly how much more or less specific groups would pay in taxes. He hasn’t identified the corporate loopholes he would close or said whether closing them would fully offset his proposed cut to the headline corporate income tax rate.

The summary is that this is a politically motivated plan that borrows something from every other candidate including Clinton and Sanders, bundles it all up in a big confusing bag, and then wraps it in a bow of promised 4% growth. The reality once you strip everything away is that it is the same old voodoo economics that Reagan was forced to abandon, Bush I rescinded, and Bush II used to turn a surplus into a deficit.

The reality, at least for the moment, is that there are a lot of angry white voters out there who are unhappy with the Republican establishment. There are also a lot of frustrated progressive voters out there who are eager for a candidate willing to mount a full throated defense of progressive principles. Trump and Sanders are riding these respective waves. It is unclear whether those waves will propel both candidates to their party’s nomination, but the political establishment is becoming very uneasy with this populist uprising.

Talk is Cheap

Thursday, September 3rd, 2015

The definition of character is the mental and moral qualities distinctive to an individual. I would suggest that character is the mental and moral qualities that DEFINE an individual.

We discover our character and the character of others when we are faced with hard choices.

Character is aspirational. It is not something that you are born with. It is something that you acquire through a lifetime of making difficult choices.

David Brooks just wrote an entire book that digs into the subject in some detail.

Our hope is that the primary season will give us an opportunity to discover more of the character of our potential candidates. That will give us a better understanding of how they will behave when they are inevitably faced with the hard choices that happen in every Presidency.

Here are two good examples.

The financial collapse of 2008 happened during the campaign for President. Obama reacted with a cool confidence the belied the political implications. He was willing to look at the best available solutions regardless of their party affiliation. He also was able to prioritize those things that were most important to do now, and those things that were most likely to have bipartisan support. McCain on the other hand seemed to panic. He was overwhelmed by the potential for failure as well as the huge risks this posed to his presidential candidacy.

The public’s perception of the difference in their reactions led to Obama’s victory. Some of Obama’s critics claim that the electorate didn’t know who they were voting for and would have made a different choice if they were better informed. I strongly disagree. This public test of character led those voters who hadn’t already made up their minds to choose Obama.

There are certainly some who will view Obama’s presidency as a failure, but he will leave office with an historic set of big achievements that will secure his place in history. Those including saving the country in general and the domestic auto industry in particular from the financial collapse, dramatically reducing the deficit through economic growth rather than wholesale cost cutting, successfully reforming healthcare, extracting us from two wars, refusing to engage our troops in new ones, and negotiating a nuclear deal with Iraq. None of those choices were a slam dunk. All had significant political risks and encountered significant opposition. In each case, he stayed the course. That’s character.

Bush won one of the closest elections in recent history. Unfortunately his “character” moment came early in his Presidency when he was informed of the 9/11 attacks while reading stories to school children. The “deer-in-the-headlights” look that came over his face at that point spoke volumes of his ability to perform under pressure. While he spoke of leadership, his administration was awash in cronyism and infighting. This came to full flower in the disaster that was Iraq, the deceptions regarding torture and domestic spying, the Valerie Plame coverup, and the tragedy of Katrina. Katrina has since become shorthand for one of these moments of failed leadership.

Let’s look at the character of a few of the current crop of wanna-be Presidents.

Trump is a narcissistic bully. In his case, he isn’t claiming to be anything else, so in some ways he passes the character test. He is going to do what is best for him. Those who don’t agree with him are losers. Those that he may harm in the process are losers. Losers in his opinion deserve their fate and he is not going to worry about them. If he manages to become President, I suspect we will all be losers.

Chris Christie’s claim to the office is also based on his tough-guy get it done narrative. But when you look at his character moments, something else comes into clear view. He is vengeful bully with “Bridge-gate” as only one example. His state is in terrible financial shape (though he claims otherwise), and now he is being “out-bullied” by Trump.

The Jeb Bush narrative was that he was a seasoned, smart, effective leader. We had a hint of his issues when he fumbled an obvious question about his brother’s failures in Iraq. The answer that he wanted to give was that he loves and respects his brother and is not going to criticize him in public. Then he could have laid out his plan for dealing with today’s Middle East realities. He didn’t have the character to give that sort of brave answer. Now, he can’t seem to find a way to respond to a bully who calling him, his wife, and his children names. Trump even challenged Jeb’s manhood by calling his campaign “low energy”. The result is that those who thought of Bush as a front runner are now questioning why he is even in the race. Turns out that the smart, effective, self-aware, self-confident leader story was fiction.

How about Walker? He was the bright shining star of the conservative movement. His character moment came when he was caught scrambling to get to the right of Trump on immigration. When one of his financial backers suggested that perhaps he had gone too far in opposing birthright citizenship, Walker quickly hustled back to safer ground.

Oh, and you remember that guy that at the start of the summer was reminding all of this Republican peers of the 11th commandment not to criticize another Republican. Now that he is no longer leading the pack, he’s decided that the 11th commandment no longer works for him.

Turns out that Walker wasn’t the star everyone thought he was. Instead he is a political opportunist who is being exposed and out-maneuvered by a political neophyte. In Trump terms, a loser.

How about Rubio? When he had an opportunity to reveal that there was substance behind his youthful good looks, we discovered that there was not much there. His strongest issue should be immigration, but every time that he has been challenged on that issue, he retreated to the safety of right wing conformity. Much like Romney, Rubio’s desire to be elected overwhelms the basic values he talks about in his speeches.

I’ve already outlined the character flaws in Rick Santorum who chose politics over religion.

What about Hillary? Her character appears to be tested on almost a daily basis. It also appears to be wanting because of choices she made during her stint as Secretary of State. Now as some of the “inside baseball” emails come out, it appears that there was considerable “Obama envy” among some of her staff. She obviously at least tolerated, if not encouraged this attitude. I don’t think that there is any doubt that she is tough. The doubt is whether or not she has the character to be able to make decisions based on what is best for the country versus what is best for her. Her front-runner status is again eroding as Bernie Sanders attacks her from the left.

Bernie has had his character moments too. But he has learned from them. Now his greatest assets are his passion and authenticity. One look at him will tell you that he is not the product of a focus group. His positions are consistent and provocative. It is unclear whether or not he will win the nomination, but in the character wars he is FAR ahead.

I could go on, but I think that it is clear that character-building is a process rather than a destination.

What is troubling in this race so far is that those with the best character appear to be those with the least chance of winning the nomination.

It will be interesting to see how this plays out over the next several months.