Category Archives: Economics

Modern America’s Infrastructure Dilemma

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Although it’s popular to dislike anything President Trump proposes, its possible that his American infrastructure plan is the best such proposal since Eisenhower. Even Obama’s impressive infrastructure stimulus package may end up being on a smaller scale than what Trump proposes.

Those who question Trump’s proposal range from many of his fellow Republicans, to a wide array of Democrats. Ironically, given the state of political paralysis America now faces in Congress, its possible that if Trump’s infrastructure plan is scrapped due to his impeachment, America may languish with sub-standard infrastructure for years. This is because Republicans rarely approve infrastructure upgrades, and Democrats are careful about advancing large agendas when they’re in power.

Part of the reason for the political paralysis in Congress is the radical disagreement about economics and the role of government in the economy. On a political and economic level, the left and right of America are caught in a Keynesian Economics time warp. This is shown by how many on the left ignore the perils of the debt Keynes advocated, while many on the right have shown an allergy to debt. Both sides seem reluctant to realize much has changed since Keynesian ideas were adopted in the 1930s. 

Although Keynes never advocated for the type of debt we see today, the influence of his economic ideas has been incredible. His idea that debt is something to embrace has invaded almost every pore of the developed world. As a result, debt has exploded in governments, businesses, and individual households too. This has led some analysts to say that Keynes’ ideas have led to an economic shift on a micro and macro level. As many remember, debt on all levels, from households to nation-states, used to be something to not only be monitored closely, but also in many cases shunned.

Regarding the Trump infrastructure proposal, many on the left dislike it since it doesn’t go as far as FDR’s New Deal of the 1930s. In addition, many on the right question it since they feel infrastructure concerns are over-stated, and too costly.

Agreeing with even one aspect of President Trump’s ideas is a hard sell to those who prefer smooth politicians. Obviously, his demeanor and communication style is highly unconventional. As a result, there are those who now tune Trump out at every turn regardless of what he proposes. Although political operatives now urge supporters to resist the opposition at all costs, it’s unfortunate there can’t be more bipartisan support on a basic idea like infrastructure. After all, this type of proposal, since it avoids the emotions common with social issues, is a natural fit for bipartisan support.

While Trump’s plan could be vastly improved by increasing the amount of federal dollars from $200 Billion, his goal of raising a total of $1.5 Trillion by creating public-private partnerships with business is not without merit. After all, many countries through the world and some Democrats now tout such ideas. This is because implementing strictly government-funded programs that add to debt without tax increases is unstable. Therefore, since tax increases are unpopular with all but the Progressives of the left wing, many politicians have embraced the cozy language of public-private partnerships.

In the long run, since America’s infrastructure is falling behind, there needs to be ways of getting both parties to compromise and move beyond the harsh political dogma in today’s society. Obviously, the Democrats have a point about increasing the amount of federal dollars allocated far beyond the $200 Billion level. However, since America’s debt is so high, it’s fair to think there could be a strong role for private business to play. Therefore, Trump’s business-friendly concept may work if tweaked through negotiation, and given a non-politicized chance. After all, even though certain politicians demonize business, the fact remains that for much of the developed world, private business provides not only goods and services, but also much of the creative color that enriches our lives.

The sad reality is that much of America’s infrastructure such as roads, trains, bridges, and airports is in need of repair. On this issue, it’d behoove us to acknowledge that Trump is addressing this serious matter. Now we should challenge the dealmaker that he is to work with both sides of the political aisle to get the job done.

 

 

 

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The Endless Search For Utopia

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One of the most enduring concepts through the centuries has been the search for utopia. Few ideas ignite mankind’s passion and intellect in the same way as the grand search for the ideal master plan for civil society. Interestingly, if one were to ask different people what utopia would be, there would often be areas of agreement. 

In essence, many people view utopia as a kind of society where strife would be at a minimum, human needs would be met, and there would be a productive place and sense of meaning for each individual. However, although this sounds both ideal and possible on one level, it’s in the implementation of utopian plans that problems can arise. 

Some social theorists have complained that attempts to implement utopian theories lead to high levels of anxiety due to the fact utopian ideals are often difficult to achieve. Therefore, the inability to achieve these ideals can lead to a constant state of unfulfilled longing and frustration for many. In addition, since some utopian theories place the needs of the group over the individual, there have been instances of persecution of individuals justified in the name of a utopian ideal. The famous injustices created over the years in Communist societies are a strong example of cruelties often committed in the search for social perfection.

Although creation of an absolutely perfect utopia has proven difficult to achieve, it has to be noted that a glance at history reveals that aspects of utopian theory have been implemented over the years. To many, a kind of pragmatic utopia that rings eternal is the type of society characterized by both Representative Democracy and regulated marketplaces and capitalism.

Although pure capitalism is difficult to achieve and can lead to strong social imbalances, a regulated market economy that provides rules that act as a check on power, has proven durable for centuries. Likewise, Representative Democracy of the type America helped usher in over 200 years ago, has become both popular and efficient worldwide.

Although America’s not been perfect, its form of government has endured precisely because it recognizes the simple fact that mankind’s not really capable of the kind of perfection some other forms of utopia advocate. In recognizing the basic imperfection of man, and setting up checks on both individuals and institutions gathering too much power, democracies such as ours provide a safety valve that keeps society in balance.

And yes…America, as well as other democracies have at times treated certain groups unfairly. A quick glance at American history shows the injustices suffered by Native Americans, as well as the slavery and Jim Crow laws that adversely affected the lives of African-Americans. However, if there was ever a society capable of acknowledging and rectifying historical wrongs, it’s the type of Representative Democracy that America has. Those who advocate moving away from both democracy and regulated marketplaces in America due to past injustices, risk getting rid of one of the most durable and pragmatically utopian societies in human history.

 

 

The Intense Emotions Of Modern Politics

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Although politics has always been intense, it’s obvious the political scene in America has entered an even more emotional phase the past 5 years. Whether one lays blame for this on the rise of social media, the presidency of Donald Trump, or the heightened activism of the progressive base of the Democrats, it’s clear that civility in politics is being undercut by a heightened Us vs. Them mentality.

Where this newfound emotionalism leads is anyone’s guess. However…one thing’s for sure: America’s entering uncharted political territory. This new era is not only more politically intense; many fear it may also serve as a transition to a state of socio-political chaos. 

Some claim that the increase in political strife is due to the fact that the Post-Modern world de-emphasizes the concept of truth. This de-emphasis has led some to even reject the concept of apparent truth. Although most of us understand that absolute truth’s a subject of much debate, many of us still seek agreement on areas of apparent truth. The decline of rationality in politics can be attributed somewhat to the fact that many have given up on the ability to find common ground on areas of apparent truth. This trend leads many activists and politicians of all stripes to just attend to their particular causes in isolation. In addition, many members of the media now follow this same trend.

Since America’s form of government and Constitution was born during the rationalism of the Enlightenment, today’s Post-Modern approach to politics is fraying America’s concept of checks and balances. Historically, the beauty of America’s government lay in how its limited government provided a legal framework that allowed opposites to co-exist. This framework led to the often-quoted ideal of “agreeing to disagree.” Implicit in this was the idea that a “melting-pot” of differing cultures and values could live side by side with each other in relative peace if they followed the law. An amazing thing about this form of government is that it unwittingly provided a framework that encouraged a cross-pollination of ideas. This process not only encouraged a certain freedom of thought, it also encouraged separate cultures to maintain their identity all while still being influenced by other cultures.

In the subjective Post-Modern world the concept of “agreeing to disagree” is being eroded. In its place is an unyielding dogma that relies on caricature and ridicule to beat into submission opposing thoughts. Unfortunately, political debate on all levels is losing the ability to coalesce around the idea of looking to apparent truths to find a common good for America. Political rhetoric now encourages followers of a particular dogma to seek a purity that’s almost impossible to achieve. As a result, most political victories are no longer seen as a chance to reach across the aisle to assure the vanquished they’ll still be listened to. Instead, in today’s environment, political victors are encouraged to keep pushing the same victorious agenda to almost unreachable lengths. This process then results in the vanquished wanting retribution someday and vowing never to work with those with opposing views.

America is facing unparalleled challenges socially, politically, and economically due to both globalization and computerization. Although the Industrial Revolution and Age of Invention unleashed change quickly, the Computer Revolution, when combined with globalism, threatens to usurp traditions at a much faster pace than before. Although change is often called the one constant in life, it’s now apparent that the increasingly rapid pace of change in our Post-Modern world is increasing the level of societal cynicism.

Interestingly, many are rebelling against current trends and are trying to reinvigorate the idea that there are some truths to life that many can agree upon. This isn’t to imply that a rebirth of absolutism is at hand. This merely implies that the strong emphasis on subjectivity that characterizes the Post-Modern world is now being questioned.

In an attempt to reduce the emotionalism of today’s socio-political world, it may be wise to look for ways to reinvigorate the fact that a common good for America can still exist. In looking for common ground for a common good, recognizing apparent truths may help many of us look past the socio-political divide we now face. As opposed to absolute truth, which is hard to prove, examples of apparent truth are all around us. If we open our eyes to these common levels of truth it may become easier to find things to agree upon. One can only hope.

 

 

The Nation-State Versus Nationalism

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In light of Brexit and election of Donald Trump, some have concern that nationalism’s on the rise. Although nationalism is related to the idea of nation-state, many who are comfortable with nation-states are wary of nationalism. These people associate nationalism with prejudice in its mildest form, and an aggressive foreign policy at it’s worst.

To many, President Trump’s controversial travel ban confirms these fears. Critics of Trump’s stance say his ideas run counter to America’s strong history of cultural assimilation. Ironically, Trump’s critics sometimes fail to point out that he’s consistently vowed to reverse the Bush and Obama pattern of using America’s military to help overthrow governments in the Mid-East. Although obviously questionable, Trump’s travel ban arose out his stated desire to reduce America’s military involvement in the Mid-East.

The dividing line between supporting a nation-state versus nationalism can sometimes be hard to determine. While some claim recent political events are nationalistic, others say these same events merely help preserve national identity. Highlighting the divide is how conservatives often support traditions of longstanding cultural preferences, while liberals sometimes view these traditions as discriminatory.

Since Neo-Liberal globalist policies have been dominant for some time, it’s inevitable a strong opposition movement to it would appear. As to where this movement leads is anyone’s guess. However…one thing’s for sure: many moderate voters who used to support it are questioning the Neo-Liberal dominance that’s held sway many years.

In light of the fact Brexit received over 50 percent of votes cast and Trump got over 46 percent, it’s hard to categorize all their supporters as racist and xenophobic. Interestingly, some supporters are moderates who’ve voted liberal in the past and are in favor of both free trade and equal opportunity for minority groups.

Regarding trade, many American voters adhere to Bernie Sanders belief in fair trade pacts negotiated more transparently. These moderates were attracted to Sanders and Trump since they were concerned that the current committee approach to trade pacts could result in job loss and weaken American sovereignty.

Contrary to the stereotype of the Trump voter, some of his moderate supporters adhere to liberal ideals of equal opportunity for all regardless of race, gender, and sexual orientation. These Trump voters broke away from Democrats in swing states due to disillusionment with both the economy, and the Clinton political dynasty.

In looking at recent political events it’s clear that the most powerful voting bloc in democracies are the unpredictable swing voters. Since the groupthink aspect of party politics doesn’t sway independents, they can influence political trends dramatically. Even if they don’t totally agree with a candidate or movement, swing voters will sometimes switch political allegiances if they feel one side of the political spectrum is becoming too powerful.

In line with this, conservatives need to also be wary of the unpredictable nature of the swing voter. If conservatives are perceived as over reaching as a result of Trump’s victory, they too will feel the wrath of the independent voter. Above all, swing voters vote their conscience as opposed to party line. This is why conservatives need to be careful about cutting social services, or following policies that are overtly nationalistic.

For 300 years the concepts of nation-state and nationalism have intermingled. Since nation-state refers to both a geographic and cultural entity, it’s understandable that the prideful aspects of nation-states can sometimes be interpreted as nationalism.

Interestingly, the concept of nationalism isn’t always viewed negatively. When Europe’s former colonies achieved nationalistic self-determination, this was often viewed as liberating. Unfortunately, one of the main reasons nationalism is viewed negatively is because it’s seen as contributing to World War 2. Although this is true, it goes without saying that a decrease in nationalism doesn’t always equate to less war. After all, although America’s been involved in many wars since World War 2, it’s rare that overt nationalism is cited as the main reason for this.

As we’re often told, globalism was looked at as an antidote to nationalism. Since World War 2, a multi-tiered globalist approach has sought to provide safety valves to the negative aspects of the nation-state. Although it’s fallen out of favor, modern globalism has undoubtedly helped temper rivalries between some nations. However, as with many successful ideas, an understandable backlash has developed to it.

Obviously, a form of globalist trade is here to stay. As the past 300 years shows, trade between nations is desirable and logical. After all, since different resources and skills reside in different areas, there will always be need to trade. What’s questioned these days isn’t free trade, but what the terms of agreement between trading nations are, and whether they’re transparent or fair enough.

The trade pacts and globalism of the past 25 years have led to major economic dislocations. As a result, a consensus has developed that globalist corporatism needs rethinking so each nation’s needs are respected. Currently, a school of thought says that if corporations have too much say on trade pacts, they may supersede nations in terms of power and influence. These concerns, in addition to job loss, are what led to Brexit and the atypical presidential campaigns of Trump and Sanders. Basically, these populist reactions are recognition of the problems posed with the current pace of globalism. Whether they provide clear solutions to the dilemma is debatable.

Many people dislocated by economic change realize there are no easy solutions. However, they tire of having gainfully employed experts remind them how a lack of good jobs is mostly due to automation, and how outsourcing gives them lower prices. Although it’s valid to point out benefits of globalism, it takes on a different look if one’s a member of the large pool of underemployed who inhabit many countries.

One of the most pressing problems facing the modern world is the jobs issue. Economists and social thinkers have predicted for years that automation and globalism will create chronic underemployment. For a temporary solution, progressive liberals such as Sanders and Elizabeth Warren have expressed willingness to work with President Trump on his plans to upgrade infrastructure. As we know, this will not only help America become up to date; it’ll provide many jobs that’ll stimulate the economy. In line with this, many economic thinkers are advocating a permanent infrastructure workforce to both lower high underemployment and provide maintenance.

Conceptually…a nation-state provides a sort of umbrella over a geographic area and culture. This umbrella gives each nation an air of distinction. In line with this, globalism can be viewed as a canopy that goes over all the nation-state umbrellas of the world. Basically, both Brexit and election of Trump were seen by many supporters as attempts to preserve national identity. Unfortunately, the awkward nature of both trends has led to fears of nationalism. Since many voters were concerned that globalist corporatism was moving too fast, they supported a new political movement that took a U-turn away from the road travelled. These voters were concerned that the conceptual umbrella of nation-state, could almost be replaced with the canopy of globalism.

Obviously, there’s a chance recent political events can degrade even more into negative aspects of overt nationalism or intense societal division. To avoid this, we need truly engaged citizens and leaders on all sides of the political aisle who are willing to try to understand each other.

 

 

 

American Race Relations in 2016

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To many, the state of race relations in America is declining. Whether we admit it or not, recent polls have shown a majority of Americans believe race relations with the African-American community are at their lowest point in a generation. Worse still, some feel America’s close to duplicating the racially tinged social upheaval that marked the 1960’s. After the recent Milwaukee Uprising and protests in Charlotte, it’s hard to deny this trend is developing.

Ironically, this social disintegration comes in an era when members of the African-American community have reached the highest levels in the government, arts, sports, medicine, business, and the sciences. Against this backdrop of high-level achievement, it’s alarming to see the increase in racial tensions recently sweeping America. After the optimism spawned by the Civil Rights movement, we’re now faced with the grim reality that for many blacks, America’s promise of opportunity is fading.

Several factors come into play when discussing recent racial problems. Obviously, many in the black community have come to view law enforcement differently than other Americans. It’s hard to deny that the relationship between African-Americans and the police has changed the past few years. Although it’s tempting to blame either just the police, or the black community for recent tensions, analysis reveals a more complex situation. Unfortunately, without honest debate, the complexities of the situation become obscured and politicized to a breaking point.

Regarding the situation with law enforcement, many of us note that most police are ethical individuals doing a tough job in difficult times. Therefore, just blaming the police for recent tensions misses the mark. However, this doesn’t change the fact that many African-Americans not only feel they’re treated differently, they can actually point to statistics and instances which seem to bolster their claims. Compounding things is the fact that many in the media blame either just the black community, or the police for racial problems. Although this approach can lead to a ratings bonanza for the media, it adds fuel to a heated debate.

Hopefully, there can be honest discussion on all sides of this current crisis. This discussion needs to not only deal with current police practices and ways to seek improvements, but also focus on the ongoing lack of economic opportunity in the black community. As many know, poverty and lack of jobs adds to social tensions.

Unfortunately, African-Americans have been caught in the middle of an ongoing hard-nosed political-economic controversy the past 50 years. Ever since “The War on Poverty” was launched, there’s been intense focus on black Americans as recipients of government aid. In retrospect, it’s easy to see that although the “War on Poverty” had positive attributes, it compounded racial tensions.

Another factor contributing to an increase in tensions is the fact that both the unemployment rate and underemployment rate for the African-American community are much higher than average. In many metro areas, this lack of opportunity is devastating.

Although the “The War on Poverty” focused somewhat on employment, it could’ve recognized more the true impact work has on an individual’s sense of self and their place in their community. As many note, a problem with economic theory is that it addresses unemployment in a dry, statistical manner. Lost in the way many politicians approach this issue is the fact that work is tied in with someone’s dreams for a respectful life. Without steady employment, dreams are often squashed.

An ongoing dilemma of modern economics is the employment-dream equation. To combat this, it’d be wise to raise the value of work to more importance in modern America. And yes, although globalism’s here to stay, we can do better at keeping jobs here. Also, we need to realize that our commonly stated unemployment figure doesn’t count those who quit looking for work, and those underemployed. Sadly, overlooking these factors means that large swaths of able-bodied Americans can’t fulfill their dreams. As we know, lack of economic opportunity creates a breeding ground for both crime, and the racial profiling that can evolve as a way to combat it.

As for addressing the serious issue of unemployment-underemployment in America, we need to think creatively. Suggestions to improve employment range from rethinking trade pacts to keep jobs here, to expanding government jobs to create a modern and more urban version of the Youth Conservation Corps. In line with this, an expansion of the Conservation Corps can create permanent infrastructure jobs for adults. As for market incentives, consideration needs to be given to expanding tax credits and exemptions for small business healthcare insurance, and a simplification of small business legal and zoning regulations. Too often, gang members in metro areas complain they feel trapped in the gang lifestyle since jobs are sparse, and the ability to open a small business seems impossible.

On a global basis, countries such as Japan have had low unemployment because they value it. If America truly wants to, it can embrace a culture of work and achievement for all. To truly address racial problems, America must first have the political will to stop kicking the can down the road and become committed to a truly transparent full employment. If we can do this, America’s metro areas can become revitalized and the culture of poverty enveloping many African-Americans will be lessened. When increasing economic opportunity is combined with improving police practices, America’s current racial divide can begin to heal.

 

 

 

 

 

 

 

Why Does Money Mystify Us?

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There are few things in life as universal as the concept of money. In many ways, it’s the blood of the world’s economic system. Without money constantly flowing in billions of directions at once, economies and countries would crumble, and billions of people would become quickly dislocated. Ironically though, if money is so important to modern life, then why is it the subject of so much confusion? After all, few things both enthrall and repulse us like money.

The main problem with money is that it’s often blamed for the problem of greed. Although many of us agree that greed is one of mankind’s most serious problems, blaming money exclusively for it is like blaming couches for people being lazy. In the truest sense, money is a means of exchange that allows people to acquire what they need without trading or bartering.

However, if money is just a means of exchange, then what accounts for the anger many have about it? After all, why don’t we hear more about how money allows all of us, from poor to rich, an element of freedom in deciding how to live? As many note, the advent of modern money has helped the middle-class grow by giving people the ability to make decisions about their lifestyle. Although many of us herd in common directions with purchases, we also express our individuality by purchasing items that go against popular trends. Money, and the way we spend it, is an important tool we use to define ourselves.

When life today is contrasted with medieval times, it’s clear that wealth was previously defined by land ownership and natural resources. During this time, the concept of serfdom, whereby multitudes of poor were at the mercy of rich landowners, was common. Also, as recently as 200 hundred years ago, wealth was equated mostly with land and resources. Since then, with industrialization and central banking, it’s clear that wealth as exemplified by money has become the norm.

Interestingly, it needs to be noted that till recently, the role of money in Americans lives was often seen more positively since it was equated with individual economic freedom. Whether one was rich, middle-class, or even poor wasn’t as important as the fact that America not only had upward mobility, but also respect for allowing people to stake out their own kind of life. This was shown by the fact that communitarian small business was a valuable component of American life till recently. Unfortunately, over the past 20 years, as large corporations and finance sectors have become more powerful, money as a concept is being blamed for problems associated with greed. 

Currently, since both the modern corporate model and finance industry pay close attention to the bottom line, we’ve arrived at a time when money reigns supreme. This current fixation is a reason why modern finance is often seen as disconnected from the general economy as a whole.

As proof of this, we hear from all sides of the political aisle about the disconnect arising the past 20 years between Wall Street and Main Street. When talking of this, many notice that strong stock market gains the past 20 years haven’t translated to stronger economic indicators in the broader American economy. In fact, many experts say that the relatively low amount of people now working, and our high amount of underemployment, is proof a new economic hybrid’s developing. This hybrid, whatever one calls it, is resulting in the middle-class being squeezed hard. In this evolving two-tiered society, the elite finance-corporate class is making astronomically strong gains while the middle-class appears to be stair stepping down.

In a nutshell, what’s developed the past 20 years is that it’s become harder for the middle-class to not only advance, but also to stay middle-class. Some economic experts say this trend is compounded by the fact wealth inequality appears to be growing in America.

To many Americans, an economic disconnect first became apparent during the severe economic downturn in 2008 that produced “The Great Recession.” As many remember, the bailing out of major Banks and members of the Auto Industry during this time was controversial. Previously, bailing out major industries was frowned upon since it went against free-market theory.

To middle-class Americans, the bailouts exemplified there was one set of economic rules for the average person, and another for the elite. After all, many middle-class Americans struggle with the fact that their hard work and sense of fair play isn’t recognized like it should be. Interestingly, economic experts have noted that cushioning major industries from a fall has created an increase of moral hazard. In a nutshell, moral hazard refers to how some businesses take enormous financial risks without bearing the cost if they fail.

Historically, what’s made America great in the past was a unique set of rules that created a check and balance on economic power becoming too absolute. These checks and balances created an economic system where money was mostly used as a tool of expression to create the type of life one desired. In line with this, the element of freedom that one showed with their use of money created a high level of happiness in a society with upward mobility and a vibrant middle-class.

If more of us can work on recreating the economic checks and balances we had in the past, America can escape evolving into a stagnant two-tiered economic model. If this can be accomplished, America will regain the economic vibrancy and fairness it once had.

 

Challenging the Political Status Quo in America

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The powerful candidacies of Bernie Sanders and Donald Trump have signaled that America’s distrust of political dynasties is alive in the 21st Century. As we’ve seen, both have garnered support by challenging the policies and ethics of the Clinton and Bush political dynasties.

Obviously, Trump and Sanders are much different in policy and style. While Sanders Socialist leanings have raised eyebrows, it’s understandable that Trump’s controversial statements have created much more of a stir. Although it’s easy to see where these candidates differ, it’s hard to deny that these political outsiders have successfully challenged the political status quo. In line with this, their success has caught political experts off guard. 

In addition to the fact political dynasties make Americans nervous, other issues explain the phenomenon of these maverick candidates. Obviously, many voters are tired of “politics as usual.” These voters are searching for candidates who express themselves in atypical ways. Although many supporters disagree with Sanders or Trump on some issues, they appreciate how both candidates downplay typical political marketing methods.

Augmenting the support for these candidates are voters disappointed that President Obama couldn’t unite America beyond the Blue and Red divide. As many remember, part of Obama’s appeal when he became famous in 2004 was his eloquently stated desire to unite an America deeply divided under President GW Bush. As a result of this seemingly unfulfilled pledge, some voters are now tired of politicians who talk in lofty generalities.

Although Obama’s eloquence is obvious, some say that over time his policies and statements reveal he’s more comfortable playing a role of referee as opposed to unifier. To many on the conservative side, Obama’s referee pleas often seem aimed at getting conservatives to become more agreeable with liberal policies. Understandably, this Obama trait rankles conservatives. In addition, although liberals have less argument with Obama, there’s a strong contingent of Democrats and progressives who feel that President Obama, as well as Senator Clinton, are strongly connected to powerful corporate interests that are pursuing a form of globalism that favors the wealthy over average Americans.

Therefore, both Sanders and Trump are picking up support from those disappointed with Obama as well as the Bush and Clinton dynasties. This part of the electorate has evolved over the past 20 years a distrust of anyone smacking of professional politician. In fact, one can argue that as opposed to the focus-group orientation of modern politics that urges candidates to smoothly appease multiple special interests at once, the fact that both Trump and Sanders stick doggedly to core issues reinforces the support they have with an electorate that fears America’s in decline due to the slickness of modern politicians.  

Currently, America is undergoing an identity crisis regarding politics. Many, including President Obama, have expressed a disdain for political nastiness. In line with that, a desire for a rationality that encourages respect for America’s checks and balances is often pleaded for by many of us.

However, if many of us are attempting to reduce political strife, why is it that many feel Americans are inadvertently being pitted against each other more than before along fault lines such as race, religion, political affiliation, and economic class? In addition, just what’s prompting the advent of a winner take all mindset that works against the idea America operates best when respect is shown to all subgroups?

Although answers to the above questions are complex, it’s within them one discovers the appeal of Bernie Sanders and Donald Trump. Basically, many of their supporters seek a strong change in modern politics. Obviously, the passive-aggressive stereotype of the modern politician rankles these people even more than the “tell it like it is” style Trump and Sanders seem to represent. These people fear that the passive-aggressive politician, by refusing to take clear stands on issues, is inadvertently pitting Americans against each other. Many supporters of maverick candidates are concerned that modern politics now seems to value smooth political style over substance.

Historically, politics has never been for the tame of heart. Over years, many issues have created strong currents of emotional waves through American history. However, while that’s true, another factor to recognize is that political operatives, talking heads, and other members of the media establishment have definitely gotten nastier since the Fairness Doctrine in media was lifted in 1987. An explosion of entertainment-laden political commentary now works to arouse political passions in a 24-7 style as never before. This media driven intensity has undoubtedly helped create the dysfunctional and almost circus-like atmosphere many claim has invaded the Congressional arena the past twenty years. This is why polls show support for Congress at abysmal levels. However, although Congressional politics has worsened, there’s been agreement amongst political operatives that Presidential candidates should leave the dirty work to them so candidates appear calm and presidential.

In the past, independent-minded candidates like Sanders and Trump would’ve maybe run for President as Independents. However, since it’s now so difficult to launch these bids, candidates are more apt to stay within Democratic and Republican confines out of necessity. Ironically, the independent style of these mavericks is changing the party dynamic of Presidential politics.

Regarding political policy, Trump has been criticized much more than Sanders for not having typical policy ideas. Interestingly, when one looks beyond his brash attention-grabbing statements, it’s been shown that Trump has policy ideas that reveal analysis. And surprisingly, there are areas where he and Sanders echo similar themes.

For instance, regarding Mid-East policy, both maverick candidates have assailed the Bush and Clinton dynasties for failing to see the problems inherent with the nation-building concept pursued in the recent Iraqi war. Also, both Sanders and Trump have serious reservations about the Trans-Pacific Partnership trade pact that’s been negotiated largely in private. As is known, many mainstream Democrats and Republicans support the TPP pact. Regarding this, Trump and Sanders echo the caution many intellectuals, politicians, and economic experts on right and left have about its potential ramifications beyond free trade. After all, in reality most of us are in favor of many elements of free trade.

A concern with the TPP trade pact is that in addition to jobs being lost, it may eventually influence American laws and regulations. In line with this, some claim an umbrella of bureaucracy may be created over countries in the pact. Critics feel that the TPP may eventually evolve to resemble the European Union. Although the EU has laudable points, its recent economic troubles have given pause to those who feel it’s an ideal to be followed.

Obviously, the campaigns of Bernie Sanders and Donald Trump are atypical. In the past, the self-avowed Socialism of Sanders and the bluntness of Trump would’ve probably disqualified them from serious Presidential consideration. However, these are different political times. Surprisingly, many political experts now concede that both candidates have tapped into a deep distrust of the typical professional politician seeking the Presidency.

If American politics and the art of governing are to truly become more rational, the nature of the campaigns of Trump and Sanders need to be understood. On one level, the popularity of these maverick candidates reflects the anxiety many Americans have about the TPP trade pact, job loss, and Mid-East policy. On another level, it’s also clear that many voters yearn for a political process that bypasses the political marketing strategies that have evolved the past 20 years. Regardless of what one thinks of Sanders and Trump, their brash ascendancy serves notice that more and more voters are starting to look upon smoothly polished politicians with suspicion.

 

 

 

 

Elections and the Promise of Democracy

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Each year at election time we’re reminded several things about the nature of life in a Democracy. For some, a wide range of emotions accompanies elections. These emotions run the gamut from sheer elation if their political side wins, to dismay at the imperfect nature of politics if one’s on the losing side of the political equation. However, no matter the variety of emotions that hit us at election time, it’s clear that for all its faults, Democracy is the best political system. A quick glance at life in a totalitarian regime can give proof to that.

Democracy’s strength lay in how it allows for a filtering of ideas from several levels of society. And yes, although Democracy is often diluted by special interests, it needs to be noted that some special interests actually represent issues important to us all.

Since America’s form of government is technically known as a Constitutional Republic, there’s debate as to whether one should refer to it as a Democracy. As a compromise, some call it a Representative Democracy. After all, as voters we elect representatives to do a majority of legislative decision-making. In a true Democracy, voter referendums may be more common and simple majorities could determine many more aspects of modern life.

In modern America, the political process has changed much the past twenty years. Due to proliferation of new media and a consolidation of existing media outlets, a much different mindset exists now. On many issues media and political elites now aggressively use their skill and savvy to rally the masses to perceived victories. Although this aspect of populism has been with America from the days of William Jennings Bryan in the late 1800’s, the skill, power, and sheer repetition of today’s media arena has heightened political intensity.

Obviously, the advent of the quick-hitting verbosity of social media can give modern politics a more intense feel than in the past. When the bullet point mindset of social media is applied to today’s complex political issues, emotional reactions can erupt due to the fact issues are often shorn of their complexity. Also, by using closed-ended bullet point language that talks sometimes of absolute defeat of political foes, modern day political operatives and politicians may be giving rise to an all or nothing dogma that used to be mostly the province of monarchies and totalitarian regimes.

In line with this, it’s been recently noted by many that the ability to civilly “agree to disagree” is being lost in America. Since many individuals and political operatives now perceive political stakes to be so high, there’s a strong sense of activism on many levels that encourages intense loyalty and at times retribution for things that used to be allowed to slide in the past. Some feel this type of activism is leading us away from reasoned debate and more into a react first, and think later, mindset. As result, a new kind of political segregation is arising in America. This newer trend seems to be resulting in fewer marriages and friendships between opposite political ideologies.

As most of us know, countless issues of modern life are now incredibly complex and defy categorization as a bullet point. In a world that runs the gamut from complex economics, to high level scientific-technological issues, to the ever-growing legalisms evident today, it’s clear that using bullet point explanations with some issues may be taking the easy way out.

Seemingly lost in today’s political-media frenzy is the sense that government sometimes functions best when a compromise is struck between opposite interests. Although political deals are often struck these days, most political operatives and politicians are afraid to explain the reasoning behind their deal making to the public at large. Therefore, since many voters perceive a lack of sincerity, the tag of RINO-Republican in name only, or DINO-Democrat in name only, is attached to a politician who refuses to explain their motives to the electorate.

Unfortunately, diluting political issues to bullet points and embracing a more emotional approach to governing can potentially contradict the checks and balances our Founding Fathers had in mind. This is the situation America faces today.

To counteract the emotionalism of today’s politics, one can look at what it was like to live in pre-Democracy times before the 1700’s. Although Democracy had been tried for a while in ancient Greece and Rome, it didn’t become a standard for governments until the 1800’s. If one goes back to reading what life was like then, and if one looks at the issues Enlightenment political theorist John Locke faced, it’s easy to see that Democracy is not a gift to take lightly.

If we sincerely look at the struggles mankind faced to reach the Democracy threshold, one comes away with a renewed awareness that Democracy is not just a vehicle to use for vanquishing a political foe, it’s more importantly a tool used to free all mankind from some of the more brutish aspects of life. This is because it is in the balance of opposites that true Democracy exists. Reconciling and living with opposite tendencies, as opposed to merely controlling or vanquishing them, is the essence of the checks and balances that Enlightenment thinkers used to create our amazing Constitution.

In line with that, if we realize how economics is tied at the hips with politics, it’d behoove us to become more aware of the seemingly boring, yet very important, study of economics. Too often, politicians reduce economic ideas to the simple concept often repeated that the rich get richer while the poor get poorer. Ironically, many of the people who advance such a simple economic dogma are often rich themselves. In addition, another simple economic myth politicians sometimes promote is that those who struggle economically simply don’t work hard enough.

If we embrace the fact our complex world demands the ability to think and debate more rationally, there’s a chance politics can return more to the concept of Representative Democracy our Founding Fathers had when they framed America’s constitutional government. As they envisioned it, such a system, by creating checks and balances through a separation of powers, would be superior to the dogmatism of a monarchy or dictatorship. This sense of governmental balance, which seeks to somewhat reconcile opposites, as opposed to controlling or vanquishing them, has been key to America’s strength. If we can work towards this concept of government more, the promise that elections hold for Democracy may become bright yet again.

Greece, the Stock Market, and Today’s Economic Revolution

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At this moment, there’s a somewhat quiet economic revolution occurring in most of the developed world. The reason this revolution appears quiet is because the economics field uses technical language often difficult to understand. However, as we’ve seen with both long lines at Greek banks, and the eyes of the world now fixated on stock markets, seemingly abstract economics policy has real world consequences.

Although hard to say at this point, this quiet revolution could possibly prove as pivotal in economic history as the fall of communism. Only time will tell as to its complete impact. To underscore how the paradigm shift is real, one can note that the head of The International Monetary Fund recently advised the head of America’s Federal Reserve Bank to hold off on raising interest rates. 

In a nutshell, the economic revolution sweeping the developed world is the record-low interest rates they’ve had since the Great Recession of 2008. Because the prevailing rate of interest is one of the most important factors economically, it’s accurate to say that the repercussions of record-low interest rates are strong. Historically, record-low interest rates have usually been advocated for only a temporary basis to stimulate slumping economies. Needless to say, many economic experts are shocked that we’ve have had to constantly stimulate much of the developed world’s economies for seven years. Obviously, many experts are surprised our economic gains haven’t been stronger over this time.

The fact that international stock markets are now beginning to slump has many economists and experts quite worried. That’s because the stock market has been the main success story since 2008. In light of the fact that parts of the developed world still suffer from effects of recession-hampered growth, underemployment, growing debt problems, and low personal savings rates, the bright spot has been robust stock markets.

Currently, many economists are worried that if the world economy is now hit with stock market downturns, they’ll have little ammunition left to battle another recession. This is because the main tool for stimulating developed economies has been record-low interest rates. With interest rates currently near rock bottom levels for seven years, there’s really nowhere to go to stimulate.

The Great Recession of 2008 was an incredible turning point economically. This is because what worked well in the past to jumpstart weak economies, didn’t work as well this time. Prior to this time, it was common for Central Banks to resort to low interest rates only until the economy started showing growth.

Currently, there’s a school of economic thinkers that says economic stimulus policies need to be rethought. They fear that if low interest rates are used as stimulus too long, a new sense of economic normal will make an economy somewhat immune to stimulus. These experts feel that trying to constantly stimulate the economy is analogous to a person building up a large tolerance to drugs. After a while, a person can become immune to the drugs’ effects if used too often. Likewise, record-low interest rates on a temporary basis have now begun to morph into almost permanent policy.

Because of the recent stock market situation, there are experts who feel that America’s Federal Reserve Bank may now hold off on their first official interest rate hike in years. The fear is that raising interest rates now will further drop the stock market. 

What Greece’s situation represents is the fact that if wealthier countries now respond weakly to economic stimulus, then less stable countries like Greece may prove too weak to respond well to stimulus. Since there are other countries similar to Greece, there is concern that Greece’s problem could become a kind of economic contagion that may spread.

Ironically, economic stimulus policy can actually depress certain sectors of the population. This is because wealth generation and savings have traditionally been acquired through a combination of Stocks, Bonds, Bank Savings, and Real Estate. As is well known, record-low interest rates hurt senior citizens and middle class savings accounts. In addition, low interest rates weaken the bond market. In turn, the weakened bond market hurts pension plans since bonds are often used as a safe investment for pensions. Therefore, stimulus policies on a long-term scale can have the effect of reducing investment choices available for the population at large.

At a time when many western governments are instituting austerity measures to deal with extreme government debt, it’s become clear that austerity cuts often target retirement benefits. Therefore, many retirees are alarmed that their ability to both save and plan for their future, are hampered by the very policies being used to stimulate the economy.

Interestingly, it needs to be noted that many economists reluctantly admit that record-low interest rates, by supercharging the stock market, may be leading to an increase in wealth inequality. This is because the wealthy own a high proportion of stocks. Also, it should be noted that the wealthy are often adept at periodically cashing in their stock gains and reinvesting in the stock market. 

A healthy economy stands on several pillars for investment, savings, growth, and security. Although the short-term gains of low interest rates on the stock market have been clear, the other economic pillars of savings through banks and bonds have been weakened. In the long-term, many experts feel that the developed world needs to return to strengthening all pillars of the economy.

In light of the fact that many recent political problems are related to the paradigm shift occurring economically, it’s advisable that we all try to do our part to be proactive with our economic situations. That way, whether the current economic revolution underway is only temporary, or proves to be permanent, we’ll all be better able to plan and adapt for our future.

 

 

 

 

Towards a More Practical View of Economics

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When some people hear the term economic theory, they often act indifferent or roll their eyes. This is because for years, many have equated it with a type of intellectual game playing.

Unfortunately, few modern theories have as much day-to-day impact on people’s lives as economics. Also, since economics is the silent partner of politics, few issues escape its grasp. In fact, when one applies a follow-the-money approach to political topics, they often find that across the spectrum, many issues have their origin in economic theory.

Because economics is misunderstood, it can be hard to discuss beyond the usual clichés. Therefore, when anyone mentions the possibility it can become more practical, many shrug and say, “Here we go again.” This confusion is compounded by how some theorists seem to setup axioms out of premises before all data is collected. As a result, economics is sometimes viewed as a statistical mishmash of competing ideas arranged in an arbitrary fashion.

But is economics really just a game? How can it be just a game when so much of what we do in life revolves around some kind of monetary exchange?

One of the reasons modern economic theory puzzles many is that much of it seems counter-intuitive. The abstract nature of modern economics, just like the abstract nature of modern physics, proves to be a barrier.

For instance, to the average American who’s struggling to pay down debt, the fact that our government can seem to function with a large amount of growing debt appears somewhat illogical. When politicians and economic experts talk about Debt-to-GDP ratios, and favorable levels of debt, many average Americans shrug as if it’s yet another example of political-economic gamesmanship.

In addition, to the average American that looks upon their family as a self-enclosed economic entity, the ever-present concept of globalism seems confusing. To many, the American nation is still the largest economic entity we envision. Therefore, getting used to the whole globe as an economic entity can appear abstract. Yes, most Americans understand globalist trade concepts and the importance of global trade. After all, since the days of Marco Polo and the Silk Road, individuals and countries have enriched themselves through trade. However, that’s not what creates confusion for many.

What puzzles many about globalism is how some American-based multinational corporations pursue loopholes to drastically lower their taxes. On occasion, these companies hint at the fact that such tax practices are a necessary part of globalist trade. Although the American corporate tax rate is high on paper, they often pay much less than what the official rate implies. Unfortunately, the reputation of corporations that pay taxes fairly is damaged by the tax avoidance pursued by some.

Adding to the bewilderment many have with modern economics is the fact that corporations are now viewed as people in legal terms. Therefore, many think that as people, corporations could pay a fair share for the roads, bridges, ports, and airports they use to conduct trade.

Probably the most confusing part of economic theory is how it’s used in the political arena. As is well known, both parties have economic experts and economists at their disposal who polish the rhetoric politicians employ. As most Americans attest to, there’s a tug-of-war between the Republican embrace of the more Free-Market approach of the Supply-Side revolution starting in 1980, and the more socialist Democratic approach of government-based Keynesian ideas used to maintain economic demand. 

In reality, although America has swung between Republican and Democratic directions the past 30 years, the economic dogma espoused by both seems to have resulted in the system that some call Corporatism. In a sense, Corporatism, as reflected in the political talk of Public-Private partnerships, has arisen since implementing the economic views of both parties in total has proven difficult. Therefore, the political-economic theorists that predicted Corporatism are correct to say this system could grow out of modern political rivalries. Although some say Corporatism resembles Socialism insofar as there’s a strong government hand in the economy, it differs by leaving the means of production in private hands.

As for developing a more practical economic view if indeed we’re living in the age of Corporatism, there are many proposals.

First off, since the post-Keynesian economic model has allowed for large amounts of unstable debt to accumulate in many advanced countries, there’s a need for debt limits that are achieved transitionally without imposing high levels of austerity. In line with keeping debt lower, the debt-risk posed by those wanting more finance deregulation needs to be recognized. After all, if another finance crash creates a freezing of liquidity assets similar to what we had in 2008, billions of dollars of outstanding derivatives contracts may trigger the need for another bank bailout. Obviously, another bailout would be added to our nation’s debt again.

Regarding debt reduction, we could actually increase tax revenue from corporations by both cutting their official tax rate, and then closing certain loopholes. This policy could help reduce debt, while also improving the negative public image many have of corporations due to how some pursue tax avoidance.

In addition, since many central banks have been pushing for lower interest rates the past 15 years as a means to stimulate certain areas of the business cycle, there needs to be recognition that we need to slowly allow interest rates to return to historic levels so the natural ebb and flow between saving and spending can be restored. As many economists note, such unnaturally low levels of interest rates, if continued, will make it hard for us to not only stimulate the economy for future growth, it’ll make it hard to stimulate the economy to reduce the chronically high levels of underemployment we now have.

Since chronic underemployment has become an outgrowth of globalism in many advanced countries, it’s apparent that relying on historically low interest rates as the main way to boost employment has led to a situation begging for creative solutions. As many have said, America could deal with its high level of underemployment by borrowing ideas from both right and left of the political-economic spectrum. These ideas include creating infrastructure improvement jobs and streamlining small business regulations to encourage true entrepreneurship. 

And finally, although globalism’s here to stay and has benefits, it’s obvious that although recent trade pacts reinforce large multinational entities, that the most important entity for each nation… remains that nation. Therefore, if politicians can honestly find ways to look out for all aspects of our nation more, America’s economic outlook could improve. 

Hopefully, with more involvement from ordinary citizens, economics will start to lose its reputation as a confusing line of thought, and become more an everyday part of everyone’s lives.