CRY MORE, LIB

Cry More Lib, Financial Humiliation driving politics

The mainspring of Donald Trump’s base is anger.  It is fueled by humiliation.

America’s Great Recession defined the tipping point, politically and economically. In the ten-year period following the Recession’s onset, economic performance of congressional districts labeled Blue diverged at a breathtaking pace from those labeled Red. GDP grew a full one-third in Blue districts, whereas it turned negative in Red districts, falling almost 2 percent.

Translated to households, Reds are failing economically relative to Blu­­­­­­­es. Median household income shot up 13 percent for Blues, while for Reds, it declined about 4 percent over this ten-year period. It’s a sad statistic that became a stunning prologue for both the 2016 and 2020 Presidential elections.

Counties that delivered election victories for Donald Trump in 2020 produce only 30 percent of America’s GDP, down from about 33 percent in the 2016 election. On the other hand, counties that delivered for Joe Biden produce 70 percent. This points up a huge economic imbalance with profound implications!

ECONOMIC POPULISM

Trump’s economic populists vent anger on those they call “Libs.”  “Cry more, Lib” is the invective and challenge used by incoming freshman Congressman Madison Cawthorn of North Carolina as he celebrates his win. Cawthorn is only 25 years old. He enters the House with two similarly outspoken Republican freshman firebrands, Georgia’s Marjorie Taylor Greene and Colorado’s pistol-packing Lauren Boebert.

New York Times columnist Thomas Friedman reflects on electoral numbers and draws upon Harvard political philosopher Michael Sandel to spell out consequences. In his new book, “The Tyranny of Merit,” Sandel observes that the politics of humiliation is at the heart of Trump’s appeal. “Trump was elected by tapping a wellspring,” Sandel observes, “of anxieties, frustrations and legitimate grievances to which the mainstream parties had no compelling answer.” These grievances,” says Sandel, “are not only economic but also moral and cultural; they are not only about wages and jobs but also about social esteem.”

Biden won the Presidency, but with practically nonexistent “coattails.” At the state level, elections were dominated by Republicans. Even as Trump is moving off of the “official” American political stage, other Republican demagogues are waiting in the wings to fill his shoes. Meanwhile, America remains deadlocked by our constitutional system that rewards polarization over consensus. In the Senate it’s a throwback to the geographical layout existing at our nation’s founding, over two centuries ago.

HOPE FOR AMERICA’S FUTURE?

Why does it matter, asks Brookings? This profound economic rift, they say, divides the nation and underscores the near certainty of continued clashes between the political parties, fueled by continued alienation and misunderstanding. Unless President-elect Joe Biden finds a way to speak to the profound humiliation felt by many working-class voters, Friedman and Sandel warn that resentment borne of humiliation will continue as the most potent political sentiment of all.  ­

Cry More, Lib is about insecurity borne of economic failure. Too often the anger vented by Cawthorne and others is also mired in willingness to vote against one’s self-interest, for face-saving purposes. But shouldn’t it be asked also? Will your resentment-fueled actions be viewed a decade or a generation hence, by your kids and grandkids, as failing the best interests of your families and your nation?

~ Jim Sawyer

Links:

Trump-voting counties equal only 30% of America’s economy.

Who Can Win America’s Politics of Humiliation?

FEEDING AT THE TROUGH

Feeding at the Trough
Feeding at the Trough

I took the call from my maiden Aunt Leona.  Uncle Myron and his idiosyncratic wife Marjorie—Republican activists and occasional pranksters—were piloting their black Cadillac limo to the Utah Governor’s office from Leona’s home in Ogden.  “Expect their arrival at the State Capitol momentarily,” Leona announced resolutely.

My octogenarian aunt and uncle were pre-World War II transplants to Los Angeles, from Utah.  They didn’t fit any of the Utah stereotypes.  Myron’s first career was as Headmaster of the little public school in Morgan, Utah.  He was a lapsed Mormon.  Marjorie was a lapsed Catholic.  Together, they were on their second marriage to one another.

I had learned about their antics through Aunt Leona’s recitations.  As their nephew, I began to wonder.  How had I been chosen to become their target?  Was I about to be “drug under the bus” by one of their melodramas?

On the outside I remained confident.  I felt vulnerable on the inside however, at the age of only twenty-six.  Perhaps they viewed me as little more than collateral damage.   Perhaps what they wanted was the really big fish, Democratic Governor Calvin Rampton.

LIBERAL UTAH?

Looking back, I marvel at some of Utah’s liberal-leaning political outcomes, although these occurred before Ronald Reagan’s ascent to power in 1980.  Nearly unbelievable to some, Utah majorities chose Democrats over Republicans in five successive presidential contests between 1932 and 1948.  Decades before that, Utah had been one of the stars of America’s Progressive Era.   As the State’s fourth governor, Jewish immigrant Simon Bamberger became not just a popular leader but also, only the second Jewish governor in the entire United States.  Cal Rampton followed Governor Bamberger’s progressive model.  Rampton had been elected by his fellow governors and served as Chairperson of the National Governor’s Conference.

Within minutes, Myron and Marjorie were making their grand entrance into Governor Rampton’s outer office.  Marjorie was squat and “dressed to the nines.”  Uncle Myron, by contrast, was tall, dapper and never without sunglasses, even in the evening.  They were a “Mutt and Jeff” duo.

A PRECOTIOUS YOUTH?

Myron frequently traveled solo and in the 1950’s, he could be mistaken for crime boss and Las Vegas casino magnate Meyer Lansky.  I remember being Uncle Myron’s relief driver from Ogden to Las Vegas, at the mere age of sixteen.  Then, we spent Saturday night casino-hopping across Las Vegas with Myron’s randy brother LeRoy, owner of the Blue Dot Pie Shop North of the City.  About 4 am, the brothers put me on a Greyhound bus bound for Ogden.  “Don’t talk to anyone,” they admonished.  “Don’t get off the bus unless your parents are there to meet you.”

My hours in Las Vegas were weird, but what an interesting night it was!  Monday morning at Ogden High, I said nothing to friends about how I had spent the weekend.  I assumed no one would believe that my family could be so crazy.

“Just stick with me,” Uncle Myron directed, “and don’t ask questions while I’m placing bets.”  Close-lipped, I tailed my uncles as we moved quickly from one casino venue to another, by foot or by taxi.  I’d belly up to the crap tables to observe how they played the game, then moments later we’d be out the door and on to the next venue.

Looking back, our threesome acted as though Myron “owned” each of the casinos we entered.  Security guards looked at me quizzically but remained at bay.  As a believable Meyer Lansky double, Uncle Myron led me deftly through each venue, then we’d be out the door before his ruse could be detected.  Surely it wouldn’t be replicated, however.  Things now are different in Las Vegas, I’m told.

Next and without introduction, Myron and Marjorie “landed” in the Utah Governor’s outer office.  What followed however, I could never have imagined from Leona’s cryptic phone call.  Rather than greeting me, they stepped past me instead, then began dancing about while chanting:  “Feeding at the trough! Feeding at the trough!”  No doubt, their antics were intended to humiliate.

A couple of minutes later they were gone, without even making eye contact.  Now it was becoming clear.  They had come to create a mini demonstration aimed not just at humbling their nephew, but at humiliating Utah’s Democratic governor as well.  As luck would have it, Rampton was not in his office at the time.

A SALUTE TO GRANDFATHER

The animal trough they visualized was government, of course.  This was their message.  As their nephew, I had become little more than a common farm animal, slopped with other farm animals each payday.  The subtext?  Government wastes hard-earned taxpayer dollars.  Taxation to pay for public programs such as the ones I oversaw is little more than legal confiscation.

I grimaced but tried to chuckle as they slipped past me into the corridor.  Then a coworker asked: “Who are those people?  They didn’t even say goodbye to you?”

“Just some of my interesting relatives,” I chortled.  Then everyone went back to work.

What Myron couldn’t have known or wouldn’t have appreciated, is what was actually happening in that dynamic little office.  Just weeks before, for instance, the Utah Governor’s Office had solidified a pivotal role in the Internet’s founding.  The Internet was the creature of well-spent U.S. Government research dollars.  A consortium had collaborated to demonstrate what then were almost unimaginable possibilities.  Four state universities came together at the genesis.  Three were in California, and the fourth was the University of Utah.  Without the guiding influences of governors in California and Utah, this brilliant research coalition would never have happened.

Under the Ronald Reagan presidency, unfortunately, like-minded souls with Uncle Myron curtailed funding for economic development projects like the one my colleagues led that birthed the Internet.  What a huge mistake Myron and Marjorie made, about the appropriate role for government in the economy.

There’s an afterthought to this narrative, also.  I wasn’t the first in my family to work in government, at the Utah State capitol building.  The first?  Myron’s father and my grandfather.  Charles Condie was founding director of what today would be known as the Bureau of Standards.  His title was Director of Weights and Measures.  Grandfather reported through administrative channels to—perhaps you’ve guessed it—Governor Simon Bamberger.

~ Jim Sawyer

IS ENLIGHTENED CAPITALISM POSSIBLE?

Modern Capitalism | Capitalism in Crisis with Jim Sawyer

Three centuries ago, a new vision of how our world works was taking shape in Scotland.  We’ll call it Enlightened Capitalism.  It was based on emerging democracy, upon the right to hold private property, and upon the free exchange of goods and services without government looking over citizens’ shoulders.

Adam Smith was an 18th Century philosopher focused on how individuals and communities should act, morally.  As capitalism’s founder, he believed selfish acts should be held at bay.  Rather, these should be tempered by the needs of one’s community.  Self-interest rightly understood, is how Smith would have described capitalism’s animus.  Today, Adam Smith would be called a communitarian.  He would not be known as a libertarian.

SMITH’S MISTAKE

Adam Smith held one erroneous belief however, which he borrowed from Isaac Newton.  Like Newton, Smith thought the economic world could be explained by expecting it to always work in an orderly manner.  In physics, this world view worked initially, but then its limits were called out as early as 1905 by Albert Einstein.  In economics however, laissez-faire advocates still believe government causes rather than repairs market disorders.

The Great Depression was a devastating time for laissez-faire beliefs, beginning with the stock market crash of October 1929.  Household consumption took a nosedive, business investment tanked, and unemployment soared.  Traditional economists believed orderliness would return naturally.  When it did not, their views were discredited by the mainstream.   Even now however, many continue to believe the economic world would work better if government is held at bay.

President Franklin Roosevelt replaced laissez-faire with a new focus on the use of government as an economic stabilizer.  He created public programs to put people back to work.  By the 1950’s, a new consensus had emerged among Americans.  It was that consumption, employment and investment could be steered through the shoals of recessions and depressions by the proactive use of economic policy.

Several decades later however, America is burdened anew with a second economic crisis.  Unlike a century earlier, the hallmark of this crisis is pseudo-capitalism or fraud.  And like 1929, it is triggered by dysfunctional thinking that still lurks inside of some capitalist thinking.

DONALD TRUMP—PSEUDO-CAPITALISTS-FRAUDS

Donald Trump won election with a plan to drain the swamp, he called it.  But the economic swamp remains very much alive, although different from how Trump describes it.  Instead of draining it, he is a contributor and one of its perpetrators.

A pre-election article from the New York Times illustrates the slippery slope many Americans sense, but feel powerless to stop.  “As Virus Spread,” the October 15th headline alerts, “Reports of Trump Administration’s Private Briefings Fueled Sell-Off.”  Implicit is an inference that while Trump was calming Americans, some in his administration were giving economic briefings to select audiences of donors and others.  Allegedly, this helped them profit from contrarian financial strategies they put into play, at variance with Trump’s public statements that all would be well.

IS ENLIGHTENED CAPITALISM POSSIBLE IN 2020?

America is at a crossroads, not unlike the crossroads encountered during the Great Depression.  Then, the underlying problem was an unrealistic expectation the economic world would respond in an orderly manner.  Now, the underlying problem is pseudo-capitalism and a new economic role is required of government, to stop fraud.  During the Trump presidency, this role is akin to removing the fox from standing guard over the chicken coop.

Here are five takeaways:

  1. The rebirth of an Enlightened Capitalism is possible, but a new role for government is required, to set guard-rails around pseudo-capitalists including Donald Trump.
  2. Enlightened Capitalism can’t operate without an explicit mission. What do Americans want?  Figuring this out will help determine the kinds and quantities of public and private investments needed.  For instance, do we want a livable environment?  Do we want expanded opportunity for all?  Do we want renewal of the American promise that each generation should be able to live better than the one ahead of it?
  3. Culture warfare in America really boils down to a “high school-type cafeteria food fight” over what our country’s mission shall be. Without acknowledging it explicitly, the implicit fight between conservatives and liberals really is about choosing the mission that will undergird America’s capitalist system.
  4. The “second glitch” in doctrinaire capitalism is its failure to state what the extra reward should be for the Elon Musks and Warren Buffetts, alongside the Donald Trumps. Practically, this means setting taxation and regulation sanctions on rigging, gaming and other schemes that pump up short-term payouts at the expense of those needing steady, positive and long-term outcomes.
  5. Reorienting capitalism also means reorienting the system America uses to prepare business leaders. MBA programs must change.  These changes must include serious reflection about ethical vs. unethical business practices.

WHEN THE LEFT AIN’T RIGHT

Karl Marx
When the Left ain’t Right

CANCEL CULTURE?

Economic schools of thought often take on characteristics of 19th Century Parisian artists’ salons, unfortunately.  These were cartels maintained to protect the interests of established artists and their patrons.  Salons functioned as gatekeepers, stabilizing market values while excluding innovative works by up and coming artists including impressionists such as Edouard Manet.

When an economic school operates like an artists’ salon, its function is to stabilize and promote prominent ideas and personas, as well as to control or exclude the flow of entrants.  This is where cancel culture comes into play.

SCORCHED EARTH

To begin, “economic religion” has combined with authoritarianism to drive a wedge into America’s political life, creating culture warfare.  It’s disastrous for our republic and one from which political liberals are not immune in their responsibility.  My belief on how this works is driven by personal experience.

First, right-wing ideologues have never abandoned Isaac Newton.  Orderliness connects for them as a link to their views of God and to their perception of natural law.  When government intervenes as it did during the Great Depression—ala the policies of Keynes and Roosevelt—free-marketeers and Christian evangelists believe it acts immorally since it substitutes man’s will for what they perceive to be the will of God.

Second, Keynesian dominance faltered during the Vietnam War.  Practically, inflation was the culprit.  Even though Keynes’ ideas had dominated for five decades following the Great Depression’s onset, they became undermined politically by the supply side prominence of Ronald Reagan.  Unfortunately, with the weakening of Keynes, also came a weakening of middle-ground policy options and cross-isle political collaboration.  What remained ala Reagan was the resurgence of laissez-faire.  Following that, what survived intellectually on the political left, too-often was reactionary and little more than Marxism.  While it has never driven a majority of pragmatic Democrats, “flirtations” have left the party vulnerable to manipulation by strategically motivated, ideologically driven Republicans.

Third, these economic policy wars melded into culture wars, eventually.  Beginning in the 1980’s as America shifted rightward politically, socialism-baiting became a powerful “trolling tool” to solidify the right-wing base.  Progressivism was portrayed as an encroaching threat and fearmongers asserted it would bring European-style Marxism to America’s shores.  What remained in the political middle was little more than scorched earth.  The victors in this fifty-year battle were Republicans and its culmination was Donald Trump’s rise to an authoritarian-dominated presidency.

Fourth, the left’s response to right-wing political baiting grew to become a disastrous outcome for what might have been successful middle-ground causes such as climate protection.  Amid this shift, the cancel culture elevated many far-left intellectuals into liberal influencers.  Some went on their own search and destroy missions, inwardly rather than outwardly.  Among the collateral damage was pragmatism championed by some innovative, “middle-range” theorists who rejected the receipt of “blessings” from the Marxist salon.

MY EXPERIENCE

I’m cross-trained as a Marxist.  As a Ph.D. student, my professors taught Marxism as an alternative to Adam Smith’s laissez-faire, but not as the sole alternative.  We called ourselves radical economists then, implying support for all varieties of constructive, new thinking.  During the 1970’s, the ideas of reformer JM Keynes were considered middle ground.  Even then however, his ideas were losing some luster due to inflation.  Intellectually, little remained vibrant on the liberal palate beyond Marxism.

As the Great Recession was taking hold, I worked with a French university and its dominant Marxist faculty. Whenever I made presentations, I sensed that my calls to confront pseudo-capitalism were resisted by Marxists, not unlike resistance to an upstart entrant in a 19th Century Parisian salon.

Years later, as a radio commentator in liberal-leaning Boulder, Colorado, blowback from far-left liberals continued.  My ideas confronted fraudulent business schemes that lowered output and expanded wealth-holding by capitalist “wannabes” such as Donald Trump.  Some radio station ideologues opposed what I was doing, labeling it as a mere distraction from left-leaning commentaries they were expecting instead.  Was I trying to undermine Marxism, some asked?  Should my commentaries be cancelled?  Eventually, they were.

AN “IN-BETWEEN” THEORY?

If pragmatism is to be resurrected in American economics and politics, the methodology of John Maynard Keynes remains as the best starting point.  However, because real economies evolve in complexity—and because economic ideas stagnate and loose vibrance—Keynesian-type thinking needs rebirthing.  The best intellectual pathway for renewal ought to start with Joan Robinson, Keynes’ student.  Her reflections on what she called the profit lacuna are a solid gateway toward the development of some sort of in-between theory dealing especially with all sorts of fraud.  Beyond economics, it might also pour balm on America’s culture wars.  Capitalism in Crisis dot Org is about fleshing out these compelling possibilities.

~ Jim Sawyer

Here’s a link to one of last month’s posts that also talks about the profit lacuna and fraud.

A CULTURE OF FRAUD?

America's Culture of Fraud 

THE PRESIDENT’S TAXES

In America’s economic “storybook,” this is where President Donald Trump will fit in.  He’s playing an economic and political role parallel with American President Herbert Hoover, from a century ago.

Hoover’s the one that economists associate with a failed culture of orderliness.  Locked up with him in his dysfunctional, rigid thinking about how he believed the economic world should work, were millions of unemployed Americans.  Three years following the great stock market crash of 1929, Hoover continued to lead the nation on a disastrous “autopilot” course.  “Wait,” he appealed, for orderliness and full employment to return naturally.  But “naturally” never happened.

President Franklin Roosevelt took the leadership reins at the Great Depression’s bottom, at his inauguration in 1933.  Rather than to merely rail against market disorder and wait for orderliness to return however, Roosevelt jump-started pragmatic initiatives to put Americans back to work through public job creation programs.

Now, America’s in the midst of a second meltdown due to over-reliance on a second glitch in economic doctrine.  But this one looks much different from a century ago, and its consequences are exploding.  This one fails to say what the extra reward shall be to ethical capitalists.  Consequently, it creates a potential freeride for riggers, gamers, and scammers who claim the benefits of being labeled as legitimate capitalists, but without giving back what American communities expect from their business leaders.

A CULTURE OF FRAUD?

Our proposed new poster icon for American fraud is President Donald Trump who personifies doctrinal confusion between the moral capitalist and the pseudo-capitalist interloper.  As a group, Trump voters care little that their leader is becoming historically associated with a culture of alleged fraud.

Trump voters are alienated and angry.  Red-state politics are the politics of economic humiliation and vindictiveness.  Trump, allegedly, is a master at conning his “true-believers” into taking positions against their best long-term economic interests.

Red-state political cultures typify economic failure, particularly following the Great Recession of a decade ago.  Brookings confirms this.  Trump voters are older, whiter, less diverse and more rural, living in communities where college attainment is stagnant.  They congregate in male-dominant jobs in traditional industries with lackluster productivity and incomes.

Ten years following the onset of the Great Recession, GDP growth in congressional districts that vote reliably Red, had turned negative.  Not so in Blue voting districts, however.  There, GDP had grown fully one-third, with total GDP now splitting almost two-thirds nationally for Blue districts, in contrast with one-third for Red districts.

Now comes the release of Donald Trump’s tax returns, by the New York Times.  With the Biden-Trump debates at hand, these are some of the things Trump’s finances reveal.  Links to key articles are below.

First off, Donald Trump is anything but a self-made economic success.  Instead, he leads a dysfunctional political culture that includes alleged association with many initiatives abutting rigging, gaming and scamming.  Fraud will become the byword of this failed president, I allege.  It’s analogous to a very different type of failure Americans associate with economic failure one century ago, during the Herbert Hoover Administration.

THE EVIDENCE

Long-Concealed Records Show Years of Chronic Losses and Tax Avoidance

Tax Records Reveal How Fame Gave Trump a $427 Million Lifeline

How Trump used the U.S. tax code to his benefit in three ways

The Biggest Revelations from the NYT’s Bombshell

~ Jim Sawyer

Here’s a link to our last post on fraud.