At Issue with The Collapse of Conservatism

In the week’s Economist, the Lexington article (see A Republican senator revolts) praises senator Jeff Flake for a book, written in secret, that laments the decline and failing of conservatism. and the mistakes made by siding with, and electing, Donald Trump.  On first blush the well-written article leads me to conclude I want to read the book. But the author lets slip their own political views and so I’ll now give Mr. Flake’s book a pass.

What is conservatism?  It seems, if you read the article, that a ‘put your country second’ perspective is equitable to free trade. Why is a, ‘put America first’ not consistent with fair trade? Really, if you ever look at global trade and international supply chains, every organization, every country, looks out for their own benefit first.  They may not always say this – as it is all part of the negotiation.  But no one actually puts their own interests on hold for the other guy.  Only when satisfied or when satisfaction is in reach do sides negotiate closely and come to a ‘free trade’ agreement. And note, there is virtually never ‘free’ trade. There is almost always some cost, tax, cover charge, buy-back, duty etc.  

Mr Trump’s ‘put America first’ is not a call for nationalist policies; it is not a call for tariffs and duties.  It is a call to those that negotiate for their country that the US will now negotiate more fairly and not keep helping others out.  If you put a tariff on imports from the US, so the US will put tariffs on imports into the US.  That is fair trade – it is not protectionism.  When will the media, even the fair media, get this right?  Mr. Trump is making a political statement that says the obvious: this country needs to fair, as every other country is fair, in trade deals. Trump does not disbelieve the benefits global trade; all smart business leaders grasp the principles and see the benefits. Mr Trump believes in trade- period!

So we are left with asking why is his rhetoric picked on? We can only assume that such complaints and criticisms pander to a political sore that came about from losing the election; an institution and establishment that wanted to feed its own bloated cause: more government begets more government. Left and right have played this tune for years. Trump just happened to take the Republicans with him but in truth he needs his own part: New Deal Republicans.  

I get the feeling that Mr Trump is more conservative than many give him credit: freedom of the individual; responsibility of the individual over government; the expectation that the individual is not owed anything; that hard work and merit will be rewarded. And yes, that a safety net will be provided for those that need it.  However we live in s society today that assumes other owe them a living; that it is their right to sit on that backsides and be given everything the need and want.  We have become a A Nation of Takers.

The Rise and Fall of CNN

25 years ago I used to travel across Europe working with clients on small projects that kept me away from home for a day or three. My French is weak and German non-existent so I preferred to stay in English speaking and organized hotels. I discovered Marriott and other US centric hotels. After a long day and a client dinner, I would hide out in my hotel room and watch CNN. It was my first regular exposure to ‘America’ from an American point of view. I loved it.

After a couple of years I started to travel to the USA, mostly the Deep South. This was typically for a few days every other month, for about a year. Kent Mercer was playing for the Braves.  Of course I continued watching CNN. In those days I felt that the channel was well balanced; political views of the left and right were equally shared and equally scrutinized. I often compared CNN to my beloved BBC. About 20 years ago I moved to the US.

But about 8-10 years ago I spotted a slight shift in focus. CNN seemed to shift slightly and that shift seems now all but complete. That shift started with less and less coverage of right leaning views and more and more coverage of left leading views. At the same time, left leaning views were examined less and right leaning views were challenged more comprehensively.  The ‘fai, balanced’ view was disappearing.  That balance is now all gone and the channel’s reputation is all but gone.

Last evening is a good example. CNN was examining the current news related to Special Council Robert Mueller who has just impaneled a grand jury in relation to the Trump-Russian probe. To have a balanced review of this news CNN should have explored equally the challenges related to:

  • Mueller’ political leanings and relationships with the Clinton’s and democrats 
  • The fact that there are technical challenges outstanding on his ability to prosecute the case
  • Despite the wide scope of his remit, he has dropped looking directly into Russian collision in the election (what he was supposed to be working on) and now he is digging around in years past financial transactions between Trump, his companies and Russia
  • The location of the impaneled grand jury is fishy since it was called in a region that voted for Clinton by 94% so it is unlikely to be neutral

Yet CNN did not cover these issues at all. They repeated over and over the left leaning views they assume there was collision, there are shady financial deals, Mueller must be a good guy, and everything is fair and above board.

To prove my point there is more. Last evening Trump was holding a rally at which a democratic governor announced he was switching parties and would become a republican. This is stunning news. Yet during the live televised announcement, did CNN switch over to live coverage? Did they even report this on their news ticker on the screen? No they did neither. They ignored the news and failed to examine its implications. Some minutes later they did report the news, post live, as a snippet and moved right back to promoting their own agenda.

It’s a sad day to have to admit and call out that CNN has to come just a mouthpiece for the left. I really did love that channel. I still hope that Jonathan King, come the next election, remains neutral. If he goes, I will have had it with CNN.

UK Election Results Capture Political Schism

In under two years since the country stunningly voted to leave the EU, the same electorate shifted yet again and leant away from the idea of a clean break with Europe and threw the whole thing now into chaos. The youngest of voters sided with Labour, who were selling polices in a throw-back to those last seen in the 70s that, if followed, would lead the country to financial ruin. Corbyn’s plan is not even realistic; yet the youngest among us just have no memory of such irresponsibility. Only the old do, and so they voted Conservative.  

Now hostage to a 10-seat minority of the DUP, Theresa May will be saddled with a back-seat driver at negotiations with the EU. Decision making responsibility will not fall to May; she will have to keep ‘calling home’ to get approval.

Worse of all, the result of this election shows how the entire political system is corrupted. We have the worst of both worlds: a disenfranchised and ignorant electorate (e.g. Most of the young) that falls for platitudes and made-up promises. Of course, the left calls such things as false truths or fake news if the right puts such things out.

Britain will now have a much riskier time with Brexit. All we can hope for is a bank run that requires a bail-out or for the IMF to drop Greece ‘in it’ and a run on the Euro. It’s a matter of time. But now we need it sooner rather than 

The Madness of Student Loans

I read an amazing article in today’s US print edition of the Wall Street Journal. The article was titled, ‘Parents are Drowning in College-Loan Debt‘. The front page article explored data that suggests new record levels of delinquency on college-loan debts associated with a government-managed program called Parent Plus. 

Apparently this program allows parents to borrow money to support educational costs over and above the maximum a child can obtain from federal aid. The article suggests that there is no limit to what can be borrowed via Parent Plus (created by Congress in 1980 when Jimmy Carter was president); and that the most information needed to qualify is a social security ID. Apparently there is no credit check or any other required qualification.

Excuse me? I had to read that part again. What idiot approved this policy? Talk about idiot. This is just the kind of lunatic policy that contributes to unsustainable price increases in secondary education that the droves demand for more subsidies, loans and debts. This is as close to nuts as the same socialist and left-leaning policies that suggested expanding home ownership for those that cannot afford it was a good thing. This is madness.

Not every child needs to go to college. But every child should have the opportunity. There is a distinction between those two points; and the result should not lead to governments controlling access by funneling loans to those that cannot afford it. Attendance should be based on merit. Thus fewer would attend and so prices would not rise as fast and so fewer loans would be needed. But socialism informs uneducated parents that they have a right to a college education and so Uncle Sam has to bend over and make crap up and print more money and screw everyone as a result. Nice.

Now we are again in another financial pickle. But I can’t stop and write about how to fix it. I am going to rush off to go apply for my free Parent Plus loan.

What is Wrong with Capitalism

Finally some data is coalescing around a real problem that is hindering capitalism and specifically that part known as creative destruction. For without creative distruction we end up with a pilloried version of capitalism that undoes itself via a painful transition (in our future) rather than peaceful adaptation (what we really want).

You have to connect several dots here in order to discover the twisted position of capitalism today. The data points are these:

– The vast and growing majority of profits are created by fewer and fewer firms (see ‘Tech ‘superstars’ risk a populist backlash‘)

– There are fewer and fewer publicly listed organizations (see ‘Why America should worry about the shrinking number of listed firms‘)

– Start-ups are starting up at record low levels (see ‘Where are all the start-ups?‘)

– Competitive sprit is running at all time lows (see ‘Bright Minds in Chicago worry about the state of competition in America‘)

It seems the success of capitalism, the ability to create wealth, has been twisted into a beast that seems out of control and likely to garrote itself out of spite. The populist movement will put this into sharp focus when it notices the situation and then takes aggressive political action to counter it.  This will cause more pain than the current monster we call capitalism.

However this is not capitalism run riot. The issue is that socialist policies have twisted the capitalist model into a hybrid and it’s now a grotesque mess.

In some economic circles there is talk of a ‘winner takes all’ mentality. This is another way to capture what is happening. As firms got larger and more successful, perhaps enabled by globalization, they created the environment that helped protect them. This environment has evolved over a number of years and was partly enabled by lobbying politicians in order preserve change and limit impact of any rules that would undermine their firms’ position. This led to ‘crony capitalism’ and spending on lobbying is at record levels.  This form of capitalism has been transforming for over 20 years.

As an adjunct to this various polices driven from a left-of-center belief have gouged the economies natural ability to re-create itself from the waste of want and failure. Start-ups are running at near all time lows. Regulation, taxes and even social stigma has all but weeded out the individuals’ desire to better oneself and create something for oneself. Socialist policy embedded in every thing we do, now commonplace and taken for granted, suggests we simply reallocate money through taxes rather than seek to grow the size of the pie first.

And finally new data shows that the number of privately listed firms continues to decline and this suggests that the chances for expansion of the investor class is limited, even declining. This just accentuates the ‘winner take all’ body that we now see before our eyes.

If you overlay this with the situation of inequality and the declining level of home ownership (record levels in the US again) and the hollowing out of the middle class, you can see what is happening and it’s not good. But the problem is not easy to fix. For twenty years socialist policies have been adopted and due to the lack of any real capitalist alternative, these left-leaning policies have become standard and even accepted as normal:

  • Higher taxes
  • Larger and larger government (and) spending (with leads to increased regulation)
  • Which leads to emphasis and ability to focus on redistribution over growth

These polices lead socialist and the average less-well educated voter to assume that capitalism is broken and it needs extra help. This all stemmed from the ‘Third Way’ that was promulgated by Tony Blair and his ‘market-based socialism’ that was concocted as a populist message to beat Thatcherism in the 90s. It has now come full circle, feeding a monster that even the socialists cannot control. 

So now we have an odd situation. Left wing populism of the 90s gave way to cronyism in the 00s and now have a neo-right wing populist uprising. What a pickle. What we need is a down to earth shop-keeper or house- keeper to run for office with solid, no-nonsense ‘do unto others’ centered polices. A return to a real capitalist system will rebalance much of what has gone wrong. Too big to fail? Yes. Let’s let the failures start. It is through failure we learn (sometimes). This crony-based maladroit system of today is killing the golden goose.

The EU – Creaking at 60

The title of this blog is the title of the Economist Special Report last week. The title refers, of course, to the 60th anniversary of the Treaty of Rome, the founding of the EU at its source, being celebrated by EU members, less the U.K., last week. Oddly the U.K. is still a member but since she wants out, political correctness prevents Albion from upstaging proceedings.

The Economist special report is really good. It is well balanced and actually concludes that Europe needs a multi-speed system to respect all the differing political and economic challenges across the EU. What is irksome though is that while a two-speed or multi-speed approach has been proposed before, why is it now that the Economist has finally woken up to reporting it and making it the basis of its views regarding the success of the EU?

It is as if the Economist has woken up just in time to see the final deck chair arrangement on the titanic. Correctly the special report calls out the weakness and fallacy of the EU’s monetary policies for all members and now current monetary union is flawed. We all knew this a while ago. If this had been addressed perhaps the U.K. vote for Brexit might never have happened!

But ignoring my cryptic criticism, the article is very up to date and very down to earth. It’s just a shame that it took Brexit and the near break up of the EU, and continuing mess in Greece and Italy to come to the conclusion we needed four years ago.

Trump One Step Closer to Quitting

Reference:

I believe Donald Trump will quit the Presidency of the United States. I forecasted Trump would win (see April 2016: Trump Will Eat Clinton Alive), and in that article last Spring I suggested that he would quit. He will quit due to the inability for politicians in Washington to be rational and negotiate. He will quit with acrimony and bolshiness. About the only thing that will prevent this situation from taking place is tax reform.

Let me first state that I think that Obamacare was the wrong tool for the job. It was a rushed, Ill-focused, partisan and socialist effort to undermine the best parts of America. Its namesake and his supporters suggested that the Affordible Care Act (ACA) it helps those that need most help (the uninsured), and it does (in some way) but at a system-wide cost that is unacceptable and unaffordable.

The free market is anything but that; regulation is like a strangling vine; prices remain untouched and high; big pharmaceutical remains unfettered; patient outcomes remain anathema to healthcare. This country continues to spend ever more on healthcare, more than any other developed nation per capita, and yet our outcomes and their improvement reman poor and lacking, even on a good day. Obamacare was the wrong tool for the job.

The bad news is the Republican approach to Obamacare has split its own party. Worse, the repeal and replacement was in their reach. Yet last week the chance for correction was thrown out.  

There were even votes against the Republican policy from folks like Ron Paul who didn’t want the ‘Obamacare Lite’ but who wanted a full repeal. So he withheld his support. The Freedom Caucus, apparent fiscal hawks, had a chance to budget-fence Medicaid, yet they withdrew support in the mad hope of a perfect policy sometime in the future.  

This is madness. This is political suicide. The Democrats have been handed a free ticket and Trump must be mad. This is Washington at its worst. There will likely never be a perfect policy or time enough to develop it.

Now the movement shifts to tax reform. If an overhaul is not executed Trump will feel like quitting and he may yet do so. The Republicans need to realize that they have a rare opportunity but only if they unite. If they play party politics and splinter again, change will not be forthcoming. The Democrats, not in power of any sort, will be in power in all but name.

Obama won on the promise of change and socialists alike all rammed through their left-leaning, redistributive, anti-business and anti-free market policies. We are slowly bleeding to death now under the weight of ignorance and self feeling. Our polices cannot be paid for without printing money since we are all too happy to free-ride the masses and garrote the rest. The rest who are free and employed folks who work for a living, who want to improve their lot with their own blood, sweat and tears, not from hand-outs from Uncle Sam.

Trump also won on an argument for change. Alas the Republicans have forgotten how to govern.