Is it just us or do you feel the same political angst that seems to be pervasive throughout the country that we do? Things not only feel surreal but there seems to be a prevailing sense of eeriness haunting our political system.
Bonds are rocking, gold is flying, and stocks are stuttering. The markets smell something rotten.
Republicans have campaigned for 6 years to repeal Obamacare, yet when they control the House, Senate, and finally the White House they can’t even get a bill to House floor. A bill that only had 17 percent support in the polls, by the way. WTF?
Identity Politics
We are not really into identity politics, but maybe part of the strangeness in the air is that the country is made up of a 70 percent non-white males yet all or most those who hold the reins of power in Washington are white males. Tell us we are wrong?
Could this have something to do with gerrymandering?
Gerrymandering, the process of drawing distorted legislative districts to undermine democracy, is as old as our republic itself. Just as ancient: the Supreme Court’s unwillingness to get involved and determine a standard for when a partisan gerrymander has gone too far.
– Salon
Furthermore, given the pushback by the hoi polloi on the healthcare bill, Washington seems woefully out of step with the country on a governing philosophy,
| Republican leaders made a fundamental mistake on health care over the last seven years: They imagined that the American people had a much more libertarian view than they in fact did. |
| Americans generally aren’t in favor of denying health insurance — and, by extension, medical care — to their fellow citizens. And once Obamacare had become law and made insurance coverage much closer to universal, Americans weren’t interested in Congressional bills that erased that coverage. |
| This support for health insurance isn’t the only way that American voters are anti-libertarian on health care, either. Polls show that voters, of both parties, support government-provided insurance, and not just bare-bones government plans. – NY Times |
An Election Not Like Any Other
Probably more important, however, the November election was not one about ideas, policies, or an aspirational vision for the country. Rather it was steeped in the raw emotion of anger toward the establishment. Not to mention it involved the two most unpopular candidates in polling history.
The marginal voter in the swing states that threw the election to Donald Trump was finally fed up with a government they watched forget about them as their livelihood, careers, and entire towns were crushed by modernization, globalization, and free trade.
These are complicated issues and the government should have done more for those who lost out as the world moved away from them. We once had governments, on both sides of the aisle, who used to care about those hurt by free trade and modernization while the majority reaped its benefits.
Recall our story as a young graduate student:
After finishing up my Ph.D. comprehensive exams in economics and in between the dissertation, I interviewed at the White House, Council of Economic Advisors (CEA), as a junior economist. They had a program where the CEA would hire graduate students for one year who were in between their comp exams and the dissertation.
Ronald Reagan was President at the time and the day long interview took place in April 1986, just a few days after the U.S. bombed Muammar Gaddafi. That day, security on the White House grounds and in the Old Executive Office Building, where the Council is located, was intense. Secret Service, dressed in their black garb and flack jackets, everywhere.
Beryl Sprinkel was Chairman of the CEA and Michael Mussa was the real intellectual heavy weight of the CEA. The entire council was made up of “Chicago Boys,” not Chileans, but academics from the University of Chicago. Very free market thinking in everything.
Note, this was during a period in the economy when the trade sector was getting hammered by the strong dollar. The trade weighted U.S. dollar index had increased almost 30 percent since Reagan took office and was causing real hardship in the tradable goods sector.
So, the first question I was asked at the beginning of the interview was, “there is a bill in Congress to write the steelworkers, who have been displaced and lost their jobs through trade, a check for $100,000 [$221,000 in 2016 dollars]. What do you think of this bill?
I answered, “no, I think retraining and other polices may be more optimal”. They replied, “that’s what the Democrats think.” I didn’t get the job.
The Chicago boys think the individual can choose their future and retraining better than the government.
That $100,000 was real money and compensation back then, much more than what the government offers to the losers of free trade and globalization today. And, let’s get real, at the end of the day, it was an “effective bribe” to the steelworkers to allow the country to keep pursuing free trade policies.
The day long interview ended in Beryl Sprinkel’s office where he asked me, “[Gregor], can you make good charts? The President likes his charts.” Indeed, President Reagan did.
When I was leaving the Old Executive Office Building (OEOB) after the interview, I thought of taking a little tour of the White House grounds. I walked out of the east end of OEOB onto the White House grounds, probably no less than 100 feet from the Oval Office. I was met by a Secret Service officer in a black flack jacket carrying a high powered rifle, who asked what I was doing there. He booted me faster than a fighter jet. But, oh, so close to power!
So, concluding, I ask folks — whatever happened to that kind of thinking among the policymakers? That is, really compensating and taking care of the losers from free trade and globalization as we, the elites, enjoy the benefits of free trade and globalization in lower prices of goods and higher profit margins and stock prices? Tariffs and shrinking free trade and globalization are going to hurt all of us, including margins and stock prices.
Do you really wanna pay 30-50 percent higher prices at Costco and WalMart? That will cause a recession and stagnation faster than you can say snap! How about a surcharge on foreign goods at the cash register to help compensate and beef up the Trade Adjustment Assistance program and help those who have been harmed?
All of the above mysteries and riddles wrapped in the enigma that Russia hacked the presidential election.
So here we find ourselves, folks. Sur-fricking-real.
The new government, elected on a very narrowly defined populism, is managed by a bunch 0.1 percenters. In a NIMBY country with a fledgling philosophy of “I got mine, you got yours, let’s get more, and who cares about the rest.”
The election, which seems to be an eternity ago, now appears to have been a fluke. Don’t think the center can hold. Here’s to hoping we can limp to the next election.
Nah, we will get through this.
