What this election is about

Reader feedback at end.

(E minus 1) Over the past 16 months, SAFE has been calling for a real debate between the presidential candidates about the fiscal problem and other issues of the day. But most of the available time and attention was devoted to parsing polling results, awarding style points, and obsessing over the latest revelations about skeletons in the candidates’ respective closets. Even when substantive issues did come up, the discussion was generally of mediocre quality. See, e.g., Presidential candidates “grilled” on debt & entitlements, 10/24/16.

There's no reason to be surprised. The shortage of substantive policy discussion in the current electoral cycle is consistent with prior experience, as a new book convincingly demonstrates. Democracy for realists [DFR]; Why elections do not produce responsive government, Christopher Achen (Princeton) & Larry Bartels (Vanderbilt),
2016.

DFR was written to debunk the “folklore” of representative democracy, which boils down to the notion that all imperfections in our political system can be cured by “more democracy.” Here’s a current example of this mindset. Both old and new media are failing voters, Vernon Jordan (Lazard), Wall Street Journal,
11/3/16.

In the last presidential race, in 2012, only 58% of eligible voters actually voted. That means 93 million people who were eligible to vote did not bother to vote. If we could get those 93 million people to vote, I am confident that America would be a better place. *** We need media platforms to urge everyone to vote as if the future of America depends on it—because it does.

Several variations on this theme are considered and rejected in DFR, and we would add that developments in the current electoral cycle (not covered in the book) seem to support the analysis. Discussion follows.

A. Popular influence over future policies – Achen and Bartels present one scholarly study and historical example after another to demonstrate that voting results are not based on prospective policy preferences. Most people lack definite ideas about government policy, it seems, and except to the extent personally affected they are not well informed about what is actually going on, Also, parties/candidates may or may not make good on their promises after elections. So much for “we the people” deciding where this nation should be headed.

As an example of how elusive a popular consensus is likely to be, let’s review two recent letters from purported experts about a subject that voters consider (according to numerous polls) very important (indeed the top issue in most elections). One was written to paint Trump as an economic ignoramus, and the other to attack Hillary Clinton’s economic policies. Taken together, these letters provide a pretty good summary of prevailing viewpoints about the economy.

LETTER ONE from 370 economists, circa
11/1/16 - “Donald Trump is a dangerous, destructive choice for the country. He misinforms the electorate, degrades trust in public institutions with conspiracy theories, and promotes willful delusion over engagement with reality. If elected, he poses a unique danger to the functioning of democratic and economic institutions, and to the prosperity of the country.”

Some of the specific charges: Trump has questioned [shudder] the reliability of economic data collected and disseminated by government agencies – offered fallacious theories about the adverse effects of trade deals like NAFTA – promised to bring back manufacturing jobs that are gone for good – claimed that elimination of EPA and the Dept. of Education could help cut deficits (the real answer is to increase tax revenues and/or cut spending on entitlements and defense) – failed to offer credible plans to balance the budget (his tax plan would make things worse by reducing government revenue) - used immigration as a red herring to mislead voters – exaggerated the US tax burden (our ratio of total taxes to GDP is lower than in many countries).

Most of the signers are affiliated with very prestigious universities. One University of Delaware professor is on the list: Saul Hoffman.

LETTER TWO: from 305 economists,
9/26/16 - Misguided federal policies have produced one of the slowest recoveries on record (average annual rate of 2% since early 2009, could have been 3-4%). “Should Hillary Clinton win the election, her outdated policy prescriptions won't return our economy to the faster growth rates it once enjoyed. And without more economic growth, her agenda won't result in more jobs or a higher national standard of living. Hillary Clinton's economic agenda is wrong for America.”

Clinton promises to repeat almost all of Obama's policy mistakes. Thus, she would undertake another massive debt-financed public works program - raise tax rates on investment and incomes to nearly 50% - raise federal minimum wage to at least $12 an hour - stall America's development of fossil fuels - continue regulatory assault on business and entrepreneurship - double down on Obamacare.

To revive American prosperity, we need an economic freedom agenda: limited but effective government - policies that rely on and strengthen markets - pro-growth tax reform - sensible federal spending restraint - regulatory relief - sound money - freedom to trade.

The signers come from a diverse assortment of institutions. Only 1% of them (versus about 18% of the signers of Letter One) are associated with Harvard, MIT, Princeton or Yale. There are 4 signers from the University of Delaware: Burton Abrams, Richard Agnello, Stacie Beck, and Eleanor Craig.

COMMENTS: For those who favor a centrally planned economy, Letter One may seem persuasive. Also, we agree that Trump’s proposals re international trade deals aren’t well-grounded and that his tax cut plan would increase the deficit if it was enacted.

On the other hand, as Letter Two states, economic growth has been decidedly sluggish in recent years. We believe that ill-advised government policies (which Clinton would continue or double down on) have contributed to this malaise, and that some of Trump’s ideas might help. Notably: (1) repeal and replace GovCare with a system that involves more choices and less compulsion; (2) enact revenue neutral tax reform (House Republicans have developed a plan that makes more sense than Trump’s); and (3) relax the ruinously costly regulatory policies of the EPA et al.

Finally, here’s a key point neither letter makes – although it seems blindingly obvious. We’re still waiting for Democrats, Republicans, or ideally members of both parties to take ownership of the fiscal problem and commit to balance the budget and keep it that way.

B. Referendum on past performance - Perhaps voters shouldn’t be expected to study all the nuances of complex policy decisions, goes a fallback argument, but surely they can track how things are going and retain (or vote out) office-holders based on the results. Over time, that habit would contribute significantly to performance of the government.

Probably this happens to some extent, says DFR, but the effects aren’t necessarily beneficial. First, the evidence shows that voters react to recent results versus results over an incumbent’s full term (a more representative measure of past performance and one less subject to manipulation). Second, incumbents are often rewarded for being lucky or punished for bad results beyond their control (thus, shark attacks along the Jersey shore in 1916 apparently reduced Woodrow Wilson’s vote in those areas during his re-election campaign).

If there was ever a year made to order for a “change election,” it would seem to be 2016. We can’t think of any major problem that has been solved since 2009, other than taking out Osama Bin Laden, and a great many problems have gotten worse. Here’s a partial inventory:

Soaring national debt – The $20 trillion debt our next president inherits, Sen. Marco Rubio, breitbart.com, 2/17/16.

The next president will inherit a national debt of $20 trillion that shows no signs of slowing down – unless we act decisively and courageously to both grow our economy and save the biggest drivers of our debt, Medicare and Social Security. Because in the end, we can’t simply cut spending to solve the debt problem; we also have to grow our way out of it.

Healthcare – Hillary Clinton goes silent on Obamacare, Byron York, Washington Examiner, 10/2/16.

There's no doubt Obamacare is in trouble. Enrollment in the exchanges has fallen far short of projections. The purchasers of policies have turned out to be older, and in need of more care, than expected. Major insurers are pulling out of the exchanges altogether. Premiums are going up. Deductibles are skyrocketing, meaning many are left to pay most of their healthcare costs themselves.

International situation – US-Russia tension escalates as Putin ends nuclear cooperation, Dave Boyer, Washington Times, 10/3/16.

Tensions between the U.S. and Russia escalated Monday as the Obama administration suspended talks over Syria’s civil war hours after Moscow announced it was ending cooperation with the U.S. on a 16-year-old program for the disposal of weapons-grade plutonium to curb the production of more nuclear bombs.

•Immigration – Border cops: US election drives new immigration crisis, Pete Kasperowicz, Washington Examiner,
10/8/16.

The last few months have seen a dramatic rise in apprehensions of illegal immigrants, on a scale that rivals 2014, when members of both parties agreed it became a humanitarian crisis. That crisis abated in 2015, but the numbers have spiked again, and federal officials have mostly been silent on why.

•Economy – [Former Fed Chairman Allen] Greenspan: “Crazies” will undermine economy, government, newsmax.com,
9/14/16.

“It is the worst economic and political environment that I’ve ever been remotely related to,” Greenspan, 90, told a conference in Washington Tuesday evening sponsored by Stanford University and the University of Chicago. On the economic front, the U.S. is headed toward stagflation -- a combination of weak demand and elevated inflation, according to Greenspan. “Politically, I haven’t a clue how this comes out.”

•Employment – 94,609,000 not in labor force; participation rate drops to 62.8%, Susan Jones, cnsnews.com,
11/4/16.

When President Obama took office in January 2009, 80,529,000 Americans were not in the labor force, and that number has steadily risen during his two terms to its current 94-million level. The number reached a record 94,708,000 this past May.

C. How democracy really works - Instead of searching out the parties/candidates whose views come closest to their own policy preferences, according to DFR, voters gravitate to the parties/candidates most congenial to groups with which they self-identify. They then become educated about and embrace or rationalize the policy positions that said parties/candidates happen to be espousing.

The affinities of certain groups for one political party or the other (aka identity politics or tribalism) are not fixed and immutable, but they develop over an extended period of time and may not be logically explicable in terms of a group’s beliefs or perceived self-interest. Thus, according to DFR, “identities are not primarily about allegiance to a group ideology or creed. They are emotional attachments that transcend thinking.”

Fault lines in the political environment can be traced back for decades, and they aren’t likely to change quickly. Some examples: preference of black voters for Democratic candidates (there was a big shift in the New Deal era) - Democratic support among Catholic voters (a surge for JFK in 1960 proved temporary, and the Democratic position reverted to about its 1950s level through the 1970s before improving thereafter) - southern states shifted from blue to red (starting in the 1950s).

The identity politics model is far from perfect. For one thing, people may be torn between loyalty to different groups. What will determine their political orientation, e.g., ethnic background, religious affiliation (or lack thereof), gender, sexual orientation, economic status, association with labor or management, occupation, military service, educational background, or generational cohort? Also, there are some people who actually do support candidates based on their policy proposals.

Notwithstanding these caveats, the preference of identifiable segments of the population for one party or the other is discernible. See, e.g., Mapping a perplexing political landscape,
7/21/14. And while both parties give lip service to the idea that everyone should vote, their “get out the vote” efforts only target the categories of voters expected to vote for their own candidates.

The group identity fault lines are stark in this year’s election. Thus, at the risk of overgeneralizing, women (especially those who are single), blacks, Hispanics, younger Americans, people who don’t hold a job, government employees, educators, the mainstream media, the well-educated, and big business tend to support Clinton. On the other hand, men, whites, the working middle class, small business, gun owners, evangelicals, law enforcement, and the military lean to Trump.

Both candidates have glaring faults and high disapproval ratings, providing fuel for bitter antagonism between the two camps. Consider these comments:

•The “honest mistakes” pile up for Hillary Clinton, Mercedes Schlapp, Washington Times,
11/3/16.

Mrs. Clinton and her team resolutely deflect the questions about the WikiLeaks email revelations, the latest FBI probes of the Clinton Foundation, and Huma Abedin’s emails on her estranged husband’s laptop. The information that has been released so far reveals the constant cover-up for Mrs. Clinton by her staff, as well as the sharing of information between the State Department and the Clinton campaign.

•The gamble of Trump, Wall Street Journal,
11/4/16.

[
Trump] overreacts to criticism and luxuriates in personal feuds. *** his often harsh rhetoric has repelled women, minorities and younger voters. He ignores or twists inconvenient facts, and even when he has a good point his exaggerations make it harder to persuade the public.

•Random thoughts, Thomas Sowell, townhall.com,
11/1/16.

Each political party has picked a loser this year. Unfortunately, one of them is going to win, and then the whole country can lose, big time.

D. Closing thoughts – Notwithstanding their iconoclastic conclusions, the authors of DFR suggest that we shouldn’t give up on democracy just because the results fall far short of perfection. After all, neither of the alternatives – anarchy or authoritarian rule – seems very appealing.

One residual benefit of democracy is that it tends to facilitate peaceful changes in control from time to time. This may be better than allowing leaders to rule until they die or are overthrown, which is what happens in a monarchy or dictatorship.

Achen & Bartels envision a second volume re ways to make democracy work better, but even if this book never gets written we think they have provided an invaluable service by rebutting the notion that the solution to all the political problems of this country is “more democracy.”

What is needed to improve the system, it seems to us, isn’t more people voting based on their tribal instincts. What would really help is more people who have made an effort to understand the issues and will vote for the parties/candidates most likely to address them effectively.

In the meantime, it will be interesting to see what happens tomorrow. Hey SAFE readers, be sure to vote!

**********FEEDBACK**********

An excellent analysis of our nation’s condition. Unfortunately, it’s not a pretty picture. #One consequence of this year’s election, I feel, will be a sea change in our political party makeup, somewhat like how the South voted for Reagan and then began electing GOP candidates down ballot. # I disagree with the notion of encouraging higher voter turnout across the board, which would predictably increase the number of voters who haven’t studied the issues and have no idea which candidate would be likely to do the best job of addressing them. #I recently sent a note to friends who rely on the mainstream media, including PBS and NPR, re how they have been cut off from Wikileaks information. Suggested that they listen to Fox News or One American News or do some on-line research on the subject. #It was interesting to read about the two economist letters, and to see that Eleanor Craig signed the pro-growth one. – SAFE director

The avalanche of illegals may have buried us. Gone is the Rule of Law. – SAFE director

Seems to me that we are heading for social chaos as the country becomes increasingly polarized between the haves and the have-nots. #Longer term, what about cutting the 40-hour work week (without changing unit rates of compensation) so that more people will have the option of working for a living? – SAFE member (DE)
Comment: Big changes in the employment market are inevitable as machines take over more and more of the repetitive tasks, but don’t forget the saying that “idle hands” are the devil’s work shop.”

Thanks, keep up the good work. – Retired judge


© 2019 Secure America’s Future Economy • All rights reserved • www.S-A-F-E.org