Unity: The impossible dream (E-78)

“All for one and one for all, united we stand divided we fall.”
Alexandre Dumas, The Three Musketeers (1844).

There’s been plenty of talk about uniting Americans to achieve a common purpose, e.g., by supporters of the “No Labels” movement that decry the increasingly sharp partisan divide and claim that our political leaders can and will come up with common-sense solutions to the issues of the day if the ideological dogmas of left and right are set aside. Our story, what we believe, nolabels.org, accessed 8/18/18.

There is a way forward on all these issues that our nation faces. Here and now, we need leaders to sit down, talk reasonably to the people on the other side, and forge some thoughtful and balanced solutions. We can’t wait much longer. That’s why the growing movement behind No Labels is working so furiously to get Washington solving problems again before it’s too late.

Such an appeal seems superficially reasonable, but consider these questions. First, what will be recognized as the common purpose? Second, is achievement of said purpose feasible? Third, will one side or the other find it advantageous politically to keep the issue(s) alive?

From time to time there is news about some longstanding issue being settled, but in general things seem to be headed the other way. Several examples follow to support this assessment, followed by some thoughts about living with continuing political disagreement.

I. Purpose – Making policy entails choices. What are the two or three top goals of the government that merit full support, which goals are basically in the maintenance (or lip service) category, and which goals should be abandoned?

During the Obama administration, the top priority seemed to be economic redistribution versus economic growth. See, e.g., “We can’t wait” to strengthen the economy and create jobs, president’s weekly address,

This week, a new economic report confirmed what most Americans already believe to be true: over the past three decades, the middle class has lost ground while the wealthiest few have become even wealthier. *** Congress can pass a set of common-sense jobs proposals that independent economists tell us will boost the economy right away. *** put more teachers, veterans, construction workers and first responders back on the job *** paid for by asking folks who are making more than a million dollars a year to contribute a little more in taxes.

Now the emphasis has shifted to promoting overall economic growth – which if realized should benefit everyone – while supporting a major tax cut and regulatory rollbacks. Seemingly vindicating the policy shift, Gross Domestic Product grew by 4.1% in the second quarter of 2018 – the best quarterly result since 2014 – and the president asserted that the improvement would last. Trump says strong economic growth proves “historic” turnaround, Dave Boyer, Washington Times, 7/27/18.

Democrats seemed less than delighted by this seemingly promising result, as though they were invested in negative expectations. Ibid.

The Democratic National Committee downplayed the positive report, saying in a statement, “Trump will try to boast about the economy, but the reality is that economic growth is not expected to continue at the same rate and workers have not benefited. Workers’ wages have actually decreased over the past year.”

Moreover, there is a continuing push for policies designed to further the cause of economic redistribution, no matter the implications for growth. Democrats launch economic agenda ahead of 2018 campaign, Heather Caygle & Elana Schor, politico.com, 7/24/18. A Better Deal.

The plan calls for substantial additional federal spending (e.g., $1 trillion in added funds for infrastructure, new family leave and daycare benefits) and added burdens on business (reinstate “net neutrality” regulations that the FCC is seeking to repeal, create a new agency to monitor prescription drug prices, boost minimum wage to $15 per hour, change existing collective bargaining rules for labor agreements, etc.)

There is no aggressive healthcare proposal in the mix at this point, but that could change. Delaware primary shows looming battle among Democrats over “Medicare for All,” Robert King, Washington Examiner,

Kerri Harris [a primary challenger of Senator Tom Carper] has modeled her “Medicare for all” plan [on] the one introduced by Sen. Bernie Sanders, I-Vt., last year. The plan would replace private insurance with a federally-run system, and have the federal government bear the costs for providing insurance to all Americans.

In short, there seems to be a basic disconnect between the policy goals of the two parties, which cannot be readily resolved by discussion and compromise.

II. Feasibility – No matter how well-intentioned a goal may be, nothing positive should be expected unless the goal is feasible. So it’s worth asking, for example, whether speeding up the US economic growth rate from say 2% per year to 3-4% is realistic. Doesn’t the experience of the prior two administrations (16 years of economic history) suggest that – for whatever reason - such a result can’t be achieved on a sustained basis for the huge, sophisticated and already wealthy US economy?

Some observers doubt this country can achieve an economic growth rate of more than 2-3% per year. US economic outlook for 2018 and beyond, Kimberly Amadeo, thebalance.com,

•President Trump promised to increase economic growth to 4 percent. That's faster than is healthy. Growth at that pace leads to an overconfident irrational exuberance. That creates a boom that leads to a damaging bust. The factors that cause these changes in the business cycle are supply, demand, capital availability, and the market’s perception of the economic future.

•U.S. GDP growth will rise to 2.8 percent in 2018, 2.4 percent in 2019, and 2.0 percent in 2020. That's according to the most recent forecast released at the Federal Open Market Committee meeting on June 13, 2018. This estimate takes into account Trump's economic policies.

Others have attributed lackluster economic growth during the Bush & Obama administrations to the economic policies that were in effect, and which penalized business and discouraged investment. An economic reality check (part 1), 8/12/13.

The drag effect on business reflects the combined effect of legislation, regulations and litigation at the federal, state and local levels. Heretofore, the results have been mitigated by the ability of businesses to choose where to locate new investments, e.g., in Texas versus California. But the current push to regulate more and more activities at the federal level threatens to close that door – leaving investments in other countries as the only effective escape hatch.

Note that robust economic growth could help to mitigate concerns about economic inequality, whereas slow economic growth would probably have the opposite effect. Opportunity is the best answer to economic inequality, 5/19/14.

SAFE’s vision for strengthening the economy is to promote smaller, more focused, less costly government and let the private sector do the rest. After reviewing the economic plans of the two major presidential candidates in 2012, we offered a “SAFE’s jobs manifesto” of our own.

•MORE JOBS will be available when the federal government changes its behavior. Without delay, the government must stop piling more and more requirements on business.

•To lighten the burden, simplify the tax system and eliminate unnecessary regulations & red tape. The result will be faster economic growth, MORE JOBS, and more revenue to the federal government without raising taxes.

•In addition, significant changes are needed to cut spending, eliminate deficits, and start paying off debt. That will reduce the present risk of financial disaster and provide fairness to coming generations.

For a similar but more sophisticated view, see: The great equalizer, David Smick (a high-powered, well-connected financial consultant, who isn’t connected to the Trump administration), 2017.

Wanted: a more entrepreneurial economy – better rewards for the working class that drive “Main Street Capitalism” – sense that everyone is working for a common goal –transformational leadership – action to cut regulations, reform taxes and rebuild crumbling infrastructure - faster economic growth (aka the “great equalizer,” which averts endless bickering about how the economic pie is divided) – trade policies that don’t put the US at a disadvantage versus other countries – can do attitude versus bunker mentality.

There can be no assurance that it will be possible to increase the rate of economic growth on a sustained basis, according to Smick. He doesn’t expect faster growth from government programs, nor from big businesses that are basically focused on maintaining their existing organizations and delivering an attractive return to shareholders.

If faster growth is to be achieved, the key will be innovation by small businesses. Give them access to capital and the freedom to innovate; then stand back. None of us can say what the businesses of the future will look like, but prepare to be amazed!

One factor that might spoil this rosy picture is soaring deficits/debt of the federal government due to relentlessly rising outlays for Social Security, Medicare, etc. It won’t do to turn a blind eye to this issue and assume things will work out somehow, although – as discussed
last week – some people seem inclined to do just that.

The longer that corrective action is delayed, the more painful the remedies that will ultimately be required. See, e.g., Free-market Social Security, John Stossel, youtube.com, video (6:09). 8/14/18.

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III. Politics – An implicit assumption of the “let’s all get along” mindset is that politicians will perceive a benefit from compromising disputes and getting issues settled between elections even while duking it out on the campaign trail. This isn’t necessarily true. See the thoughtful testimony of Secretary of Defense (etc.) Leon Panetta before the Joint Select Committee on Budget and Appropriations Process Reform. 5th public session, JCS, video (2h,21min.), 7/12/18,

Members of Congress don’t get elected to fight political battles, said Panetta, they get elected to govern, and governing well used to good politics. He’s not sure that’s true anymore, however, and he’s not clear what can be done to make it true again.

Negative political attacks can be very effective, particularly in the short term, and they provide a handy way to avoid defending one’s own policy positions. It’s not hard to think of issues that have festered for years because one side or the other hasn’t been willing to admit there is a problem and engage in meaningful discussions of how it should be addressed.

Immigration may well be a good thing (if nothing else because, as David Smick argues in The Great Equalizer, it will support a vibrant US economy), but illegal immigration – facilitated by the existing laws being massively flouted by government officials and businesses – is socially corrosive. Action to effectively enforce the immigration laws (subject to whatever changes might be agreed to) has been deferred year after year, recently prompting the president’s threat to “shut down the government” unless Congress funds the border wall he has promised. Trump vows to get “full funding” for border wall, S. A. Miller, Washington Times,

One of the tactics of the president’s opponents re immigration is to attack him as mean-spirited, xenophobic, racist, etc. Thus, they jumped all over a recent misstep in efforts to cope with a surge of illegal immigrants bringing children across the border. See how heartless the administration was for separating children from parents being held for deportation. Republicans abandon Trump, demand end to zero-tolerance border policy, Stephen Dinan & Dave Boyer, Washington Times, 6/18/18.

Other examples abound of issues being politicized and/or publicized in ways that divert attention from genuine problems. Forest fires in California (Interior Secretary Brian Zinke sparked outrage by saying global warming wasn’t involved, never mind that his comments about the failure to keep roads open and clear underbrush were spot on) – scandalous claims of a fired White House adviser (Omarosa Manigault Newman) who the president slammed in tweets – the president’s reference to the media as “enemies of the people” in tweets – revocation of former CIA Director John Brennan’s security clearance after he publicly accused the president of treason – etc.

With juicy things like these to talk about, why should the current minority party or the left-leaning media feel it necessary to address the real issues? And who could blame the members of the president’s party if they chose to duck for cover rather than backing the president?

IV. All is not lost – Some may find it pleasing to imagine our political leaders sitting down to amicably resolve all the issues of the day, but the foregoing discussion suggests it’s not likely to happen (once in a while, maybe, but not in the normal course). So how bad is that?

Vigorous discussion of policy differences is not a bad thing, in our opinion, to the contrary it’s healthy. – and certainly better than sweeping policy differences under the rug. No political leaders or parties are infallible, they are surely entitled to their respective opinions, and competition should help to keep them on their toes. Why consensus style government won’t work,

We reject the notion that wisdom necessarily resides in the center . . . for two reasons. First, the muddled middle is not equipped to assume the burdens of political leadership. Second, ideas do matter because viable government policies are typically a matter of choice (where are we going) versus compromise (how much).

Civility and following the rules are important, however, and we think Americans should decry the decline in behavioral norms that seems to be taking place. Personal attacks designed to intimidate (or potentially worse) political opponents & their supporters – use of procedural rules for the purpose of disruption and delay – failure to offer positive proposals for consideration. A disturbing political climate, 7/2/18.

And at the end of the day, when one side or the other prevails on the merits of a policy issue, all concerned should accept the result until the next election rather than continuing to howl about it.
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