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Saturday, April 9, 2016

The Real Income Gap

The Panama Papers are making waves-- detailing the extensive use of shell corporations and secret offshore accounts as tax havens for the wealthy. We’ve long suspected that the rich made their own rules, but now there is positive proof that hiding money and shirking taxes is widespread. All it takes is a shady lawyer to look the other way when creating a faux corporation in the name of a pet, or some other bogus entity, and a willing financial institution to open an account in the name of Fido.

The left and right look at this story with different eyes. The left sees another example of greedy, wealthy tax evaders manipulating the system to their own advantage. The right sees excessive taxation forcing people to find creative ways to reduce their tax burden. Whether this story is an indictment of the rich or of the tax system itself misses the most important element of the story, an idea that strikes at the heart of a democratic society.

Many of the wealthy hiding their financial assets are political leaders and government officials. These leaders are not just corrupt despots and dictators from the Middle East, Africa, and Eastern Europe. Swept up in the scandal are democratically elected leaders. David Cameron, the Prime Minister of England, and Sigmundur David Gunnlaugsson, the Prime Minister of Iceland, are connected with the scandal, and we can be sure that they are not alone.

These are democratically elected leaders avoiding paying taxes on their amassed wealth, but we need to wonder how they amassed such wealth in the first place? Politicians serve the people; they earn relatively modest salaries of politicians, yet they retired as multimillionaires. In an indirect way this is the question Bernie Sanders asks Hillary Clinton when he questions the enormous speaking fees she garners for talks given to financial institutions.

Virtually all career politicians become multimillionaires over the course of their careers. Yet every political cycle they talk of their humble roots. They mingle with the public, attend fairs, eat at diners, ride subways, and shop at supermarkets. This is a far cry from their actual lives, lives of power and prestige, with endless access to information and connections, which is the foundation for influence and wealth building. Politicians live lives of privilege where rules that govern the rest of the country do not always apply to them.

Several years back “60 Minutes” did a piece on members of congress engaging in insider trading for profit. Insider trading is the buying and selling of stocks by corporate insiders who have non-public information that could affect the price of a stock. It is an illegal practice for which Martha Stewart went to jail. Yet congressman conveniently wrote themselves exemption rules under the guise that they have no corporate responsibilities. As they saw it, it’s perfectly legal for a congressman sitting on a healthcare committee to buy stock in a pharmaceutical company with the knowledge that Medicare was about to approve reimbursement for a drug made by that pharmaceutical company.

The most egregious example covered in the “60 Minutes” piece was that of a Congressman sitting on the House Financial Services Committee. In the days leading up to the financial meltdown in 2008 he was briefed by the Treasury Secretary and The Federal Reserve Chairman about the impending financial crisis. Literally the next day this Congressman bought stock options that would increase in value if stock prices went down. While, presumably, this Congressman was working to avert a financial crisis, he was privately betting on the economy cratering. He profited while ordinary Americans were losing their shirts.

No wonder the elected class is so despised and that this is the year of the outsider in politics. A tipping point has been reached, the middle class is fed up with politicians, immune from the anxieties of ordinary citizens, overlooking the needs of the ordinary citizen except during an election cycle when much is promised and little is delivered.  Bernie Sanders highlights the growing income gap between the rich and the middle class and speaks of a rigged economy that only benefits the wealthy. His target is billionaires and large corporations. Instead his target should be the crony politicians who write legislation for their own benefit and the benefit of large corporations that they have cozy relationships with. The economic system of free market capitalism is not broken. It is our political system that is broken.

Thursday, March 10, 2016

Donald Trump: The FDR For The Blue Collar Worker

Whether by design or happenstance, Donald Trump’s risen as the new spokesman for the concerns of America’s long struggling, white middle class. It would be a mistake, however, to believe that Trump's bigoted rhetoric is solely tied to white blue collar's attraction to Trump, either because they themselves are racist, or because increased racial diversity threatens whites who are no longer the racial majority in America. Racists groups like the KKK and Neo-Nazis do indeed show up at Trump rallies, but they represent the fringe elements of society. Trump’s appeal to blue collar whites is far more nuanced than that.

White blue collar workers are angry; they see themselves as a marginalized group. The invisible class that political leaders ignored and let down. Until recently, political conversations centered on the issues facing the poor and minority groups, but offered little or nothing to address the challenges confronting working class whites who face significant economic hardships that are exacerbated by American factories closing and relocating overseas. Those managing to remain employed struggle to survive on wages that do not keep up with inflation due to long term trends of globalization and technological advances. For them the American dream has died. They see fewer opportunities for themselves and even fewer on the horizon for their children.

Socially they feel abandoned too. As America grows more secular, their religious and cultural views on gay marriage, abortion, and promiscuity are out of step. The shift in these values has happened so quickly that it’s created cognitive dissonance. The core values of a decent, moral society of the recent past are now seen as prejudiced, uncaring, quaint or even despicable.

When this group is referenced by mainstream political leaders it can be with an element of contempt. When President Obama says that an anxious lower-middle class is clinging to their guns and religion, he’s putting them down. Just as Mitt Romney is when he implies that the bottom 47% of the socioeconomic class are parasites on society.

These may not be meant as put downs, but the reality is that historically neither party has addressed the economic anxieties of the white middle class. Democrats focused on minority rights and income inequality, even though for most working Americans, their day to day concerns are about achieving a decent living and lifestyle for their families. Republicans focused on cultural and national security issues, on reforming taxes and business regulations, rather than on the dwindling standard of living for so many Americans. They see themselves as the forgotten Americans, and they are cynical about either political party ever doing anything to address their needs and anxieties.

Into this cauldron of uncertainty and betrayal, enters Donald Trump. Despite his enormous wealth (and maybe because of it), he emotionally connects with blue collar workers. It doesn’t matter that Trump came from an upper class family as his wealth was earned though real estate development and construction, both seen as honest ways to earn a living. Trump’s wealth is not a barrier to connection; rather, it’s an asset, proof that with hard work, anything can be accomplished. It helps too that Trump speaks like a blue collar worker-- unpolished, plain speaking, pugnacious, insulting, and totally unapologetic. The middle class are not invisible to him, in his heart he’s one of them, and they can be darn sure he’ll address and solve their economic concerns.

Trump brilliantly addresses the concerns of blue collar America by expressing their views in their language. He talks about incompetent politicians allowing China, Japan, and Mexico to steal jobs from America. He talks about deporting illegal immigrants because they take jobs meant for true Americans. He talks about finding ways to help them make more money, just like he did for his own family. It doesn’t matter that Trump doesn’t share their religious values, that some of his antics are outlandish and embarrassing, or even that he lies, because they know he will do right by them. Trump hears them and he will not let them be marginalized. They will have a powerful ally in Washington, finally a President who understands their concerns, and who will fight for their needs. In an odd way, Trump’s replicating what FDR accomplished – a politician of great wealth that’s connecting to the little guy.

Thursday, March 3, 2016

Donald Trump The Wizard Of Ozz

What to make of Donald Trump. Against all odds he is now the prohibitive favorite to capture the Republican nomination for President of the United States. The party of Lincoln and Reagan is about to nominate a crude, authoritarian, narcissistic blowhard whose claim on the presidency is that he is a “successful businessman”. Conventional political strategy is to attack him for not being a true Republican; for lacking the temperament, judgment, and core principles to be President; and for not having detailed policy proposals to address the issues facing America. This logical approach to criticizing Trump is spectacularly unsuccessful as his political strength is growing rather than diminishing.

Instead of a logical approach to undermining Trump, what is needed is a psycho-logical approach. Politics has a logic of its own that is based on meeting the psychological needs of people. To paraphrase Jonah Goldberg, when Trump says 2 + 2 = 5 he is considered an idiot by conventional standards. In politics, however, if a million people believe 2 + 2 = 5 they are not a million idiots but a “constituency” and as the constituency expands it becomes a “movement”, and the person proposing 2 + 2 = 5 is the opposite of an idiot. He is a savior.

Trump's core constituency are white blue collar workers most affected by the decades long trends of globalization and technological advances. Manufacturing shifts to countries with lower labor costs puts downward pressure on wages and technological advances replaces blue collar workers with machines. Blue collar workers no longer believe in the American dream and are considerably anxious about their economic future – particularly blue collar workers with no other job skills and too old for retraining.

Enter Donald Trump who promises to bring back jobs from China, Japan, and Mexico; eliminate illegal immigrants that are usurping jobs from Americans; and create a booming economy where wages grow and the American Dream is restored. This is catnip to his constituency and is taken as gospel because of Trump's track record of amassing a multi-billion fortune as a businessman.

Attacks on the feasibility of Trumps immigration or economic plans or his off the wall comments that range from childish to dangerous and bigoted do not persuade his core constituency. Not because they are stupid or ill informed, but because they have great faith in the Trump persona honed over many years as a TV reality host – the plain spoken, take no prisoners, feisty, and successful businessman.

Constituents re-construe criticisms of Trump through the lens of his persona. His outrageous comments and personal attacks evidences his unvarnished truthfulness. Details on his economic plans are unnecessary as his phenomenal success as a businessman demonstrates his economic acumen.

Tuesday night's primary result showed Trump expanding his constituency beyond blue collar workers. Exit polls indicated that Trump was overwhelmingly favored by voters who expressed anger or frustration with current politicians. The anti-establishment sentiment incorporates a wide swath of Republican voters. He won most states in the Super Tuesday primaries from the north to the south, from Massachusetts to Alabama. He solidified an ideologically diverse coalition of working and middle class families behind his clarion call that politicians have failed and only he can turn America around.

His followers see Trump as a fighter who speaks their language and has their back. He is the one that can make Washington work again. Never mind that Trump hints at using strong-arm tactics when he is opposed. His voters just want the proverbial trains to run on time again.

This will continue until the Trump persona is pierced, the curtain is pulled back, and he is revealed as just another Wizard of Oz. This requires questioning his business success and net worth, his concern for the vulnerable, and the consequences of having a strongman President. There is plenty of video of ordinary people affected by Trump's business scams and failings; of his roughshoding veterans and homeowners to further his business interests; of his threats to use law suits or the institutions of government to shut down freedom of speech; of his refusal to disclose prior tax returns because they reveal business reversals, lack of charitable contributions, and a considerably smaller net worth than his boastful claims.

It may be too late for saturation ads with these videos to turn the tide. The die may be cast, but the consequences of a Trump candidacy are too painful to contemplate. Truly a miracle is needed. I am going to pray for one.

Wednesday, January 6, 2016

Guns And Abortions - Two Peas In A Moral Pod

I must confess, the idea of having a gun at home for protection frightens me.   I am far more concerned about the consequences of an accidental discharge than I am of the consequences of having an intruder in my house.   I believe that hurting someone through an accidental discharge is a more likely scenario than the intruder scenario. I also am very squeamish at the thought of hunting.  I do not understand the emotional satisfaction of the hunting experience, and hunting for sport is dead wrong and immoral to me.  

Modern guns are rapid fire, accurate, and so powerful -  capable of mass killing in a short period of time.  So if it were up to me, only law enforcement would be able to legally own weapons.

ON the other hand, my brother is a gun advocate. A retired military man, he is very comfortable around guns, but is also extremely mindful of the safe handling and use of weapons.  My brother owns multiple guns as he keeps a gun in each room of his house so he's ready everywhere in case of a home invasion. My brother also appreciates the craftsmanship of his weapons.  He can talk at length to me about the balance, precision, beauty,and mechanical advances of guns.  He cleans and oils his weapons and takes pleasure in how they look after maintenance.  For my brother, his guns are admired tools in the same way that a carpenter admires and cares for his tools.   For me, a gun is a lump of steel that can have deadly and immoral consequences

The issue of abortion breaks along similar lines.  Pro life advocates find abortion immoral and abhorrent.   Pro choice advocates perceive abortion as a tool used for the constitutionally protected privacy rights of women.   An abortion doctor can talk in a matter of fact, or even an admiring way, about the procedural details of an abortion from a clinical, instrumental, perspective.  The undercover tapes of the Planned Parenthood doctors talking in this detached and sometimes approving manner about manipulating forceps on a living being disgusts and shocks pro life advocates.

Each side believes that legislation which creates obstacles to access is designed to whittle and ultimately eliminate their constitutionally protected rights.  Gun advocates believe that additional gun control laws will lead to a nationally registry of weapons, and then confiscation by the Federal Government.  Pro choice advocates perceive laws adding further requirements to perform abortions are
designed to reduce and ultimately eliminate abortion in this country 

Each side presents statistics and polls buttressing their point of view.  The reality is that data is not persuasive when addressing moral beliefs.  Social, moral issues will continue to polarize until a consensus on these issues is achieved.

Both of these issues are highly politicized.  Republicans and Democrats, at the national level, do so to fire up their respective bases and to create wedge issues for political advantage.  In a pure world, Democrats and Republicans would allow these issues to play out at the state level, a proven, effective manner of coming to a consensus on social issues.  A consensus on gay marriage was achieved that way.   Prior to the supreme court protecting  gay marriage as a constitutional right, 37 states had already legalized gay marriage. 

Of course I would be naive to think that we will live in a world where politicians act solely for the greater good.  In the mean time, how about each side appreciating that their issue is a kindred spirit to the other side's issue when thinking about and discussing guns and abortion.  

Wednesday, December 30, 2015

Donald Trump - Rebel With A Cause

The big story in American politics is the meteoric rise of Donald Trump as a serious political candidate.  His mix of reality television shamelessness, nationalistic messaging, and narcissistic boastfulness would normally doom a candidate.  Not Trump. The more outrageous he becomes, the more his popularity grows.   

Trump defies ideological pigeonholing because he lacks coherent messaging that reflects conservative or liberal principles.  He's his own man, a populist, and like populists before him--George Wallace, William Jennings Bryan, and Ross Perot--Trump's rise is occurring during a time of great social and economic unrest. 

What distinguishes Donald Trump from other populists is his unabashed crassness.  The social trends allowing for such a boorish candidate to emerge as a front runner in America today is the result of a paradigm shift in Western culture that began in the 20th century. Before then, a belief in Christianity and a universal God organized society, providing a moral and social code to live by and a bulwark against tragic events that defied human explanation.  

As time passed, huge advances in mankind's scientific understanding of the world began to undermine the belief in God because so many things could now be explained without reference to God.  Doubts about God's existence accelerated when people began questioning how a personal and loving God could allow the massive carnage of two world wars. Beginning in Europe, where the two wars were fought, then moving to the United States, Western society secularized. 

As the Judaeo-Christian doctrines holding America together waned, the beliefs that held American society together lost their influence. Conspicuous consumption replaced thrift and decorum. Psychiatrists, psychologists, and social workers replaced clergy as spiritual life counselors. Politeness and civility as a means of regulating social interaction eroded. Self help books emphasized self-improvement rather than character development, self esteem rather than self-control. Painting no longer focused on the richness of humanity--of people living in humanity with nature and one another --  filled with human portraits portraying rich interior lives.  Modern art freed itself from the world of humanity, eventually even freeing itself from visual reality.  In books and film the anti-hero was born, whose obligation was more to himself than his fellow man.   

Donald Trump is the extreme embodiment of these changing cultural trends. Trump defines himself by the wealth he has amassed. He evaluates people by their ability to dominate rather than by their character. Character means very little to Trump, which is why he can without moral qualms, be honored by Vladimir Putin's flattery and praise Putin as a respected leader. Trump's entire world is divided into winners and losers rather than decent and indecent. Since character doesn't matter, winning takes on a Machiavellian tone where lying, cheating, and manipulating are perfectly acceptable strategies to succeed. 

Donald Trump's over the top rhetoric falls outside the acceptable bounds of political leaders' discourse.  Sadly, he is within the bounds of what Americans perceive politicians to actually be like. Most Americans view politicians as part of the cultural trend of mainstream society, untrustworthy and mostly out for themselves. 

Trump is seen as refreshing and candid because he is willing to voice what people believe other politicians are thinking but are too afraid to actually say. Trump's grittiness and politically incorrect rhetoric make him the ideal candidate for our times, the quintessential anti-hero.  The outsider who upends the rules and creates a new order. The traditional noble, heroic politician, sacrificing for the good of many, seems boring and out of step in today's world. Trump the anti-hero fascinates and excites, bringing his followers closer to him because his flaws and realness are on display.      

Like all good populists, Trump's rhetoric addresses people's worst fears, in this case economic uncertainty and the very real threat of terrorism. Relying on his image as a winner and his anti-hero status, Trump assures voters that he has all the answers for our nation's economic woes, the grit and toughness to deal with ISIS, the guts and wiliness to take on the likes of Vladimir Putin.

A key to understanding Trump's appeal is his campaign slogan, he'll make America great again. This phrase is a vague enough commitment that Republicans can project their own wishes for themselves and America onto the phrase, the same way Democrats did with Barack Obama's campaign slogan of hope and change.   

The majority of Trump supporters are older, working class Republicans, and for them making America great again represents a by gone era when the values that  made America economically strong and morally great were dominant features of society.  These traditional American values are etched on our coinage --  Liberty, In God we Trust, and E Pluribus Unum,          

Today our nation's working class continues to be pounded by economic and social trends beyond their control.  Globalization and technological advances have lowered their wages and reduced the numbers of jobs available to them. Secularism supplanted a faith based society, individual freedoms deteriorated with the growth of government, and cultural diversity replaced the melting pot. 

These marginalized Americans see Donald Trump as a successful business man with the skills necessary to grow our economy, and as a hard nosed negotiator that will bring back manufacturing jobs to the homeland from nations like China.  His followers also believe Trump's tough stance on deporting illegal immigrants and building the border wall, will reverse the trend towards cultural diversity.  No doubt his base will remain loyal because he brings solutions to their existential crisis. Whether Trump can expand beyond this base of supporters and secure the nomination is an open question. If history is a guide, populists rarely do. But the anti-hero populist has no historical precedent, so he may well beat the odds    

Saturday, December 12, 2015

Historical Context To The Rise Of ISIS

Imagine being Catholic and Vatican City is conquered and the Pope deposed. Imagine the despair, anguish, and disbelief of such a horrific event.  A similar scenario happened to the Jews several thousand years ago when Jerusalem was destroyed, the holy temple razed, and all Jews expelled from Israel.  The destruction of the holy temple was particularly unnerving because it was the site where God resided.  Jews wondered whether their God was not all powerful or worse not real?  This was unthinkable.  To resolve the cognitive dissonance and make sense of what happened, they concluded that God was punishing them for not following His ways and a period of self examination followed.  Jews experienced pain and loathing and complete impotence for the suffering they wrought upon themselves.  Homeless, the Jewish people wandered through through many European countries experiencing outer rejection and hostility from European natives and inner shame.  This journey lasted several thousand years until Israel was reestablished.  Once home their psyche changed and they vowed never again would others control their fate.

Muslims, particularly Sunnis, are undergoing a similar journey today which began with the fall of the Ottoman Empire at the end of WWI, and the subsequent end of the caliphate in 1924.  The Ottoman empire was conquered by Britain and France and divided between them without regard to the religious and ethnic makeup of the lands.  Sunni Muslims were a minority in Iraq and Iran and a majority without power in Syria and Egypt.

In WWI the Ottoman army was almost entirely Turkish. Turkish nationalism precluded Arabs from serving in the military.  Hoping to fracture the Ottoman Empire, the British offered Arabs their own Arab Kingdom in exchange for revolting against the Turks.  Unbeknownst to the Arabs, Britain and France had a secret post war agreement that they would divide the Arab lands between them.  British representative, T.E. Lawrence encouraged a group of Arabs who were Sunni Muslims from the Western Arabian Peninsula to side with the British and revolt against their brothers in Islam. The Arab revolt allowed the British to easily conquer Iraq, Palestine, and Syria from the Ottoman Empire. For the first time since 1187 the holy city of Jerusalem was under the control of Christian Europe.  At the end of WWI the Western European powers per their wartime agreement kept the conquered lands for themselves rather than create an Arab Kingdom.  This betrayal, the loss of Jerusalem, and the end of the caliphate reverberated throughout the Muslim community, particularly elements of Sunni Muslims,and ignited the path towards Islamic terrorism that is the scourge of the 21st century.

Sayid Qutb, an Egyptian religious scholar and devout Sunni Muslim martyr is considered the ideological father of Al Qaeda as his writings and lectures greatly influenced Ayman-Al-Zawahiri and Osama Bin Laden. Qutb encouraged takfir, the religiously sanctioned killing of apostates.  According to Qutb's takfir, Muslims not adhering to the true Islamic faith, Sunni Muslim, were to be killed.  This idea and others were incorporated into the Muslim Brotherhood and followed by its leader Ayman-Al-Zawahiri.  The goal of the Muslim Brotherhood was provincial, the overthrow of the secular President of Egypt and the installation of the Qur'an as the state religion.  The Muslim Brotherhood's mottoes were:  the Qur'an is the constitution, the Prophet is our leader, jihad is our way, death for the sake of Allah is our wish.

Ayman-Al-Zawahiri later merged the Muslim Brotherhood with Al Qaeda founded by Osama Bin Laden.  Bin Laden was a wealthy Saudi appalled that the Western apostate, the United States had military bases on the soil of Saudi Arabia, home to Mecca the holiest city in Islam. Bin Laden agreed with the Muslim Brotherhood mottoes but also believed in the implementing the goals internationally, particularly against the United States, the great defiler of the holy lands and of Islamic teachings and practices.

In 2014 ISIS broke from Al Qaeda and adopted a version of the the Wahhabi doctrines that are practiced in Saudi Arabia.  ISIS primary goal was the re-establishment of the caliphate which they did by conquering large parts of Iraq and Syria.  ISIS now overshadows Al Qeada as the dominant terrorist group, doubling its size since its inception in 2014 and receiving pledges of allegiance from Al Qaeda affiliates in other parts of the world.  

Isis is now more dangerous, brutal, and robust than Al Qaeda. ISIS practices a medieval form of Islam embodied by Wahhabi doctrines which aim to return to the practices of the first two Caliphs of Islam and rejects all subsequent innovations to the religion as a corruption of Islam.  .  In accordance with Wahhabi practices ISIS terrorizes infidels into submission using beheadings, crucifixions, rape, and enslavement.  This is akin to the medieval form of Christianity in which Christian crusaders, Christian inquisitions, and Christian pogroms led to multiple massacres and tortures of Jews based on a New Testament reference to Jews acknowledging blood on their hands for the crucifixion of Christ.

ISIS is more dangerous, brutal and robust than Al Qaeda.  ISIS practices a medieval form of Islam embodied by Wahhabi doctrines which aim to return to the practices of the first two Caliphs of Islam.  Like these first Caliphs ISIS terrorizes infidels into submission using beheadings, crucifixions, rape, and enslavement.  This is akin to the medieval form of 
Christianity in which Christian crusades and Christian Inquisitions led to multiple massacres of Jews based on a New Testament reference to Jews acknowledging blood on their hands for the crucifixion of Christ.

The great attraction to ISIS flows from its perceived religious legitimacy through its establishment of the caliphate.  Unlike other terrorists groups where recruits pledge loyalty to a cause, recruits to ISIS undergo a religious conversion and pledge their lives to the Caliph, the representative of Allah on earth.

Religious conversion is powerful, powerful stuff.  It provides deep meaning and purpose and is rapturous to the disaffected, alienated, or marginalized.  On top of that, ISIS re-establishment of the caliphate, the Suni Muslim homeland, lifts the deep shame that Suni Muslims feel, in the same way it did for Jews when Israel was re-established.  This explains why ISIS recruits cross socioeconomic boundaries.  It is not economic justice that drives these recruits to ISIS but the search for meaning, purpose, and positive identity.  Similarly, religious conversion explains why recruits who show no history of violence are able to commit the most heinous acts.  They are acting for the glory of Allah to purify the world of subhumans in accordance with the Prophet Mohamed.

Religious conversion can happen very, very quickly.  Muslims versed in the teachings and practices of the Qur'an do not need a full religious conversion but merely an acceptance of the ISIS Caliph as their true religious leader.  So there is urgency in having plans to adequately protect the homeland and to eliminate ISIS from the face of the earth. Examining current plans in the light of the historical context of the rise of ISIS is the subject of the next blog.