Sunday, October 9, 2016

Frankenstein's Monster Redux - Wrecking Havoc from Day One.

Nearly eight years ago, on the evening of Inauguration Day 2009, a group of leading Republicans gathered for dinner and vowed to make the president inaugurated that same day a one term president. President Obama had nominated to the Cabinet two Republicans (including the Secretary of Defense) and reached across the aisle in his Inauguration Speech to champion a government for all Americans. But his presidency was to be undermined from day one by the dogged pursuit of the political goal of restoring a Republican to the White House above all. This in spite of the U.S. being involved in two ground wars and in the depth of an economic recession the likes of which had not been seen since the Great Depression. A situation that would seem to clamor for bipartisanship.

The conspiracy begat that evening eventually led to, among other things, the scuttling of the budget deal and the demonization of immigration reform, as well as to a few government shutdowns. The Republican opposition to President Obama relished, encouraged, grew and supported factions and groups that distorted his origins, mocked his race in the most disturbing ways and generally were visceral and toxic to government institutions in general and the president in particular.

The environment emanating from such confrontational partisanship is at the root of destructive interactions between and within our political parties. It is an environment that, fueled by the contrived hyperbole of fringe media (radio and on-line), desensitizes a basic sense of civility that allows social co-existence. Incendiary talk radio and web sites that are just a notch below in their rhetoric of the ones used by Hutus in Rwanda or Serbs in Bosnia to inspire genocidal rampages have become increasingly pervasive in the partisan dialogue and in social media. And with no doubt within this environment we can find the origin of that political Frankenstein monster: Mr. Donald Trump. A creature nurtured by an unfettered sense of entitlement, a sublimated inferiority complex and a craving for attention at any price. A creature pieced together and supported by a coalition of people exactly like him showcasing in social media and any other vehicle they may find their blinder constrained narcissism. These are not Bush or Romney Republicans, not Reagan or Clinton Democrats, confrontational and antagonistic, but they are politically alienated, for lack of a better word, anarchists.  Après nous, le déluge!

Trump’s claim to fame and biggest selling point is that he is a successful businessman, that he knows how to run a business, knows about money and that it is time someone with his credentials ran the country.  Setting aside the fact that he has not demonstrated that he has had the acumen to use his inherited fortune to grow it over market returns (without bilking thousands of customers, contractors and even state and federal government), the notion that a nation can be run like a business is spurious. The last time that was attempted here was by Calvin Coolidge and it led to the Great Depression.

A successful business is a closed system with a clear goal: survive market competition and the innovation forces of creative destruction to maximize the profits to its limited number of shareholders.  A successful nation is an open system that by regulating market failures, externalities and common goods seeks to maximize the well-being of all its citizens. The set of skills and knowledge that lead to success in one endeavor are not the same for the other.

If it were granted that Trump has been a successful CEO, to transfer his skill set to running the government could lead to the worst cases of influence peddling and conflicts of interest since Spiro Agnew (when America was great?). In a perfectly logical pursuit of benefitting his present and future investments, decisions impacting markets and regulations would be taken in “best for the business” mode, disregarding the overarching economic and political reasons for national government.

Of course, that is what some in the Republican leadership are counting on. Not that Trump will use the government to benefit himself personally (like any businessman would naturally tend to do), but that his lack of skills for governing will force Trump to call on them for assistance in running the country--at which point they will just tell him what to do. This party leadership tries to convince itself and a diminishing group of their followers that Trump is “politically manageable.” However that, a risky proposition at best, does not account for the obvious personality traits embodied in Trump.

Because power limits through checks and balances do exist, a temperament recognizing such limits and acquiescing to this most basic tenet of our government is one of the fundamental reasons to choose a candidate over another. Trump has made clear he does not believe in limits to his use and manipulation of power. The latest evidence of his sense of entitled power and his willingness to abuse it is the “Access Hollywood” video where he says: “And when you’re a star they let you do it. You can do anything.” 

President Trump as a risky proposition does not even begin to describe the possible scenarios of uncontrolled abuse of power that could occur with a White House occupied by an unapologetic reckless bully. A bully directly descended and nurtured by the blind partisan interest wrought upon the nation that cold January evening in 2009. This is a risk that America should not allow itself to take. It has a lot to lose.

All images copyright their respective owners,

Friday, September 16, 2016

Populism, or the Collective Blindness that Leads Nations to the Abyss.

This is an English language version of an essay previously published in Spanish.

Abdicating Governance: The Failure of Institutions

Winston Churchill’s description of democracy as the worst of all systems of government except for all the others is famous. Democracy, it has been argued, carries within itself the seeds of its eventual destruction by allowing within it by definition voices and factions that oppose it. In democracy it happens that the universal right to vote is considered the desideratum-and yes it is; but, doubtless, universal suffrage is occasionally captured by leaders who hear voices from a dissatisfied populace within the system. Voices echoed by those who will use the liberties of the democratic system to exploit emotions arising from heterogeneous, and sometimes contradictory, dissatisfactions and coalesce a political movement against the cold pragmatic reasoning offered by traditional leaders. A popular movement with the intention of rewriting existing political and social institutions outside the trite formulas and solutions spread by the elite and the intelligentsia of the status quo. A movement that is usually described as populism.

The average citizen has many things top of mind: family, job, garden... The common citizen has many occupations and prefers to devote more time to them than to government. The ordinary citizen wants to have the confidence and satisfaction that his or her government is led by capable people who protect the common interest to the best possible extent. Those are the terms of the political contract that the citizen, the people demand from their government and institutions. When public officials break that contract, that confidence, dissatisfaction arises and the populist seed is sown.

As a further condition, populism flourishes not only when dissatisfaction is widespread, but when existing-political, economic, social and the media institutions ignore this dissatisfaction or do not offer a clear message about how to respond to it—that is, fail in their role. Symptoms of institutional failure include:
  • Media with credibility gaps,
  • Partisan and ideological polarization driven by self-interest or perceived as such and,
  • Low voter engagement with an institutional discourse seen as sterile and irrelevant.

Under these conditions a growing group of people becomes a diminishing group of voters so, and as a result of such low participation, traditional representatives are perceived with scant legitimacy. “Don’t blame me, I didn’t vote for…” is the bumper sticker capturing that sense of illegitimacy.

The citizen body has many needs and demands. When political representatives address these needs before letting them escalate into a general grievance, democracy works. By ignoring these needs and allowing them to become widespread anger against what is then perceived as a detached elite, fertile ground for a populist movement is created.

It is at that moment that the disenchanted, cynical, disenfranchised, marginalized, poor—the forgotten—are easily seduced by a snake charmer who gets from the fervor awakened in the popular mind an adrenaline rush feeding his/her own narcissism while inflaming the masses. The populist dynamic thus enters into a cycle of increasingly toxic feedback between the leader and the mass—as in any overdose of any drug.

Deceit: The Anti-democratic Nature of Populism 

The populist discourse is sectarian by nature. The populist seeks to establish a simple reason why people are dissatisfied with their status and targets the blame on an easily identifiable group and the institutions, politicians and intellectuals affiliated to that group. Common base emotions exploited in sectarian speech are resentment, envy, xenophobia, racism and revenge.

For these reasons (sectarian, anti-institutional and emotional discourse) populism is one of those bad words in politics that few allow as a valid alternative. Recent political movements such as Podemos, in Spain or Kirchnerismo in Argentina, have sought to redefine the term positively, repackaged as "popular democracy." However, as with every populist, they label themselves anti-institutional or protectors of the oppressed. That so called Popular, Participatory or Democracy for the Masses preaches a sectarian credo without respecting the rights or even the legitimate participation of opposition minorities [i]. Also it begets concentration of power, destroying or nullifying institutional checks and balances and separation of powers. It is the tyranny of the majority in full-fledged form.

Populism’s true nature, sometimes in the past and certainly nowadays, hides within the very rules of the democratic game. But make no mistake, populism is fundamentally undemocratic despite looking as if it seeks to legitimize its power from the people, as the name suggests. Even when populist leaders fail to reach power they will change the political dialogue, planting in their followers deep skepticism about the validity of the institutions; and when democrats use populism’s seductive tools to gain power, they equally undermine democratic institutions by the skepticism sown (drunk uncle's "inconvenient truths" -mercantilism, favoritism and corruption- suggested by B. Arditi, as cited by Frei and Rovira, 2008).

Democracy can only be sustained when people trust their institutions. When trust declines a leader can take advantage of that lack of trust by calling the institutional system incompetent, corrupt or rigged. The expectations created by the leader’s promises feed a craving for radical change and breeds hope in the movement’s followers. When achieving power by institutional means, i.e. popular vote, the only way for the leader to fulfill the promised change is by eventually destroying the institutional system that brought him or her to power; otherwise followers in the future will seek a more radical populist. When the populist leader achieves power through non-institutional means, ferocious purges are unleashed against the institutional representatives of the previous system. Undoubtedly the populist and authoritarian go hand in hand. Unbridled populism always and eventually will become totalitarianism.

Institutionalists left behind by the wave leading the populists to power in the best of cases retire, and in the worst end up in exile, prison or executed. Survivors write and ponder from their political paleolithic cave, sometimes not even realizing how they failed the constituents and institutions or media they led.

Thomas Jefferson argued that institutions should be renewed radically every so often—periodic elections originate from that reasoning. Institutional stagnation undoubtedly can decelerate, prevent or reverse the political, and therefore economic, development of nations. For industrial cycles in business theory Schumpeter referred to a similar concept calling it Creative Destruction, caused by technological development and its consequent effect on both production and distribution systems as well as lifestyle preferences. Populism is inserted into the political world as an alarm, like the canary in the mine, indicating the need for a fresh renewal in a nation’s institutions as social needs evolve—or else be forced to face a destructive transformation.

When populism appears democrats need to read the signs and take a stance against it, even if it seems contradictory that a democrat is apparently against popular will. The leader in a liberal democracy must recognize the grievances behind the populist movement and rectify the institutional elites' rule. A populist leader is not fooling people, he is channeling dissatisfaction, collecting and making a powerful emotional echo that appropriates the voice of those alienated by socially bankrupt institutions. [ii] True democrats need to expand horizons outside their political bubble and recognize that the alienation the populist harvests exists. True democrats have to address and rectify the social and economic conditions that cause dissatisfaction, because allowing populism to take over political and media institutions causes serious damage to democracy. And democracy must be protected even though it is the worst system of government, except for all the rest.

Populism has its role in democracy, that of the canary. It is attractive and sings a song, but is toxic and dangerous, as botox can be. The utopian idealism offered by populism is seductive when it groups heterogeneous complaints under the large cover of general dissatisfaction and promises to satisfy these complaints with simple symbols and slogans instead of specific and complex proposals. Liberal Democracy is in danger under those conditions but must hold its political ground to balance the attacks of populists with the need for social redress. 

The fundamental promises of Liberal Democracy are: defending the dignity of the individual, equal protection under the law, ensuring equal opportunity, and protecting private property. Those also are seductive promises. Those are the conditions under which individuals can take charge of their life freely in their pursuit of happiness and thrive, a pursuit that brings benefits to the collective of society—as postulated by Adam Smith almost 250 years ago and proven in practice.

It is only under a system of Liberal Democracy that nations have been able to improve the economic and social condition of their population. There are flaws of course but, we must reiterate, it is only in an alternating democratic system committed to solving these flaws that they can be rectified, as history has demonstrated. Human, civil and social rights have flourished and developed under democratic governments with constructive dialogue. Herein lies the largest and most damaging failure of populism: its purposeful ignorance of history. And that ignorance has led prosperous societies to the abyss of economic suffering, social disintegration and destruction of civic values under regimes using the state’s monopoly of legal (and para-legal) violence to remain in power.


[i] Qualifying democracy with adjectives is an unfortunate necessity to distinguish ideological systems. Just as "populism" often has implicit negative connotations in its terminology, "democracy" is considered a positive descriptor for any system of government, as was the case for the German Democratic Republic (DDR – East Germany, a fiercely totalitarian regime) or is that of the Democratic People's Republic of Korea (North Korea). Because the usage of the word democracy has been distorted so much it needs the qualifying adjective “liberal” to describe a government system based on free periodic elections, rule of law, and free market principles.
[ii] Regarding the link emotion / reason Frey and Rovira (2008) make this interesting observation: "The fact that the establishment of populism is based more on passion than reason points out one of its greatest political weaknesses: the problem of duration. Rational criteria are much easier to stabilize than emotional factors. Thus, the permanence of a populist movement depends on its continued ability to activate and sustain collective passion. To do this it exploits emotional attention niches, such as speech and images arousing emotions like anger, fear and hatred that keep alive the distinction between friend and foe in society. "


Whatdo we mean when we speak of Populism?; Ezequiel Adamovsky. AMPHIBIOUS, National University of San Martin, Buenos Aires Argentina - Accessed August 11, 2016
Populismas Political Experiment: History and Political Theory of Ambivalence; Frei, Raymundo and Rovira Kaltwasser, Cristóbal. Journal of Sociology 22, 2008; Faculty of Social Sciences, University of Chile - Accessed August 11, 2016
Populismwith a Brain; Lynn, Barry C. and Longman, Phillip. Washington Monthly, June / July / August 2016 - Accessed August 11, 2016
It'snot just Trump. Authoritarian populism is rising across the West. Here's why; Norris, Pippa. The Washington Post, March November 2016 - Accessed August 14, 2015
Sorry,Obama: Donald Trump Is a Populist, and You're Not; Chait, Jonathan. New York Magazine June 30, 2016 - Accessed August 14, 2016

All images copyright of their respective owners.

Sunday, September 11, 2016

The Immigrant.

I am an American born abroad: born from an American parent in a foreign land. I have dual citizenship and lived a large portion of my formative years outside the U.S. in a country close to my heart, Venezuela. I have relatives, friends, dear memories and continued interest and involvement with the country where I was born. Its current situation and of those I have left behind pains me greatly. This is a common affliction shared, with different details, stories and backgrounds, by many in the U.S. born in other countries and living here now; and while I am not technically an immigrant I understand, literally, where they are coming from and have an ear attuned to anti-immigrant rhetoric.

That anti-immigrant rhetoric ignores a basic question: why did 42 million people, a number greater than the whole population of Canada or half the population of Germany, decide to migrate to the U.S.? Contrary to the current Republican candidate’s messaging, no country actually “sends” people to the U.S.

Migrants make the individual hard choice of leaving their home country because they see no other way out of their situation, be it political, economic or personal. They believe that in the U.S. they will have a new opportunity to improve and/or protect themselves and their families. They believe such opportunity is lacking in their country of origin. Many make the trip thinking they will go back once they’ve made it (“if you can make it there, you can make it everywhere”) or conditions “back home” have changed. A great majority eventually remains in the U.S. once they have constructed a new life, under new rules and with a reliable social contract. They sometimes try to return and realize, as Thomas Wolfe wrote, “you can’t go home again” as the home they once knew exists no more.

A portion of U.S. born Americans always says before any election that if the candidate they oppose wins, they will move out of the country. Canada has often been the supposed destination, New Zealand seems to be a popular choice this season. No mass migration has in fact occurred after any U.S. elections, but immigrants in many cases have not only chosen but been forced to leave their own country of birth for political, war strife, hardship or safety reasons. The quipped motivation in the “if he/she wins I’ll move to Canada” retort, is augmented hundreds of times over for many incoming migrants. They have truly voted or been forced to vote with their feet. Most have probably not read or know but would empathize with the lines by Emma Lazarus:

“Give me your tired, your poor, 
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.

Send these, the homeless, tempest-tossed to me,
I lift my lamp beside the golden door!”

By definition immigrants believe in the promise of America. Their economic contribution is significant and their social contribution incalculable. Many have mixed marriages and there are 36 million U.S. born children of immigrants. Immigrants by the most part do not want to reject their origins and naturally seek fellow expatriates to socialize and live with, maintain their country of origin customs and enjoy the cuisine they miss. That is not a rejection of U.S. values and customs, it is an addition. When their origin values and customs are anathema to those in the U.S. in most cases they and their children adapt, particularly when they feel socially welcomed by their new country. Conversely, the U.S. adapts elements of immigrant culture and makes it our own. Salsa, pizza slices and Chop Suey come to mind as adaptations now natural to the U.S. culture.

The hard numbers of size, scale and factual contribution are clear:

  • The Migration Policy Institute calculates, derived from Census Bureau statistics, that the immigrant population (defined as “people residing in the United States who were not citizens at birth”) totals 42.4 million people. That is a little over 13% of the country’s population. For perspective, the African American population is 12.2% of the population and the Hispanic American population is 16.3% (2010 Census). The estimated population of undocumented migrants is around 11.2 million which would make approximately 3.5% of people residing in the country “illegals,” a small minority bearing a disproportionate amount of vindictive political venom and upon which countless ills are laid on. The number of undocumented immigrants has decreased from a little above 12MM in 2008 to its present level and counting.

U.S. Foreign Born Population by Region of Origin. 
Europe Region: 4.8MM
Asia Region: 12MM
(East Asia: 3.77MM / So. Central Asia, including India: 3.2MM / West Asia, including Israel: .96MM)
Africa Region: 1.75MM
America Region: 22.3MM
(Central America, including Mexico: 14.8MM / Caribbean: 3.88MM / So. America: 2.8MM)
Migration Policy Institute, U.S. Immigrant Population by State and County (accessed Sept 1, 2016)

  • The Pew Research Center calculates there are 36 million second generation Americans, of which 20MM are adults, i.e. can vote. Added to the approximately 19MM immigrants that are naturalized citizens it makes for a powerful voting bloc. Even with a 50% abstention rate it would mean almost 20 million votes, enough to swing many an election.  Politicians demonize immigrants at their own peril when driving wedges between long timers and newcomers.

Much ink and bytes have been used to counter arguments laid out by the anti-immigrant rhetoric. In a fact-free reality immigrants (coded as “illegal” to slander a population much greater than the actual 3.5%) are accused of stealing jobs at best and being harbingers of terrorists and criminals at worst.

  • Fact is, as has been pointed out, the low end jobs “stolen” usually do not involve language skills (typically crops, dishwashing, abattoirs, gardening, clean up, etc.) and higher end jobs are filled by companies skirting laws and ethics in pursuit of self-interest through legal corporate sponsorships. In 2012, there were nearly 420,000 “removals” by Immigration and Customs Enforcement (ICE), of which 228,000 were by border capture (they never made it in) and 190,000 where “interior apprehensions.” During 2012 there were 1.8 million jobs created by the private sector, that is, nearly the same number of jobs were created every month than all “interior apprehensions” for the whole year. Of the total removals, 55% were of convicted criminals--not everyday workers.
  • Facts are, as has been repeatedly demonstrated, neighborhoods and cities with increasing immigrant populations have seen decreasing crime over the years. While absorbing a portion of immigrants, members of the Muslim community aid in uncovering terrorist plots, and members of Hispanic communities work with police to better control gangs. This does not mean that there are no bad apples, but the rhetoric paints broad strokes with a wide brush, smearing minorities to reinforce stereotypes.
  • The Institute for Taxation and Economic Policy has calculated that undocumented alien residents (“illegals”) currently living in the United States collectively paid $11.64 billion in state, local taxes, sales taxes and government fees in 2015. These do not include their tax withholds which will not be returned.
  • GDP is the sum of all transactions in products and services. The contribution of 78 million immigrants and children of immigrants to the market of transactions make for a sizable chunk of America’s GDP.

There comes a morning when the immigrant looks in the mirror and realizes that an American is staring back; an American accepting of differences, striving in the pursuit of happiness, created equal; and troubled by the whipping up of anti-immigrant sentiment. Many have seen and lived such persecution of minorities for electoral purposes in their country of origin and know what it has led to. Thus, when asked, “Is America headed in the wrong direction?” their answer is “yes” because of the celebration of obstructionism, racism, extremism and sheer stupidity in political discourse, its lackadaisical treatment by the so-called mainstream media and the rising influence of fringestream media feeding populist frenzy. The wrong direction. Something I have lived, outside of the American Democracy bubble. I personally know that democracy is not the end of history: we can regress.

There will always be a special place in the immigrant heart for his or her roots. This is human, understandable and not a reason to marginalize. I know of the pain they feel when there is pain in the country they grew up in. Immigrants will support in humanitarian ways and with patriotic fervor the causes they believe in and, in so doing, defend and spread true American values throughout the world. They are the newest Americans. Welcome.


Links and References

Pew Research Center: Second Generation Americans (PDF)

Sunday, August 21, 2016

A Foundation for Public Service.

It has been said that “Jimmy Carter provided Americans with an ideal model of post-presidential life.” Regardless of political affiliation, President Carter’s efforts with Habitat for Humanity and the Carter Center for Democracy since he left the presidency have been hailed as making a positive impact both at home and abroad. Different interpretations may feed different narratives but, having personally read the Carter Center reports on Venezuela elections for example, detailing abuses of the power of incumbency in an unlimited reelection system, the abuse of the media by government propaganda, and the manipulation of electoral registrations in that country ring true. This is a contribution of a statesman to the world.

After Carter, however, three out of four presidents have not quite lived up to that standard of statesmanship in public commitment. The foundations with the names of Presidents Reagan, Bush 41 and 43 have dedicated their efforts to ensure that the legacy and history of their presidencies is polished. Before President Carter, President Nixon’s and Ford’s foundations did the same as their later Republican presidential peers, and Ford is credited with being the first former president to leverage his status to enrich himself through the speech making and book circuit.
The Clinton Foundation was started in 1997, following the customary method to fund the eventual Clinton presidential library. After the Clinton presidency, multiple offshoots of this foundation redefined the idea of service in a post presidential life. The Foundation has grown immensely with some extraordinary accomplishments and, perhaps, some  eyebrow raising alliances—normal for an organization with the scope, scale, nature and structure that it has.
The Foundation has become a complicated multi-national organization with staff and programs around the world. A small portion of the Foundation’s expenses, about 6%, are used for direct grants (charitable contributions), but the bulk of its expenses are in programs with “intended social impact e.g., improving education, creating livelihoods, improving health, etc.” implemented and operated by the Foundation. It is facile to dismiss the Clinton Foundation as a “money making scheme” but its level of transparency reveals true social work at a level unprecedented by any former president’s initiatives.
Besides funding the library, the Clinton Foundation includes now under its umbrella the following:
·         The Clinton Economic Opportunity Initiative, which primarily focuses on small business growth and equal opportunity which is the overarching theme of the Clinton Foundation. Its domestic efforts have included the Harlem Small Business Initiative, the Entrepreneur Mentoring Program and the Financial Mainstream Program.
·         The Clinton Global Initiative, which encompasses the world wide reach of the Foundation's work in 180 countries and that has transformed positively the lives of 430 million people. CGI Annual Meetings have brought together 190 sitting and former heads of state, more than 20 Nobel Prize laureates, and hundreds of leading CEOs, heads of foundations and NGOs, major philanthropists, and members of the media. Its mission is “Turn Ideas into Action.”
·         The Clinton Health Access Initiative, founded in 2002 as part of the CGI and spun off in 2010, CHAI is a global health organization committed to strengthening integrated health systems in the developing world and expanding access to care and treatment for HIV/AIDS, malaria and tuberculosis.
·         The Clinton Development Initiative, formed in 2006, with a mission to target the root causes of poverty in Africa. It currently has projects to improve food security, clean water and sanitation, and quality health care by operating projects to empower smallholder farmers and increase their economic potential in Rwanda, Malawi and Tanzania.
·         The Alliance for a Healthier Generation, a partnership between the Foundation and the American Heart Association with a mission to reduce childhood obesity in America. Among its initiatives included is the “Kids’ Movement.” The Kids' Movement has inspired more than 2.5 million kids in America to make a pledge to go healthy.
·         The Clinton Giustra Sustainable Growth Initiative, which has taken the Clinton Foundation’s mission primarily to Latin America, with projects in El Salvador, Colombia and Peru.
·         The Clinton Climate Initiative, founded in 2006 to combat climate change. Among other activities it has the 1Sky campaign, supporting an 80% reduction in climate pollution by 2050. It has funded, among others, reforestation projects in Haiti.
·         The Clinton Health Matters Initiative, launched in 2012, works to improve the health and well-being of people across the United States.
The Foundation supports continued relief efforts to the victims of the tsunami in Malaysia, hurricane Katrina in New Orleans and the Haiti earthquake, efforts made in collaboration with former President George HW Bush. With president George W. Bush, and starting during his presidency, it has led continuing anti AIDS and Malaria efforts in Africa.
The enormously ambitious agenda of the Foundation has relied for its execution on fundraising from many like-minded individuals and charity foundations, as well as corporations and governments, some with possible hidden agendas not necessarily compatible with the Foundation’s mission. It is conceivable that some tried to take advantage of connections enabled by their donations to seek questionable political favors from persons in positions of influence. What is unquestionable is the Foundation’s role in improving the quality of life and broadening opportunity to millions of people in the US and around the world.
Since its beginning the Foundation is estimated to have raised $2B and it has an estimated 200 to 300M in yearly contribution funds. Several independent charity evaluation organizations have looked into the Clinton Foundation and found it to adhere to sound charity practices: In its latest financials, for example, it shows nearly ninety percent of expenses used towards direct mission operation's work, out of a total of $242MM (2014); for each $100 raised, $2 are spent to raise them. The American Red Cross, as an example, is also at the 90% funds for charity out of $2.87B in expenses, but spends $30 for every $100 raised. Amnesty International USA uses 80% of its expenses for its operational work, out of $32MM in expenses and spends $14 for each $100 raised. All these organizations have garnered an A Rating from Charity Watch.
The Foundation is running a surplus between donations and expenses. This difference is being accumulated to create a permanent endowment to make it less reliable on continuous fund raising and decrease its exposure to influence peddling, given the high profile nature of its directors and founders.
The political attacks on the Foundation based on its name within the heat of a presidential campaign are understandable. But using shorthand memes to undermine a complex array of worldwide social programs that generate US good will and influence, and has the support of former presidents from both parties, could damage the image of our nation and affect charitable foundation work for years to come.
The bar for post-presidential service has been raised from those first steps that President Carter took. We hopefully will see in the next few years a greater role of former presidents in using stately influence not only to maintain a library but to make a positive mark in the world. After all, what else is a former president to do?
Where Does Clinton Foundation Money Go? -- FactCheck.Org
Charity Watch Rating Alert: The Clinton Foundation
Life after the Presidency – Jimmy Carter
Life after the Presidency – George HW Bush
Life after the Presidency – George W Bush

Wednesday, August 10, 2016

The Great American Con

It must be conceded that some Trump supporters are not only sincerely convinced Trump's beliefs and positions are based on true American values but believe these positions, if enacted, will improve their lot and their countrymen’s to “Make America Great Again.” Otherwise a Trump supporter is either a self-serving cynic or a willfully ill-informed disaffected protestatarian with anarchic tendencies. While these two latter characterizations do indeed define important groups of Trump supporters, these segments cannot to be reasoned with; and all of the three major groups, the American value based, the self-serving cynics and the anarchists, attract their share of morally reprehensible racists, xenophobes and nativists which are also beyond reasoning with.

Yet, it is within the first group, the one embracing their interpretation of American values, that we must seek to understand the appeal of the economic case Trump claims to have. This is a group of Americans that should be listened to, understood, and be afforded empathy, to start a conversation of reason. Not to do so is not only politically unwise, it seeds the possibility of a “better Trump” in the future: someone with the same divisive discourse but better disguised and better scripted. So, how does Trump then embody the emotional needs of these followers?

American Values

American values are set forth in several origin documents of the nation. The Declaration of Independence, establishing the right to representation and the foundation of inalienable rights; the Constitution establishing the separate powers of government, a united federation in pursuit of a common goal and the Bill of Rights; and the Gettysburg Address establishing American democracy as an experiment in progress. The Federalist Papers could be added, as they illuminate the thoughts and interpretation of our founding fathers on the first two documents and the role and promise of the union.

A common thread in these documents is faith and optimism in the future and role this grand experiment will have in the world. This has become a core value of America: a belief that the best is yet to come, that this is the land of opportunity, that there exists an inalienable right to the pursuit of happiness. This is at the root of what is commonly called American Exceptionalism. Trump makes a primal call to that core belief. He vociferously denounces America as a land that has lost its way and promises to rectify and restore that faith in America and its people. 

But Trump distorts the essence of American Exceptionalism and has deceived a large portion of the values group. He has done so by making up some facts unabashedly and distorting others, starting by his vague claim but catchy slogan “Make America Great Again.” By the numbers, this claim is spurious. Just a few gross indicators tells us that:
  • From 1947 to 2016 GDP per Capita (constant) steadily climbed from $13,407.01 to $51,276.06.
  • Infant mortality rates for full term births decreased from 15.2 per 1000 in 1960 to 2.6 in 2006.
  • High school graduation rates increased from 74% in 1990 to 82% in 2013.
  • The economy is currently in its longest streak of monthly job creation on record.
Civil rights have unquestionably expanded over the last 100 years and such expansion has accelerated at an increasing pace in the last 50. More Americans than ever can fully participate in the civil, social, political and economic life of their own country. Social nets have spread, nearly eliminating destitute elderly, protecting children and assisting low or no income Americans in their plight.

Those Jobs are Not Coming Back

Emotionally, however, the case to “Make America Great Again” rings true.  The flip side to the listed achievements attained is a sense of unfairness and abandonment from the technological and social displacement such progress has wrought. That is the raw nerve that Trump touches. Trump argues that American workers have lost their jobs to overseas cheaters, stoking xenophobia and false expectations simultaneously, promising (as do some Democratic politicians) to bring back “good manufacturing jobs” to America, typically meaning by that heavy industry and manufacturing jobs.

The reality is quite different, as technology is more to blame for such job losses. Silicon Valley technology thinkers are so aware of this issue that talk of “Universal Basic Income” is commonplace (along with speculation on the Singularity) among them. The UBI would be a way to ensure the welfare of everyone when all jobs are lost to automation and robots. But that is a whole other discussion and argument.

What is beyond argument is that technology disrupts the labor force, and that there is no turning back to a glorious past of a different (and “greater”) labor market structure. Productivity and output increases have been taking place in America and affecting the labor market structure. Suffice these examples:
Agro Industry:
  • From 1900 to 2000 farm employment fell from 41% to 1.9% of the total workforce
  • From 1948 to 1996 agricultural productivity increased 250%
  • From 1955 to 2000 agricultural and farm exports increased approximately 800%
Automobile industry:
  • 1980: 8,011,000 vehicles manufactured in the US by 725,000 workers – 11 veh/worker
  • 2014: 11,661,000 vehicles manufactured in the US by 714,000 workers – 16.4 veh/worker
  • The US accumulated Auto worker productivity increase from 1950 to 2013: 243%
  • Estimated growth 2014-2018 - Employment: 2.1% / Productivity: 2.4%
Steel Industry:
  • 1980: 101,455,000 Metric Tons shipped – employment: 398,829 – 254.38 MT per employee
  • 2014: 95,400,000 Metric Tons shipped – employment: 149,800 – 636.85 MT per employee
  • Overcapacity of the industry is estimated around 25 to 30% while steel imports estimated at 20 to 30% of the US market.

Electricity Generation:
  • 2006 Generation: 4,060 TWh / By coal: 2,000 TWh (49.26%) / coal used: 1,030,556 K Tons
  • 2014 Generation: 4,255 TWh / By coal: 1,600 TWh (37.60%) / coal used: 853,634 K Tons
Each of these industries has its own set of issues and problems, some of their own making, some related to unfair trade practices and some structural, but all indicate a substantial increase in output while reducing total employment or shifting resources. In fact, manufacturing jobs as a percentage of the total labor force has decreased from above 30% in 1960 to less than 8% in 2014 while manufacturing as a % of GDP has remained constant. No investor, businessman, entrepreneur or factory will give back the productivity gains attained to “Make America Great Again.”

Job Creation Blues

It is the reality and nature of a developing and growing economy that there will be labor force displacement, but no one expects or wants to return the economy to a country where 41% of the labor force worked in farms. The political promise of returning to an imagined better past is a pipe dream; in fact it is the original Marxist dream of Social Utopia. It also has striking visual imagery. The closed factories of old technologies create urban wastelands. Populists stand in a blighted area and decry such closings, making for a great image. It is not as striking to stand month after month in front of a hospital, a technology information park, or a construction site and say that in the last month more jobs were created than all existing jobs in the steel industry. If it bleeds it leads and that is red bleeding meat eaten up by voters of all persuasions.

According to labor economists it takes a little less than 150,000 jobs created monthly to keep the unemployment rate steady. Since 2010 this number has been exceeded repeatedly, decreasing unemployment from its peak of 10% in October 2009 to 4.9 % in August 2016. To compare, the highest unemployment rate since 1948 was 10.8% in Nov. 1982, and its lowest 2.5% in June 1953. Still, why does a steady stream of jobs created at a greater rate needed than by natural growth does not to quell the malaise that is touched upon by the slogan “Make America great Again”? When did this malaise begin?

Recessions strike employment as a lagging indicator, meaning unemployment peaks at the end of the recession once GDP starts growing again and impacts the labor market. The graph from the Federal Reserve clearly illustrates it well (shaded areas are recession periods). But this graph can also help us understand somewhat the underlying malaise tapped by Trump’s economic speech. The labor participation rate, i.e. the amount of people working and wanting to work, increased steadily at a rapid rate from around 1962, at 58% of the population, to 1990 at 67%. The participation growth curve slope starts to taper off in 1990 and peaks at 67.3 % in April 2000, climbing steadily down ever since to its July 2016 level of 62.8%.

Social changes have an impact, of course. The incorporation of women to the labor force likely explains part of the steep climb in labor participation rates between 1960 and 1990, while the growing peaks of recession-end unemployment rates in that period correlates to the desire of people to work during those years.  That growing participation curve can be interpreted as an optimistic outlook by the labor market. People expected the labor market to grow and have a good paying job waiting for them. Even in recessions, America was The Land of Opportunity. This may be, perhaps, the period to which Trump beckons when he says “Make America Great Again.”

The late 80’s and early 90’s changed the game. The biggest hoax perpetrated on the American people is the hoax of Supply Side economics. Begun with Reagan and synthesized in the phrases “trickle-down economics” and “a rising sea lifts all boats” but better described by Reagan’s own primary rival George H. Bush as "voodoo economics,” Supply Side economics transformed the economic landscape of the American worker.

The American labor market was under strain already. Technological disruptions (as described above) were driving down the manufacturing sector’s labor participation, and light industry, such as clothing and small goods, were feeling the beginning of globalization’s impact.  Starting in the mid 70’s the disconnect between productivity growth and wage growth became the norm. While many explanations for this disconnect have been put forward (including methodology problems measuring factors in the transit from a manufacturing to a service economy) undoubtedly the gap exists, resulting in owners of capital accumulating a greater share of the productivity gains than owners of labor.

The graph illustrating the disconnect between productivity and compensation (Lawrence Mishel, 2012) also indicates a sharp uptick in the slope of productivity gains in the advent of voodoo economics, while not as much in the hourly compensation curve, albeit it stopped declining.

In addition to these structural shift trends, income inequality has steadily increased in the US since 1969. Mercantilist policies, pushed by political “protectors” of business, created subsidies, tax loopholes and protective regulations resulting in increasingly non-competitive markets for goods and services benefitting the owners of capital. The GINI coefficient (indicator for income inequality) tells us that between 1969 and 2009 such inequality has increased an astounding 122%. This means that the increase in GDP per capita noted before has been distributed disproportionally at an increasing rate.

Increased income inequality has been directly correlated with increased divorce rates, increased personal bankruptcies and increased commute times, all associated with a lower quality of life. The increased income inequality pattern in America is a fundamental cause of the anger of the electorate with the political establishment as it fails to deliver the promised opportunity for a better life.

Hope and Greatness: Is There an Economic Case for Trump?

Reexamining the Unemployment/Participation chart from the Federal Reserve, 1990 onwards can now be understood as a period in which factors affecting the labor market structure and the remuneration of labor have come to a head. It is from that time that a trend of disillusionment begins for the American worker: a feeling that the American Dream is out of reach. It is no wonder that by 2008 the message of “Hope” resonated in the electorate enough to choose as president its purveyor, Barack Obama.  

Because the built-in structures (tax code) driving income inequality remain mostly unchanged, the faithful of voodoo economics hang on to the levers of economic policy and discourse, and the labor market structure is still buffeted by globalization and technology with no clear answer, it is no wonder that Hope gave way to Revolution in the 2016 election cycle. The “Rage Against the Machine” is understandable. And Trump preaches rage.

Yet, the answers Trump offers to quench this anti-establishment mood created by the disenfranchisement from the American Dream do not address the nature, origins or bases of this condition. His “recipe” includes more of the supply side economics that have been demonstrated time and time again to stifle growth and drive up inequality (supply-side faithful devotees are as blind to the failures of their economic ideology from the right as Marxist socialists are to theirs from the left). He promotes trade barriers potentially increasing by thousands of dollars per household prices for consumer goods from cars to TVs to toasters. Other agenda points in his recently announced master plan: weaken the social net and generally make the tax code more regressive for individuals and more generous for corporations, accelerating income inequality.
Trump’s answers are not the ones that will solve America’s woes. His answers do not even address the problems he highlights in his economic speech: job creation, fair trade and America’s “greatness.” It may be probable that by the way he posits the problems—with his knack for finding the raw nerve—and the way he parrots solutions from his supply side economic advisors, it may be just probable that he truly does not know how to link problems with solutions; and it is possible that at least some of those supporters that believed Trump could embody their aspiration of restoring America as the Great Land of Opportunity will soon see in Trump what Michael Bloomberg saw in him: A loud mouthed New York City conman.

Trump’s answers are not new, they have been tested before. Supply side economics has been tried throughout the world and failed—and brought us the Great Recession. His stance on trade has been tried before—and brought us the deepening of the Great Depression. And, beyond economics, his tribal stance of Country First has been done before—and brought us at its best ethnic cleansing and at its worst World War II. Trump is not the answer to America or is what America stands for. The grand experiment must go on, but different results should not be expected from trying the same solutions over and over again, no matter how loudly those solutions are pitched. His sales pitch is the Great American Con.

Decline and Resurgence of the US Auto Industry (EPI) (Accessed 8/7/2016)

The US Steel Industry, Where we Have Been, Where we are Going, Keith Buse Feb 2005, Citing statistics from the American Institute of Iron and Steel (accessed 8/7/2016)

Coal Usage for Electricity Generation (Accessed 8/7/2016)

Manufacturing and the GDP (Accessed 8/7/2016)

Total Electricity Generation (Accessed 8/7/2016)
Manufacturing Labor Participation Federal Reserve Blog (Accessed 8/7/2016)
Labor participation rate/employment Federal Reserve Blog (Accessed 8/7/2016)
US GDP per Capita (Accessed 8/7/2016)
Infant mortality (Accessed 8/7/2016)
GINI in the US: Income Inequality and its Costs (Accessed 8/7/2016)
The wedges between productivity and median compensation growth, Lawrence Mishel,  April 26, 2012, EPI Issue Brief #330 (Accessed 8/7/2016)

Sunday, July 31, 2016

The Voice of America

UPDATE: On November 8th 2016 Donald J. Trump won the presidential election and will be the 45th president of the U.S. Contrary to all predictions, pundits, and even his own expectations he became the president elect that evening. There are multiple reasons for such outcome and the election campaign and results will be fodder for writers for years to come. Points for further analysis include:
  • Overreliance on negative campaigning by Secretary Clinton: she tried to convince people not to vote for Trump, instead of to vote for her.
  • Low turnout in swing states. In some cases potentially by voter suppression, notably North Carolina, in others on account of the “Comey Letter,” the FBI Director’s untimely letter to Congress suggesting additional (and eventually unsubstantiated) wrongdoing charges against Secretary Clinton.
  • Third Party votes.
  • Influence of polling and the narrative of an inevitable “Clinton Coronation” on supporters who did not think their vote was needed for her to win.
A combination of these factors resulted in an election in which all expectations were trumped.


Donald Trump is not going to be the 45th president of the United States. That is what most polls and forecasters predict. Electoral Vote, FiveThirtyEight, RealClear Politics and many others would make us believe that is the case. Hillary Clinton only needs 270 electoral votes and the ElectoralMap does not look good for Republicans no matter who the candidates are. So Democrats, progressives, moderates, many Republicans and rational people of all stripes and colors can breathe easy: Trump will be defeated by the Blue Wall. Right?

Clinton: 347 / Trump: 191
Yet, disregarding the fact that complacency seeds defeat, while Trumpism may not elect Donald Trump its legacy may survive him.  Just as the Tea Party before it, Trumpism is a movement rooted in a mish mash of social grievances addressed by populist politicians. Its leading figure, Donald Trump, has galvanized a sector of society that is willing to give him wide latitude with the facts as long as he embodies the frustration they feel. And that wide latitude makes for a big bandwagon in which frustration mixes with dark emotions.

Trumpism is beholden to Trump, a figure that voices a grievance and vows he alone has the truth, the solution and the will to carry it out. His solution is to take: take back from usurpers; take away from enemies; take down those who would question him. Trumpism seeks to ensure that the strong will prevail and the weak annihilated. Trumpism seeks to lead the country to a future new paradise where life will be so much better, just like it was in the old paradise. The tenets of Trumpism are the same ones of totalitarian rule, which thrives on the anxious frustrated seeking someone who will protect them from usurpers, enemies and questioners—and lead them to a promised land.

Donald Trump urges his followers to:
With these tools and techniques he presents himself as the spokesman of truths up until now purposely hid by politicians and “the mass media.” He paints a picture to his audience of an America and the world centered on visions of fear and violence. An America where the only valid optimism is to believe and trust in him as a strong leader that will do an undetailed “whatever it takes” to fight against those dark forces he presents in hyperbolic rhetoric and lead the country back to a paradise lost.

That is the essence of Trumpism, a distortion of what America is. That is not America. America is the Promised Land, the land of opportunity. A place where the daughter of a teenage housemaid or the biracial son of a single mother can become president of the United States. A place where new industries are born, a place where new ideas are bred and tested, a place that prides itself in having the pursuit of happiness as an inalienable right for its people, thus believing that the best is yet to come.

Nonetheless, when Trump loses he will have left the legacy of Trumpism with all its tenets as described: a moral black hole. That is why Americans need to stand up for what our country is about and demonstrate to the world that such legacy is repudiated. In this election it is not only votes that count, it is the voice that must be heard. Trump must not only lose. His ideas on how to change America from a bright land of opportunity for all to a dark divisive territory of suspicion of each other must be rejected soundly.

In this election Red and Blue states don’t matter. Even if electoral college votes of any state remain in their historical trend, people in “red states” have to vote against Trumpism, as many as can do. People in “blue states” have to vote against Trumpism, as many as can do. New York and California must not only be in the blue electoral column, they must overwhelmingly reject Trumpism. Mississippi and Georgia can be in the red electoral column, but by the smallest margins ever. 

The voters of America, the popular vote has to say it loudly: Trumpism does not represent America.  Every vote counts as a voice against Trumpism. We owe it to the world to contain Trump and his ideas within a wall of their own.

 Wall Object created by LA street artist Plastic Jesus (AFP Photo/Mark Ralston)
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