The Tale of Two Countries

I watched President Obama’s State of the Union address last week. I also watched the rebuttal and commentary from the republican side. I was blown away by the difference in perceptions. Perceptions are real, even though often they might be based on false data.

I felt that I was living in two very different countries!

To illustrate the divergence, I will summarize a few perceptions, side by side. You, the reader, will decide which perception might be rooted in fact, and which on fabrication, and which one fits your reality, and which does not.

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Country 1: The economy is in great shape. We have created 14 million jobs, unemployment is half what it was 7 years ago, and we have reduced the budget deficit by 2/3. Price of gas has never been so low! The car industry had the best year in many decades. We saved many jobs there. 18 million people now have health insurance thanks to the Affordable Health Act. We have reduced dependence on foreign oil and invested heavily in the green energy. We have created thousands of jobs in this industry and made it possible for our companies to be competitive in this emerging global market. We also have made great strides in combating income inequality by raising the minimum wage and by extending other benefits.

Country 2:  The economy is not in good shape. Most jobs that were created are low paying jobs. 50% of workers earn an average of $ 30,000 per year. Unemployment is down because many no longer look for work; therefore they are no longer included in the statistics. We have a record national debt, double what it was 7 years ago. The stock market has dropped by more than 10% in the past six months or so. Insurance premiums have skyrocketed since the adoption of the Affordable Health Act. Almost 29 million Americans are still uninsured. 52% of Americans are still not in favor of the Affordable Health legislation. We have decreased our dependence on foreign oil thanks to the new technology of  fracking – a practice, both the President and his party have been fighting. We have already killed thousands of jobs in mining. Over 47 million people are on food stamps and live in poverty, more than when Obama took office in 2008. Wages continue to be stagnant.

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Country 1:  ISIL is a bunch of misguided guys on pick up trucks with machine guns, they are not an existential threat to America. We have killed many of its top leaders, destroyed their supply lines, and disrupted the flow of money. We are leading a coalition of about 60 countries to defeat it.  

Country 2:  ISL is growing as a threat. ISL is now in Libya, Indonesia, Egypt, Nigeria, Afghanistan, the Philippines, Burkina Faso, and other countries. They have killed people on American soil as recently as a few weeks ago. People do not feel safe in their home. In the recent past, ISL downed a Russian civilian airplane, killed innocent tourists in Istanbul, and other innocent people in Paris, Beirut, Jakarta, and the U.K.  

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Country 1:  The agreement with Iran assures us that Iran will not have nuclear weapons. We have avoided starting another war, and spending our treasury, and sacrificing our young men and women.  We are not the world’s police force.

Country 2:  The Iranians have violated a U.N. resolution by testing prohibited ballistic missiles. We are about to release 150 billion dollars that surely will be used to buy armaments, and finance terrorist groups in the Middle East and elsewhere.  North Korea just exploded a hydrogen bomb. It shows that you cannot trust or negotiate with rogue states.

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Country 1:  We are the most powerful nation in the world! Russia and China are second-class when it comes to the military. The world comes to us when there are problems to be solved. We contained Ebola and saved perhaps two million lives.  

Country 2:  Our military has been decimated by cuts to its budget. We have the smallest military in several decades.  We are not respected in the world. We put lines in the sand but do nothing when they are crossed. Our allies question our resolve.  Just last week Ebola claimed new victims in Sierra Leone.

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Country 1:  The Trans-Pacific Trade agreement frees American products from 18,000 taxes that prevent their entry and sale in the Pacific region.

Country 2:  The trade agreement is not a good deal for America. It will facilitate the export of thousands of jobs overseas. We are not smart dealmakers.

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Country 1:  We have a robust foreign policy. We are leading the world with multilateral involvement of and cooperation from many countries, not unilaterally as in the past. America is now more respected.

Country 2:  The world is a mess. Obama withdrew from Iraq to keep an irresponsible election promise, leaving a vacuum, soon filled by Iran and ISL. The Middle East is in flames.  We bombed Libya to smithereens and destabilize the country. Leading from behind has made us the laughing stock in many capitals.

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There is some truth in both competing perceptions. We are prone to filter facts that do not fit out our paradigm – our lens on politics. The clash between the two competing visions will not go away anytime soon. Reconciliation for the collective good is elusive as each side pursues petty self-interest.

Democrats constitute about 30% of the electorate and Republicans about 27%, leaving the rest in the Independent or undeclared column. It is one of the two nominees of main parties that will determine our collective future.  Without a leader capable of building national consensus we will continued to be a divided nation. 

Inability to unite Americans was President Obama’s only parting regret in his State of the Union address.  

I personally attribute this failure to the passing of the Affordable Act without the involvement of and participation by the opposition when Democrats controlled both chambers of Congress. With absolute power, they enacted a far-reaching law without bi-partisan support and thus planting the seed of discord that has dogged the country for the past five years.

We badly need a uniter, not a divider, to emerge as our next president.

The Primaries Are Coming ...

The presidential election of 2016 is already in full swing. The field is crowded, in particular on the Republican side. All candidates want your vote, and they all promise that their policies are better for you.

As I listen to the electioneering, I am overcome by confusion.

I like some things, and not others. I suddenly realize why my liberal friends think of me as a conservative, and why my conservative friends think of me as a liberal. I am one of those guys who look at ideology as one column in the menu of ideas. By habit or by personality type, I am one of those guys that often select items from both columns, A and B.

This propensity of picking and choosing drives true believers nuts. They accuse me of being wishy-washy, unable to make up my mind, lacking strong convictions, and so on. Some will come to my rescue suggesting that maybe I am an independent. Independent from what?

I decided to do a little research on the ideology of both extremes of the political spectrum: socialism and capitalism, mindful that I am skeptical of anything that ends in -sm.  I learned years go that all –sms have two sides. On one side, they seduce you with all the benefits the ideology has to offer; on the other, they minimize the negative consequences.

For the two major parties, it is not an all or nothing choice of these two opposing philosophies, but a more or less combination. Folks in America do not like being called socialists or capitalists, choosing progressive (liberal) and conservative (right wing) as desirable substitutes.

One group demonizes the other by referring to its adversary as extreme -- extreme from their position, of course, but not necessarily from middle ground.

A cursory review of these two political movements …

Socialism

It came about in the mid to late 1700’s out of “the general concern for the social problems associated with capitalism.” Over the years many forms of socialism have emerged. Central to all is the degree to which to rely on markets versus planning, how should the economy be managed, and how to distribute goods and services.

A common thread throughout is that the state should own most, if not all, property. Lately, socialists have adopted a variety of other causes and social movements, such as environmentalism, feminism, social justice, pay equity, and liberalism.

Socialists tend to be internationalists. They desire a world where class differences are minimal, all countries have an equal say over collective issues, and where one country should not necessarily be better than another.

On May 1^st, socialists celebrate Labor Day. The hymn they sing during the festivities is called appropriately Internationale, a hymn crafted in France around 1880 and popularized during Soviet times.

On the negative side, socialism is often criticized for its “one size fits all approach.” Although we are all created equal, some folks will argue, we differ in ambition, capability, and motivation. Many see the lofty goals of social equality as utopian and far from practicality. Attempts by many states to plan economies have been utter failures. Government intervention tends to distort markets, ignore consumer needs and preferences, thus creating artificial barriers.  Critics suggest that heavy government intervention fosters crony capitalism as political “oligarchs” choose the winners and losers.

Capitalism

Capitalism is an economic system based on private ownership of the means of production and the creation of goods and services for profit.

It all started in Florence, Italy, when wealthy Florentine rulers began to loan money to the warring rulers of Europe. They did so for profit (interest).  Central to capitalism is ownership of private property, capital accumulation, and competitive labor markets. Investments are to be determined by private decision. It is the parties to the transaction that need to agree on prices at which they will sell or buy assets, goods, and services.

The degree of competition in markets, the role of government intervention and regulation, and the scope of state ownership vary across different models of capitalism. Capitalists will point out that they are more efficient at producing products and services consumers want.

Capitalists tend to be nationalists. Their primary concern is for the country in which they live. As a result they promote robust defense policies, preferential trading rules, and a less intrusive government. In the U.S. many believe that America is exceptional and blessed by a manifest destiny. The left scoffs at this assertion and the arrogance they associate with it.

On the negative side, capitalism has been criticized for its heartless and often greedy and predatory practices. Some suggest that the notion that markets are free is an invention, and that private property rights should not trump social needs. Another criticism is that wealth provides few  privileged lives. Other criticisms are that money can corrupt the political system and that capitalists lack concern for the environment.

The reality is that most economies are a mix of state and private ownership.  In defense of socialism, supporters will bring up the Scandinavian example. Indeed, socialism has thrived there and is accepted as the norm. There are many unique factors that make the system work in these Nordic countries, e.g., community solidarity, common values, and a higher degree of interdependence. The rest of the world is not Scandinavia, critics point out.

Fascism

A few words on this ideology might help since it has become fashionable to hurl charges of fascist to the opposition, especially to the extreme right.

Fascism is a form of “radical authoritarian nationalism that came to prominence in early 20^th century Europe.” National unions in opposition to liberal market practices, Marxism, and anarchism promoted and influenced fascist ideas in post-WWI Europe.

Its most famous advocates were Mussolini and Hitler.  They were both staunch socialists. Stalin, although a committed communist, used fascist methods to rule the Soviet Union by mobilizing the entire country under a strong leader (dictator) in order to forge national unity and maintain an orderly and stable society.

History has shown that both, the left and the right, of the political spectrum have used fascist methods.

Fascists advocate a mixed economy, protectionist and interventionist economic policies. They reject assertions of violence automatically being negative in nature and view political violence, war, and imperialism as means to achieve national rejuvenation.

In post-WWII years, few parties will describe themselves as fascist. Political opponents often accuse the opposition of non-democratic or dictatorial methods, usually using the term fascist pejoratively.

The Middle Class

Here is a term that you will hear a lot during the political campaign.

In a not very class-conscious America, it has come to include just about everyone who is not poor or rich.  If you ask any American in what economic class they belong, most, if not all, will say middle class, even though they might be poor or wealthy.

CNBC’s survey of millionaires identified 4% of the respondents as wealthy or rich, while 44% were classified as middle-class. This leaves 45% in the working class and about 7% in the poor category.

Democrat leaders consider middle-class as anyone earning less than $ 250,000. The IRS tells us, on the other hand, that 95% of earners make less than $ 167,000 per year. The cut-off in order to be in the top 50% is roughly $ 35,000. The most recent census showed that the average household income was $ 53,637. It was also reported that the median income was $ 88,800.

These numbers are stubborn facts that no politician can change.  However, that will not stop them from manipulating them.

So the argument that the middle class, once the strength of the American electorate, is shrinking is a fact. Tax policies can narrow the gap between the classes, and avoid using cut-offs or brackets designed to protect voting blocks. 

Some Interesting Questions

I include this list because you often hear it during heated debates. You might want to add to this list.

·      Does it make sense to ask those people who do not pay or pay just a few dollars in taxes whether someone else should pay more?

·      Is it easier to redistribute someone else’s income than your own?

·      Why cities with the strictest gun control laws have the highest crime?

·      How can the rich rob from those who have nothing?

So What?

The electorate, by and large, is not educated to make the vital choices to cure the nation’s ills. Politicians feast upon this ignorance! They will appeal to our darkest fears, imagined or real injustices and grievances, racial inequities, and class envy to get our vote.  

Proceed at your own risk!

This worries me a lot. How about you?