A few More Election Observations

Just a couple of observations:

The Return of the War on Women: It wasn’t really called that this year, but in the pearl clutching, fainting couch department, it was 2012 all over again.  Where Romney was portrayed as insensitive and clueless when it comes to women, Trump has been portrayed as a sexual predator.  The failure of the typical War-on-Women attacks in 2014 lead many Republican “thinkers” to believe that it was an expired tactic, but that’s really just a reflection of the difference in the electorate that shows up in Presidential year elections and non Presidential ones.  I predict that in 2018 Republicans will once again declare the War-on-Women tactics dead, and then be surprised when they work like a charm in 2020.

Power over Principles:  Ideology barely made a single campaign stop in probably one of the most ideology free Presidential campaigns in my lifetime.  The Democrats have long espoused a policy, modeled off of Samuel Gompers’s famous quote, of “more.”  The Democratic coalition has long been a “more” party, rather than an ideological party; as long as that “More” comes from the other guys. That’s been Democratic Policy for decades, but the shift of some #nevertrump holdouts as the election neared showed that no matter how you want to slice it ideologically, there are two broad coalitions in American politics, a generally left leaning extraction coalition, and a generally right leaning production coalition.  How else to explain that the same anti war crowd that voted for Obama based on his promise to leave Iraq now voted for the candidate that promised to confront Russia, militarily if necessary, to establish a no fly zone in Syria?

It’s the Identity stupid:  The economy barely showed up as an issue in the campaign.  In fact, it was probably less of a factor in any election in my lifetime, and that includes economic high points hit during the Reagan and Clinton administrations.  The Obama economy has been no high point, but, as I observed in 2012:

“Even if Romney had won, it would have been the last gasp of an archaic idea in US politics; political parties that are more or less based on policy decisions and ideas and to a lesser degree, ideology and the left/right continuum   Eventually, I suspect that we will be voting according to our ethnic, gender, and sexual preferences.  In other words, our politics will become more tribal.”

I’m quite the prophet!  So the economy and public policy proposals (except on the Trump side) were minor accessories to this year’s election, not the central focus as they had been in the past.  But we’re a different country now so tribe is more important than policy. Meanwhile, Trump won about 60% of the white vote although I think these numbers understate that.  Hopefully there will be better data in a few weeks and I’m betting it will show a much higher percentage of the white vote.  That’s the only way I can figure that Trump won such a large victory and won so many previously out of reach states when the percentage of the white vote dropped 2% from 72% in 2012 to 70% in 2016. Although Trump won a higher percentage of both the Black vote and Hispanic vote than Romney did, that just doesn’t give you the margin of victory that Trump managed.  As an aside, that 2% drop in the White electorate every four years seems like a good rule of thumb to calculate how much more of the white vote Republicans will need to win in the future to be competitive.  Some liberal wag on twitter made the comment last night that the white working class finally started voting like a minority.


That’s the future, love it or hate it (I hate it personally, but I didn’t bake this cake).

Policy loses to Persuasion:  Dilbert writer Scott Adams has distinguished himself as the preeminent political prognosticator of this election.  Adams predicted a Trump landslide in 2015 and has been following up on the campaign at his blog, which has turned out to be the most accurate site on Trump for the duration of the campaign.  Adam’s experience in the techniques of persuasion gave invaluable insight into why stupid things that Trump said weren’t stupid at all, they were deliberate attempts to create an imagery and mood and how to feel about something.  Once he had tagged Jeb Bush as “low energy Jeb” you couldn’t help but analyze his speech and the way he physically handled himself to see if he was “low energy.”  Brilliant!   All of Jeb’s 100 million dollars couldn’t save him after that.

I’m sure I’ll have other observations about the election and I’ll post them as they come, but the Trump victory is really making me look forward to Thanksgiving Day dinner conversation.  I intend to make Thanksgiving great again!


Seizing the Cockpit of the Flight 93 Election


OK I was wrong.

Back in August I predicted that Trump would lose to Clinton, and even further back, in 2014, I predicted that Senate would go back to the Democrats. Instead, Trump smashed down the gates of the establishment, winning the Presidency with (as of this writing) 279 electoral votes.  I also predicted that Florida would go Democratic this year.  I was wrong about that too. Instead, this Black Swan Event totally disrupted the polls and the process. How sure was I that Hillary Clinton was going to win?  Last weekend I wrote a totally different draft version of this post, one that made the assumption that Clinton would win: one that would be ready to publish as soon as the networks called the election.  I didn’t even bother to prepare an alternate version.  After all, Clinton had been leading in the polls most of the year, and in that way it resembled 2012 or 1996.  The polls would have to have been totally wrong in order to get another result.

Well they were wrong.

This election truly was the Flight 93 election. While writing this I had thought for sure I had written about this article previously and apparently didn’t.  And for that, I apologize to my readers, since I regard it as the most important piece that’s come out this year in defining the stakes of this election for the right.  Well even though the election is over, it’s still worth reading in its entirety. But just a few excerpts to summarize the main thesis:

“2016 is the Flight 93 election: charge the cockpit or you die. You may die anyway. You—or the leader of your party—may make it into the cockpit and not know how to fly or land the plane. There are no guarantees.

Except one: if you don’t try, death is certain. To compound the metaphor: a Hillary Clinton presidency is Russian Roulette with a semi-auto. With Trump, at least you can spin the cylinder and take your chances.

To ordinary conservative ears, this sounds histrionic. The stakes can’t be that high because they are never that high—except perhaps in the pages of Gibbon. Conservative intellectuals will insist that there has been no “end of history” and that all human outcomes are still possible. They will even—as Charles Kesler does—admit that America is in “crisis.” But how great is the crisis? Can things really be so bad if eight years of Obama can be followed by eight more of Hillary, and yet Constitutionalist conservatives can still reasonably hope for a restoration of our cherished ideals?”

“Let’s be very blunt here: if you genuinely think things can go on with no fundamental change needed, then you have implicitly admitted that conservatism is wrong. Wrong philosophically, wrong on human nature, wrong on the nature of politics, and wrong in its policy prescriptions. Because, first, few of those prescriptions are in force today. Second, of the ones that are, the left is busy undoing them, often with conservative assistance. And, third, the whole trend of the West is ever-leftward, ever further away from what we all understand as conservatism.”

“One of the Journal of American Greatness’s deeper arguments was that only in a corrupt republic, in corrupt times, could a Trump rise. It is therefore puzzling that those most horrified by Trump are the least willing to consider the possibility that the republic is dying. “

Basically, the country is declining, which is an argument I’ve been making for years. I don’t believe any other Republican candidate could have won this year.  The Republican brand is trashed and only a Republican who has an identity of something other than a Republican, like Trump, could have fought through that.  That eliminates almost any other “normal” candidate.  Normal has not been working for a while.

So the question has to be asked, does this mean my basic thesis, that our politics is becoming more tribal and based on identity politics wrong?  I think it actually confirms it. I’ll be curious to look at more hard data on the demographic breakdown as it’s released in the days ahead, but winning Ohio and especially Pennsylvania, which last went Republican in 1988, shows that Trump did exceptionally well with the white working class.  Trumps version of the Sailer Strategy, which is that Republicans should go after the white vote in the same way that Democrats go after the Black or Hispanic vote, appeared successful.  Although I don’t think that was an intentional racial appeal on Trump’s part, when your platform reflects the concerns of the white working class, the results will be similar. As Lee Kwan Yew, the late former President of Singapore noted, “In multiracial societies, you don’t vote in accordance with your economic interests and social interests, you vote in accordance with your race and religion.”  That’s been the trend in the US for a generation; everyone is bunching up according to their identity group.  The last people to recognize that was happening were the Republicans.  I think at this point, they’ll have to learn to accept and deal with that reality.

So it looks like the passengers were able to rush the cockpit and grab the controls, but it’s not clear yet if they can land it.


A Prediction for Europe

Most of the time (and by most I mean 99% of the time) discussing politics on an online forum is a waste of time and effort.  I still plead guilty however.

Ehhh…it’s a hobby.

But occasionally something worthwhile turns up.  I was discussing the future of the West with a Sunni Muslim from the Middle East who has a view of Western decline very similar to a Pat Buchanan style Paleoconservative; the decline of religion and morality in the West will chip away at Western institutions until they crumble.  He has his own version of a life boat, Ta Da!  Islam will ride in and save the day!   I don’t think Islam is as much riding in as boating and walking in.  Nor do I view it as saving the day. That’s more like my version of dystopia, as if Charlton Heston looks up from the beach and sees a giant Minaret.

But before Islam establishes its glorious new world order in Europe, he envisioned a  “bounce back” and revival of Christianity; however briefly.  I was surprised at his theory, because it parallels one that I’ve had for years regarding the future of Europe.

Basically what I’ve envisioned is this:

The demographic and Islamic conversion in Europe will continue, but as the percentages of Muslims grow they will flex their political muscle and slowly remake their societies in an Islamic image. Muslims are about 5% in the UK and about 7% in France, but what happens when they’re 25 and 27 percent?  Either one or more of the current political parties will Islamicize or there will be new Islamic political parties that will share power (if you are at all familiar with the plot of Houellebecq’s Submission you basically know how that will work).

Eventually Europeans, and by that I mean the native peoples who are by and large Christian, whether devout or not, will have a WTF moment, and realize that if they don’t do anything to stop the trend, the outcome is becoming a minority in their own countries, with all the joy that being a non Muslim minority in a Muslim majority country brings.  That’s when you have civil war.  Imagine Yugoslavia, spread out across the continent.

But I can’t imagine that happening until it’s too late to do anything about it. And I don’t think it will necessarily bring a rebirth of Christianity with it, although it could.

Do I think anything could put a stop to this sort of future?  I think that moment has passed. Very notable with last week’s Trump proposal to ban Muslims, European politicians criticized Trump on that, something I think is pretty much unprecedented for European politicians to do; criticize an American Presidential candidate who hasn’t even won the nomination yet.  The fact that they would do that is more than just signaling how morally upright they are, it’s a political signaling too to their own constituencies.  For Europeans, it’s already too late to ban Muslim immigration.  They are already too large a part of the European electorate.  President Hollande vowed to take in even more Syrian refugees.  That will show ISIS!

So long term, eventually you have a Muslim Western Europe, at least as far as political power goes.  That doesn’t mean that even the majority in those countries would necessarily be Muslims, but it seems unlikely they could unite in any meaningful way. Those things only seem to become possible and thinkable when it’s already too late.



Blue Pill Conservatives versus Red Pill Conservatives

This has certainly been a summer of a crack up and civil war within the conservative movement.  It started out as the summer of the Cuckservative, in which conservatives attacked each other over who was giving in and trying to please leftists and their media.  It’s ending as the Summer of Trump; the domination of Donald Trump over all other Republican Primary candidates.

Something is radically changing in conservative politics and the fault lines seem to be radically changing every few months, but there seems to be a current divide that explains a lot of the conservative on conservative conflict: Red Pill vs. Blue Pill Conservatives. If you’re not familiar with the term, a simple trip to Mister Google will solve that since Blue Pill/Red Pill is a fairly common internet meme, based of course on The Matrix movies. Blue Pill is living your life under a delusion, and the Red Pill is when you finally wake up to the sometimes bitter reality.

I first started to have the fog lift out of my blue pill haze after the 2012 elections.  Although I expected Obama to win, I was fascinated by the post election armchair quarterbacking that was trying to pin every other imaginary reason on Romney’s loss other than the fact that, as NBC Political Analyst Chuck Todd put it, “The demographic time bomb went off.”  It was a turning point election because it demonstrated that policy positions, the state of the economy, the unemployment rate, or winning the independents; none of the old rules applied. As I wrote after the 2012 election:

Even if Romney had won, it would have been the last gasp of an archaic idea in US politics; political parties that are more or less based on policy decisions and ideas and to a lesser degree, ideology and the left/right continuum   Eventually, I suspect that we will be voting according to our ethnic, gender, and sexual preferences.  In other words, our politics will become more tribal.

What that means in 2015 is that the Republican Party, which is dependent on white votes, is seeing a steady decline in their voter base. As the Washington Post reported:

The total number of white voters decreased by roughly 2 million in 2012 as compared to 2008, the first time since 1996 that a “race group” (as they describe it) has seen a diminution in net votes cast. And, in the last five presidential elections, the white share of the electorate has dipped by nine points…

That coincides with the factoid that Republicans have lost the popular vote in five of the last six elections.

So if you put the increased tribalism of American politics with the decline of the white “tribe” you end up with a more or less inevitable decline in chances for the Republican Party to win the White House.  Each Presidential election will have whites, the mainstay of the Republican Party, as a declining percentage of the electorate. The result of this is that for 2016, the Democrats start out with an advantage of 217 electoral votes more or less locked up.  When you need 270 electoral votes to win, most of the race is already over before the first primary or caucus vote is cast. The Democratic electoral vote advantage is only likely to widen for each Presidential election.  Every four years the Republican base contracts and the Democratic base expands to fill in the gaps.

So how does the Republican Party Inc plan to address this?  Their 2012 Autopsy Report boiled down to go big on amnesty and then Hispanics will love Republicans since they are “natural conservatives.”  This is so counterintuitive to common sense that I honestly can’t believe that the autopsy report writers believe it.  It sounds that it’s a justification of a policy that the establishment of the party is already committed to based on donor desires.  Certainly passing Amnesty didn’t help either Reagan or Bush Senior.

Pro amnesty John McCain got only 4 percentage points more of the Hispanic vote than self deporter Mitt Romney got.  Considering that Romney would have needed 73% of the Hispanic vote to win, there is no path to Republican victory counting on Hispanic votes. In fact, if you consider the Electoral College math, the increased tribalism of American politics, and the declining percentage of the Republican base it’s easy to conclude that all things being equal, conservatism, as it’s currently formed, is doomed.

As a conservative, when you finally come to that conclusion, you’ve taken the red pill.

This really shouldn’t be that much of a shocker.  The Republican Party was a secondary party for much of the 20th Century.  After being caught holding the bag after the Great Depression, the Democrats were the American political party for decades. Republicans only got a shot at the Presidency again by nominating a national hero and celebrity, Dwight Eisenhower, for President.  Eisenhower’s status made it OK to try voting for a Republican again.  That coincided with the rising post war middle class that found themselves more comfortable with Republican Party values.

Much of the Republican Party is still under the blue pill, and thinks that each election, the slate is wiped clean and they have a 50-50 chance to make their case to the American people (who must be devoid of party preferences and are willing to listen to Republican arguments on an equal footing with Democratic ones) with a promise of tax cuts and smaller government, just like they’ve promised every election for decades.

Red Pill Conservatives think this is a path to continued failure and realizes that something big has to change.  There has to be a massive shaking up of the old order, since it’s on a glide path to obsolescence.  What will that look like?  I’m not sure, but the Republican Party needs to be ripped apart and put back together with a 21st Century sensibility.  Maybe we’ll get a glimpse this election season.


Obama Wins; the Republic Loses

On the one hand, I should be happy that I called it right once again.  Months ago I predicted that Obama would win and I was right.  But on the other hand…Obama won.

The practical effects of that election are that Obamacare, with all of the costs and “unintended” consequences, is here to stay.  To me, this election was a referendum on Obamacare, so I am disappointed in what I see will be the declining state of healthcare in the country. So over the course of the next few years the cost of health care will go up and its quality will decline.  That’s the perfect mixture to lead to Obamacare Part II: Single payer.

But that’s for the future.  For now, the biggest take away is that not that this was just a win for a Democratic incumbent by a rather large margin, but it was the first of what will be the new normal in American national elections:  The triumph of identify politics.

Of course identity politics are nothing new.  That’s been around a long time, but we are entering a new era.  President Obama’s campaign strategy, as leaked by Thomas Edsall on the pages of the New York Times last year.

For decades, Democrats have suffered continuous and increasingly severe losses among white voters. But preparations by Democratic operatives for the 2012 election make it clear for the first time that the party will explicitly abandon the white working class.

All pretense of trying to win a majority of the white working class has been effectively jettisoned in favor of cementing a center-left coalition made up, on the one hand, of voters who have gotten ahead on the basis of educational attainment — professors, artists, designers, editors, human resources managers, lawyers, librarians, social workers, teachers and therapists — and a second, substantial constituency of lower-income voters who are disproportionately African-American and Hispanic.

Considering that working class whites have been the mainstay of the Democratic Party since the New Deal, this was quite a startling change in campaign strategy.  But the results speak for themselves.  You can win the White House without working class whites.  This isn’t really about demography though.  That is an issue, and I’ve already heard it discussed on the post election babble on TV this morning.  As Chuck Todd said on Morning Joe this morning, “The demographic time bomb went off.” But that’s not what I’m talking about; it’s really about how we identify ourselves.

That lesson will revolutionize American politics for the future.  But I may have been among the last to pick up on the idea of whites as “the other” so I’m playing a bit of catch up.  I didn’t even know that white was now being used as a pejorative; at least culturally.  Politically it’s been going on for a while. That’s clear to the most casual viewer of MSNBC. Slate took the position that white men were out of step with the rest of America, with a 23 point gap between Romney and Obama among whites.   What’s up with those white people?  Why can’t they get with the program?

As the lamest, majority/minority in America, white people continue to both fascinate and repel the “normal” people of the country.  As a San Francisco Chronicle columnist put it, … older white males remain the most terrified, lopsided, confused demographic in all of America, perhaps even more acutely – and more embarrassingly –  in this election than any other in modern history.

It’s clear that since Obama carried only 39% of white voters, they are no longer necessary for a win.

Four years from now, as the demography of the United States changes, these trends will become more pronounced.  In the political process at least, whites will be just another minority vying for power among a coalition of other groups. Single white women are already their own tribe.  So what does that mean for our politics?   Even if Romney had won, it would have been the last gasp of an archaic idea in US politics; political parties that are more or less based on policy decisions and ideas and to a lesser degree, ideology and the left/right continuum   Eventually, I suspect that we will be voting according to our ethnic, gender, and sexual preferences.  In other words, our politics will become more tribal.

This has been Democratic standard operating procedures for decades, but the Republican Party has mostly (not entirely) managed to avoid direct appeal to ethnic loyalties.  But it was a doomed policy.  General appeals to all Americans left out those who identified by ethnicity first.  Decades of multiculturalism have taught the country that ethnicity was first.  Eventually leaving a Republican party left with those who didn’t think of themselves as having an identity beyond their American national identity.

So the Republicans became the political party of white people.

That’s fairly standard outside of the first world nations that have representative governments.  Political parties are drawn along tribal lines and politics is a game of acquiring wealth, status, and patronage through the political process for the winning political party; which is really a surrogate for a tribal or ethnic group or a coalition of ethnic groups.  But that’s the lowest level of the political process, and our politics is reverting to it.  Our democracy is becoming less advanced, not more.

There will be lots of Republican weeping, wailing, and gnashing of teeth for the upcoming weeks, with the usual cast of “experts” giving their opinions that the Republican Party is too far right, and needs to change.  But we had in Mitt Romney one of the most moderate Republican candidates in decades, and in him a candidate who was competent and qualified.  He was just in the wrong tribe.

So for the long term big picture, Identity politics will have more to with who supports what party then any public policies, programs, or ideology.  Anyone who has studied anything about post colonial third world democracies knows what that looks like, and it’s not pretty.

We are all hyphens now.

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You’ll Know We Are in Decline When…

A few months ago I wrote about America in decline and a couple of ideas that I thought could, if not turn it around, at least keep things getting worse.  However decline is so much easier than, you know, actually doing anything about it.  I think it more likely than not that rather than getting off the couch and doing something about it, we’ll continue our long slide downward, stirring ourselves only occasionally to go to the bathroom or pop another bag of popcorn.

I had hoped that on my deathbed, right before I whispered “rosebud” to my confused yet adoring family, I could die knowing that the country was still a great power and still had a great future.  Instead, I’ll probably end up throwing a snow globe against the wall and saying, “I hope we can stay even with Argentina.”  Then I’ll die and release my bowels.

I think under either scenario at death I end up releasing my bowels, but for some reason that doesn’t fit in to my rosy America-The-Strong scenario.

English: one hundred doller bill colection

English: one hundred doller bill colection (Photo credit: Wikipedia)

But when you are in the midst of a decline it’s sometimes hard to see it.  Your national self image, inherited from a time when your country was worth a damn, will get in the way.

Case in point, France.  Why is France on the UN Security Council again?

But the current world order will give us a big clue as to when our national greatness begins its slide into that good night:  When the dollar loses its world reserve currency status.

Being the world’s reserve currency means that banks and nations all over the world keep a good stash of US dollars on hand and a lot of internationally traded commodities (like oil) are priced in US dollars.  This is great news for us since it means there is always a steady demand of US dollars worldwide to buy things priced in dollars.  This saves us the expenses involved in constantly converting our currency into another currency to buy things on the international market.  Gas prices at the pump would be even higher if we had to convert dollars to another currency, like the Euro, to buy oil.

Dollars make the world economy go round.

But the dollar isn’t what it was, and other countries are starting to tire of their financial fortunes being anchored to a now whimsical US fiscal policy. The International Monetary Fund has called for replacing the US dollar as the world’s reserve currency.  France has made a proposal to replace the dollar with a basket of several currencies.  The BRICS group of nations (Brazil, Russia, India, China, & South Africa) has formally called for revamping the world financial system and replacing the dollar.

The FED has been working overtime via QE2 to devaluate the dollar.  Not good news if you are actually holding dollars.  The longer you hold dollars, the more earnings power you lose.  Domestically we understand that as inflation.  Of course, since the Bureau of Labor Statistics has rigged our inflation counting, we really don’t know what our domestic inflation rate is, only that mysteriously, prices are going up.

Must be speculators!

Since the current FED chief and the current administration seem to have taken a damn the financial system, full steam ahead policy as far as wrecking the dollar’s value, there is little hope for a turnaround of the dollar’s decline in the near term.  I suspect that the dollar would have been dumped by the world by now if it’s nearest rival, the Euro, wasn’t also in deep doo doo.  The Euro Zone, filled with countries that have also sabotaged their own futures by sinking into debt beyond a reasonable means to pay, make the Euro a poor long term prospect since eventually to avoid default or austerity beyond what the Europeans are willing to endure, they will have to either dump the Euro and go back to their national currencies, or inflate the Euro to the point that even the Greeks could afford to pay their debts.  Either option would end the Euro experiment as we know it.   However that’s the short run.  In the long run, the deterioration of the dollar and our own expanded debt will bring us to the options that face the Europeans now; austerity (which doesn’t mean what it’s critics seem to think it means), or to inflate our currency, or as economists like to say, monetize the debt, will force the world to jump ship, if not to another single currency, than to a basket of currencies.

At that point, let the decline begin!

If the dollar is no longer the world reserve currency, the demand for holding dollars drops like a rock.  Who needs them then?  As the world dump the dollar holdings, the dollar will decline even more.  Without the massive buying of US Treasuries by governments and banks around the world, we can’t run up the massive deficits we’ve been getting away with.

And that fair readers, is Bond-Ageddon; what I call that fateful day in the future when the demand for US Treasuries collapses, leaving us no way to finance our deficit or debt.  If you want to know what sort of austerity that would cause in our government, imagine if we were told that we could no longer run a budget deficit, right now.  Immediately the government would have to cut spending.  And considering the size of our deficits, that would mean everything would be sliced, Medicare, defense, roads, pensions, you name it.  There just would be no more money, and no way to borrow enough to cover our bills.  Not just for a few weeks, but for the foreseeable future.  We would become a 2nd world nation.  Mexico will make fun of us.

So there you go, your own little early warning indicator, the demand to replace the dollar as the world’s reserve currency.  It’s not quite Rome being sacked by Vandals, but they’re on the riverbank, gazing at the city.

A version of this post first appeared on Muchedumbre.com on July 2, 2011.

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Putting the Brakes on American Decline

I originally wrote and posted this a few years ago and have gone back and re-read it since, and it still holds up.  Our big national problems are basically the same, only worse, so I felt this was worth a repost; particularly since it required only a few updates.

Baring stunning breakthroughs in longevity, I should probably be dead in 50 years or so.  But I care what happens to this country after I’m dead, and would like it to continue to be a great power.  Not just a good one, or an “OK power” but a great one.  So I thought of a couple of ideas that I think would help to guarantee American dominance through the 21st Century and beyond.  Not by any means a complete list of course, but just a couple of ideas to get us started.

Getting our fiscal house in order

This should be a no brainer, but given that we are heading for a 16 trillion dollar budget deficit, it’s clear that we are a nation that wants far more government than we are willing to pay for.  How we got in this situation is easy to see:  Republicans are no fan of taxes, but have made little headway (none actually) in cutting spending.  Democrats have a limited ability to raise taxes because the country doesn’t like to pay them, but have an unlimited appetite for Federal spending.  Add both parties in power; simmer for a few decades, and presto!   Of course that doesn’t even count the unfunded liabilities of our Social Security. Medicaid, and Medicare promises, that we have no ability to pay, now, or in the future.  That’s about 61 trillion dollars and growing.

The GOP has already put a proposal on the table to at least get the conversation started on that.  The Ryan Plan would convert Medicaid to block grants to the States and modify Medicare into a premium support plan that is similar to Obamacare’s exchanges to purchase individual healthcare plans.  It’s a start at least and it does reverse the debt to GDP ratio that the current administration has us on.

Any debt plan that doesn’t address the escalating costs of Medicare, Medicaid isn’t really a debt plan, it’s a stalling plan.

Fixing this problem should be a national priority of the first order.  It’s not of course but it should be.  The next place to start is with a balanced budget amendment.  We (both the Congress and the American people) have proven that we are not mature or responsible enough to handle an allowance without adult supervision.  We need some rules and that would be best one.  Just like we self righteously tell someone in credit card debt to cut up their cards, we need to cut up our national one.

In addition we need to redo the way federal budget is handled.  Social Security has a trust fund in theory.  In practice we spent the surplus from that year after year, for decades and in return gave the Social Security Trust fund an IOU.  Of course the days of the Social Security surplus are now over.  From here on out, we’ll be cashing those chits, not collecting them. But that’s not even the only one.  The federal gas tax is supposed to go to a transportation trust to fix our roads and bridges; infrastructure in other words.  What happened to that money?  Same place as the Social Security money, into the general pork fund.  I’m not an accountant, but even I know that taxes that are being collected for dedicated purposes, like the gas tax and Social Security, shouldn’t be spent on anything other than what was intended.  They should be in off budget separate accounts.  Fix these fiscal problems and maybe a dollar will still be worth a dollar 50 years from now.

Tapping into the brain drain

We are a nation of dummies.  We’ve allowed the K-12 educational system in this country to fall apart and since we still don’t have a national consensus on what the problem is or how to fix it, I don’t expect that to be solved soon.  However our system of colleges and universities are still some of the best in the world.  As a consequence they attract the best and brightest from all over the world to come and study. Foreigners dominate our technical graduate and PhD programs. On the world market, a degree from a US University still means something.  So naturally, as soon as one of these foreign students graduates from a degree program with useful technical skills, what do we do?  We kick his or her ass out.

We do have a Visa program to allow people with technical skills to come to this country, but we limit it to 65,000 per year.  That’s a drop in the bucket compared to refugees, family “chain immigration” and other categories that allow people in this country.

And that’s not even counting the illegals.

What should we be doing?  We should gradually increase the number of H1-B technical skills visas and reduce the percentage of the some of the other categories of Visas.  We should also make it easier to allow foreign students to convert their student visa to an H1-B.   Since we can’t produce enough home grown professionals and technically trained people, let’s just import them.  If we are going to maintain our economic dominance in science and technology, we need engineers, IT professionals, and scientists of all types.  We are able to provide domestically all of the sociology and feminist studies graduates that this country will ever need.  Maybe we should export those.

Another useful visa type is the E-2 Visa, which allows foreigners to come to the US to live as long as they invest and start a new business in the US.  The requirements on this visa are tough.  Although a spouse can come over on this visa, children can’t.  Also, if the business fails, you can be deported even if you’ve lived in the country for years.  It’s astounding to me that so many in this country want to give amnesty to people who’ve entered the country illegally, but people who’ve followed the rules, worked hard and done everything we’ve asked we can’t wait to give the boot to.

Between these two Visa types, we can get almost all of the high quality immigrants this country needs. This country is still the number one destination for immigrants worldwide.  As long as that is the case, we should take advantage and get the cream of the crop.  Long term, they provide a bonus to our country by generating upper middle class wages and paying upper middle class taxes.  You want to reduce poverty in this country?  Stop importing so many poor people and start importing an educated, English speaking middle class.

Tax haven to the world

With New York losing its battle with London as the financial capital of the world, we should be concerned that capital is finding other places more attractive than the United States.  We are losing to a European country?  There are a variety of reasons, the financial crisis, Sarbanes Oxley, and even Eliot Spitzer gets some blame for chasing away companies from New York.

And of course there is the tax treatment.  US corporate taxes are among the highest in the developed world.  Although personal income taxes in most of Europe are far above the US level, we make it up by kicking in the crotch the companies that provide jobs and economic growth.   I’ve always found it interesting that “socialist” Europeans want their businesses to succeed worldwide, while in the “capitalist” United States we hate and incessantly attack our most successful companies.  We attempted to break up Microsoft and investigated them for years for anti-trust violations; one of the most successful US companies of the 90’s.  One of the other successful companies, Wal-Mart, is on the liberal ‘sue’ list. You don’t see Finland attacking Nokia for having too large a market share of the cell phone market.

We need to redo our regulatory and tax structure to encourage capital to come to the US to invest, not chase it away.  There are several options to do this, such as the fair tax, or a flat tax.  We should have as a goal to reduce and gradually eliminate the capital gains tax.  Basically, whatever rules and regulations that successful tax havens have, we need to emulate them so people worldwide will want to put their money here.

These are just a couple of ideas and I’m sure other people have their own wish lists for what they would like to see and this is by no means a complete list.  But we need to start recognizing that the US continuing as a superpower isn’t inevitable, or even particularly likely.  It will take much effort and work to continue that status.