Negative Ads Dominate Campaign, Obscuring the real issues

After the American Century

Last week in Virginia, just one week, more than 4,000 negative campaign ads were on radio and television. They came from both the Obama and Romney campaigns. Each clearly has decided that they have the best chance to win if they can undermine their opponent.  But the result of such campaigning is that voters lose respect for the political process and do not want to see or hear the advertisements. More and more people become convinced that the candidates are exaggerating or lying. Indeed, some people  get disgusted and will not vote at all. The candidates know they are driving some voters away, but nevertheless continue their negative advertising. 

There are basically two kinds of negative advertising. The first stays focused on an opponent's political activities, particularly how he or she voted, their relationship to special interests, and any evidence of flip-flopping on important issues.  The second makes personal attacks (veiled or otherwise), suggesting that the candidate is not a good person. So far, we have mostly the former, but there are hints of the less acceptable advertisements, and these are more likely was we come closer election day.

One would think that after four years a president's image would not easily be challenged, though that is what Romney is trying to do. Surely most voters have formed an opinion about a sitting president, but apparently Romney thinks he can convince people that Obama is not a good American - this apparently being the line of attack in some of the ads. Such attacks seem just plain stupid to me. These two men differ in their views, but I do not think either one of them is insufficiently American.

It is time to have a real debate about issues - accompanied by detailed policy proposals. Where do these candidates stand on the following issues?

-  Is it possible to institute some form of gun control, to protect the public from massacres like the recent one in Colorado?

- Should the US continue to use killer drone planes in Pakistan and other countries? If so, what are the limits for using such weapons?

- Do women have the right to an abortion? (An issue especially important given that several Supreme Court positions are likely to open up due to retirement during the next four years.)

- Are banks now sufficiently regulated, or does the new scandal (centered in Britain) suggest tighter controls are needed to prevent them from defrauding the public?

- Should the Bush II tax reductions for wealthy people end or not?

- How should the United States finance university education? Its price tag has increased more rapidly than wages during the last thirty years, and the nation risks becoming uncompetitive with countries where tuition is low or even non-existent.,

- What is the best foreign policy for the future, as the US economy declines in relative size compared to the world economy as a whole?

- To what extent, and how, is the US going to pay off its enormous national debt?

- As evidence accumulates that global warming (and Greenland's melting) are very real, what is the US going to do to reduce its contribution CO2 emissions?

This is only a partial list of important issues. Negative advertising focusing on individuals will not address them. The voters deserve better.

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The Offshore Candidate: Romney and the Cayman Islands

After the American Century

Perhaps Romney should run for president of the Cayman Islands. He has millions of dollars invested there. How many millions we cannot know because he refuses to release his financial records. Does he tithe more money each year to the Mormon Church than he pays to the US government in taxes? Again, we have no idea. 

Candidates usually are open about their taxes, because they want to convince the public that they have nothing to hide. Later on, if elected, they may become less open, as a measure of secrecy comes with high office.  But it disturbs me that Romney is secretive and evasive about his wealth.

What do we know at this point?

1. Romney has kept large sums of money in off-shore accounts, including Switzerland and the Cayman Islands.

2. Bain Capital, that Romney long worked for and that still is paying him, has 138 investment funds organized in the Cayman Islands, where Romney also has millions of dollars, how much we do not know, much of it in 12 of these Bain investments.

3. Money deposited in the Cayman Islands, or invested in funds located there, avoids US taxation. This is apparently legal, but it is not the behavior voters expect of a president.

4. Romney has released only his 2010 tax return, and even that raises questions. In contrast, all recent Republican candidates have released a plethora of information, including all recent tax returns.

5. Romney claims to have deposited much of his wealth in blind trusts, either in his name or his wife's name. But it turns out one of these "blind" trusts has invested in their son's company, and the trust itself is run by one of Romney's close friends. How blind is that?

What do we (know that we do) not know about Romney's finances?

1. The full extent of his fortune, rumored to be about $250 million.

2. The extent of his wife's fortune - much of it transferred from Romney to her.

3. Romney's annual income and the tax rate he has been paying, apparently about 15%, which is a much lower rate than that of the middle class.

4. Any financial  relationships between Romney and the Mormon Church, for which he served as a missionary and is now a Bishop. Does he tithe 10% of his income to the Mormon Church, which it asks of all its members?  Does Bishop Romney pay more money each year to the Mormon Church than to the US government in taxes? We have no way of knowing. Without financial disclosure, we cannot judge Romney's priorities. Does he put is money where his mouth is?

5. To what extent has Romney's wealth increased due to the illegal interest rate-fixing scam that is now coming to light? Mr. Diamond, who was running Barclay's Bank and has had to resign in disgrace, has organized contributions to the Romney campaign, and it seems there may be complex financial ties between some of the banks who illegally manipulated loan rates, Bain Capital, and Romney. Again, full disclosure would clear this up.

Paul Krugman put the larger question this way; "Has there ever before been a major presidential candidate who had a multimillion-dollar Swiss bank account, plus tens of millions invested in the Cayman Islands, famed as a tax haven?" Is an extremely rich man who takes millions of dollars out of the country to avoid taxes the sort of fellow we want running the federal budget, appointing Supreme Court justices, and deciding who ought to be on the Federal Reserve Board? 

Post-Modern Waiting Room

After the American Century

I am sitting in a new emergency room, where I have taken my mother-in-law, because she has broken her thumb working in the garden. She insisted that she could cut the hedge while smoking a cigar at the same time, but fell over a bush. I did not see it, as I was up on a ladder with my back to her. That is another story, not to be told here. But for almost four hours I have been sitting in this curious public space, where many ailing people come through, all of them ambulatory. Those who are more seriously injured or ill come in by ambulance and by-pass this room. 

In fact, if I did not know what this place was, I might have difficulty deciding what it is.

Victory for a Compromise: Obama Care

After the American Century

It costs four times more more money to have a baby in the United States than it does in Germany or in Canada. 

Seen from outside the United States, the Supreme Court decision, which found the new American health system to be constitutional, is only a partial victory. For the law is a compromise that keeps competition and profit-making at the center of American health care. This means that the US will continue to spend billions of dollars supporting a vast health insurance industry and a huge number of tort lawyers. All those white-collar workers and all those buildings could be put to much better uses than making money out of human suffering and human need.

Doubtless there are some areas in which competition can improve medical care, but I doubt these benefits are worth all costs associated with a medical industry that is organized for profit, with all the legal fees, court battles over malpractice, and endless form-filling and record-keeping involved. 

It is much better, surely, to have a system like that in Scandinavia where all patient costs are automatically covered through taxation, and where hospitals compete to provide the best care, researchers compete for funds, and doctor's compete to be the best in their field.  This costs little more than half as much as the US system. Yet Scandinavians compare quite well with Americans when it comes to life expectancy, child morality rates, and other measures of well-being.

According to the 2012 Statistical Abstract of the United States. health expenditures rose as a percentage of American gross national product from 9% in 1990 to 16% in 2008. They do not give statistics for after that year, but surely no one is going to argue that medical costs have dropped since then. By comparison, in Denmark medical costs were 8.9% of GDP in 1990, almost exactly the same as in the US then, but since have only risen to 9.7% of GDP.  In Germany the corresponding figures are a rise for 8.4 to 10.5%, in the Netherlands from 7.4 to 9.9%, in Japan 6.5 to 8.1%.

In short, by 2008 Americans were spending one dollar in every six for medical care, while the Danes were only spending one out of every ten kroner, and Japanese were spending only one yen of every twelve.

How about the rest of the English-speaking world? In 2008 New Zealand used 9.9% of its GDP on health care, compared to 8.6% in Australia, 10.4% in Canada and 8.7% in Britain. In short, no nation on earth except the United States uses anywhere near 16% of its GDP on health care. The closest "competitor" was France, at 11.2%.

Americans have made progress with their new health system, which requires all citizens to carry medical insurance and makes certain that they can buy affordable coverage. But it is still an expensive and inefficient system compared to what already exists in the rest of the developed world. 

Health costs for the typical American family doubled from 2011 to 2011. President Obama was right to see that such galloping growth is unsustainable, and the new system he has put into place should stop costs from rising so fast. But Americans need to develop a medical system that can reduce costs to levels common in other advanced industrial nations.Even with Obamacare, the US system is behind the competition.

The Banality of Evil: What Americans now seem to accept

After the American Century

Fifty years ago Hannah Arendt compellingly argued that great evils are commonly not the work of sociopaths or deranged persons but rather are the work of ordinary persons. They have gradually accepted as "normal" certain actions and social conditions that their ideology tells them are inevitable or unavoidable. Arendt was writing about the kinds of people who carried out the Holocaust, but her insight applies to lesser evils as well.

The United States is hardly Hitler's Germany, but it is in danger of accepting some things as "the ways things are done" or as "normal procedures" that I find unacceptable. These  include.  

(1) Increasingly, Americans are using drone aircraft to assassinate people inside other countries, because they are alleged to be terrorists or because they have the bad luck to be in the vicinity when a drone flies in.  This does not seem fitting behavior for a nation that believes in the rule of law.

Drone aircraft

(2) Beginning after 9/11 Americans have openly taken up the practice of imprisoning people without access to a lawyer and without even being charged. The practice is limited to non-Americans who are outside the country, but once established might become US practice as well. Such imprisonment is against the principles of English common law and it would have been anathema to the Founding Fathers of the country.

(3) Another issue is whether to deny medical care and education to children who arrived in the United States as infants, through illegal immigration. These young people recall no other country as home, and they have grown up as Americans, whatever their legal status. 

(4) Rapidly rising costs of university education have outpaced inflation. These high costs have created a gulf between an ordinary American's aspirations and his or her real possibilities. This makes the United States a less egalitarian society, and also a less competitive one, because some talent will remain undeveloped because the tuition was too high. (By way of contrast, university education remains completely free in Denmark and Norway.)

(5) The United States was founded as a society based on egalitarianism. But today it is fast becoming a society of social classes based on huge differences in wealth. The gap between the average wage earner and the wealthiest 1% has grown enormously since the end of the Cold War, and threatens to become a permanent condition of inequality. This is a question of whether to tax wealthy people more, and also a question of whether to raise the minimum wage.

(6) It has become "normal" for American corporations to move jobs overseas where they pay workers poorly and manufacture with few pollution controls. Extremely successful clothing and electronics companies behave abroad in ways that would be judged unethical or illegal inside the United States. Not only are American jobs lost, but foreign workers are exploited to make every new Ipad and every pair of Nike shoes. Is this just the way things are now? No more discussion?

More issues could be added to this list, but the point would remain the same. These practices have become the new normal. In 2012 Americans seem to accept as ordinary practices, in certain circumstances, murder, imprisonment without trial, denial of medical care to children, loss of educational opportunity, the increasing rigidity of the social class system, and outright exploitation of workers abroad.  These things would not have been acceptable to most Americans a few generations ago, but now it seems that the country is getting used to them. But these practices are not normal or inevitable, they are the result of policies that are relatively recent and that are not common in other democracies.

Election 2012: Causes of American Political Polarization

After the American Century

Jeb Bush has now said what every thoughtful commentator has been saying for some time: the Republican Party has moved far to the Right. Bush is hardly a radical, but he noted that even Ronald Reagan would not fit well into the current climate of the GOP. It has moved so far toward right-wing positions that his father also feels marginalized. The GOP has gone through an internal transformation that has pushed him toward the margins.

This movement toward the Right and the polarization of the two parties will be one of the great subjects for future historians. In a simple-minded sense we can attribute it to the end of the Cold War, which freed Americans to be less cohesive, since there was no longer a common external threat. But if we accept that as the catalyst for this change, it still does not make clear what forces are at work inside the country.

The change can be compared to the slippage along a geological fault, which periodically leads to an earthquake, like the 1994 election with its proclaimed "Contract." To resist this change, the Democrats had to trim their sails and move toward the center. Clinton took some of his program from moderate Republicans, cutting back on welfare, for example, and embracing the NAFTA treaty against the wishes of the labor movement.  But the geological pressures kept building up, and under George W. Bush the country split more completely than before. The bi-partisanship that once was a hallmark of Washington, in contrast to some dysfunctional democracies elsewhere, has largely broken down. 

However, this is only a history of the political surface, not a sociology or history of the forces that have led to this seismic shift. Some of the reasons can be listed:

(1) The increased inequality between social classes. Between c. 1940 and 1972 equality was growing in the United States, as measured in real wages. Since then, the society has increasingly split, with the top 10% benefiting disproportionally, while the income of most of the population has tood still or fallen. 

(2) Greater political focus on non-economic issues, such as abortion, gay marriage, birth control, teaching evolution in the school system, and much else. These issues have been used by the Republicans to mobilize a considerable base. 

(3) The development of large church organizations, often media-based, that offer not only religious services but a community for the working- and middle-class. These mega-churches are typically controlled by a charismatic minister who is not inside a hierarchy like that of the Catholic Church or older, "classical" Protestant denominations. Politically, such churches are seldom on the left. There seem to be few heirs today of the social gospel movement that thrived in 1900, or of the Civil Rights Movement of the 1950s and early 1960s, when in part for religious reasons, millions of white Americans supported social reform.

(4) The persistence of traditional American values, notably individualism and self-reliance, along with resistance to anything that can be labelled "socialist" or "communist." 

(5) The rising cost of medical care and education has increased the difficulties of ordinary Americans. It has become a struggle to educate children and care for the severely ill. One might expect that the Obama medical program would be wildly popular, but it is often seen, instead, through the lens of the traditional values just mentioned.

(6) The persistence of racial and ethnic tensions, which are largely unspoken but a very real part of the shift to the right and the Tea Party demand for  tighter immigration controls.

(7) The transformation of public discussion, changed through the Internet, including Twitter and the blogosphere, which makes it possible, even likely, that people get only the news and opinion that they want to hear, rather than a spectrum of issues and ideas in a newspaper that appeals to a range of readers. Rather than being challenged to hear diverse opinions, the new social media can create on-line communities that share prejudice, rumor, and half-truthes.  "Narrow casting" is becoming the norm, in contrast to the broadcasting, which by its nature was conducive to forming a broader political base that adopted moderate positions. 

(8) The radical increase in campaign spending, along with the sharp rise in the number of negative advertisements. Rather than developing a program, many candidates can get elected by tearing down their opponent. This is not a new idea, of course, but it is more common, and it fosters polarization.

This list is not complete. A historian in 30 years time will be able to look back and identify more social and economic forces that are driving this polarization. It is not only a change inside the Republican Party, but inside the Democrats as well. President Obama understands this and has tried to position himself in the more conservative portion of his party, much to the frustration of many 2008 supporters.  He is a pragmatist, a bit to the right side of the Democratic Party.  On the right side of the Republicans, however, are ideologically driven leaders who reject pragmatism and compromise.

Will coming elections increase tensions and drive the parties further apart? Can the country begin to heal, or will it split further? 

What Does the Wisconsin Recall Vote Mean?

After the American Century

The Democrats failed to recall the sitting governor in Wisconsin, but Obama remains more popular than Romney. What can the candidates learn from these local results?

Which Underdog Will Lose the Election?

After the American Century

There may be an advantage to being a (slight) underdog in the American presidential election.  Both candidates seem to realize this. Supporters are more motivated if the victory seems achievable but not at all certain. The polls have see-sawed up and down, with Obama generally slightly ahead of Romney, but not always.

Obama, as a sitting president, would normally not have much trouble with reelection. In recent memory Johnson, Nixon, Reagan, Clinton, and Bush II all were re-elected. But the US economy apparently is slowing down, if the new job figures are accurate, and the only presidents not to be reelected since 1916 (Hoover, Carter and Bush 1) presided over weak economies. A weak economy always hurts an incumbent. Worse still, Obama's chances might be torpedoed by economic forces completely beyond his control, notably the Greek election later this month, which seems likely to cast Europe into economic chaos, or at least uncertainty. Moreover, the Republicans have raised more campaign money than Obama, which puts the president at a disadvantage in another economic sense. 

Romney is an underdog in quite a different way. As a Mormon he can easily seem to represent a little-understood religion. In the abstract, if you ask Americans are they ready to vote for a Mormon for president, the support is weaker than for a generic woman candidate. Romney is also an underdog in another statistical sense, in that the Republicans are the smaller party, in terms of registration. But perhaps his greatest liability, with many voters, is that he is tightly linked to the financial sector. The public generally distrusts, even hates, the banks. Romney was a key player at BAIN, and this is surely not the ideal qualification for office in the wake of the misdeeds on Wall Street that led up to the meltdown of 2008.

But perhaps the real underdog is the American pubic. In 2012 Republicans and Democrats together will spend $2 billion on the campaign, a rather obscene new record. Will American voters be, in effect, sold to the highest bidder? Will clever advertising replace serious debate? Will the election be won on spin rather than substance? The poor voter will be bombarded with half-truths and misinformation, much of it emanating not from the candidates themselves but from their supporters.  If on election day the big questions on voters minds are such things as how it felt to be Romney's dog on top of his car or whether Obama has a valid birth certificate, then the public will certainly have lost the election.

Are Europe and Greek Debt like the Titanic and the Iceberg?

After the American Century

Imagine that Europe is a large ocean liner called the Titanic, and that it is sailing straight toward a massive iceberg that has appeared in the Mediterranean off the coast of Greece. The original idea  for the ship was to create watertight compartments (national economies) below deck, so that if one or more of them filled with water (debt), the others would not also fill up. But this original plan was not fully carried out in the actual construction. The ship turns out not to be unsinkable because its compartments are not sufficiently strong, watertight, or numerous.

If I could go back in time and rebuild the Titanic, I would carry out the original design more completely. Greek debt is the iceberg smashing into the Euro, and I would rather each national economy had largely to stand on its own. Unfortunately, the European "reform" that seems to be favored by most leaders today is to remove most of the interior barriers and thicken the outside hull of the ship as a whole. The idea is that superior leadership and regulation from the center will avoid most of the fiscal icebergs of the future, and that when they do come the improved hull with be strong enough. I would rather not make well-functioning economies hostage to the Italians, the Greeks, the Spanish, and the Portuguese, or for that matter to any country that in the future might get itself into financial trouble.

What can Europe learn from this fiasco? I suggest that it ought to learn to keep the national economies more separate, rather than the widespread idea that what Europe needs is more integration. Better, surely, (1) to prevent banks from loaning more than 4% of their total worth to a single country, and (2) to limit how much money any nation can borrow abroad, making it finance a minimum 75% of its own national debt. If its own citizens will not buy most of the debt, why should anyone else?

More than two years ago I argued that Greece should not be bailed out. I wrote then, "Greece cannot pay its bills, even in the short run. With a national debt that is more than 110% of its gross national product, and a deficit of more than 10% for this year, Greece's debt will only get worse unless and until it enacts real reforms. So far it has failed to do enough, and the deficit will only get worse."

Most of what I wrote then is sadly still accurate now, except that the rest of Europe and the IMF have been pumping money into Greece while insisting on draconian reforms. But it has not worked. The choices then as now are either Greece leaves the common currency and goes back to its traditional overspending (with periodic drachma devaluation) or it really puts its house in order. Sadly, the second task is beyond its political capacity, as its recent, failed election process demonstrates.

As the crisis has been prolonged, money has been fleeing the country for safe havens before the collapse which seems to draw slowly but inexorably closer. It is difficult to know precisely how much money has been transferred or carried personally away from Greece, but it is more than €1 billion. This money could have helped keep the economy going. It is like taking blood from a dying man. Adding further to the misery, tourists are wary of booking trips to Greece, because it may descend into financial and political chaos. Why go there when other places are far more stable?

The only bright spot here is that the rest of Europe has had 27 months to prepare itself, by putting some firewalls in place. Whether these are good enough is not clear.

Had the Greeks been hit with a natural disaster like an earthquake, they would deserve sympathy and charity. But for years the Greek insisted on spending more than they could afford. They gave massive pay increases and early retirement to state employees that were not funded by taxation. Tax evasion was massive. There is no reason for the other European states to give or to loan them any more money. Giving them another handout will only delay for a short time the day of reckoning.