Well, the last post brought several comments & good discussions about our elections, especially highlighting the dissatisfaction, breakdown, & perceived decline in the quality of both our candidates & incumbents as well as the two party system itself. It has once again become obvious that the two parties just take turns being in power @ the expense of the voters who let it happen.
One comment representative of the discussions - "Doug, I always appreciate your insightful posts. Our country is in such trouble. There has to be some new alternative to the two party system. I have become an independent myself" expressed the frustrations I heard.
It is easy for members of both the Republican & Democrat parties to be disgusted with both parties' terrible records especially since 2019. Mishandling the Covid-19 pandemic caused by the Wuhan coronavirus including throwing thousands of dollars @ roughly 165 million to over 200 million people that led to the highest inflation in 40 years that produced the affordability crisis, where prices still regularly increase faster than wages resulting in unaffordable healthcare & high home prices with steep mortgages in a job market where the prospect of gainful employment that allows for self sufficiency remains elusive for both experienced people & recent college graduates with thousands of dollars of student loan debt outstanding; an attack on the Capitol after false claims of a stolen presidential election in which Trump tried to turn the Constitution on its head asking Pence to throw out electoral votes from states that had certified their votes for Biden; the election of Biden, a doddering old man whose ineptitude & incapacity were attempted to be hidden by the hostile anti-American media until revealed by Biden's nonsensical performance during the June, 2024 presidential debate & whose accomplishments in public office for half a century are nonexistent; a presidential election in 2024 where neither candidate deserved to be president & both had more people vote against them than for them; & the last two years of unconstitutional tariffs, a six month war with Iran that is being waged with no input from Congress or the tax paying public that has resulted in national average gasoline prices over $4 per gallon, & an anti-weaponization fund Trump plans to use to compensate people who assaulted police officers & marched to the Capitol on January 6, 2021 to harm Mike Pence are all examples that display voter disgust.
Some of the above examples of problems, complaints, & grievances against the two party system speak for themselves. Below is a further drill down of others:
The median price of a previously owned house was $434,100 on July 31 - a 161% price increase since 2011. To comfortably afford this median priced house, a buyer generally needs an annual household income between $90,000 & $130,000 depending on location. To appreciate the high home price problem in America consider that the median household income is $87,600. Even considering regional variations in median household income of $94,650 in the West & $92,000 in the Northeast, a would-be median household income buyer barely makes it into the low end of the house affordability range. And saving for the 20% down payment of over $86,000 in the low real interest rate environment is also very difficult if not discouraging.
I have found more & more people are becoming aware of the Social Security & Medicare insolvency problems that I have written about for decades. These pending funding shortfalls currently scheduled for 2032 are still not recognized by enough people or any of our elected representatives.
Instead of working on shoring up the entitlement programs, Trumps' Treasury Secretary Scott Bessent is more concerned with making the next two years look good for Trump by trying to manipulate interest rates lower by two separate schemes.
The first scheme involves the Fed helping Japan strengthen the yen, following a 40 year low against the dollar, through Repurchase Agreements (RePos) where the Fed prints dollars to lend to Japan to buy yen with Japan's large stock of Treasury securities put up as collateral. This arrangement expands the Fed's balance sheet, sending billions of dollars produced out of thin air into the economy, until Japan repurchases the securities with dollars per the terms of the RePo. Coupling the higher global supply of weakening dollars with a stronger yen inevitably will lead to higher prices of Japanese exports to America - representing two thirds of the American-Japanese total merchandise trade while American exports to Japan representing one third of the American-Japanese total merchandise trade are helped by these currency swings. Bessent prefers the RePo intervention method rather than having Japan sell billions of dollars worth of Treasury securities on the open secondary bond market which would spike interest rates immediately @ a time, as usual, that Trump wants rates to drop. Under Bessent's preferred approach he is betting that Professor Friedman is right when he taught that changes in the growth rate of the money supply, like under Bessent's RePo arrangement, take about two years to correlate with changes in inflation, & that the timing is "long and variable." In short Bessent is counting on inflation not showing up under his RePo gambit until he & Trump are just about out of office when the inflation from the RePos can be blamed on the next president. And to top it off after the RePo arrangement concludes everything is right back where it started - meaning Japan still has to solve their currency problem since nothing meaningful was accomplished toward meeting Japan's goal in the interim. The advantage for Bessent & Trump is that the RePo intervention buys some time keeping interest rates lower than the Japanese dump of Treasury securities on the bond market alternative would - until after the midterm election.
The second scheme involves Bessent's plans to double the rate of buybacks of long term treasury securities (10 to 30 years) financed through the issuance of short term bills (weeks in duration). Since this manipulation will reduce the supply of long term treasuries & increase the supply of short term bills, Bessent is counting on long term interest rates declining & new Fed Chairman Kevin Warsh lowering the Fed's policy interest rate target range thereby lowering the government's interest payments - having his cake & eating it too in both the long & short term bond markets. The idea is to please Trump, who would like to see interest rates near zero. But the gross national debt exceeding $40 trillion, heavy AI data center corporate borrowing, & inflation persistently above the Fed's 2% target has helped the bond market see through Bessent's trickery & realize that we need real fiscal & monetary reform especially with the looming Social Security & Medicare insolvencies - Treasury debt has become harder to fund, sending the yields of both long term & short term debt higher. And to his credit Warsh has not indicated that he will function as Bessent's banker, saying @ the recent Jackson Hole Wyoming symposium of central bankers that he didn't find financial conditions restrictive & that he hadn't been convinced that the underlying trend of inflation was improving. Bessent's plan is nothing of substance - it runs from September 10 through November 4. If the plan was a serious inflation remedy & not just a ploy to please Trump, why would it end the day after the midterm election?
So it's been a tiresome & costly seven years of the two parties taking turns being in power & with the above list of grievances it is no wonder that so many people are asking each other "How's that working out for you?"
The problem & solution really starts with the primaries. Some of the 45% of voters who now identify as Independents may have precluded themselves from participating in the primary process. If you are not registered as a Republican or Democrat in your state, check to see if you can vote in your state's next primary. If your state has a closed primary (17 Democrat & 23 Republican) you will need to choose one party or the other in order to vote in the primary. In an open primary state (18 Democrat & 14 Republican) a voter of any affiliation can vote in either primary & some states don't require voters to identify with any party affiliation when they register to vote. In a semi-closed primary state (12 Democrat & 10 Republican) a voter registered as an Independent may choose to vote in either a Democrat or Republican primary.
Ballotpedia gives a good explanation of primary election types by state including an excellent interactive map that provides details for each state.
But dropping your registry with your previous party of choice is not the answer. More than thirty million Independent voters have been excluded from the primary process across the country in recent years. Far left & far right candidates thrive (i.e., get elected) in low turnout primary elections. AOC won her primary by 1.9% after receiving 7.4% of the total registered vote in an election with 12.9% turnout in the summer of 2018. And this past June voter turnout in NYC was between 18% to 25% of registered Democrats in each of the closed primaries for the three contested House nominations meaning less than 15% of the party electorate, no where near a majority, chose avowed socialists to represent the Democrat Party in the House midterms - source Mark Penn & Andrew Stein.
Not participating in the primary process leaves you with the choices of others & for @ least since the Covid-19 pandemic it is a choose your poison exercise. Do you prefer strychnine, arsenic, anthrax powder, phosgene, or Tylenol made by McNeil Laboratories in Fort Washington, Pennsylvania in July 1982 that was laced with potassium cyanide?
***
The other concern people expressed was DSA members &/or avowed socialists winning elections & turning the country socialist. One person told me he has explained the problems with socialism & the benefits of capitalism to the point that he may be on the verge of losing lifelong friends.
I don't think you have to challenge the road to serfdom the way that Friedrich Hayek did in 1944 mostly because people today falling for DSA planks would not know what you are talking about quoting Hayek - since many of them don't know what socialism is. They just know they are hurting.
A much better approach than arguing & losing friends is to review the DSA website & ask specific questions
to people considering voting for socialists based on the content of that website.
For instance:
1) Healthcare For All - "Guarantee universal healthcare @ no cost to individuals, including complete access to reproductive & gender affirming care. Expand healthcare access & quality by investing (a capitalist word) in new public hospitals & clinics. Make all medical education & training public & free."
Since the doctors in the new socialist system will not be going into private practice, where is the incentive for them to spend all of those years in medical school preparing to help people medically? As the number of doctors dries up, where will the medical school professors come from to teach new medical school students, if any? Can you see this plank leading to doctor shortages?
BTW - The word "investing" is primarily a capitalist term because it describes putting money or resources into private assets to make a financial profit.
Socialists generally avoid the word "investing" because it is tied to private financial gain. They prefer terms like "public funding," "social development," or "collective production."
2) Prosecute U.S. & Israeli leaders responsibe for the genocide in Gaza.
But another plank defunded the police & ended incarceration so what is the purpose of prosecution?
3) Defund the Department of War. End all foreign wars & close overseas military bases. End economic warfare against countries whose governments act independently of the United States, such as Cuba, Venezuela, & Iran.
But how do we survive if they attack us?
4) Grant amnesty for all immigrants regardless of status, provide a path to citizenship for all permanent residents, & end visa caps & quotas.
Do you do your part by filling your house with immigrants to live with you & your family?
5) Housing For All - "Housing is a human right. Build new, publicly-owned social housing, strictly regulate investment (capitalist term) properties, establish universal rent control, & guarantee the right to counsel for all tenants."
Strictly regulating investment properties & establishing universal rent controls gives the owners of these properties no incentive to maintain the properties thereby resulting in a deteriorating quality of existing housing leading to severe housing shortages that the proposed "new publicly-owned" entity will have to address. Can you see the problem taking human incentive out of the reason for owning property & people's need for shelter? Can you see how this leads to underdevelopment? And where will the counsellor come from since it will take years of going to law school for a lawyer to represent the person's rights as a tenant - same incentive problem as finding doctors in point #1 above.
These five examples give you an idea of how to go through the DSA website & point out some impracticalities with this brand of socialism. You can also point out Shannon Bream's enlightening rapid-fire "true or false" list of platform positions to DSA national co-chairwoman Megan Romer on July 26 on FNC.
Do you think Romer's answers confirming or defending the following organizational positions during the segment is the answer to your personal dissatisfaction with the two party system - or is there something else in play?
- Abolish the U.S. Senate: Confirmed as true.
- Replace the Presidency and Supreme Court: Confirmed as a goal to alter them from how they are currently known/structured.
- Abolish ICE (Immigration and Customs Enforcement): Confirmed with an "absolutely".
- Abolish National Borders and Grant Amnesty: Confirmed as a long-term plan (including amnesty for individuals currently in the U.S. illegally).
- Defund the Pentagon: Confirmed with an "absolutely".
- Abolish Prisons: Confirmed as part of a long-term program.
- Government/Public Ownership of Large Corporations: Confirmed the stance to end private ownership of major companies and transition control to the public.
In short, don't discuss socialism as a general idea but rather point out the specific real things it means to change people's lives, standard of living, & freedom. Do Americans want public ownership of corporations where they work & have 401(k)s with significant company matches, wealth taxes where there never is enough money so the tax filters down to people in the middle income level, the Department of War defunded, publicly owned social housing, abolishing police, border patrol, & prisons, abolishing the Senate, expanding the number of Justices on the Supreme Court & making both the Supreme Court & president subordinate to Congress?
***
Just like Hayek's dedication in The Road To Serfdom "to the socialists of all parties," I offer the following appeal for consideration to people dissatisfied with the goings on in America & are considering voting Democrat including for avowed socialists or DSA candidates. The appeal does not go against the above advice in this post but can be used in conjunction with it as you think appropriate.
Dear Potential Voter Of Socialists:
Please meet me halfway in that I acknowledge you have a problem but it is not with capitalism & socialism is not the answer. What you are frustrated with is not capitalism. America is a mixed economy that is over 50% socialist - this is the country Millennials & Gen Zers know, have lived in all their lives, & were told was capitalism.
A free enterprise capitalist economy requires an educated & well trained workforce who create things of value for their employers to sell & wealth for themselves, &/or people who start new businesses who have common sense & the energy to make that business successful using the workforce as needed. Over half of our adult population reads @ an elementary school level & far too many Americans are dependent on several parts of the the 126 welfare programs identified by the Cato Institute.
The Pew Research Center reports that more than 65% of millenials (people born between 1981 & 2005) support reducing military spending in order to preserve spending on these welfare programs. This describes a socialist country whose candidates you are considering voting for far more than a capitalist country that you have never lived in.
Just since the Covid-19 era (February 2020 to the present) the dollar has lost 22.5% of its value to inflation meaning prices have increased 29%. One of the tenets of a capitalist country is sound money defined as something that is used as a medium of exchange, something that measures the value comparisons of the goods & services to be exchanged, & something that is an asset to hold that serves as a store of value & unit of account in contracts, investments, & savings.
Please consider the following graphic that shows the United States as a capitalist country using sound money based on gold & silver that produced steady price levels from 1800 until 1946 - the year that the U.S. declared federal policy & responsibility to promote purchasing power. From that point on inflation debased the dollar 94.6% of its value meaning it takes over $18 today to buy what one dollar did in 1946, an increase of 1,735%.
Click on graphic to enlarge
Inflation makes it hard for a young entrepreneur to save $5,000 so that he can turn it into $10,000 & then $50,000 constant dollars. A debased currency does not provide a steady unit of account for the growth described. Instead the real growth to $50,000 is swimming in a sea of inflation that requires a constant calculation to determine the real after-inflation values of contracts, salaries, currencies, & investments.
The other problem a person starting a new business faces today in America is finding qualified help. This brings us back to the need for an educated & well trained workforce. Employers are addressing the shortage of qualified people by replacing poorly educated people with robots. Have you been remiss in your own development of job skills & consequently AI is the reason for your dissatisfaction with life in America? Socialism is not the answer to this either.
The last point I ask you to consider is the growth of the gross national debt to over $40 trillion that was reached on August 18, 2026. Growth of this debt is a way of life for millennials & Gen Zers as evidenced by the following graphic.
Click on graphic to enlarge
You will note that $35 trillion of the $40 trillion was accumulated in the 21st century - virtually doubling under Bush, then again under BO, & then again under the combined nine & a half years under Trump & Biden.
Throughout America's free enterprise capitalist economy whenever debt was used to move production forward, like during wartime, that debt was paid off so that we would have the ability to call on borrowing again when needed, See graphic below - note I have marked the five debt paydown periods: Revolutionary War, Civil War, WWI, WWII, & the Cold War arms race that led to the financial exhaustion & collapse of the Union of Soviet Socialist Republics. Emphasis on the word Socialist.
Click on graphic to enlarge
There has been no attempt or even a mention to pay down the $40 trillion national debt which equals 125% of GDP - a figure well over what economists have shown makes for a less robust economy. The five periods shown above paid down debt resulting from national defense expenditures. The current $40 trillion debt represents money spent on the 126 welfare programs identified by the Cato Institute, which is more in line with a socialist country than a capitalist country.
In summary, you & I are really looking for the same thing but you are trying to find it in socialism. I hope you see from my presentation that the America Millennials & Gen Zers have lived in all their lives is not the free enterprise capitalist country they were told it was. It is a country eroded more & more every year by people making it more & more socialist. You will have a much brighter future working to get America back to the pre 1930s mindset of limited government, personal responsibility, & free enterprise. It won't be easy as Mary O'Grady wrote twenty years ago this past August "... what seems to be tempering the hope of even positive thinkers these days is the growing, sobering realization that the burden of socialism is exceedingly hard to throw off, even when patently obvious that it is the chief culprit producing underdevelopment, poverty, & misery."
What you should be looking for is not socialism but a return to excellence.
No comments:
Post a Comment