Sunday, October 2, 2016

What should have been (but wasn't) debated in this election

All elections are won essentially on emotional grounds and issues rather than rational ones. Politicians promise things they know perfectly well they can't deliver but that sound good, and voters tend to vote "tribally" (Republican or Democratic, regardless of how good or bad the candidate is).  This election is no different.  But in this election the emotional issues (immigration, income inequality, the unlikability and sleazyness of both candidates) have been so dominate that there has been almost no discussion of the real issues facing the country.  If we had a rational election, what might be the real policy issues that would have been debated?  Here is my current suggested list:

Priority 1: As I have argued before, everything else depends on the economy. A strong economy can afford to spend money on things both conservatives want (defense) and liberals want (social programs). An anemic economy can support neither.So the first priority should go to finding ways to keep the maximum number of people employed at the highest possible wages, producing the greatest possible tax base. That implies at least:

1. Improving the quality of US education (now well below the mean level of first world nations)  to better prepare the young for the workforce, and to effectively retrain workers put out of work by shifting trade patters and technological advances.

2. Repairing and improving the national infrastructure that supports the economy.

3. Reducing the national debt - currently over 100% of GDP when external debt is included - so that much of the 6% of the federal budget ($223 BILLION a year) that is devoted to debt service can be redirected to other priorities. Also, a reduced federal debt would leave more latent capacity for federal deficit spending next time we face a fiscal crisis.

4. Supporting directly and encouraging indirectly (with tax policy) increased research and development to keep the nation at the forefront of new technologies that might power the economy in coming generations.

5. A rational reassessment of the regulatory environment in the US.  Regulations are essential, but as is inevitable with a huge federal bureaucracy, regulations have gotten far out of hand, with multiple federal agencies having overlapping jurisdictions and sometimes even imposing conflicting regulations. A 2014 report by the Competitive Enterprise Institute estimated that complying with federal regulation, including preparing and filing all the associated paperwork, costs US businesses about $1.8 TRILLION per year, or about  $15,000 for every household in the nation. And that is undoubtedly a significant underestimate, because it doesn't include the lost opportunity costs - that money and effort  could instead have produced a great deal of additional production or research.

6. A rational reassessment of federal corporate tax policy. On the one hand we have one of the highest corporate tax rates in the developed world.  On the other hand it has so many special interest loopholes that many huge companies pay almost no tax at all.  Clearly it needs a complete overhaul and simplification.

Priority 2: Fixing the broken national political system. Political power inevitably invites abuse and corruption - that has been true all through history and is still true today; it is simply human nature.  The founders of our nation recognized that, and tried to establish a system to at least control and limit the abuses.  First, they divided power among three branches of government, two of them directly elected, so that each branch could be a check on the other two. Second, they gave Congress, a large body of regularly elected people, the sole power to make laws and appropriate funds and declare war - the president can only sign or veto what Congress proposes. Third, they severely limited the power of the federal government, leaving most power in the hands of the individual states, so that the states could act as a check on the power of the federal government.

We have allowed almost all of these safeguards to be overturned by ambitious politicians, and as a consequence are paying the price for our negligence and foolishness. We have allowed the growth of a huge new fourth unelected branch of government, the federal bureaucracy (over 430 federal departments, agencies and sub agencies at last count) that can impose regulations and exact fines and shape policy, yet are not directly accountable to voters or in many cases even to Congress. We have allowed the executive office (the presidency) to arrogate to itself critical powers that only Congress should have (such as waging war or effectively changing laws by failing to enforce laws they don't like). We have allowed the federal government to arrogate increasing powers from the states, removing the restraint that states should have on federal overreach. And in Congress we have allowed gerrymandering to make most of the seats comfortable lifetime sinecures rather than regularly elected positions responsive to voters concerns. Less that 10% of seats in the House of Representative are competitive - the rest are "safe" for one party or the other because of blatant gerrymandering..

It is not at all clear how to overhaul this situation, especially since the political elite have every incentive to keep the status quo. However we badly need to (a) reduce the ability of wealthy individuals, corporations and special interest groups to essentially buy legislation and federal agency rulings in their favor. and (b) make the whole system - legislators and agency bureaucracy alike - more accountable to voters for their actions or inaction.

There are many other things that need to be done, but I would argue that these are the two top priorities at the moment. Too bad both have been largely ignored in this election.