So who gets stiffed, and how?

Congress, after endless months of haggling and posturing, finally got around to putting together another COVID relief package. It is, of course, packed with all sorts of goodies for special interests and the wealthy (racehorse owners got a special tax break, for example).

But the legislation does at least put some money in the ordinary person’s pocket. Since about 70% of the US economy comes from consumer spending, and since a large portion of the country is in financial distress, most of this money will go right back into the economy helping, we hope, to avert a 1930’s-type depression. So on balance I think this was the right thing to do, and no doubt the Biden administration will try to do more next year unless the economy shows signs soon of a sharp rebound.

But this is almost a trillion dollars more added to the burgeoning national debt, added to the $2+ trillion from the March stimulus package, and the $1+ trillion budget deficit that we already had in 2020 before COVID hit. With an official federal debt (now about $27 trillion) greater that the entire nation’s annual GDP (about $21 trillion in 2019), and additional off-books unfunded obligations (mostly in Medicare and Social Security) totaling somewhere between $125 trillion and $200 trillion, depending on what one counts, we have an exceedingly large debt load. The federal income in a good year is only about $3.5 trillion, and that doesn’t even cover our current expenses, let alone begin to pay down any of the debt.

So I have been wondering, in the end who gets stiffed, how and when? Clearly someone is going to get left holding the bag eventually, and history suggests it won’t be the wealthy or the politically well-connected.

I see only three ways this can end:

One. Congress raises taxes (and restrains its proclivity to spend) enough to actually cover the current federal budget and also begin to pay down the debt. That would mean at least doubling everyone’s taxes, if not more. Pigs will fly before that happens!

Two. The fed lets inflation rise to begin to eat away at the debt. Suppose we try to get the real total debt (assume it is about $150 trillion in todays dollars) down to no more than the annual GDP – say about $25 trillion in today’s dollars. That is reduction to 1/6^th its current size. A 6.2% inflation rate would reduce the real value (buying power) of the current debt to one-sixth its size in 30 years. (the dollar denomination of the debt stays the same, but they are cheaper dollars by a factor of 6). That assumes Congress doesn’t add any more debt during those 30 years, a highly unlikely assumption.

Of course a 6.2% inflation rate would also destroy the buying power of everyone’s investments, savings, and retirement plans as well.  In effect it is exactly the same as simply confiscating 5/6th of everyone’s assets to pay down the debt. And a high inflation rate would have other troublesome aspects. The government would have to offer higher interest rates to roll over Treasury notes, which would increase the annual interest payments and hence the federal budget. And higher interest rates would put a damper on business investment and expansion, reducing growth and hence federal tax revenue.

Three. The government simply defaults on the debt. Promised pensions get reduced or not paid at all. Medicare/Medicaid and Social Security disappears. Pension funds invested in Treasury notes lose their investments, so they go under. And investors get very skittish about loaning any more money to the US government.

If there is another alternative I don’t see it. A mature economy like ours is unlikely to grow fast enough to increase federal income by enough to pay down the debt, and if it did Congress would likely simply spend the additional revenue. There is no dearth of expensive new programs that the left or the right would dearly love to fund.

So the question remains, who gets stiffed in the end? Probably those who can least afford it, and who have the least political power, as usual.

 

Returning to normal?

It will be a relief not to be embarrassed internationally by our president, to be deluged with floods of misinformation from Trump’s endless tweets, and to have some sort of consistency coming from the presidency. But Democrats need to get real about this election. While Biden won the popular vote by many millions, it is the electoral college vote that matters, and he won those by the slimmest of margins – just over 81,000 votes in four battleground states (Nevada, Wisconsin, Arizona, and Georgia) gave him the presidency, just very slightly more than the razor-thin margin by which Trump won the 2016 election. And Democrats performed miserably in the House and Senate races, and disastrously at the state level.

Looked at that way, Democrats have by the slimmest of margins won a short 4-year window to try to reverse their fortunes. If they don’t the next president is likely not to be a Democrat, is very likely to be another populist, and might even be Trump again.

There is a palpable sense of relief among the chattering classes that Washington is hopefully going to return to “normal” again.  But Robert Reich, who was U.S. Secretary of Labor from 1993 to 1997, and served in the administrations of Gerald Ford, Jimmy Carter  and Bill Clinton, wrote an article recently entitled Beware going 'back to normal' thoughts – normal gave us Trump. (if you don't want to read his book, you can watch his 12-minute video on YouTube summarizing his book here , or you can watch his hour-long movie Saving Capitalism on Netflix - it covers much the same argument) He has a point worth considering, a point he has been arguing in a series of good books, the latest of which is The System: Who Rigged it, How We Fix It (2020). His argument is that the American system is currently rigged for the rich elite, and the rest of the country is in the process of revolting against them (a point I have been making as well).

Biden is filling his top spots, naturally, with the experienced people he has been working with for years. The problem is that these same experienced people are the ones who got us into and kept us in the endless Middle East wars, who promoted the globalization that has put out of work and  impoverished million in Middle America, who abetted the disastrous CIA ”rendition” and torture programs, whose policies helped the Chinese to exploit the world's trading rules to their advantage, who arranged after 2008 for the “too-big-to-fail” banks to get even bigger, who promoted the probably-illegal drone assassinations, and who failed to understand or deal with the destruction of the American middle class. As Reich argues, this “normal” was what gave us Trump in the first place. And if we return to it we may be setting the stage for another Trump, or worse.

The question is whether Biden and the Democratic party will understand that they won by the slimmest of margins and could well lose the next election if they don’t pull up their socks and pay attention to the unrest in the country that produced a record number of votes for Trump in this election. I’m not hopeful. The party didn’t appear to learn much from the 2016 election, and managed to delude themselves thoroughly before this election.

Thoughts on the nation

 This started just as an observation, but seems to have turned into a long sermon. Sorry about that!

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I have been thinking a lot recently about the 2016 and 2020 elections, and about two aspects in particular; (a) the fact that after 4 years of Trump mismanagement he still drew the second greatest number of presidential votes in history, exceeded only by Biden, and (b) the profound split in the nation that these elections have revealed. The media talking heads tend to think of this split as liberal vs conservative, and are often fairly disdainful of the conservative side, the “deplorables”. But I think that is really pretty shallow, condescending and self-serving reasoning. The reality is, I think far more complex.

First of all, we are all – liberal and conservative alike – in this together. As Ben Franklin once said, "We must all hang together, or, most assuredly, we shall all hang separately." That is as true now as it was when Franklin said it. Well-off urban elites, stock brokers, politicians, academics and senior executives may disdain the “lesser classes” that vote for people like Trump, but in fact they are wholly dependent on all those “lesser classes” for their daily comfort, indeed even for their daily existence. 

Think about what the world would be like if all the highly-paid people in the country stopped working for a month. Some software would be delayed, college classes and academic research would stop, some stocks wouldn’t get traded, some lawsuits and big corporate mergers would be on hold, lots of inter-office memos wouldn’t get written, and Congress wouldn’t get anything done. Would anyone really notice, except perhaps for the missing doctors?

Now think about what the world would be like if all the low-paid people, the “deplorables” stopped working for a month. The food would run out first, since no one would be working the warehouses, driving the delivery trucks, or restocking the store shelves. Water, gas and electricity, telephone and internet would go next, since no one would be maintaining the utilities or repairing the inevitable breakdowns. All construction and home maintenance would stop. People on cruise ships or in hotels would suddenly find themselves having to make their own beds, clean their own bathrooms and cook their own meals. Police and fire protection would disappear. There would be no gas at the gas stations or oil in the home furnaces because no one was driving the resupply tankers, but the oil refineries would be shut down anyway, with no skilled trades to maintain and run them. And of course most farmer’s crops would suffer and lots of livestock would die

My first point is that we are all dependent on one another in this society. And just because someone is wealthy and highly paid, and perhaps highly educated, it doesn’t follow that they are therefore more essential than people who are paid less or are less educated. There are times when a good plumber is far more important than a nuclear physicist, or a good nurse more important than a thoracic surgeon, or a good farmer more important than a corporate lawyer.

Our society has people with a wide range of abilities. Some are smarter than others. Some have more drive than others. Some were lucky enough to get better education than others. Some are healthier, or stronger, or taller than others. Not everyone is suited to be a professor of mathematics or a wall street “quant” or a C++ programmer, just as not everyone is good at car mechanics or farming or being an Olympic gymnast.

This distribution of ability is reality, and a healthy society needs to find a way to provide a reasonable life and useful employment for almost everyone, whatever their functioning level.  That used to be possible for the majority of people in this country. There were lots of assembly-line jobs in manufacturing, jobs in skilled trades like pipefitting or welding or construction, moderate-skill office jobs like typists and filing clerks and messenger boys, and manual labor jobs like dockworkers and ditch diggers. And there was farming. These jobs, especially after unions became common, usually provided a reasonable, if not opulent, living wage for people with average intelligence and a high school, or even just a grade school, education. An assembly line worker at GM or Ford or Whirlpool could afford a house and car and occasional vacations away, and support a family reasonably.  

But the world has changed. Lower-skill jobs have been automated, or moved offshore to lower-wage third world nations. Dockworkers were displaced by container ships. Small farmers were bought out or outcompeted by huge agribusinesses. Ditchdiggers and road builders were replaced by complex million-dollar machines run by one guy. Filing clerks were displaced by computers. Auto assembly lines are now rows upon rows of robot arms. Travel agents were displaced by online self-service sites. And on and on…. Read Barbara Ehrenreich’s 2011 book Nickel and Dimed: On (Not) Getting by in America to get an idea of what this is like now for the average worker.

Here are two graphs I posted last year that make the point:

The point of this first graph is that those of us in the top income brackets have done very well indeed since 1965. Those in the lower income brackets have seen hardly any wage improvement at all in 60 years! No wonder they are struggling.

 

The second graph makes the point that since about 1970, increased productivity has not been matched by increased wages. Where did all that excess profit go since 1970? Mostly to the top 1%, and in fact mostly to the top 0.1%. No wonder so much of the country is furious and willing to elect anybody who will at least acknowledge their pain.

The result is that we now have a substantial proportion of the nation, many of average intelligence and no more than high school education, that can no longer make a living wage.  And we have evolved an “upper class” of generally (though not universally) more intelligent people, generally with more education, who work in highly-paid fields, often technical fields, and who unfortunately seemed to have developed a disdain for their less-well-off fellow citizens.

This has produced an unhealthy tension in our society, with the well-off disdaining the less-well-off and the less-well-off deeply resenting the well-off, and for good reason.

We have developed a tradition at our family parties of watching funny YouTube videos at one point in the party. At a recent birthday party (via zoom, of course) we all watched a really funny video in which a (liberal) reporter interviewed Trump supporters, many of whom were revealed by his rather condescending questioning to be not really very bright. I laughed a lot, yet on further reflection I am really embarrassed that I laughed at the ignorance of those people – it revealed an intellectual arrogance in myself I am not proud of.

Woke liberals would never laugh at the ignorance of Muslims, or blacks, or transgenders, or Hispanics – and plenty of them are ignorant, though no fault of their own. And most people would understand that it is not right to laugh at a cripple. But somehow it is ok to laugh at the ignorance of our own fellow citizens, who also are generally ignorant through no fault of their own, but just the luck of their genes, their parentage and/or their social condition. I don’t think so!

So my second point is that we have a serious social problem – the workplace no longer has reasonable jobs for people who weren’t lucky enough to get the good intelligence genes, and/or lucky enough to be born into families wealthy enough to give them a good education. This has produced a very large portion of the population who are in deep economic distress, who are being ignored – even disdained – by the better-off, and who, reasonably enough, deeply resent this. Enough of them that some 73+ million of them voted for Trump, or at least against the status quo, in this last election despite all his obvious faults, many just to give a finger to the ruling elites. That’s a lot of people to piss off at once!

I highly recommend Arlie Hochschild’s 2016 book Strangers In Their Own Land: Anger and Mourning on the American Right. A liberal Berkeley sociologist, Hochschild set out to “cross the wall” and try to see the world from the point of view of the “deplorables”.  In my opinion she succeeded, and what she found is quite revealing.

The serious social tension that that is revealed in this election can destroy a society, can lead to civil unrest, civil war, or revolution, and can create the conditions for the rise of authoritarian leaders and regimes. There are valid ethical/religious arguments for being more compassionate toward those less-well-off than ourselves, but let me make a more pragmatic argument: we risk our own well-being if we don’t address this problem. Take a look around the world at places that have fallen into revolution or authoritarian rule. There are plenty of examples, and none of them are pretty.

My third point is that our current political system is unable to solve this problem, or perhaps even to recognize or understand the problem. The reasons are too complex to explore here, but the point – which is probably obvious – is that the federal political system is dysfunctional at the moment, heavily beholden to wealthy individuals, corporations and special interest groups ($14+ BILLION was spent on the 2020 campaign!), staffed mostly by the rich (the majority of the 116^th Congress were millionaires). The end result of these effects, and many others, is that U.S. federal politicians in both parties generally have little real idea of the economic difficulties of a large segment of the population, and little incentive to correct their ignorance. Local politicians have a better grasp of the problems, but much less political leverage.

Some commentators are fond of claiming that Trump voters are so dumb that they are voting against their own best interests. Perhaps not. Most of us think globalization has been a good thing; it has certainly helped our investments. But if you are a 50-year old unemployed factory worker whose factory was moved overseas and whose town is now a wasteland, it doesn’t look so good. Forgiving college loans sounds like a great idea – if you are middle class. If you didn’t go to college it just looks like a government handout to a special interest group. Green energy sounds like a great idea, unless you happen to be one of the twenty million or so who make your living directly or indirectly from the extraction, processing or transportation of oil or gas (sure, in theory you can retrain from being an oil rig roustabout to installing wind turbines 500 feet in the air – how likely is that?). I can understand why some people don’t think the major parties - Republican or Democrat alike – represent them, and why they might vote for someone who doesn’t talk down to them condescendingly, and who at least acknowledges their pain, even if he didn’t really do much to change it.

It seems to me this all has to start with an attitude change, mostly among those of us who are better off and better educated. It starts with the recognition that most of us are where we are now due primarily to dumb luck – we were lucky enough to get good genes, lucky enough to manage to get a good education, lucky enough (most of us) not to get saddled with a debilitating disease or depression or get trapped in an addiction that ruined our chances, lucky enough not to have a family or be raised in a subculture or go to a school that killed our interest in learning. It may be true that we are where we are now because we worked hard – but there are lots of people in the country who have worked a lot harder than we ever did and are still dirt poor. We were just lucky, so we have no cause to feel superior to those “dumb Trump supporters”.

It continues with the recognition, as I said earlier, that we are all in this together. It is in our own best interests to ensure that ALL our fellow citizens have a decent life. There are moral and religious arguments for this as well, but I want to make the pragmatic argument: if enough of our fellow citizens become desperate and disillusioned enough, it will threaten the stability - even perhaps the very existence – of our nation. We think we are so smart, so we ought to be smart enough to see that.

It ends with the recognition that it is OUR responsibility, the responsibility of those of us who are better-off and better-educated, to deal with this problem. We (or at least our class, if not ourselves personally) created this problem, with our drive to automation and globalization and efficiency and higher profits, heedless of the human consequences to the workers thereby displaced. It is our class who has profited, sometimes handsomely, from these changes. It is our class who has the education to figure out how to make a more equitable workplace in the nation, and our class who has the wealth and political power to make the required changes.  In short, we (as a class, if not personally) caused the problem, so it is up to us to fix it.

It will take a lot more than the sort of band-aids politicians typically offer to win votes, like a $15 minimum wage (nice, but not much help if one has no job at all), or Obamacare (helpful when sick, but not much use for putting food on the table day to day or buying warm clothes), or tax cuts (not much help if you are among the 44% of the country that doesn’t make enough to pay taxes), or farm subsidies (which go almost entirely to huge agribusinesses, not small farmers). It will take a rethinking of the workplace and the economy, and figuring out how to create enough  useful and meaningful jobs that pay a living wage for people of average intelligence and without higher education.

That’s our challenge. And if we don’t take it up, we deserve the consequences.

Bad losers

President Trump’s inability to come to terms with his loss and give a gracious concession speech is certainly embarrassing for the nation. Even Hillary Clinton managed to give a gracious concession speech in 2016, though it was apparently delayed half a day by her need to have a private tantrum first. And the Republican Party’s backing of these interminable re-counts and challenges, when it is pretty clear none will affect the result, is annoying.

But I do recall similar Democratic attitudes after Trump’s 2016 victory. Remember the effort to suborn electoral college delegates to change their vote? Remember the movement to impeach Trump even before he was sworn in? Remember all the Hollywood celebrities who claimed they were going to leave the country because Trump won (none did, as far as I know). And of course the "never Trump" crowd has spent the last four years relentlessly attacking the president any way they could, from the now-discredited "Russian collusion" to the failed impeachment effort, and endless media spin against him, no matter what he did.

Being a bad loser seems to be the norm these days, in both political parties. That’s pretty sad.

Thoughts on the progressive agenda

President-elect Joe Biden, a moderate by nature, will have his hands full keeping his party together over the next few years. The far-left progressives muted their tone somewhat during the campaign to help him win, but now that he has been elected they are already starting to build pressure for him to swing far-left and support things like Medicare-for-all and free college and forgiving all college loans. What is there to say about these sorts of far-left progressive proposals?

Garret Hardin in his seminal 1986 book Filters Against Folly: How To Survive Despite Economists, Ecologist, and the Merely Eloquent proposed that one should ask three basic questions of any proposal: (1) Do the ideas make sense? (2) Do the numbers add up? and (3) What then? (what are the unintended second- and third-order effects)

 Let’s assume the ideas make sense. What can be wrong with providing medical insurance for everybody, or a post-secondary education for everyone who wants it? We do need a national conversation about just what the government owes every citizen. We already assume it owes them police and fire protection, K-12 education, and basic infrastructure like roads. Does it owe them health care? Does it owe everyone a job, whether they are competent or not? Does it owe everyone housing?  Does it owe everyone a car? A paid vacation to Cancun? The psychedelic drug of their choice free? As you can see, there really is a spectrum here, and while it is easy to see the things the government clearly does or does not owe people, there is a big gray area in the middle that needs rational discussion and debate (but won’t get it).

The third question also needs rational discussion and debate. If we give everyone government-subsidized health care, that will probably increase the demand for health care. By how much? Where do we find the doctors and hospitals to take up the increasing demand, since we are already short of both? Will people stop worrying about life styles and diet if there is free medical care to make up for their poor choices? There are similar questions to be asked about the second-order effects of a free college program. But I won’t deal with that here.

It seems to me all these expensive progressive proposals stumble at question 2 – do the numbers make sense? Britain’s one-time prime minister Margaret Thatcher summarized the issue nicely when she said “The problem with socialism is that you eventually run out of other people’s money”.  Put bluntly, the US can’t pay for the government programs it already has, and is surviving by borrowing vast amounts each year and never paying the debt down, so how is it going to pay for expensive new programs?

We now have a federal debt of about $27 trillion (includes debt held by Social Security and Medicare trust funds), in addition to an estimated $57 trillion in unfunded Medicare promises, $44 trillion in unfunded Social Security promises, and about $8.5 trillion in federal pensions and health care liabilities. The last few years we have been borrowing just under $1 trillion a year to cover the budget deficit, but now of course we have borrowed an additional ~$3 trillion for CORVID stimulus, and will probably borrow another $2-4 trillion next year for the same purpose. And yet our total annual federal income is only about $3.5 trillion.

Take Medicare-for-all. Bernie Sanders, when he proposed it, told us it would cost us $30-40 trillion over ten years. He probably low-balled the cost. Most politician’s proposals do that. But let’s take his own figures. That comes to $3-4 trillion a year additional spending, as much as we are spending to manage the COVID crisis, and about the size of the entire current federal budget, or a bit more. Where does that money come from?

Increased taxes? Well, taxes (payroll and corporate together) amount to about $3.4 trillion a year, so we would have to more or less double everyone’s taxes to pay just for this, let alone offset the rest of the ~$1 trillion annual deficit or begin to actually pay down the debt a bit.

Soak the rich more? This is always a popular one on the campaign trail. Assuming we actually could outwit the ranks of tax accountants and attorneys who help the rich avoid taxes (a questionable assumption, especially since the IRS has been strapped for budget and personnel for years), would it make a difference? Well, there are about 1.4 million households in the top 1% income bracket (over about $539,000 a year in income) in the US, and they have an average annual income of about $1.7 million. So if we confiscated ALL the annual income of the top 1% earners in the US, that would yield about $2.3 trillion the first year (the next year most will have left the country). Not enough to cover the cost. So much for this idea.

How about some of the other progressive ideas? Free college for all (based on the College for All Act of 2017 introduced by Sen. Sanders and Congresswoman Pramila Jayapal) is estimated by independent sources to cost on the order of $1 trillion a year. President-elect Biden’s climate plan, another progressive wish-list item, is estimated by the Biden campaign itself to cost about $2 trillion over 4 years, and again is probably a low-ball estimate. And so on.

So I would argue that all these wonderful-sounding progressive ideas will founder on cost, on question 2. Of course European countries manage to implement many of these ideas. How do they do it? Simple. First, they tax their people much more heavily. It is not easy to do a side-by-side comparison of US vs EU tax rates, because their tax brackets differ, their income distributions differ, and their demographics differ from nation to nation. But roughly, Europeans pay twice as much in taxes or more.

Second, they arguably offer a lower level of service. In the UK the National Health Service current average waiting times are 18 weeks for standard treatment, 12 weeks for new outpatient appointments, and 6 weeks for key diagnostic tests. Average waiting time in the UK for a hip replacement last year was 19.3 weeks, and for a knee replacement was 20.5 weeks. Would Americans stand for a six-week wait to get an electrocardiogram if they had chest pains? (We actually knew a person in the UK some years ago who reported chest pains and was scheduled for an electrocardiogram some weeks later --- she died that night!)

So the reality is that American taxpayers aren’t willing to pay enough taxes to cover the government services they are getting now – how likely is it that they will accept a doubling or more of their taxes to pay for these wonderful new services? How likely is it that we can keep borrowing trillion of dollars each year and never pay down the debt without eventually having a painful – even disastrous - reckoning?

Biden’s opportunity, or cross?

Joe Biden is almost certainly the next president, though we will apparently have to go through some tedious political theater before we get there. I wonder if he is pleased with that, or apprehensive. He faces at least two daunting tasks, and will be constrained by what will almost certainly be an obstructionist Republican Senate.

Task 1: Recover the nation from the COVID pandemic. There isn’t really much he can do as president to affect the spread of COVID-19. He can certainly organize some sort to federal effort to get personal protective gear produced and distributed better, and of course if/when a vaccine becomes available the federal government can help with the distribution and funding. And I suppose he can temporarily limit people coming into the country from COVID hot spots. But beyond that really the president can do little.

But where he can have an effect is in dealing with the massive economic impact of the COVID pandemic shutdowns, business closures and bankruptcies, unemployment, and the resultant drop in demand, which may well reach levels not seen since the Great Depression. But this is a difficult balancing act. He can’t throw endless amounts of (borrowed) federal money at the problem because (a) the fiscal conservatives in the Senate won’t let him, and (b) the federal debt is already skyrocketing to dangerous levels (according to some). So as Churchill once said "Now that we have run out of money we have to think.” It will be interesting to see what his administration can come up with in terms of relatively inexpensive (anything under a trillion dollars is “inexpensive” in today’s Washington) regulations and policies and actions to help the situation.

Task 2: Recover the fortunes of the Democratic Party. Though staunch Democrats don’t want to admit it, President Obama was a disaster for the Democratic Party. During his eight years the party lost control of both the House and the Senate, lost 13 governorships and 816 state legislative seats. When he took office Democrats controlled both chambers of 27 state legislature. When he left office they controlled only 13. Things didn’t improve in the 2016 election, the 2018 midterms, or in the current 2020 election.

More worrying, early analysis of voting patterns in this election shows a marked movement of minorities away from Democrats. Not, I suspect, really toward Republicans, but at least away from Democrats, or perhaps simply away from the establishment or the status quo. I’m sure the data from this election will be analyzed endlessly, and people will put all sorts of spin on the results. But people were clearly surprised by the increased share Trump (or at least, the anti-establishment) got of Hispanic, Black, and LGBTQ voters.

Whatever Biden does, he will have to help his party simultaneously keep the votes of the far left and win new votes among the 50% of the country that is (at least nominally) conservative. The far left isn’t going to go off and vote for Republicans, but they might stay home if they are disaffected enough.

He will of course have to do some symbolic things like rejoin the Paris Climate Accords in order to keep his base happy, but if he is smart he will focus most of his effort on these two tasks. And if he can do Task 1 well enough, it will probably help a great deal with Task 2.

Reflections on the 2020 election

Everyone is biased, whether they think they are or not. So let me make my bias plain from the start. I am a social liberal and a fiscal conservative, and a moderate. I have voted for Democrats and for Republicans and even for a few third-party candidates in my time. No current party represents my views. I think Republicans, Democrats, Libertarians and Greens all have some valid points here and there, and that all also subscribe to some pretty naïve and dumb things as well. I read history, and I read/listen to people I don’t agree with because it is informative, and occasionally I discover they are right and I am wrong. So filter what I say below through those biases.

Despite the desperate attempt of spin doctors and liberal media to put a cheerful face on it, this election has been as big a disaster for Democrats as 2016, or perhaps even worse. Yes, they will almost certainly get the presidency, but it will be a weak presidency because Republicans will almost certainly maintain control of the Senate, which is much more powerful. Democrats will hold the House, but they even lost seats there. Even more significantly, Democrats failed to make any significant dent in the majority hold the Republicans have on state governorships and state legislatures, and this will matter greatly as we come up on the decennial redistricting fights. So what lessons could one draw from this election?

Republicans don’t need to draw any lessons from it. I have no idea what Republicans stand for these days, and probably they don’t know either. Nevertheless, they are doing just fine in the vicious power-driven street knife-fight that passes in Washington for politics these days. Speaker of the House Nancy Pelosi is a brilliant, if thoroughly unprincipled, political strategist, but she is more than matched by the equally brilliant and equally unprincipled Senate majority leader Mitch McConnell, and the Senate has more power and leverage than the House. Actually, in the long run getting Donald Trump booted out of the presidency is probably a bigger help to Republicans than to Democrats.  

Democrats, on the other hand, have lessons to be learned from this election, lessons that they could have learned from the 2016 election but didn’t. Here are a few that I see:

The nation is split almost exactly 50/50 between liberals and conservatives, and this isn’t going to change any time soon, despite the perennial optimistic books that predict demographics will ensure a liberal dominance “soon”. If liberals are to return to power, they are going to need to capture some votes from the 50% on the conservative side, and calling conservatives nasty names – racists, sexists, “deplorables”, knuckle-dragging Neanderthals “clinging to guns and religion” etc. - isn’t going to do it. That conservative 50% is angry, because they think – correctly – that the nation’s ruling elites in both parties, happily focused on enriching themselves, neither understands their increasingly desperate plight nor cares about it. Donald Trump’s 2016 election was a message to wake up and pay attention to the distress of rural America. Democrats didn’t, so now the message has been repeated. If they don’t get the message this time, they will probably suffer more defeats in the coming elections, and that is not good for the nation. We are healthier when liberals and conservatives are more or less in balance in power, and restrain each other’s excesses.

It is always dumb to underestimates the opposition. Democrats have done that twice now, aided by the illusions the left-leaning media provide for them. It is always dangerous when you begin to believe your own propaganda and spin. In this case it seriously compromised Democratic election strategy. Conservatives/Republicans are not dumb. In fact, the conservative movement is more cohesive, more pragmatic, better organized and better at long-term strategic planning than the liberals, which is why they hold so much power in the country.  Liberals have to get out of their absurd “holier than thou” attitude and get real about the world they live in and about human nature. And a good start would be to shut up, stop lecturing conservatives about how evil they are, and really listen to why they are upset. Then Democrats could craft campaign messages and positions that would draw some conservative votes to their side.

The nation is general slightly center-right; extremists on either the right or the left don’t get much traction in elections. Democrats did manage to avoid immolating themselves by selecting Bernie Sanders as their candidate, but they still are pandering too much to the far left, to media darlings like AOC and “the Squad”. Pelosi was absolutely correct yesterday to warn the Democratic caucus to shut up about defunding police and socialized medicine, for fear of damaging the chances of the two Democratic Senate candidates in the January Georgia runoff who represent the only (thin) remaining chance the Democrats have of taking the Senate.

“It’s the economy, stupid”. James Carville, who was Bill Clinton’s brilliant strategist, said this, and he was absolutely right. Liberals get lost in their flights of fancy about fundamentally reshaping the society and the culture, but what really matters practically, and for winning elections, is the economy. When the economy is good for everyone, not just the top 10% or 1% but for everyone, then the nation is calm and stable and as rational as nations ever get. When things get as unequal as they are now, with a few billionaires and overpaid CEOs raking it in at the top while tens or hundreds of millions see their financial situation as hopeless, things get ugly fast. Liberals despaired at Donald Trump, but he was a minor threat, far too incompetent at governing to be a true autocrat. But if thing don’t improve economically for rural America we might well eventually get a real threat – a competent autocrat with a competent following.

Liberals like to think they are smarter and better educated on average than conservatives (a questionable belief, but let’s go with it). If so, then they had better show it by using all that supposed intelligence and education applying themselves to improving the economy and reducing the inequality. It will take more than cosmetic changes like raising the minimum wage, nice as that is for those whose jobs don’t disappear or get automated as a result. Let be real. If the COVID pandemic hadn’t happened Trump would likely have won this election easily, simply because the economy had improved (slightly) under his watch and wages for the lowest paid had risen (slightly) during his administration. It’s hard to get people to worry about elite issues like climate change or social justice or immigration policy if they are unemployed, facing eviction and can’t afford to put food on the table.

If I were a strategist for the Democrats right now, I would advise them to abandon all their elite issues for the moment and to think first and foremost about a Marshall Plan for middle America that addresses the chronic unemployment or underemployment of all those rural and small-town workers whose jobs went overseas and whose local factories closed and who are now in such desperate straits. And I would advise them to remember that these folks are their fellow citizens, in need of help, and that to despise them just because they are different is thoroughly illiberal.