Donald Trump And The State Of Democracy

Fred Hiatt is the Editorial Page Editor for the Washington Post.  He makes some obvious points about the implications of Donald Trump's presidential nomination.  Democracy loses if the unlikely happens and he wins the elections,  but it has also been harmed by his nomination.  The rest of the world can't understand how Trump won the GOP nomination.  He then turns his attention to Hillary Clinton and President Obama.  He claims that the rest of the world has become less democratic during Obama's presidency and he asks whether President Clinton will reverse that trend.  In other words, he largely ignores the state of democracy in the US and he shifts his attention to an impossible role for any US President.  Donald Trump defeated the best candidates that the Republican Party could pit against him in the GOP primary.  Over 40% if the electorate will vote for Trump in the general election.  We have no business holding a US president accountable for the state of democracy in the world when it is in such serious trouble at home.  Unless we address the problems at home we are in no position to preach democracy in other parts of the world.  Democracy must go well beyond running elections.  That is especially true when electioneering becomes the primary focus of our political parties along with raising millions of dollars to run political campaigns.  It is also a problem in world that has not come to grips with globalization and economic stagnation.  Political failures are at least partially to blame for the discontent that we have in the US and in other democracies. That should not be surprising when one of our major political parties wants to reduce the role of government in a world that requires an active and competent government to deal with rapid economic and social change.

Globalization Requires A Larger State In Order To Avoid Populist Backlash

We have seen the rise of Donald Trump in the US as well as the rise of populist parties in Europe. Immigration and trade agreements have been under attack for good reasons.  Globalization increases the size of the economic pie but it is not equally shared.  The losers from globalization have been getting a smaller share of a bigger pie. The global economic expansion was arrested by the financial crisis and that made things even worse for the losers.  Monetary policies, which have been the favored response,  increased the value of assets held by those who benefited from globalization but that only made it more expensive for the losers to purchase housing and financial assets which have increased in value.  The political backlash that we are seeing should not be surprising.  It has happened before under similar circumstances.  This article provides us with a history lesson that has been largely ignored by economists and the political leadership.  Globalization could easily be reversed in dangerous ways unless something is done to deal with the unintended consequences of poorly managed globalization.

One of the reasons for the political backlash is that our political leadership views the state and markets as substitutes.  Their focus in on reducing the size of the state and privatizing many of the activities of the state.  The market and the state are complements and not substitutes.  We will continue to see backlash, and threats to market integration,  unless the state is expanded to address the needs of those who been left behind by poorly managed globalization. If the Tory government in the UK wanted to remain in the EU, it was a bad idea to reduce the level of public services when many were worried about sharing those resources with immigrants. It would be unfortunate if rational responses to globalization turned into the irrational forms of populism that we have seen in the US and in much of Europe.

Drug Pricing In The US And EpiPen Price Increase

EpiPen is a product that can save lives for those with allergies.  The firm that owns the patent has been raising the price of its product for the last six years.  Drug companies tend to raise prices to milk as much profit as they can prior to the appearance of less expensive generic drug.  The firm created a political storm when it recently increased the price of the EpiPen by 400%.  The CEO of the parent firm defends its price increase in this article.  Her defense is quite simple.  She is the CEO of a for-profit firm and she is responsible to her shareholders.  The anticipated generic competitor to EpiPen has not been approved by the FDA so the firm can raise the price without the fear of price competition.  The only problem with the CEO's decision is that the high price might make a life saving  product less available to customers with deadly allergies. 

For most of EpiPen's customers, who have commercial health insurance or government insurance, the price increase is not a real problem.  The real story is about the market for drugs and other healthcare services in the US. In the first place, the consumer will only pay a small portion of the price increase in the form of a deductible.  The bulk of the price increase will be paid for by the insurer or by government.  That will cause insurance premiums to rise so that insurers can recover the higher cost.  The real price negotiations are between insurers and healthcare providers.  As long as insurers can pass the costs on to their policy holders everyone is happy.  Healthcare providers have considerable pricing freedom, which is good for profits, and consumers with insurance have access to life saving products and services.  The only problem with this system is that healthcare spending in the US is almost twice as high as it is in other rich countries.  Insurance premiums, and, or government spending on healthcare, will continue to rise.  The higher our spending on healthcare, the less we have to spend on other things.

Are We Becoming A Nation Where Objective Facts Don't Matter

A famous French author once said that "people believe what they want to believe".  I have always thought that he was a good observer of human nature and that we do have a strong tendency to believe what we want to believe.  However, I also thought that most of us would change our minds if we were confronted with facts that were inconsistent with a belief.  I may have been wrong.  It would appear that strongly held beliefs are very resistant to contradictory information.  Modern information technology has provided everyone with access to objective information, but the social media, which occupies much of our time, has provided propagandists with the means to shape our beliefs and to make us resistant to falsifying information.  Everyone can choose the interest groups to which they want to belong.  Sharing a belief system provides all of its members with resistance to objective information that is counter to their belief system.  This article describes the sad state of objective information in the US and how the Internet has been used to systematically misinform many of our citizens and share their ignorance within their social media universe. They never have to question their belief system within their information cocoon.

Donald Trump Understands His Base Better Than Most

Donald Trump needs to win Florida and other states with large Hispanic populations.  His extreme positions on immigration have attracted many of his followers but this has alienated many potential voters.  Trump has softened his views on immigration but that does not bother many of his followers.  What does Trump know about his followers that makes him successful with them?  Trump's hard views on immigration sent a strong signal to this followers.  He will be tougher on immigration than the weaker politicians to whom he is compared.  Even if Trump softens his positions for practical reasons, that does not change the opinions that he established with his followers when he took stronger positions.  Many still believe that he is on their side.  Most of them knew that it was impossible to find and evict 11 million illegal immigrants.  Trump can still tell them that he will build a wall between the US and Mexico.  That softens his position but his followers still believe that he will be tougher on immigration than politicians who never established their identity as strong opponents of illegal immigration. He can soften his extreme positions without losing his base in the hope that he can hang on to Republicans who worry about many of his positions. Trump can also talk tough about keeping Muslims out of the country, and reducing the risk of violence, and the potential for the imposition of Sharia law on evangelicals.  Trump and many of his followers are less interested in the details of policy that occupy most politicians.  He is a personality and his followers identify with the personality that he projects.  That is why he loves running Trump Rallies more than having policy discussions with talking heads on the conventional media.

Facebook Is Where It Is All Happening

Facebook has changed politics in a significant way. Bernie Sanders and Donald Trump surprised everyone by their performance in their respective primary campaigns.  Most of us agree that politics has become more polarized.  Much of this is due to the ways in which Facebook has changed how we consume news.  Misinformation which would never have made its way through the editorial process in traditional media is routinely published on Facebook.  There is a positive relationship between the inflammatory potential of content and its potential to go viral on Facebook.  This article explains how entrepreneurs have set up "news sites" that organize and feed "information" to likely readers or watchers of videos.  They can earn a good living if they are successful at misinforming their audiences of true believers.  Its not surprising that those with strong, and often strange views, are reinforced and supported by the ways in which Facebook creates groups of followers with strong convictions that puzzle many of us.

Donald Trump's new campaign manager is also the CEO of an extreme right wing news site that has millions of followers.   This article provides a good sample of the information that he feeds to his followers.  Most of his followers are ardent Trump supporters.  They use Facebook to share the information that originates on this news site.

David Brooks Attempts To Explain Why Leadership Fails In The US

David Brooks correctly observes the failure of leadership in our political system.  He understands that politicians are forced to deal with powerful private interest groups but he insists that politicians with the proper motivation can rise above the pressures placed upon them by those who hope to manipulate the political system.  He argues that politicians are either motivated by careerism or by ideals which lead them to view a political job as a vocation. The system can wear down the idealists, and turn those who entered politics to serve the public interest, but he holds that the properly  motivated politician can be an effective leader.  He concludes that Hillary Clinton entered politics with the proper motivations but that she has been worn down by the system.  He wishes her luck if she wins the election. In order to succeed she will have to shed her careerist shell and ignite the idealism which caused he to enter politics as a vocation.  In other words, if Hillary Clinton does not succeed as a leader it will her own fault.

David Brooks is a very smart person and lots of smart people read his articles in the New York Times. I have listed a few of the comments that I found insightful below:

*  It would be hard to find a politician who was more vocationally oriented when he was elected twice as our president.  The Republican leader of the Senate declared that his objective was to limit the president to one term in office.  Its hard to assess Obama's leadership ability without considering the careerist motivations of the Republican senators who did want him to succeed.  The same could be said for Republicans in the House and even for Democrats who had to face elections in conservative states.  Hillary Clinton will face the same obstacles to leadership as those which Obama faced.

*  Money has always played a powerful role in politics because candidates must raise large sums of money in order to run for office.  We have made it easier for money to affect elections in the US in two ways.  It costs more money to run a successful campaign with each election cycle.  Moreover, the Supreme Court made a decision which made it easier for individuals and groups to contribute unlimited amounts of money to candidates who want to run for office.  They audition the candidates before granting them the funds that would enable them to run a political campaign. That places a limit on the quality and number of candidates that run for office.  In a sense elections are over before they begin.  David Brooks and most Republicans have not opposed the decision by the Supreme Court.

* Ronald Reagan declared that government cannot provide solutions to our problems.  He told us that government is the problem.  That has become the motto of the Republican Party.  How can a president lead our country if the goal is to limit the role of government in our society?  David Brooks and most Republicans share the same opinion about limiting the role of government.  That is why they promote tax cuts that benefit their friends and why they oppose the use of fiscal policy in recessions.  Reducing budget deficits is more important to them than reducing unemployment.  Those who contribute to their campaigns do not face the risk of unemployment.

* The GOP primary campaign was won by Donald Trump.  David Brooks is one of many who question the ability of Donald Trump to be an effective president.  He won the GOP primaries for two reasons:  His opponents were unable to provide a compelling reason why they were good candidates for president; The GOP has cultivated a base that responded favorably to Donald Trump because it, and many in the media, have conditioned millions to believe much of what was on offer from Donald Trump who understood the GOP base better than they did.  The GOP base did not believe that the candidates favored by the "establishment" were motivated to serve their interests.  They were perceived as careerists and Trump was viewed as the vocational leader that Brooks described.

* The Democratic primary was a contest between Hillary Clinton, who has a low favorability rating for many reasons, and Bernie Sanders who had little chance of winning the nomination until he inspired many disillusioned Democrats to support the populist agenda which defined the Democratic Party during a period in which labor unions provided the funds and votes that were needed to win elections and legislate social welfare programs.  Sanders did better than many expected but that was not enough to win the nomination.  The striking thing about the Democratic primary, however, may not have been the contest between Clinton and Sanders.  What struck me and many others was that it was hard to come up with the names of Democrats who would be strong candidates for the presidency.  The shortage of strong Democratic candidates, and the large number of weak Republican candidates, raises an important question that Brooks did not consider.  We have not been able to attract large numbers of vocational leaders, like those described by Brooks.  Most of those attracted to politics are either career motivated when the enter the game or they have been worn down by the system as they move up the ladder.

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