The economic angle to electoral madness

== Economic Recovery ==

This economic recovery has lasted longer, without even a small recession, than all but one stretch since WWII, prompting some economics sages like John Mauldin to caution the next president - whoever - to expect a recession in his or her first term. 

Hm. Maybe but can one say "this time is different"? Those are famously fatal words. But there truly are some differences. In fact we never had a recovery this slow before, dragged by a Congress that refused to spend on badly needed infrastructure repairs, because that would create high-velocity money in worker pockets, and that in turn would have sped the recovery and helped democrats.

But this month's labor stats show it happened anyway.  Steady, steady job growth and now those long delayed wage increases.  Obstruction can only do so much.  And hence the question: might there be a silver lining to this slowness? Could it mean that the usual recession just got smeared into the more gradual slope of this slowly improving economy?

Certainly  psychological factors fit this model, with a US public deliberately talked into gloom, not just by Fox & pals but also sourpusses on the left.  And hence no "ebullience penalty" this time. Except for an equities bubble, there's been no overshoot for a recession to correct. Just hardworking folks pushing it all forward.

Well well.  Just a theory. No doubt there are forces trying to start that recession in time for the election... amid a myriad types of desperate cheating.  Stay wary. Nurse a little optimism.  Stay tuned.

== Psychological factors? Or reality? ==

In a different newsletter, John Mauldin shows - yet again - what U.S. conservatism could be, if it decided to argue for market enterprise from a position of, well, sanity.  The following figures that I clipped from that newsletter show what any sensible person has to understand... and the part of Bernie Sanders's riff that is blatantly and wholly and completely right...

... that wealth disparities in the United States have skyrocketed to a degree that no rationalization, no theory or incantation, can possibly justify anymore.

These charts - from a conservative capitalist economist - are clear, vivid and entirely self-explanatory.  They prove that not only America but flat-open-fair-competitive -creative capitalism has been betrayed, and both desperately need a refresh, lest we spiral toward the other possibility.  One that was well described by the famous historians Will and Ariel Durant, in The Lessons of History.

"…the unstable equilibrium generates a critical situation,

which history has diversely met by legislation redistributing wealth

or by revolution distributing poverty.” 

John Mauldin goes on to suggest solutions that are ... ahem... a bit to the right of center.  For example, replacing social security taxes with a European style Value Added (consumption) tax, or VAT. And eliminating all tax shelters/deductions in exchange for a lower, 20% income tax above $100,000. Um, interesting and I am willing to negotiate...

   ... but how about we start by returning to tax structures that brought us surpluses, in the late 1990s, before Supply Side Voodoo gifts to the oligarchy threw everything out of whack.

But the key thing is that he uses the word "negotiate." He calls for a return of American pragmatism. For sincere, moderate-liberals and moderate-conservatives to sit down, compare facts scientifically and trade wants toward optimum deals.

Charmingly, John assumes there are still sincere, moderate-conservatives in any substantial numbers to negotiate with. Just because he talks to a few members of that endangered species, and sees one in the mirror, when he shaves.

== Election nightmares ==

Are hackers stealing elections? Read about a fellow who claims to have “made” more Latin American presidents than voting majorities have.  Do not dismiss this as purely a south of the border thing.  Many of the techniques he reveals are used in North America.  Moreover we have a hackable cheat that most other countries still don’t… electronic voting machines.  How any of you can look at one, and deem it trustworthy, is beyond me.  In some states, precincts can be random audited with paper records, and that should keep the cheating down.  Some other states -- alas too many -- are run by the cheaters, though, and they will get any vote count that they order-up, this fall. 

There were signs of recent electoral cheating by computer in Arizona.  And you ain’t seen nothing yet.  We need a millionaire…not a billionaire but a mere millionaire… to offer a whistleblower prize for henchmen from the voting machine companies, who bring forth proof.  Heck, I personally promise to make it worth any whistleblower's while. After the proof makes a difference.

Want to understand what a contested or brokered convention might be like?  Read this fascinating account of the squeaker when FDR got the democratic nomination in 1932.  

…aaaaaand the Koch boys had a Nazi Party member as their governess.  Sure. Just as irrelevant as  their dad's... oy... colorful political arc, helping both 1930s Berlin and 1950s Moscow. 

What's more interesting is their not so subtle efforts, along with Steve Forbes and the wholly-owned Cato Institute to control not just the GOP but the Libertarian Party. Um, preparing a lifeboat, guys?  Hey, I never said they wasn't smart.

== Billionaire Wealth ==

This interesting article on the Evonomics site is part of a trend I've noticed lately... a surge of rediscovery interest in Adam Smith. A surge I helped to nurture (as many of you know) for the last decade. 

Do see: "How Adam Smith’s Invisible Hand Was Corrupted by Laissez-Faire Economics If read correctly, Smith’s theory proposes the opposite of laissez-faire."

It's a hopeful sign that ever more folks appear to be reading or referring to Smith, who today would be a democrat.  Looking back across thousands of years of grinding feudalism - something too few of us shallow Americans seem inclined to do - Smith knew that some incentive wealth disparities are needed, in order to encourage creative enterprise, but that overly-concentrated wealth turns toxic, leading to cheating, inherited oligarchy...

...and especially "rent-seeking" in which lords and moguls "invest" not in productive, job-making industry but in jiggering the rules so that they get even richer by parasitism. 

To be clear, that is exactly opposite to what we were promised from Supply Side "economics." But it is what Smith and nearly all economists predicted would happen with gigantic, budget busting tax gifts to the rich.  (No wonder Fox wages war on economics, and science and every other knowledge profession.)

Now the proof - an analysis shows that 74% of billionaire wealth in America was acquired not through competitive goods and/or services, but by Rent Seeking and rigging the economy.  And, as Smith predicted, this especially harms the wealth-creating middle class.

What about that 26% of billionaire wealth derived from actual enterprise? That certainly includes our modern tech moguls, who have propelled good things from SpaceX to Google.  And guess what? Some of them are libertarians. Most are democrats. Very few are republicans. Because these folks know they owe everything to a middle class that most of them came from, to the middle class engineers they work with, and to the civilization and nation that made it all possible.

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