The Coming American

by

Gadfly

Americans are wondering what life is going to be like if and when we ever get beyond the fears of a viral pandemic.  This essay attempts to explain the current phenomenon by presenting theory about agents within a complex adaptive system (such as society and all its political, social, and economic institutions) and an analysis of known data on viral activity and the political economy, followed by how this will shape the coming American.

Theory

Black Swans are highly improbable events that can have existential effects.  In his book, The Black Swan:  The Impact of the Highly Improbable, Nassim Nicholas Taleb explains that "Such [Black Swan] events, considered extreme outliers, collectively play vastly larger roles than regular occurrences."  The COVID-19 virus pandemic is a Black Swan event.

America is under siege due to the treatment of a Black Swan event.  Ordinary Americans are being manipulated by external and internal political forces.  Specifically, the COVID-19 virus is being used as a “tagging” mechanism (i.e., amplified in the media) to significantly modify behavior in America (and possibly in other countries as well).  “Tags are ‘external’ characteristics of agents that can be recognized by other agents.  They facilitate selective interactions and the formation of aggregates and boundaries by allowing agents to identify and categorize each other” (from Smith and Bedau, (2000), “Is Echo a Complex Adaptive System,” Evolutionary Computation 8 (4), p. 420; available here).

In complex adaptive systems, the tagging mechanism influences flows of aggregations.  Aggregations represent agents (i.e., people).  The political manipulation currently at play involves shaping the flows of aggregations of agents (people:  the elderly, the vulnerable, business owners, etc.) well beyond public health; thus, affecting large numbers of aggregations of people trying to live a normal life in America.

    

In the public administration field what is happening with the political manipulation would be the “punctuation” function disrupting and then reshaping equilibrium (i.e., normal life) within a society--a social theory called punctuated equilibrium, borrowed from the field of evolutionary biology.  How many times have we heard, “a new normal”?

Analysis of Known Data


Science

According to NPR, the first documented case of COVID-19 (a corona virus) in America occurred on January 19, 2020.  The case was a man from the state of Washington, who returned to the United States from Wuhan, China, on January 15, 2020—two weeks after China officially declared the virus was an issue on December 31, 2019.  Today, as of 1:00 PM ET, March 24, 2020, there are 50,138 confirmed cases in the United States with a total number of 622 fatalities.

Let’s put this in context.  According to America’s Centers for Disease Control (CDC):  “CDC estimates that influenza has resulted in between 9 million – 45 million illnesses, between 140,000 – 810,000 hospitalizations and between 12,000 – 61,000 deaths annually since 2010.”  Estimates are not indisputable like the actual number of hospitalizations and deaths.  Estimates are based on modeling and assumptions that can be close to accurate or wildly incorrect.  This makes a difference because it is the reliability placed on “estimates” that determines the advertised death rate of .1%.

  

Using this number the public health community (an aggregation of agents) argues that COVID-19 is more deadly by orders of magnitude.  For example, as of 1:00 PM on March 24, 2020, the global COVID-19 confirmations versus deaths is at 4.45% (18,295 deaths divided by 411,242 confirmed cases).  This rate is 44.5 times the .1% rate.  The CODIV-19 rate for the United States is 1.24% (622 deaths divided by 50,138).  This is 12.4 times the .1% rate.

Unless I misinterpret CDC’s estimation rationale, it appears confirmed cases of influenza are hospitalizations.  For the 2018-2019 influenza season, the hospitalization estimate was 490,600 with 34,200 deaths.  The death rate, based on confirmed cases (hospitalizations) was 6.97% (34,200 divided by 490,600), NOT the .1% figure so widely circulated by the public health community (an aggregation of agents) and the corporate media (an aggregation of agents).  Consequently, the actual influenza rate is 5.62 times GREATER than the current death rate for COVID-19 in the United States.  This comparison should be an eye opener.  Combine this fact with the realization that we have been vaccinating people against the influenza virus for years.  Currently, there is no vaccination for COVID-19.

In 2009-2010, Americans experienced the A/H1N1 (influenza-like swine flu, beginning in California).  According to the CDC: “From April 12, 2009 to April 10, 2010, CDC estimated that there were 60.8 million cases (range: 43.3-89.3 million), 274,304 hospitalizations (195,086-402,719), and 12,469 deaths (8,868-18,306) in the United States . . ..”  Again, if we consider only the confirmed cases (hospitalizations) and deaths, the death rate was 4.55% (12,469 deaths divided by 274,304 hospitalizations), or 3.67 times greater than COVID-19.  Unlike, COVID-19, 87% of the A/H1N1 deaths occurred in people under the age of 65.

  

During the CDC documented timeline for the A/H1N1, swine flu pandemic, not once did the President of the United States intervene.  No social distancing, no businesses shut down, no government-control of businesses.

Based on the analysis above the table below summarizes data so far:

Virus	Cases/Hospitalizations	Deaths	Death Rate
Influenza, 2018-2019 season	490,600	34,200	6.97%
A/H1N1 (swine), 2009-2010	274,304	12,469	4.55%
COVID-19--US	50,138	622	1.24%
COVID-19--global	411,242	18,295	4.45%

Some will refute the above analysis.  They will argue that the capacity for hospitalization will influence the number of deaths.  The more that can be hospitalized then will reduce the number of deaths.  In simple math, that means the denominator increases.  So in our chart above, if the number of hospitalizations were 60,000 instead of the 50,138, then would it not be reasonable to conclude that the hospital intervention would have saved lives?  If this is true, then the number of deaths reports would be less than 622.  The death rate would then be less than the current 1.24% (622 divided by 60,000 = 1.04%).

Life is sacred (even for the unborn according to many Americans).  How much is a life worth?  Saving life is a moral obligation (except when it conflicts with a progressive’s “reproductive right”).  If saving one more life requires a total economic shutdown, is the tradeoff worth it?  Perhaps for the one life saved.  But how about for the millions who are adversely affected (to include death) by an economic meltdown?  The approach to a solution is not black and white.

Political Economy

Yesterday, the Dow Jones Industrial Average Index barely hovered above 18,000, down over 11,000 points within a couple week timeframe.  Today, it has rebounded to above 20,000.  Americans have lost nearly half of their retirement assets.  Some say—no worry, we will recover.  I say, I can support that if we resist a new, politically manufactured normal.

  

As I write this, the economic stimulus proposed by the President and Republicans in Congress to help common Americans (the little people) adversely affected by these circumstances is stalemated because it does not accommodate the left’s (political power grabbers) “vision” such as tax credits for solar panels, arguing with airlines over carbon footprints, and school loan debt forgiveness.

Some (like the New York Times David Leonhardt) believe it is not good enough to simply encourage private sector companies to ramp up production because this reflects an obsolete “small government ideology.”  After all, Hugo Chavez made the Venezuelan people believe that bigger government would solve their problems, especially by nationalizing (like all Communist countries do) businesses in the private sector.

  

These tactics are not unusual for the left, who believes in a win-lose, or lose-lose mentality:  they win, their political opponents lose; if winning is not possible, it is imperative that their opponents don’t win either.  They did this with government shut-down threats, always giving the impression that people would suffer.  In all the recent government shutdown incidents, government workers never lost pay or their jobs.  But one party won political capital by persuading public sentiment to see the other party as uncompromising.  Holding government workers hostage to a political agenda worked, and government workers got paid time off from work.

This is not so for the millions of people in the private sector who are losing income and their jobs.  There is no negative impact to government workers.  

The left believes the end justifies the means.  The end, in this case, is to deny President Donald Trump legitimacy.  They tried but failed during the Mueller investigation, and they failed to achieve a Senate conviction after a partisan impeachment in the House of Representatives.  Now the focus is to deny a path to reelection.  The left will do whatever it takes to make this happen, even if it brings pain to the little people trying to live a normal life.  

I must admit that I once took advantage of uncertainty to implement a major structural reorganization in a flying squadron consisting of a fleet of 36 aircraft and nearly 500 personnel.  Prior to the uncertainty, there had been a lot of opposition to change because it violated the “if it ain’t broke, don’t fix it” paradigm that had not changed since the Vietnam era.  I told my inner circle, “the best time to loot a store is during a riot.”  But, we all believed the change would improve our organizational effectiveness and be good for everyone involved.  And it was.

Well folks, we have the equivalent of looting during a riot by the political left, not for the common good but as a power grab.  Last week, the Senate passed a COVID-19-related House bill to respond to the urgency of the matter.  Yesterday, Senate Democrats blocked a $1.8 trillion Senate bill over ideological matters; and today, the House submitted a counterproposal worth $2.5 trillion, loaded with obligations completely unrelated to COVID-19.  In other words, Democrats are holding Americans (the little people) hostage to their progressive agenda.

Meanwhile, China may already be buying massive stock in companies seriously affected by the stock market losses.  We are now discovering that trade was a minor issue compared to the extent America and many other countires are so dependent upon China in a supply chain of critical products and services such as pharmaceuticals, precious metals, manufacturing capacity, and so forth.

  

China has been exploiting political and economic vulnerabilities for quite some time.  See for example, Helen Raleigh’s article, “Iran and Italy are Paying a Hefty Price for Close Ties with Communist China.”  And lest we forget the possibility of more sinister motivations, America’s exposure to the COVID-19 virus occurred just after President Trump negotiated a tough trade deal with China.

  

Sun Tzu was a Chinese general.  His book, The Art of War, devotes a chapter to defeating an enemy preferably without the use of force.  The chapter title varies based on translator preferences.  The different titles include, “The Sheathed Sword,” “Attack by Stratagem,” “The Plan of Attack,” and “Strategic Attack.”  According to this strategy, Tzu asserts, “supreme excellence consists in breaking the enemy’s resistance without fighting.”

Many Americans can appreciate that President Trump did not wait for a riot to implement needed change once inaugurated, even though he was fully aware of the rot that is the government swamp.  His changes are not welcome by the progressive left because it is content with the firmly established political, technocratic regime called the administrative state.  The progressive left believes in big government—the bigger the better.

Under constant assault by the left, even before he took office as President of the United States, President Trump is currently being pressured by the manipulation of public sentiment to do things that might not have been even thought of under a previous regime (recall the 12,469 deaths during the 2009-2010 Swine Flu episode).  Despite clear differences in public sentiment and rates and total numbers, we now have a national emergency.

  

Recognize:  Americans are having their First Amendment right to assemble curtailed. Social distancing has been imposed.  Businesses have been shut down by state governors.  Americans across the Nation have been placed in lock-down.  To my knowledge, none of these actions have taken place in America in my lifetime.

  

President Trump has formed a task force for a whole of government approach to dealing with the COVID-19 Black Swan event.  He and members of the task force update what they have learned, adjust from what they have learned, and provide guidance based on what they have learned to mitigate the effect of the virus.  President Trump personally spends each day along with members of the task force to update the public on progress. Yet, the left still criticizes the President for not doing enough, but, worse, claims he is an incompetent leader who divides our Nation.

How does America emerge from this Black Swan event?  What will Americans be like?

The Coming American         

At a Fourth of July celebration in 1894 in Woodstock, Connecticut, Sam Walter Foss recited his poem, “The Coming American.”  Here it is:

Bring me men to match my mountains;
Bring me men to match my plains, —
Men with empires in their purpose,
And new eras in their brains.

Bring me men to match my prairies,
Men to match my inland seas,
Men whose thought shall pave a highway
Up to ampler destinies;
Pioneers to clear Thought’s marshlands,
And to cleanse old Error’s fen;
Bring me men to match my mountains —
Bring me men!

Bring me men to match my forests,
Strong to fight the storm and blast,
Branching toward the skyey future,
Rooted in the fertile past.
Bring me men to match my valleys,
Tolerant of sun and snow,
Men within whose fruitful purpose
Time’s consummate blooms shall grow.
Men to tame the tigerish instincts
Of the lair and cave and den,
Cleanse the dragon slime of Nature —
Bring me men!

Bring me men to match my rivers,
Continent cleavers, flowing free,
Drawn by the eternal madness
To be mingled with the sea;
Men of oceanic impulse,
Men whose moral currents sweep
Toward the wide-infolding ocean
Of an undiscovered deep;
Men who feel the strong pulsation
Of the Central Sea, and then
Time their currents to its earth throb —
Bring me men!

The poem was from a larger collection in Foss’s book, Whiffs from Wild Meadows.  During the 1894 celebration, Foss read an excerpt from the book that introduced the poem:

But this is but prelude Fate’s orchestra plays,
To the strains that shall come in the fulness of days;
For the age-lengthened rhythm beat out by the Fates
In the building of cities, the founding of states,
In the earthquakes of war, in its thunder and groans,
In the battles of kings, and the crumbling of thrones,
Is but prelude that’s written by Destiny’s pen
To herald an epoch of masterful men.

In that day we shall worship, by wisdom made whole,
Not greatness of bulk, but perfection of soul;
And the thought-millionaires with our full acclaim then
Will be wreathed and anointed the leaders of men.
And methinks our Great Fate, from the hills to the sea,
Has sent forth this call to the years yet to be.

Foss was excited and hopeful that the “coming American,” with a perfected soul, would advance greatness for America.  He or she was not afraid, but bold, hardened by adversity, yet resolved to be a match for God’s mountains.  This was the coming American who rose to the occasion and defeated the brutal tyranny of 20^th Century communism, Nazism, and fascism.

Till now, President Trump symbolized the “coming American.”  He’s still standing, and his approval rating remains strong.

But what will his fellow Americans look like after the current CODIV-19 Black Swan competes its mission?

Will the progressive left be successful in achieving a punctuated equilibrium and fulfilling Alexis de Tocqueville’s prophecy?  Will America and the coming American look like Tocqueville’s “new normal” described in the following passage?

After having thus successfully taken each member of the community in its powerful grasp, and fashioned them at will, the supreme power then extends its arm over the whole community.  It covers the surface of society with a net-work of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd.  The will of man is not shattered, but softened, bent, and guided:  men are seldom forced by it to act, but they are constantly restrained from acting:  such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to be nothing better than a flock of timid and industrious animals, of which the government is the shepherd.  I have always thought that servitude of the regular, quiet, and gentle kind which I have just described, might be combined more easily than is commonly believed with some of the outward forms of freedom; and that it might even establish itself under the wing of the sovereignty of the people.  Our contemporaries are constantly excited by two conflicting passions; they want to be led, and they wish to remain free:  as they cannot destroy either one or the other of these contrary propensities, they strive to satisfy them both at once.  They devise a sole, tutelary, and all-powerful form of government, but elected by the people (Alexis de Tocqueville, Democracy in America, 1840, p. 398).

If Tocqueville is correct, then Trump will lose the coming election; and America, as we’ve known, it will be forever lost.  History has recorded similar developments.  But, America is unique.  It remains the only country in the world that is a Constitutional Republic, based on the fundamental concept of liberty.

Fortunately, too many Americans still prefer liberty over security.  Like so many before us, we are prepared to fight for liberty, even if it involves death to preserve liberty for others.  This is the coming American I believe will reflect America after the COVID-19 Black Swan event.

  

America's War-Weary

AM (an American combat aviator with an inquiring mind):  Gentlemen, as I currently endure a once, highly acclaimed health system attempting to minister to the accumulated bodily (my wife would include mental as well) wear and tear stemming from my three decades of military experiences, I can’t help but snicker at absurd “war-weary” complaints (see also here, here, and here).

Old Gadfly:  There is a lot to unpack in what you just said.  We all know that the Affordable Care Act, in concert with a bloated and highly inefficient, government-run Veterans Administration healthcare system, has swept in a nearly fatal blow to America’s healthcare system.  So, let’s focus on the “war weary” comment.

AM:  First of all, you will not hear complaints from those who actually wear the uniform of our armed forces.  And, they represent only 1% of our population.  Add another 6% for those who are living and have worn a military uniform.  The complaints come from the ranks of the remaining 93% who have been kept safe by that 7%.  Imagine:  only 7% have invested their lives, fortunes, and sacred honor to preserve our freedoms.

Old Gadfly:  They understand what is at stake.  I recall a very powerful reflection by General Douglas MacArthur, who fought in World Wars I and II, the Korean Conflict, and other expeditions and conflicts. 

On May 12, 1962, MacArthur spoke about “Duty, Honor, Country,” to the Cadet Corps at the United States Military Academy at West Point.  As we talk about America’s “war-weary,” there is a particular passage in MacArthur’s speech that especially resonates with those of us who have actually served in our profession of arms:

The long gray line has never failed us. Were you to do so, a million ghosts in olive drab, in brown khaki, in blue and gray, would rise from their white crosses, thundering those magic words: Duty, Honor, Country.

This does not mean that you are warmongers. On the contrary, the soldier above all other people prays for peace, for he must suffer and bear the deepest wounds and scars of war. But always in our ears ring the ominous words of Plato, that wisest of all philosophers: “Only the dead have seen the end of war.”

IM (an American citizen with an inquiring mind):  We seem to have lost that sense of leadership among our civilian political leaders.  Look at how our nation turned on George W. Bush.  Armed with a bipartisan Joint Resolution from Congress, Bush had the courage to actually force the removal of a fascist tyrant to allow an educated population an opportunity to advance the concept of self-governance.  Sure, the effort was far from perfect.  But, when members of a political faction realized they could not stomach Bush’s 90% public approval following the 9-11 attacks and then the more than 70% when attacking Hussein, they had to politically assassinate Bush as indicated by an internal memo by Senator Jay Rockefeller (the memo was originally released by the Hill.com, but has since been removed).

Old Gadfly:  What we are witnessing is how political elite have shaped a war-weary narrative for political purposes.  This political faction was very successful in convincing America that the wars we were fighting in Iraq and Afghanistan were wrong and immoral—because Bush, a Republican, made the decision to commit our armed forces to these endeavors.  They conveniently forget the political momentum that had developed well before Bush entered the picture.

IM:  Then, when we see how national debt now exceeds our GDP, for the first time in our history, we seem powerless to reverse the pattern of behavior that got us to this point.  Labor participation rate is still the lowest since 1978.

Old Gadfly:  Speaking of 1978, international and national conditions called for courageous and wise leadership.  Just the other day, I located the First Inaugural Address that Ronald Reagan gave on January 20, 1981, and listened very closely. 

 

AM:  Reagan spoke of American heroes, a characteristic unique to being an American.  He also understood that peace could only be secured through strength, economically and militarily.  Here is a telling picture of shifting priorities based on government budget data between 1962 and now:

So, you see that our investment in preserving liberty is becoming overshadowed by a push for greater dependency on “entitlements” controlled by the government.

IM:  Obama either does not comprehend the same concepts and principles advanced by Reagan, or he has a completely different vision of America—one that needs no heroes because political elite, at the helm of a large and powerful central government, will provide what Americans need.
 

          Old Gadfly:  Reagan’s leadership was unifying, uplifting, and constructive.  Even more so than in 1981, we badly need a Reagan today.  Has America lost its capacity for heroic behavior?  I hope not. 

The Art of Economy Surfing

An American citizen with an inquiring mind (IM):  Gadfly, before we get into our discussion about former President Clinton’s economy surfing skills, are there any additional points we may have left out of our discussion on tax cuts, unemployment, and national debt?

Old Gadfly:  I took another look at the claim of 4.5 million jobs created by the Obama Administration in the past 29 months.  As you recall, we concluded this number does not add up.  Perhaps the claim fails what former President Clinton (aka Slick Willie) called “an arithmetic test” in his policy lecture at the Democratic National Convention (DNC, Wednesday, September 5, 2012).  Nonetheless, we wondered why the period did not start in January of 2009, the beginning of the Obama Administration.  By starting at that point, the employment situation would still show a net loss of 3.1 million jobs.  What change took place between January 2009 and July 2012?  There was no change in top marginal tax rates.  But in November 2010, there was a political sea change in Congress, especially the House of Representatives.  So, I looked at the unemployment rates for this period and discovered the rate reversed when Republicans took control of the House.  The number of unemployed at the end of 2010 was 14,825,000.  The number of unemployed in July 2012 was 12,794,000, a net gain of a little more than 2 million jobs. 

IM:  Yet, former President Clinton alleged in his DNC lecture that Obama created 4.5 million jobs, and a Republican Congress created none.  Should we believe him?

Old Gadfly:  I remember when Clinton looked into the camera and said, “I did not have sexual relations with that woman,” and then later was found guilty of perjury by a grand jury and faced impeachment proceedings in Congress. 

IM:  Perhaps he has redeemed himself in terms of honesty.

Old Gadfly:  Clinton spent a lot of time, during his DNC lecture, bragging about all the great things he did while President.  Yet, he did not share any of the credit for “his successes” with a Republican dominated Congress, which drove a balanced budget and the welfare reform that put a lot of Americans in the workforce.  While taking credit for many imagined successes, Clinton seemed to overlook the recession he handed off to George Bush.

IM:  But, I was impressed by all the facts included in Clinton’s speech.

Old Gadfly:  Clinton threw out a lot of “facts” at the DNC to fit the Obama narrative “frame.”  The only problem with a lot of the facts is that they are not completely true.  But, to a progressive, that doesn’t seem to matter.  As Professor Lakoff would tell us, cognitive science research has revealed that it is the frame that matters—if facts fit, great; if not, they are irrelevant (see lesson # 8 in Thinking Points, p. 14).  Clinton cherry picked facts, even some that did not pass his own “arithmetic test,” to fit the Obama frame--hope and change, forward, and so forth. 

IM:  Well, I know I referred to Obama types of narratives as lies, damned lies, and statistics in our last conversation.  Yet, I did find a credible source that addresses this type of behavior in political campaigns.  Anthony Downs explains this dynamic in his book, An Economic Theory of Democracy.  According to Downs, “political parties are interested in gaining office per se, not in promoting a better or an ideal society. . . . Uncertainty allows parties to develop ideologies as weapons in the struggle for office.  An ideology [is] a verbal image of the good society and of the chief means of constructing such a society” (1957, p. 96, italics in the original). 

Old Gadfly:  Interesting.  How do you see this dynamic playing out in today’s political campaigning? 

IM:  Wow!  I see this dynamic playing out in two major ways.  First, why would Clinton speak at the DNC?  Clinton was not on speaking terms with Obama for months after Obama’s tactics against his wife, Hillary, during the Democrat presidential primary in 2008.  According to Edward Klein, in his book, The Amateur, Clinton believes Obama is utterly “incompetent” and has caused great damage to our nation.  So, the only way to explain Clinton’s behavior is with Down’s observation that “political parties are interested in gaining office per se.”  Second, Downs’ “verbal image of a good society” is remarkably different between Democrats and Republicans—it is characterized as visions for America.  A classic example is the Democrat vision of collective liberty, guaranteed by a strong central government to ensure “shared responsibility” and “shared prosperity” as their dream of America.  Of course, this dream requires egalitarian policies.

Old Gadfly:  What do you mean by egalitarian?

IM:  Egalitarianism is a belief that it is morally expected to ensure equality of outcome for all, even if this requires restricting freedoms for some.  Obamacare’s individual mandate is a clear example of an egalitarian policy.  And, despite the top 1% of our tax filers already paying more than 38.7% of federal tax revenues (as of 2009) while nearly 50% are paying none of the revenue, the 1% is demonized for not paying its fair share (see also a report from the Congressional Budget Office).  Egalitarianism is a key mechanism of the progressive movement in promoting social justice.

Old Gadfly:  Hmmm.   Progressive.  I have heard people use this term before.  Progressive means wanting progress does it not?

IM:  The meaning is far more complex than simply wanting progress.  Progressivism is an entire philosophy that derives its inspiration from European socialism and statist administrative practice.  Read Hayek’s The Road to Serfdom.  Think about political correctness in our society.  Where did it come from and why did it take root in America?  Bill Lind provides an explanation at the web site, Accuracy in Academia.  Read C. S. Lewis’s The Abolition of Man and how “conditioners condition the conditioned.”  Lewis wrote this book in reaction to society-wide experiments by Lenin, Stalin, and Hitler in the mid-1940s.  In today’s public narrative, progressivism means “moving forward.”

Old Gadfly:  Wait a minute.  Moving forward.  That’s the Obama campaign slogan:  “forward.”

IM:  This is no coincidence, Gadfly.  The attacks on the wealthy in defense of the middle class is the same class warfare promoted by Karl Marx in alleging bourgeoisie (those who controlled centers of production) exploitation of the proletariat (labor force).

Old Gadfly:  Are you suggesting that Obama and those who endorse him are socialists?

IM:  I am amazed at how reluctant people are to acknowledge this possibility.  Perhaps this is so because of political correctness.  Yet, here is how socialism is defined:  “A theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole. . . . (in Marxist theory) the stage following capitalism in the transition of a society to communism, characterized by the imperfect implementation of collectivist principles” (http://dictionary.reference.com).

Old Gadfly:  So far, we seem to be describing our understanding of the progressive Democrat vision for America.  How about the conservative Republican vision?

IM:  The Republican vision has great faith in the goodness and innovativeness of American citizens to live virtuously within their communities while exercising liberty in the pursuit of happiness.  Of course, these are two of the three unalienable rights endowed by the Creator.  Life, the third unalienable right, seems to be a right that has been amended by human beings.  In politically correct terms, life is now subordinated to reproductive rights.  Now, this is a complex issue, Gadfly, and I want us to discuss it in a near future conversation because I think this issue, more than any other, tests our ability as a civilized nation to truly live virtuously in a truly just society.

Old Gadfly:  I look forward to the conversation about reproductive rights.

IM:  Meanwhile, the following models graphically depict the Democrat and Republican visions of America.

The Democrat vision:

The Republican vision:

   

Old Gadfly:  This is all fascinating and sobering, IM, which brings us to the topic for today’s conversation: President Clinton’s role in the good economy in the 1990s.  What does your analysis reveal about this period?

IM:  First of all, most of us, including Ivy League and London School of Economics economists, underestimated the role President Reagan and the states played in enabling the economic conditions that led to economic growth in the 90s.  Two of Reagan’s major actions included (a) promoting deregulation of the airline industry, which was critical to operating in a globalized economy; and (b) taking a leadership role in bringing the Cold War to an end.  I don’t think we have time to discuss the Cold War victory in this conversation.  But, I believe it contributed to a tremendous increase of certainty and confidence in support of a growing economy and greater prosperity. 

Old Gadfly:  Tell me more about deregulating the airline industry.

IM:  Most of us forget that it was President Carter who signed into law the Airline Deregulation Act of 1978.  Yet, it was President Reagan who championed its enactment, along with his major tax reform (which removed “over 3 million low income people from the tax rolls”).  Airline deregulation brought down prices to the consumer and made U.S. companies more adaptive and profitable in the international system. 

Old Gadfly:  How did the states play a role?

IM:  When we hear politicians talk about deregulation of the financial sector, we seem to understand this to mean Presidential fiscal policy.  For the financial sector during the 70s through the 90s, state legislatures played a major role in deregulating banking practices.  In their article, “Big Bad Banks?  The Winners and Losers from Bank Deregulation in the United States,” published in The Journal of Finance, Thorsten Beck, Ross Levine, and Alexey Levkov concluded from their analysis that bank deregulation “removed restrictions on intrastate branching, which intensified bank competition and improved bank performance. . . . deregulation materially tightened the distribution of income by boosting incomes in the lower part of the income distribution while having little impact on incomes above the median” (2010, p. 1637).  This state-led banking deregulation accounted for a lot of the economic growth during the 1990s.

Old Gadfly:  So, what you are telling me is that federalism works, especially when respecting the role the public and private sectors play in the economy at all levels of government.

IM:  Absolutely.  But it is far more complicated when trying to understand what is called the “New Financial Architecture” (NFA).  James Crotty does a great job of explaining apparent structural flaws in the NFA system in his article, “Structural Causes of the Global Financial Crisis:  A Critical Assessment of the ‘New Financial Architecture,” Cambridge Journal of Economics.  Crotty concluded from his analysis that the lightly regulated NFA, in combination with the propensity for government bailouts, allowed financial institutions to take far greater risk to enhance profits and bonuses.  The dilemma in this dynamic is to either increase regulation or to avoid bailouts.  Crotty admits that lighter regulation promotes innovation.  Thus, while not suggested by Crotty, it seems that government bailouts should not be allowed in order to reduce the incentives for excessive risk.  

Old Gadfly:  Were there any fiscal policies that aggravated the flaws in the NFA system?

IM:  Yes, but hardly anyone is aware of it.  In 2011, Gretchen Morgenson and Joshua Rosner revealed the causes and conditions for the global financial crisis in their book, Reckless Endangerment:  How Outsized Ambition, Greed, and Corruption led to Economic Armageddon.  The key trigger that moved our nation to the financial crisis was the Federal Housing Enterprises Financial Safety and Soundness Act of 1992.  The law was essentially written by James Johnson, Chief Executive Officer of Fannie Mae, in cooperation with a Democrat-controlled Congress and with the help of activists from ACORN to pressure mortgage lenders into making risking loans, i.e., sub-prime mortgages.  In 1994, “Clinton launched the National Partners in Homeownership, a private-public cooperative with one goal:  raising the numbers of homeowners across America” (p. 1).  While three Republicans--Phil Gramm, Jim Leach, and Thomas Bliley—are implicated for their role in the Financial Services Modernization Act of 1999 (i.e., the elimination of Glass-Steagall), the vast majority of the politicians who worked with the financial sector in advancing corrupted practices were Democrat.  The book is loaded with detailed patterns of corrupted activities.  The evidence in Reckless Endangerment clearly supports the dynamics described in Crotty’s article about structural causes of the financial crisis.

Old Gadfly:  IM, I am amazed that there is so much credible analysis on this topic.  Did Congress commission any studies on the crisis?

IM:  Yes.  Congress established The National Commission on the Causes of the Financial and Economic Crisis in the United States as part of the Fraud Enforcement and Recovery Act. 

Old Gadfly:  Well, that sounds encouraging.  Did the Commission complete its task?

IM:  Sort of.  The Commission’s final report in January of 2011 was listed on the New York Times and Washington Post best seller lists.  The commission consisted of 10 commissioners, six appointed by Senator Reid and Congresswoman Pelosi and four appointed by Senator McConnell and Congressman Boehner.  When the report was publicly released, only six of the 10 commissioners endorsed the report—they were the Reid and Pelosi appointees.  The four commissioners appointed by McConnell and Boehner dissented from the report and were allowed a short rebuttal at the end of the report, which pointed to other potential causes not considered by the Commission.  The official report placed all the blame on the financial sector with absolutely no consideration of government fiscal or monetary policy causes.  Nowhere in the entire report, which is loaded with specific names, is Fannie Mae’s James Johnson mentioned.

Old Gadfly:  Am I misreading the public narrative that appears to claim the recent Bush Administration did little to stem conditions that led to the financial crisis?

IM:  No.  The public narrative and corresponding public sentiment, which I believe was intentionally engineered (a topic for another conversation), made Bush look incompetent.

Old Gadfly:  I infer from your innuendo that this is not true.

IM:  As early as 2003, the Bush Administration wanted stronger oversight on Fannie Mae and Freddie Mac.  Two years later, Republicans in the 109^th Congress also pushed legislation for greater oversight in Senate Bill 190.  The bill never made it out of the 20-member committee.  The bill needed 12 votes in favor to defeat a filibuster.  Eleven Republicans voted in favor and nine Democrats opposed.  So you see, efforts were under way to avoid or minimize the effects of the tidal wave, but they are not widely known among the voting public.  Also, don’t forget the public outrage about Enron and Worldcom.  Bush “inherited” these “problems” and pushed for regulatory reform that became Sarbanes-Oxley.

Old Gadfly:  But, how do you account for the willingness of Congresswoman Pelosi, as the Speaker of the House, to level such harsh criticisms against Bush?            

IM:  It was all rhetoric—it reinforced a narrative frame.  By creating an “image” that Bush was incompetent to advance an ideal society, Democrats, especially the progressives driving their agenda, created a political bogey man for any Democrat to run against in 2006 and 2008 elections.  Democrats took majorities in both houses of Congress in 2006 and that momentum helped Obama win in 2008.  Don’t forget.  Obama changed his mind about campaigning with federal funding while McCain kept to his pledge to do so, which explains why Obama spent over $760 million or $10.94 per vote versus McCain’s $358 million or $5.97 per vote.  If we’re willing to be objective about what is happening, then we clearly see examples of politicians who are willing to say or do anything to get elected.

Old Gadfly:  Your analysis provides strong support for Anthony Downs’s observation you described earlier in the conversation.  So, before we stop for a glass of wine, what are our key take away points from today’s conversation?

IM:  I think there are four conclusions:  First, Clinton’s DNC lecture reinforced his Slick Willie legacy.  Second, while he demonstrated brilliant surfing skills with a growing economic wave in the 1990s, Clinton deserves little credit for generating the conditions for the wave, yet deserves some credit for the recession he handed off to Bush.  Third, Democrats, more so than Republicans, use ideology (i.e., egalitarian social justice policy to promote equality in outcome) to attain political office.  Fourth, our “free press” has done a very poor job of being the watchdog of current affairs in our society.  Most of what I learned about the global financial crisis I had to glean from deep research of credible research sources.  The information I found provides important insights to guide future actions to put our economy on a healthy footing.

Old Gadfly:  Thank you, IM, for your powerful reflections.

IM:  For our next conversation, perhaps we can discuss the dream I had after Obama’s DNC speech.  Two features of the dream frightened me:  it was in black and white, and Obama had dried, parched lips.

Old Gadfly:  I can’t wait to hear about it.