A Greater Lawlessness—Self Interest vs. The Common Interest

Popular Economics Weekly

Are we at the beginning of an era of Greater Lawlessness, or nearing the end with the greatest law breaking we may have seen in our lifetime? And are we at the beginning or end of the greatest wealth accumulation by the wealthiest, of another Gilded Age that last happened in 1900, at the beginning of the Industrial Age?

In a potentially bombshell report, CNN reported Wednesday night that the FBI has information that suggests members of President Donald Trump’s team may have colluded with Russian operatives to coordinate the release of damaging information in an effort to torpedo Hillary Clinton’s presidential campaign.

FBI Director James Comey had already testified in televised House hearings that the Trump campaign team was under criminal investigation for collusion with Russian intelligence operatives in trying to undermine the legitimacy of US elections and democracy in general.

Such interference by Russian and even Wikileaks has led to the election of possibly the most corrupt President in US history, with his refusal to divest himself of his assets that are creating countless conflicts of interest, as well as blatantly ignoring the emoluments clause of the US Constitution that prohibits presidents from being compensated by foreign governments.

How did the US, leader of the free and democratic world since WWII, become so weak and vulnerable that Russian hackers could help to elect Donald Trump, an openly pro-Putin ally who wants to implement the Kremlin’s own foreign policies and subvert those of the democratic western world?

We have had major lawbreaking by Presidents before with Nixon’s Watergate, which was a break into Democratic National Committee headquarters to steal their election plans. Sound familiar?

Then there was President Reagan and the Iran-Contra Affair in the 1980s, which entailed the secret shipping of some $8 million in weapons to Khomeini’s Iranian government to aid them in their Iraq war, and more than 250 criminal convictions of Reagan era office holders for law breaking.

This was in part because President Reagan considered government the problem, and therefore its laws and regulations to be subverted or ignored when inconvenient to his goals.

What were those goals? It’s in fact a long story, but one that can be summarized easily. Such a greater lawlessness of elected representatives and presidents in particular, began with the concerted push to transfer greater wealth to the already wealthy begun in the 1970s and catalogued best in Jacob Hacker & Paul Pierson’s Winner-Take-All Politics. It was the beginning of massive tax cuts, and gutting of labor protection laws, the backbone of middle class prosperity, which weakened labor’s ability to both organize and bargain collectively, and resulted in the massive globalization of the labor force.

These policies were implemented under the rationale that self-interest trumped the common interest championed by governments, and therefore those laws that supported public interest should be subordinate to private interests. Its ideologues and supporters advocated an economic program called trickle-down economics that maintained the owners of capital knew best how to run a country and create the greatest prosperity for all with only the most minimal government regulations and protections, in order to maintain US leadership as a world power.

This led to the abuses of the housing bubble and wholesale loss of middle class wealth from overleveraged Wall Street, a shadow banking system, and failure of financial institutions such as Lehman Brothers that bankrupted millions of ordinary workers.

It led to the Great Recession, which did as much damage to the US economy as the much longer Great Depression, but without the leadership of an FDR and Francis Perkins, his Labor Secretary, who created most of the modern social safety net, including social security and the Fair Labor Standards Act, the first minimum wage and overtime laws for American workers.

It has also led to the greatest income inequality since the beginning of the Great Depression in 1929, which in turn led to the polarized electorate we have today. There is very little left of the middle class created after WWII that grew due to New Deal legislation that protected unions and collective bargaining, funded early education and government research that gave US the technological edge.

Under the aegis of a revolt against globalization, we have instead elected those who believe healthcare should be restricted only to those that can afford it, a government so diminished that it no longer is able to protect the environment, educate all in public schools and tuition-free public universities, or protect the public from Wall Street excesses, (which means another recession is inevitable).

All this could only have happened with the greater lawlessness we have today that a president and White House make no attempt to hide. President Trump seems to believe in the Mafia code, a code that trusts only his family and closest associates, where the only honor is the honor among thieves, some of whom are turning out to be Russian oligarchs whose stolen wealth he is more than happy to launder in his various real estate holdings.

CNN, basing its report on unnamed U.S. officials, said the evidence is largely circumstantial and is not yet conclusive, though the investigation is ongoing and is now focusing on the possibility of that collusion. The FBI’s information is based on “human intelligence, travel, business and phone records and accounts of in-person meetings,” CNN said.

Rep. Adam Schiff (D-Calif.) went a step further Wednesday, telling MSNBC “there is more than circumstantial evidence now” of collusion with Vladimir Putin’s Russia.

So is this the beginning, or the end of an era of rampant lawlessness that began almost 50 years ago, and that few of the lawbreakers have paid for, from Presidents to Wall Street financiers?

Maybe the various investigations will help is to understand what has happened to the no longer United States of America?

Harlan Green © 2017

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Hillary Clinton, A New FDR?

Popular Economics Weekly

Even President Obama, among others, has said Hillary Clinton is one of the most qualified presidential candidates ever. And she has been advocating a new New Deal for America, including tuition-free public universities and colleges, paid maternity leave, child care, expanded social security and Medicare benefits, as well as more public investment at a time when the private sector has severely cut back on productive investment of any kind.

She would also be our first female president. So how should we compare her to FDR, our father figure during the Great Depression and WWII, at a time of economic suffering from the second worst depression we have just lived through?

What is little know is that the major New Deal programs created during the Great Depression, including Social Security, unemployment insurance, and the 40-yr work week, were designed and created by a female Labor Secretary, Francis Perkins, whom he had brought with him from his New York state governorship.

During her term as Secretary of Labor from 1933 to 1946, Secretary Perkins created the Civilian Conservation Corps, the Public Works Administration (WPA), and the labor portion of the National Recovery Industrial Act. With the Social Security Act, she established unemployment benefits and pensions for the many uncovered elderly Americans, and welfare for the poorest Americans. She pushed to reduce workplace accidents and helped craft laws against child labor. Through the Fair Labor Standards Act, she established the first minimum age and overtime laws for American workers, and defined the standard forty-hour work week.

Yes, Francis Perkins, a woman, was the real designer and implementer of most of the New Deal programs, without which we would not have weathered the Great Depression with enough economic strength to win WWII.

So might Hillary Clinton provide a similar vision for America during these divided times when so much of the rest of the world wants what we have? Her drive to provide tuition-free public colleges is a first step.

The now $1 trillion in student debt is holding back economic growth, for starters. It prevents students from investing in their future growth, such as a profession they prefer, rather than continuing to pay for the past investment in themselves. It has held back the number of college graduate that both earn higher salaries and are more fully employed than non-college graduates.

A recent NBER Working Paper by economist Enrico Moretti, showed a percentage point increase in the supply of college graduates raises high school drop-outs' wages by 1.9 percent, high school graduates' wages by 1.6 percent, and college graduates wages by 0.4 percent. The effect is larger for less educated groups, as predicted by a conventional demand and supply model. But even for college graduates, an increase in the supply of college graduates increases wages, as predicted by a model that includes conventional demand and supply factors as well as spillovers, said Dr. Moretti.

Graph: CAP

It is particularly important that the United States increases its investment in postsecondary education in the face of rising competition from its international peers, and having government take on the burden of public university debt is a first step. As recently as 1996, the United States had the second highest share of adults who had earned postsecondary education credentials and the highest share of adults with university degrees, in part because there was little or no tuition until the 1970s, when governments began to cut back on their share of state university funding, which was then taken up by rising tuition fees.

More recently, however, America’s level of achievement has fallen behind other nations. In 2012, the most recent year measured, the United States ranked fifth in the percentage of adults who had earned postsecondary education credentials, according to the Center for American Progress. Even more worrisome, the share of young Americans—those between the ages of 25 and 34—with postsecondary credentials has dropped to 12th relative to other nations, while those possessing university degrees fell to 14th.

Why is Hillary so qualified? President Roosevelt had a history of public service, first as Assistant Secretary of the Navy, then New York Governor, before serving as our President from 1932-45. Hillary has had 30 years of service, including as a State Senator, Secretary of State, and First Lady. And such a broad record of service is what it will take to even begin to heal our fractured society.

Harlan Green © 2016

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen