Biden’s task

By January 3, 2021US Politics

The election of Donald Trump and the behaviour of him, his family and his appointees have demonstrated the shortcomings of the democratic system of the United States. Their constitution was written in the second half of the 1700s, and even though there have been several amendments, there is much that is left to convention. This constitution was written by people who were planning the future of their nation, to try to help it succeed in an unpredictable and often dangerous world. They guarded against corruption from within as much as they thought they needed to, but they wrote this constitution under the misapprehension that politicians would have the same concerns as they had for the future of their nation. They did not allow for incumbents to be either solely concerned with retaining power, being monumentally corrupt, or as in the case of Donald Trump, a malignant narcissist who is openly criminal, and probably treasonous1.

The fact that Trump was elected in 2016 despite losing the popular vote by almost 3 million votes, but still won the electoral college by 304 to 227 is a major problem which has been dealt with elsewhere2. However remedying this is made doubly urgent by the fact that some of Trump’s supporters have met in a handful of battleground states won by Biden and tried to appoint themselves as ‘alternate electors’, thereby going against the vote in those states in an attempt to keep Trump in office. This is unlikely to succeed3. The fact that this could even be contemplated shows that the electoral system in the US is deeply flawed, and needs to be repaired. There are several other problems including gerrymanders and voter suppression which are also favoured by Republicans, and the fact that in many states, state laws run the federal elections.

While all of the items listed above need to be remedied, the foremost task facing Biden is, as he has articulated himself, to bring the country together. While that sounds admirable, I fear that any attempt to do so will be superficial as both main political parties are beholden to their donors which, in large part, are corporations and billionaires4. Trump is not the cause of the current malaise afflicting the US, but he is a symptom of it.

Trump was elected by people who believe they have been screwed by the system. An analysis of the 2016 presidential election demonstrated that it was the less educated who voted for Trump5. Whether this is simply because of education level or other factors dependent on tha,t is unclear. While many of the far right were overjoyed at Trump’s election in 2016, there are not tens of millions of them. Indeed, many people who voted for Trump are likely repelled by people like those who belong to the Ku Klux Klan. So, why did they vote for him? Basically, they wanted to bugger up the system that has buggered them. While many of them are unable to articulate precisely why they voted for him, there is a clear theme within what they say: ‘Trump is not part of the government; he is not controlled by anyone; he is not part of the system’6. The irony, which is perhaps lost on some of these people, is that while Trump was ‘not part of the government’, he was a child of the system that buggered their lives. One of his first policy moves was to give tax cuts to the wealthy.

The system which has led to these gullible people to their situation is that enthusiastically supported by both the Republican and Democratic parties over the last 40 years. That system is what has been called neoliberal economics, or market fundamentalism, and is disparagingly referred to as trickle-down. I say ‘disparagingly’ because there is no trickle down involved7. The money is simply vacuumed up by the wealthy and their corporations with the aid of politicians who have been purchased by the wealthy and their corporations.

In what must be deemed most suitable for the ‘no shit, Sherlock’ file, is a working paper from the London School of Economics, entitled ‘The Economic consequences of major tax cuts for the rich’. In this paper, Hope & Limberg identified instances of major reductions in tax on the rich in 18 OECD countries from 1965 to 2015 and analysed the causal effect of major tax cuts for the rich on income inequality, economic growth, and unemployment. They found that:

  1. On average, each major tax cut resulted in an increase of 0.8% percentage points in the share of pre-tax national income by the top 1% of income earners (i.e. the rich get richer at the expense of others). This holds in both the short and medium term. 
  2. There were no significant effects on real GDP per capita from tax cuts for the rich in both the short and medium term (the rich keep their money).
  3. The unemployment rate is unaffected by significant reductions in taxes on the rich in both the short and medium term (the rich don’t employ more people with their extra money). 

These results provide causal evidence that supports the growing pool of evidence from correlational studies that cutting taxes on the rich increases top income shares, but has little effect on economic performance. They also are consistent with other causal findings obtained from a handful of selected countries8.

The economic effect that tax cuts for the wealthy when compared to the economic effect of the same amount of money given to the poor has been explained at a more basic level, by someone who can see what may be approaching. Billionaire Nick Hanauer (one of the original investors in Amazon) gave a TED talk which caused a furore among big business people who believed it to be too partisan to appear online despite the fact that some very partisan politicians had had their talks posted. Fortunately, TED later relented. In this talk, Hanauer stated: “We plutocrats need to get this trickle-down economics thing behind us, this idea that the better we do, the better everyone else will do. It’s not true. How could it be? I earn 1,000 times the median wage, but I do not buy 1,000 times as much stuff, do I? I actually bought two pairs of these pants, what my partner Mike calls my manager pants. I could have bought 2,000 pairs, but what would I do with them? How many haircuts can I get? How often can I go out to dinner? No matter how wealthy a few plutocrats get, we can never drive a great national economy. Only a thriving middle class can do that.”9

Hanauer’s main theme was that if the inequality continues to rise in the US, the society “will change from a capitalist democracy to a neo-feudalist rentier society like 18th century France before the revolution and the mobs with pitchforks”9. While pitchfork time is some way off, but not as far off as some would like to believe, something just as bad may be closer.

I know this is a big task for Biden to undertake, especially given the entrenched control that big business has over the political parties in the US. However, if Biden cannot fix the US system of trickle down then he will be leaving the way open for another Trump-like demagogue, but one that may not be as stupid or as incapable as Trump, but more focused and more malevolent, and hence more dangerous. If such a person does arise, it will be the end of the United States of America.

Sources

  1. http://www.blotreport.com/2020/08/09/major-misapprehension/
  2. http://www.blotreport.com/2017/03/23/archaic-us-electoral-college/
  3. https://apnews.com/article/election-2020-joe-biden-donald-trump-elections-electoral-college-ab4452c5e54dc55b5e45bbe737ae66ee
  4. https://www.opensecrets.org/elections-overview/biggest-donors
  5. http://www.blotreport.com/2017/01/15/uneducated-voted-for-trump/
  6. https://www.bbc.com/news/election-us-2016-36253275
  7. http://www.blotreport.com/2017/01/28/joke-economics/
  8. http://eprints.lse.ac.uk/107919/1/Hope_economic_consequences_of_major_tax_cuts_published.pdf
  9. https://www.ted.com/talks/nick_hanauer_beware_fellow_plutocrats_the_pitchforks_are_coming/transcript

4 Comments

  • Jon says:

    The notion that Trump was not part of government is fanciful nonsense. The President, with support of his party, is essentially the head of USA govt, even if he/she needs congressional support at times. Far, far more than previous Presidents Trump set his own seat-of-the-pants agendas and policies, often contrary to advice. Trump sacked numerous highly-qualified and well-respected govt officials (usually when they didn’t kiss his arse or offered rational advice that he didn’t like) and replaced them with sycophants. He didn’t drain any swamp, he simply made one in his own image and populated it with his family, compliant supporters, and weak-minded acolytes. The fact that Republican representatives supported him irrespective of his narcissistic whims, and continue to support him despite clear attempts to corrupt state voting officials* is an indictment on both those people as individual and the “government” he led.
    * https://thehill.com/homenews/news/532576-read-transcript-of-trump-phone-call-with-georgia-secretary-of-state

  • Jon says:

    That should be: Far far [more than].. …

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