The Garrison State Today

     On February 24, 2017, Wayne LaPierre of the National Rifle Association told the Conservative Political Action Conference that "Right now, we face a gathering of forces that are willing to use violence against us....Among them and behind them are some of the most radical political elements there are.  Anarchists, Marxists, Communists and the whole rest of the left-wing socialist brigade."
     This is an example today of the concept of  the garrison state identified by Prof. Harold Lasswell in 1941.  Lasswell was describing the totalitarian regimes of both the fascist right (Hitler and Mussolini) and the Communist left (Stalin).  His concept became further developed as the siege mentality, whereby a whole society can believe and act as though they were captives within a besieged city (or country).
     We continue to see many examples of governments in which the leaders persistently cry out against foreign threats and internal subversion.  They not only exaggerate the threats, they exacerbate them in order to foist a sense of great danger that will convince people that they need to support the government's policies.  These include higher military spending, the law and order crackdown of dissidents, the promotion of traditional social and religious values, and the suppression of free speech and press.  In the end, the goal is not so much to protect the country as it is to promote the interests of certain internal groups and to maintain the individuals and the party in power.
     President Donald J. Trump, with the solid support of his base, including the National Rifle Association, is the current leader of an emerging garrison state in the U.S.  He is encouraging the siege mentality of Americans by emphasizing the dire threats of radical Islamic extremists and terrorists, ISIS, the nuclear threat of North Korea, the nuclear threat of Iran, proposed restrictions to the Second Amendment, and the dangers of illegal immigrants, especially Hispanics, to the safety and security of Americans everywhere.  He discourages the freedom of speech and the press by denouncing stories that challenge him as "fake news" to be disbelieved and rejected.
     Trump is not concerned with unifying the American people.  On the contrary, he feeds contentious divisions and social unrest with fear and anger to increase the siege mentality.  He himself and his White House staff display symptoms of deep paranoia.
     By scaring people, Trump is promoting an agenda that is highly favorable to certain interests and individuals in the U.S.  He does this through increasing budgets for Defense and Homeland Security, restricting immigration, constructing a wall along our border with Mexico, permitting the private exploitation of public lands in the West, rejecting global climate change in favor of fossil fuels (especially oil and coal), and passing tax "reforms" that provide tremendous concessions to large corporations, corporate executives, stock investors, investment portfolio managers, and other very high income and wealthy people. 
     Those people of the Trump base without so much material but with high emotional interests  indicate that they are OK with the crumbs from the table according to supply-side, trickle-down economic theories.  They continue to trust Trump and long for making America great again, which they see as crushing all of Trump's and their own enemies, foreign and domestic, real and imagined.
     It is obvious that high income individuals and the interest groups of the Trump base will gain much in material advantages from the siege mentality.  But how will the base of true believers also benefit?

(c) 2017 Stephen M. Millett (all rights reserved)  

Politics Are Personal

     In my book American Ways, I identified the four corners of American politics:  money, issues, organizations, and personalities (pp. 168-171).  These four corners have provided the foundation of American politics since colonial times, but at different times some of these corners have appeared more prominently than others. 
     Money has always been important to pay for electoral campaigns.  It has also played a major role in competing interests trying to win advantage through contributions and favors in the public arena; in return for their support, they see the kinds of regulations and taxes that they desire.  They may also get repaid through government patronage and contracts.  The border between money as a form of freedom of speech and money as corruption has always been hazy.
     Issues have included both concrete matters, such as the gold standard in 1896 and the continuation of the New Deal in 1936, and abstract ideals, such as states' rights, personal liberties, and limited government.  They include political, social, and economic ideals and ideology. 
     Organizations relate primarily to political institutions and parties.  They provide the structure for the processes of American representative democracy.  Congress, for example, passes laws according to very specific rules of order.  Parties give cohesion and continuity between elections and the organization with which to get voters registered and delivered to the polls on election days.  For some political leaders, party loyalty may be more compelling than issues and maybe even money.
     During the 1980s, Speaker of the House "Tip" O'Neill claimed that all politics are local.  My corollary is that all politics are personal.  The personalities of candidates go a long way in attracting financial supporters and voters.  Successful political leaders often exude exceptional personal charm.  They can be poignant, charismatic, and entertaining.  They can arouse public emotions, either inspirational optimism or angry indignation.  Once in office, in complex negotiations over public policy the ability of leaders to trust each other and engage in productive inter-personal dealings count for a great deal.
     It presently appears that personalities are extremely important to President Donald Trump.  He was a well-known TV personality with high ratings before 2016 and he continues to crave public adulation in the White House.  He is very wealthy and not much concerned with money (besides his own).  He is not doctrinaire, contrary to much of his rhetoric; he is more interested in practical results than ideological purity.  In this regard, Trump is at odds with the rigidly opinioned Freedom Caucus in the House.  It has been reported that Trump does not care for Senate Majority Leader Mitch McConnell, who highly values the integrity of the U.S. Senate and the long-term unity of the Republican Party.  Trump likes to make deals in public policy like he made real estate deals.  Therefore, he likes people he can relate to, joke with, respect, and ultimately trust.  Such a person may prove to be a Democrat:  Senate Minority Leader Chuck Schumer.  Looking forward, the compromises finally reached on Obamacare, immigration, budgets, and taxes may be reached through the social dynamics of the streets of New York.

(c) 2016 Stephen M. Millett (All rights reserved)                 

The American Politics of Afghanistan

     In Chapter 8 of American Ways, I observed that "Americans view their relations with other countries as more or less extensions of their relations with each other, with typically compatible combinations of self-interests and ideals, so that American foreign policy often has more to do with domestic than with international politics." (p. 281).
      We saw an example of this general trend in American history in the speech that President Donald Trump gave on Monday, August 21, 2017.  The President rejected the policy option of American withdrawal after 16 years of our fighting in Afghanistan and pledged eventual victory there over the Taliban, ISIS, and other terrorist groups.  He did not say how this could be achieved or when.  He did not specify what constituted "victory," but he said that it would depend upon conditions, also not defined, in Afghanistan and not upon some artificial timetable.
     Although the President acted as though his new policy was based on careful analysis of the realities of the Middle East and South Asia, Trump's re-invigorated war in Afghanistan has more to do with domestic than international politics.  It is based primarily on the ideals and self-interests of his political base, upon which he expects to win re-election in 2020.  What are the political appeals of an extended war and the hope of victory in Afghanistan?
     At a very basic level, Trump's war in Afghanistan diverts national attention away from or makes up for domestic political disasters, such as the investigations into Russian meddling in the American elections of 2016, the failure to repeal and replace Obamacare, and the white supremacy mess of Charlottesville.  It's an old political maneuver to shift public attention from divisive domestic to unifying foreign issues. 
     In particular, Trump is arousing the patriotism of national unity that focuses on military might and service values.  Among other demographics, one target is the aging Boomers who painfully remember Vietnam.  They seek a military victory in the future that will compensate for the frustrations of Southeast Asia some half-century ago.  This generation today is prone to hold in contempt those who might be soft on terrorism like those in the past who were seen as being soft on communism.  They believe deeply in teamwork and social cohesion.  Trump gains politically when he convinces people that he is a strong leader who knows how to solve problems with the advice of generals.
     Furthermore, there are young men and women from small towns and rural areas around the country who enlist primarily because the Armed Forces present the best paying jobs to be had.  Their families and neighbors know this, too, and they enthusiastically support the military as the industry that supports their children.
     There certainly are Americans who deeply believe in a strong military to defend liberty and the American way of life against foreign enemies.  They greatly fear ISIS and foreign-generated acts of terrorism in the U.S.  Nobody wants another 9/11.  And along with high ideals often come the self-interests of military patriotism, including the pay and benefits of the military, the revenues of military contractors and suppliers, and the election of representatives in districts and states with military bases and instillations.  Defense has been a strong sector of the American economy, and a strong economy provides strong politics.   
     Trump is probably correct in his expectations that some kind of military success in Afghanistan could be called "victory" and leveraged for political gain.  On the other hand, he is tempting the same fate of other nations and leaders who have tried and failed to extend their foreign policy goals into this region of the world, including the British and Russians over the last two centuries.

(C) 2017 Stephen M. Millett (All rights reserved)      

The Importance of Process

     In Chapter 6 of American Ways, I observed that "When Americans cannot agree on conflicting ideals and interests, they resort to agreeing on a fair and equitable process to resolve their conflicts peacefully."  Since the earliest days of the colonies, Americans have asserted their individual ideals and interests.  They often butt heads with other individuals doing the same.  While Americans have enjoyed certain rights, they have never enjoyed the right to infringe the rights of other individuals.  Had there been no agreed-upon procedures to settle numerous conflicts among individuals, Americans would have fought and killed each other off a long time ago.
     Processes are extremely important to Americans.  Most Americans have followed the axiom "live and let live."  But to people with self-absorbed interests and absolute beliefs, the ends justify the means.  We see this often in the business world of high-competition and high-expectations.  Profits are what matter most to many business people and investors.  But they have to stay within the boundaries of the law and social acceptability or they risk alienating authorities and customers.  We also see people with uncompromising values who are willing to go to extremes regardless of who else gets hurt.
     To most Americans since the 17th century, however, the means justify the ends.  There are "right" and "wrong" ways to get things done, not just favorable or unfavorable results.  If you live according to the rules, then you are entitled to your gains, and those gains become protected under the law with broad community approval.  You are also respected by the community of other individuals.
     What do the concepts of fair and equitable mean?  "Fair" means that all parties in a dispute agree to a process by which to settle conflicts and then abide by the outcome.  In the eyes of many Americans, "fair" may relate more to the process than to the results.  If the process is run according to consensual rules, then you have to accept the results as fair even if they are not what you wanted.  Then, you just move on.  "Fair" also means that the process was run without trickery, corruption, or perversion of the rules.  Many times Americans have tried to bend the process to get their desired results.  Therefore, procedural knowledge and transparency are required.  For example, judges, lawyers, and law enforcement agents must understand the American system of justice.  And "equitable" means that all parties are treated the same with no biases based on political favor, power, wealth, or social standing.  That's the concept, at least.  Unfortunately, achieving the ideal is a continuous struggle in the practical world in which wealth and influence play such prominent roles in the day-to-day affairs of both business and government.
     Furthermore, the concepts of fair and equitable in the operation of peaceful processes apply to the most powerful person in the country, the President of the United States.  He or she cannot excuse any means to justify the ends.  The Constitution lays out a process for national government with limited powers and internal checks and balances.  Just as a judge in a court, the President has to know the proper institutional procedures and follow them with transparency.  In addition, the sensitivities of the American people based on generations of social processes must be respected, even in the technological world of social media.

(C) 2017 Stephen M. Millett (All rights reserved)           

The Ideals and Self-Interests of Global Climate Change

     In Chapter 5 of my book American Ways, I set out one of the major patterns of historical American behavior:  Americans find clever ways to combine their lofty ideals with their self-interests and self-satisfaction, and only rarely will they consciously pursue their ideals at the direct expense of their own well-being (p. 143).

     Let’s take a simplified example from an extremely complicated issue:  global climate change.  On one side are those who assert that the Earth’s climate is changing rapidly, with many areas suffering from increased surface temperatures and storms; that global warming is potentially damaging to all life forms on land and in the seas; and that actions must be taken now to avert climate disaster in the future.  In particular the Paris climate accord of 2015 called for reductions in greenhouse gas emissions and a shift from the extensive use of fossil fuels with high concentrations of carbon dioxide to sustainable energy.
     Who benefits from such goals in the U.S.?  One might argue ideally that everybody will benefit by not enduring climate disasters.  Many arguments are based on the high ideals of quality of life, improved health and safety, and environmental stewardship.  But behind such ideals are many self-interests, too.  Scientists and R&D enterprises might receive more Federal government programs.  Insurance companies might reduce their risk exposure to large claims based on extreme weather events such as hurricanes, thunderstorms, and floods.  Obviously, there are farming, ranching, forestry, and fishing interests at stake if climate conditions reduce their outputs.  The shift to sustainable energy forms particularly favors investors and companies engaged in the production and operation of electricity-generating windmills, hydro-electric facilities, solar panels, geothermal systems, and perhaps large-sized batteries and fuel cells.
     In addition, the natural gas industry has been benefitting by the increasing use of methane as a fuel for central station generation of electricity.  Furthermore, greenhouse gas emission restrictions might reinvigorate nuclear energy. 
     Less well-known are shipping and tourism interests that see new business with the melting of the North Pole ice cap.  This aspect of global warming may also appeal to oil and gas interests seeking new drilling opportunities farther north.
       On the other hand, the opponents of the Paris climate accord and the environmental and energy policies of the Obama Administration denounce the notion of global climate change as fake news and perverted science.  They decry the environmental regulations of Big Government and the meddling of Washington, DC, in the smooth operation of the private sector.  They argue that global climate restrictions on greenhouse gas emissions will crimple the American energy industry, throw millions of people out of work, and lower the annual GDP growth rate.  But what are their vested interests?  There are the traditional interests in fossil fuels, especially coal.  In its extreme form, global climate regulations would virtually kill the coal industry, as coal remains a relatively dirty form of energy with typically high carbon emissions.  Five states produce over 70% of American coal:  Wyoming, West Virginia, Kentucky, Pennsylvania, and Illinois.  Coal interests are also strong in Ohio and Montana.  The industry hit a peak in 2006 and has been in steady decline for over a decade with lost jobs and reduced company revenues.
     Many electric utilities continue to rely heavily upon coal to operate central station facilities representing billions of dollars in plant investment.  Some electric utilities have claimed that further restrictions on their carbon emissions would result in skyrocketing electric bills for consumers and eventually leave tens of millions of Americans in the dark.
     The automotive industry might be severely impacted by global climate regulations on gasoline emissions, but many companies are gradually shifting to more efficient internal combustion engines, hybrids, and electric vehicles, as the consumer demand supports such products.
     In addition to the high ideals and self-interests at play, the global climate change debate has exposed deeply held social biases and hatreds:  the academic community vs. large corporations, tree-huggers vs. economic opportunists, rugged individuals vs. Big Government, conservatives vs. liberals, Democrats vs. Republicans, and the admirers vs. the detractors of Barack Obama.  For example, Vice President Mike Pence once said that the principal problem with Obamacare was Obama – he might have said the same of global climate change and the Paris climate accords.                  

© 2017 Stephen M. Millett (All rights reserved)

The Get Even President

     Donald J. Trump is the Get Even President.  He has emerged as the champion of Americans who feel that they have been gravely wronged and who seek retaliation against their enemies, real and imagined.  Trump’s behavior reflects the mood of his base: confrontational, indignant, impatient, defiant, abrasive, and unapologetic.  Not far beneath the surface exist layers of pain, fear, and anger.
     Who are the people who support Trump?  The Trump coalition consists primarily of six groups, among which there are many overlaps.
     The first consists of highly partisan and “yellow dog” Republicans.  Their faith in the GOP is largely based on family political tradition, regional political preferences, the ideals of individualism and free enterprise, and vested interests.  They include Republicans who remain enamored with Ronald Reagan and adhere to the conservative principles of Robert Taft and Barry Goldwater.  They generally fear and loathe Democrats, who threaten them through government regulations, taxes, and social reforms.  Many Republicans continue to hold great disdain for Bill Clinton and his unseemly personal conduct as President; they also greatly distrust Bill Clinton’s wife, or “crooked Hillary” as Trump calls her.
     The second group is the American déclassé that I discussed in my blog posting of June 1, 2017.  These include people from the middle and working classes who suffered from the Great Recession of 2008 and never fully recovered.  Many lost their jobs, savings, homes, and their comfortable lifestyles and they want them back, now!  They feel victimized by various evil-doers in a corrupt system (“drain the swamp”) and exploitive illegal immigrants (“build the wall.”).  They are very angry, and in particular damn President Barack Obama.  Anything connected to him (such as Obamacare, environmental restrictions, global climate change, trade agreements, and post-2008 banking and financial regulations) must be reversed.
     The third group is Baby Boomers who are now approaching retirement and who still have vivid memories of the 1960s.  They recall the violence of the Civil Rights movement (especially the urban race riots) and the war in Vietnam, both in the jungles of Southeast Asia and in the streets of the U.S.  They resent the perceived shunning of Vietnam veterans as though they were war criminals.  They want a strong military that will be allowed to win foreign engagements.  They in particular want to “make American great again,” or a return to a world order in which countries defer to the U.S.
     Americans who have a persistent fear of criminals and terrorists make the fourth group.  They abhor street shootings and random acts of violence.  They remain traumatized by the Al Qaeda attacks upon New York City and Washington, DC, on 9/11 of 2001.  They generally supported American retaliation in Afghanistan and the unilateral, preemptive invasion of Iraq.  In contrast, they bemoaned the seemingly irresolute policies of the Obama administration in the Middle East.  They defend domestic gun rights and distrust Muslims (“the travel ban”).  They cheer a strong leader who will end criminal violence and foreign-generated acts of terrorism one way or another.
     The fifth group are members of the social conservative movement, especially those who embrace traditionalist social and religious views.  They are defenders of their own religious freedoms.  They may not always condone Trump’s language, but they support him as a national leader who will curtail abortions, gay marriages, and the mandated coverage of contraceptives in Obamacare.  Most importantly, they support Trump’s appointment of conservatives to federal courts, like Neil Gorsuch to the U.S. Supreme Court.

     Finally, the sixth group consists of Trump’s fans who love his books, reality TV shows, speeches, and tweets.  They are awed by his great wealth and CEO style.  They see Trump as spectacular political entertainment.
     Will these groups find satisfaction?  And will they be better off in the long run?

© 2017 Stephen M. Millett (All rights reserved)     

The American Déclassé

     Toward the end of the 19^th century, the French introduced the word déclassé to describe people who had fallen in social status.  The déclassé might include aristocrats who lost their titles or their estates for one reason or another.  They might also be middle class who lost their businesses, white-collar employment, savings, and homes.  They were reduced to the tattered trappings but no longer the substance of their former comfortable lifestyles.  They felt victimized and marginalized and often blamed others for their own misfortunes.
     Many Germans experienced a middle class déclassé in the 1920s due to hyper-inflation that wiped out long-term savings.  Then they suffered further from the Great Depression and deflation.  Financial reverses along with personal loses and the humiliating defeat in World War I caused many German déclassé to turn to hyper-nationalism, including German racial superiority as expressed by the Nazis.
     Now the United States has its own déclassé.  They were used to middle class standards of living until the Great Recession of 2007.  Some were upper- and middle-middle class who were overextended in debt, particularly inflated home mortgages.  When the financial and real estate bubble burst, many lost their houses, which were their principal assets as well as their homes.  Others lost their businesses and investments, too.  Meanwhile, white collar workers lost their jobs to process innovations and business cost reductions.  After decades of wages and benefits that lifted so many factory workers from the working to the middle class, millions of industrial jobs were eliminated by factory automation, offshore production, and layoffs by companies faced with reduced demand for their goods and services.  For many, the upward spiral of the American Dream had suddenly reversed its course downward.
     Particularly devastated was the new working poor, broadly defined, of people who could not find any jobs, or took jobs that paid significantly less than their previous jobs, or went into retirement without pensions and adequate savings.  They found themselves on the wrong end of the growing income-wealth-education gap in the U.S.  Having once enjoyed a middle-class standard of living, they now had to struggle to just make ends meet.  If they still bought the things they were used to, they went more heavily into debt.  Many became very bitter about their losses and retreated into social isolation and alcohol and drug abuse.  Some turned outward and blamed various other people, including Wall Street fund managers and bankers, the one-percenters, the Federal government that seemed pleased to help the chronically poor but not the working poor, and illegal immigrants who allegedly exploited public assistance programs.  In addition there was a growing fear of public violence and acts of foreign-generated terrorism.
     Some of the American déclassé personified their anger in President Barack Obama and railed against the well-educated and well-paid elites who appeared to dominate the Democratic Party.  They hated when the President lectured them about large corporation bailouts (but none for the “little guys”), mandatory healthcare insurance (which for some people resulted in unwanted coverage with unwanted premiums and new taxes), race relations, and global climate change.  What about good jobs with good pay?  What about people who were not working but getting public handouts?  What about illegal immigrants from Mexico?  What about Muslim terrorists shooting and bombing innocent Americans?
     Then came the elections of 2016…. 

© 2017 Stephen M. Millett (All rights reserved)

Who Protects American Individuals?

     Perhaps no country in history has valued individuals as much as the U.S.  American ideals amplify the rights and value of individuals – we talk about individual freedoms and opportunities and making life better in the future.  The American Dream is ideally open to everyone.  But who provides the safeguards that protect American individuals and allows them to assert their individuality?  
     At the basic level, each American has assumed responsibility for his or her own well-being and rights.  If you are an American, you have to watch out for yourself.  You are expected to work, earn a living for yourself, and provide for your family.  You have to guard your own home and personal safety the best you can at moments of danger.  Yet, no American is empowered to assert his or her prerogatives upon other individuals without justifiable cause.  We all live under the same laws that protect individuals and maintain social order.
     There have been times and places in which people had to defend themselves in the wilderness or on the frontier because nobody else was around to help them.  For most Americans, however, individuals tended farms and ranches, built businesses, and labored within communities.  Once Americans came into social organizations, they were expected to help their friends and neighbors and to live by the law.  Uninhibited individualism might have led to people willfully fighting and killing each other.
     The law as practiced by communities provides the police on patrol.  It also provides the courts and prisons that back the law up with consequences.  And who makes the law and pays for its enforcement?  In the U.S., from the earliest colonies, it has been the people working together through a prescribed process within communities.  Directly or indirectly, they made the laws, raised the taxes, and operated the public institutions.  In the final analysis, communities protect and serve American individuals in regard to personal safety, property rights, civil liberties, due process, and public health.
     To carry this point further, who protects American workers and consumers as well as honest business people in the pursuits of earning a living or building a fortune?  There have always been bad guys in stores and offices as well as in the streets.  Many business people are not criminal but are still self-serving and greedy while taking advantage of other people.  Who protects workers from inhumane conditions and treatment?  Who protects American consumers (who are also citizens and voters) from broken promises, misrepresentations, cheating, and swindles?  Again, the communities do, at all levels.  Local governments, for example, have passed zoning laws to protect private property and neighborhoods.  They have also passed building and health codes and maintained standard weights and measures.  State governments also protect individuals from certain business crimes and abuses of workers and consumers.  So, too, does the Federal government at the national level.  The whole purpose of regulations passed and enforced by communities is to protect individuals and maintain the integrity of the free enterprise system.
     In the face of combines to monopolize interstate products, services, and prices and in the face of nationwide corporations that proclaim “Let the public be damned!,” the protection of individual rights from abuses of Big Business was the one community that represented all the people:  the Federal government.  Or so argued President Theodore Roosevelt over 100 years ago.  In a growingly complex and rich commerce, the national community has to regulate the national economy.  Meanwhile, Americans through voting, expressing opinions, and demonstrating peacefully must guard against the abuses of the Federal government as well as those of huge interest groups, especially when the interests of a few, as expressed in hidden political donations and intense political lobbying, dominate government policies over the interests of the many. 

    

© 2017 Stephen M. Millett (All rights reserved)          

The Most Important Word

     I used to ask my MBA students what was the single most important word in business.  Many would respond “profits,” and indeed that is how many business people think.  But the most important word is “trust” – without that no business can be conducted.

     Customers buy products and services that they trust from providers that they can rely upon.  The quality and consistency of goods and services are reflected in their reputations and brands.  It may take years for a company to build an attractive brand, which can be quickly destroyed by an accident or loss of consumer confidence.  Businesses also have to trust each other:  if you pay out money, then you expect value in return, each and every time.
     When people know each other and share positive experiences, they might make agreements based on a handshake.  They trust each other to do as promised.  In far more impersonal and complicated situations, we rely on contracts, which are legally binding agreements whereby the law provides trust.

     Likewise, there was a time when people shopped at the same stores all the time – the storekeepers knew which customers wanted what products and whether they could be trusted to pay their bills.  In addition, an individual might use the same bank over a lifetime.  Credit from stores and from banks have always been based on trust, both personal and legal.  Today when we use our credit cards we trust that most if not all merchants will accept them and that the credit card companies can be trusted to protect us from fraud.
     Not all businesses, unfortunately, are trustworthy.  Some seek as much profit as soon as possible.  They cut corners.  Some businesses will act unethically; some will even break laws.  While many business people can be trusted – it’s in their long-range interest to be so – there will always be those people who cannot be trusted.  They may deceive customers and take advantage of them.

     Trust is also the most important word in government as well as in business.  Our system works because we trust it.  The power of the Constitution, like the value of our money, ultimately rests upon the full faith of the American people.
     Trust relates to  fairness, and as I wrote in my book, American Ways:  “In both private and public affairs, the management of fairness requires the sharing of information, transparency of procedures, the participation of stakeholders in decisions, and people abiding by the results of agreed-upon processes.”  (p. 339).  Since colonial times, officeholders at all levels have needed to build trust in many of the same ways that businesses have built it.  They have to offer services consistent with expectations and at acceptable prices (taxes).  They have to do what they say that they will do.  They have to be honest and abide by the law.  They have to include many people in their policy-making in order to achieve full cooperation and they have to be transparent with the real-time sharing of full information.  No lying, suppressing facts, contradictory stories, and broken promises. 
     Perhaps someday in the future we will see these qualities of trust restored to American governments.

© Stephen M. Millett (All rights reserved)  

            

     

Money in a Hurry

     Several years ago a senior economist told me that most business people manage “by the seat of their pants.”  I didn’t understand then what he meant, but I do now if I equate “by the seat of their pants” to a decision-making and investment-making style that emphasizes the here and now.  We might call it management by the moment.

     For example, in the early 1990s I was consulting for NCR, which was in the process of being acquired by AT&T.  I was told that when the CEO of NCR was asked how long his company had been in existence he allegedly replied about 424 quarters.  Indeed, a company’s stock price often goes up or down based on nothing more than the most recent quarterly report.
     The focus of American business on short-term performance dates back to the 1620s.  Governor William Bradford was outraged when the London investors pressured him for profits when his Plymouth colony was barely surviving, having lost half of its population during its first winter.
     The American short-term perspective has been based in part on the gold rush mentality that drove early European colonization of the New World.  During the 1500s, the Spanish pulled out enormous amounts of gold from Mexico and Peru, leading many generations of investors and immigrants to believe that in America the streets were lined with gold.  The colonists of both Virginia and New England, however, discovered no gold – but with hard work and some luck they produced crops (such as tobacco, corn, and wheat) and products (such as flour, lumber, and rum) that eventually paid off handsomely.  The real gold rushes came later in North Carolina (1799), Georgia (1829), California (1848), and Alaska (1896).  We still have periodic gold rushes today, but they occur mostly on Wall Street.
     There is an old American saying that if you are going to get rich then quick is the best way.  Yet, so many successful enterprises have taken years to develop, while most startups fail.  The get-rich-quick mentality survives despite common sense and history; many business people manage resources, employees, and processes with an eye to sooner rather than later results.  The problem, however, is that short-term thinking can lead to short-sighted decisions.  People become too satisfied with the expediency of today and put off potential problems to tomorrow.
     American business people in the 21^st century will have to learn to think in the long-term because global competition and financial risks have become so great and the periods of return have become so long that they can no longer afford just short-term thinking.  They have to stop solving today’s problems when doing so sacrifices new product and service R&D, market positioning, and brand-building.  They must remember that all businesses survive on customer loyalty and repeat business, and they have to understand and anticipate how consumer behavior changes over time.  You have to satisfy customers both in the present and the future.

© 2017 Stephen M. Millett (All rights reserved)

                 

What Drives Economic Growth

     The primary driver of the American economy is consumer spending.  Historically, the people of the U.S. have worked hard, earned wages, and spent money.  Now as in the past, Americans spend for housing and energy, furniture and appliances, food and beverages, clothes, personal hygiene and health care, transportation, recreation and entertainment, education, etc.  Ever since the 1600s, whenever consumer spending increases, the national economy grows, and vice versa.
     We think of the American economy as a free market, with individuals and businesses offering their services and products while consumers freely pick what they do and do not want.  As long as consumers have choices, they can make or break businesses.  

     In 1932, at the peak of the Great Depression, consumer spending accounted for 83% of the GDP in the U.S.  It hit a low of 49.5% in 1944 during the Second World War.  From 1946 to 1980, consumer spending averaged 63% of the GDP.  It rose to 67% in 1981-2011 and over 70% since 2003.  
     In 2016, the American GDP was about $18.5 trillion in current dollars.  Of this amount, 70%-71% was consumer spending, 11%-12% was business investment, and roughly 20% was government spending.  Net imports may have been -4%, as the U.S. imports more than it exports, with the net coming off the GDP.
     Historically neither business investments nor government spending has sustained economic growth as strongly as consumer spending.  Yet, some pro-business economists and politicians have argued that the Federal government could stimulate further economic growth by giving benefits and incentives for businesses to invest more, as if the principal driver of business investments were government policies and taxes rather than consumer spending. 
     Since the presidency of George Washington, Federal government spending, barrowing, and taxing have impacted the people and national economics.  It has always been a matter of how the government benefits some interests more than others.
     You can lower Federal taxes on businesses, from small enterprises to large corporations, but they may use the extra cash to buy back their stock, give executives bonuses, buy out competitors, or just hold on to it, as corporations have since 2008 held an unusually large amount of cash (perhaps $2 trillion).  Or they can invest in further process improvements, meaning more automation, which will require still fewer employees.  Where is the assurance that if businesses had more cash because they paid less taxes that they would necessarily invest more money in new product and service offerings that consumers will want, hire more workers and pay higher wages in the face of consumer apathy, and pass the savings of process improvements on to consumers with lower prices? 

© 2017 Stephen M. Millett (All rights reserved)                             

The Party of Know Nothings

     In the 1840s and 1850s, several secret societies arose in reaction to the heavy immigration of poor Irish, southern Germans, and Central Europeans into the U.S. due to the potato famines in Ireland and the suppressed revolutions of 1848 across Europe.  These societies became openly political in the forms of the American Republican Party in New York, then the regional Native American Party, and finally the national American Party by 1855.  When asked about their organizations, one member answered “I know nothing.”  From that point, these people became the Know Nothings.    
     The Know Nothings were extremely anti-immigrant and anti-Catholic.  Many believed that Pope Pius IX, who was widely accused of being anti-democratic, had hatched a plot for millions of Catholics to immigrate into and then take over the U.S. by force of arms if not by ballots.  Conspiracy theories ran rampant.  The Know Nothing story was particularly popular among the American lower middle and skilled working classes, especially Protestants of English, Welsh, Scottish, Scotch-Irish, Dutch, and northern German ancestry.  They saw the new immigrants as slovenly, stupid, criminal, and unwitting tools of unpatriotic Catholic bishops and corrupt city machine politicians.  The Know Nothings argued that immigrants posed serious threats to traditional (their) American ways and therefore should be denied the rights to vote, run for public offices, and American citizenship when residency was less than 21 years.      
     The Know Nothings varied on points of emphasis in different parts of the country.  In addition to anti-immigration and anti-Catholic sentiments, in some areas they were also anti-elitist and anti-intellectual.  In other areas, they advocated social and political reforms that anticipated future popular causes, especially temperance and Progressive political reforms.
     The Native American Party (with “Native” meaning white and older generational Americans, not Indians) swept elections in Massachusetts in 1854.  The Know Nothings also exercised major political strength in Pennsylvania, Ohio, Indiana, Illinois, Maryland, and California (where the anti-immigration hatred was directed at the Chinese).  They successfully elected mayors in Boston, Philadelphia, Chicago, and San Francisco.  The movement hit a high point of popularity in 1855, and then began to decline after a serious Know Nothing riot killed 22 people and wounded many others in Louisville.  The American Party ran candidates for President and Vice President in 1856, but then virtually disappeared by 1860.
     It was another issue that eclipsed the anti-immigration movement:  slavery.  Northern Know Nothings migrated to the Republican Party, even though Abraham Lincoln of Illinois disapproved of them.  (The Irish and German immigrants, by the way, became furiously loyal to the Union and supplied numerous troops for Lincoln's army.)  In the South, the Know Nothings bitterly opposed Lincoln and supported secession when racial proved stronger than ethnic prejudice.
     Periodically, nativist groups have gained popularity in American politics because they reflected deep fears and biases concerning generation-after-generation of newcomers to the U.S.  Once each immigrant group took hold in America, they tended to object to new immigrant groups, which were seen as threats on several levels.  Having worked so hard to win social respect and middle-class lifestyles, Americans have jealously guarded their advantages against foreign-born intruders.  There have always been Know Nothings.  They may even exist today.

© 2017 Stephen M. Millett (all rights reserved)                   

Personal Health as Public Health

     If an individual becomes sick, does he or she pose a threat to others?  When the sickness is due to transmittable viruses and bacteria, you bet!  Personal health can become public health.
     As discussed in my previous blog posting, the concept of public health in the U.S. dates back to at least the 1640s.  Local and state governments routinely regulate individual behavior that impacts the health of other individuals.  They also provide public health services, such as sanitation, public water, garbage collection, and contagious disease controls.  Public health has always included disease prevention as well as epidemic management. 
     In Jacobson v. Massachusetts, the U.S. Supreme Court ruled in 1905 that states have the power to require individual vaccinations to prevent epidemics (in this instance, smallpox).  The ruling also went far to justify state powers to impose individual isolation and mass quarantines.
     At the national level, the Federal government regulates public health and provides services under the war powers, the taxing powers, and the commerce clause of the Constitution.  The Public Health Service Act of 1944, subsequently amended and enlarged by numerous acts of Congress, created the Public Health Service and the Center for Disease Control (CDC) to prevent the spread of illnesses into the U.S. from abroad and among the states.  Congress further provided health care services to individuals through Social Security and Medicare.
     In 1985, during the Presidency of Ronald Reagan, Congress passed the Consolidated Omnibus Budget Reconciliation Act (COBRA).  Among many provisions, the act prohibited hospitals (but not necessarily physicians) from the practice of “patient dumping” because people could not pay.  Hospitals are required to provide full services in cases of individual health emergencies caused by sicknesses, disabilities, injuries, and assaults regardless of the individual’s ability to pay for such services.  Hospitals often recover their losses by charging other patients and their insurance companies higher prices, so that those who can pay end up indirectly paying for those who cannot.
     If the government requires people to do certain things for their own individual healthiness in the interest of public health and if the government requires hospitals to serve people in medical emergencies, then cannot the government also require patients to pay for such services?  In 2010 Congress passed the Affordable Care Act (ACA), also popularly known as “Obamacare,” mandating that people had to have healthcare insurance to pay hospitals (and physicians) for medical services.  It was a way to balance the obligation to provide medical assistance with the obligation to pay for it.  The constitutionality of Obamacare was twice upheld by the U.S. Supreme Court. 
     The requirement that everybody must have healthcare insurance, including checkups and disease prevention as well as cures and recoveries, is in the public interest.  Requiring individuals to take responsibility for pursuing and paying for their own well-being and healthcare in addition to preventing and managing epidemics is a legitimate government power in the pursuit of public health.  In matters of health, the government is protecting me from you, and maybe you from me.

© 2017 Stephen M. Millett (All rights reserved)

Public Health Protects Individuals

     In an attempt to save the colony from its own self-indulgences, the stern governor of the Dutch settlement of New Amsterdam in 1648 ended the common practices of allowing hogs and other animals to free-range across both public and private property, throwing household garbage into the streets, and allowing private outhouses to overflow.  The alleged tyrant was the colorful Petrus Stuyvesant and the nascent colony survived and prospered to become New York City.
     Dutch libertarians in 1648 might have protested that nothing was more private than a privy.  They might have decried regulatory intrusions into personal matters.  The governor, however, would not tolerate libertarian excrement.  He took the stand that no individual enjoyed the freedom to do things that infringed upon the freedoms of other individuals or compromised the well-being of the entire community.  Stuyvesant did not understand public sanitation and the biology of human feces carrying viruses and bacteria dangerous to other people, but he did understand that an overflowing privy “not only creates a great stench and therefore great inconvenience to the passers-by, but also makes the streets foul and unfit for use.”
     For nearly 370 years the city fathers of New York have regulated human sanitation, water quality, and garbage collection; they have even mandated that you have to clean up poop left on the sidewalks by your dog.  The regulations of New York have been widely adopted by cities and states across the country through public health regulations and services.  Communities have gone beyond just sanitation and garbage to enforce ordinances and laws concerning restaurants, restrooms, land zoning, and building codes to protect individual health, lives, and property along with maintaining public order. 
     As I explained in my book, the Federal government is the institution of the national community.  Few people would dispute today the authority of cities and states to regulate public health, but does the Federal government also have the power to regulate it?  As early as 1798, Congress, based on its war powers, created a network of public hospitals for seamen that evolved into the office of the Surgeon General of the U.S., the U.S. Public Health Service, and the U.S. Department of Health and Human Services.  In 1906 Congress, based on its interstate commerce powers, passed the Pure Food and Drug Act and the Meat Inspection Act to protect the health and safety of consumers.  As transportation, communication, and business networks expanded from coast to coast, the Federal government has exerted more national regulatory powers over increasingly national health problems for all Americans that cannot be adequately addressed by just local and state governments.  After all, the water quality of many major lakes and rivers and the air quality that we breathe transcend municipal and state boundaries.
     Does the evolution of the United States as a fully blended national community justify increasing Federal powers to regulate even global climate change and individual healthcare insurance?  Let’s explore this question more fully in future blog posts.

       

© 2017 Stephen M. Millett (All rights reserved)