In 1942, the eminent economist Joseph Schumpeter coined one of the most profound terms in modern economic theory: "creative destruction." In his book Capitalism, Socialism, and Democracy, he argued that free market capitalism is always a messy work-in-progress. It is an economic system that is inherently unstable due to the dynamics of entrepreneurship, competition, technological discoveries, innovations, and productivity improvements. These systemic characteristics destroy existing products and markets while providing greater value to consumers. Because he approved of thses characteristics as modes of positive economic behavior, he said that in the long run such destruction of old businesses was creative of new and better products. It was actually creative, even though some interests and individuals were damaged, while on the whole many people benefitted. He saw economic growth as spurts of creative destruction along with entrepreneurship and innovation.
Unfortunately, history tells us of many negative modes of economic behavior. The free market system is unstable for many bad reasons, too. Businessmen can destroy their own enterprises along with the whole free market economic system with absolutely no creativity. Schumpeter ignored the dark side of American capitalism: the abuses and stupidity of too many bad business practices, personal greed, and the creation of monopolies to eliminate competition and fix higher prices. In the American economic system there is extraordinary pressure on enterprises to show attractive short-term profits -- to make money, as much and as soon as possible. Americans prize immediate successes. The fixation on short-term goals often leads to short-sighted decisions and corporate policies, and investments. Managers get bonuses for quarterly profits even at the expense of long-term business growth. There also have been corrupt businessmen who have deceived customers and investors through false claims and down-right lies. They often cover up their greed and selfishness with false reports and falsified tax returns. In he pocess they can destroy customer and investor confidence with ripples through the entire economic system. Consumers will stop spending and investors will sell off stocks when they lose trust in business.
In a national democracy with a nation-wide economy where individuals are workers, consumers, investors, voters, and taxpayers all at the same time, does the government have the responsibility to protect the people by regulating business practices and policing non-creative destruction of the free market econmy as though they were victimized by common criminals or attacked by hostile foreign invaders? Too many conservatives and business people would say "no way" and "over my dead body." Along with plenty of innocent dead bodies as well. If left entirely on its own, the greed, selfishness, and stupidity of a few players would make the free market system so unstable that it might destroy itself.
Copyright 2018 Stephen M. Millett (all rights reserved)
Tuesday, November 20, 2018
Tuesday, July 24, 2018
The Curse of Sarah Palin
A milestone of contemporary American politics was hit on September 24 and 25, 2008, when CBS aired Katie Couric's interviews with Gov. Sarah Palin, the GOP candidate for Vice President. At the time, many people were appalled by the Alaskan governor's superficial knowledge of American domestic and foreign issues. They should not have been. The curse of Sarah Palin was that it was not what you knew or how much experience you had but rather what you believed in that counted most. She expressed a feeling of frustration and indignation that reflected the mood of many Americans who would later support Donald Trump. And still do.
The idea that candidates for public office should be well informed is now seen as elitist. It reflects the values of well-educated Americans who dominate the professions, high skilled occupations, and most middle management in manufacturing and services. They are the American urban upper middle class. They place the accent on proven competency for any position of responsibility, regardless of race, gender, ethnic origins, religion,or personal orientation. They respect preparation, analysis, and rational problem-solving. These same people get denounced as liberals, do-gooders, and snobs. By 2018 they might even be accused of constituting the Resistance.
Gov. Palin called Barack Obama a socialist. Name calling was certainly not new. What was new was the deliberate use of disinformation and blatant lies to attack political opponents. For example, Palin popularized the wrong idea that Obamacare would create medical review panels that might deny coverage to the chronically ill and dying. She called them the death panels, and her followers believed her.
Her beliefs morphed into the Tea Party movement that merged with the alt right to support Donald Trump. In 2016 they captured the Republican Party. Today, President Trump consistently exploits disinformation to shore up his base of supporters, which might be as large as one-third of the American active electorate. This base includes white men of the Baby Boomer Generation who are still fighting the battles of the 1960s, unrelenting Republican partisans, anti-regulation vested interests, the very rich who hate income taxes, people with lesser education and skills who have lost once well-paying jobs due to technological changes and industry restructuring, deeply religious people who adhere to a rigid reading of the Bible, and rural populations in decline who have nowhere else to go. They are anti-abortion, anti-gay rights, anti-Muslim, anti-free trade, anti-immigration, and pro-military. They worry about the Iranians, ISIS, and the North Koreans, but not the Russians. They blame their own troubles on the snobbish urban elite that looks down on them, assertive minorities, Hispanic immigrants, and social deviants. They greatly fear violence in the forms of crime, riots, and acts of terrorism (but not so much school shootings). They see conspiracies everywhere and dread social upheaval. And yet, if the U. S. were to have a violent revolution or a new kind of civil war, wound it not come from the Trump supporters after the eventual political fall of their hero? After all, they are the people who are armed to the teeth and warn "Don't Tread on Me"
(C) 2018 Stephen M. Millett (All rights reserved)
The idea that candidates for public office should be well informed is now seen as elitist. It reflects the values of well-educated Americans who dominate the professions, high skilled occupations, and most middle management in manufacturing and services. They are the American urban upper middle class. They place the accent on proven competency for any position of responsibility, regardless of race, gender, ethnic origins, religion,or personal orientation. They respect preparation, analysis, and rational problem-solving. These same people get denounced as liberals, do-gooders, and snobs. By 2018 they might even be accused of constituting the Resistance.
Gov. Palin called Barack Obama a socialist. Name calling was certainly not new. What was new was the deliberate use of disinformation and blatant lies to attack political opponents. For example, Palin popularized the wrong idea that Obamacare would create medical review panels that might deny coverage to the chronically ill and dying. She called them the death panels, and her followers believed her.
Her beliefs morphed into the Tea Party movement that merged with the alt right to support Donald Trump. In 2016 they captured the Republican Party. Today, President Trump consistently exploits disinformation to shore up his base of supporters, which might be as large as one-third of the American active electorate. This base includes white men of the Baby Boomer Generation who are still fighting the battles of the 1960s, unrelenting Republican partisans, anti-regulation vested interests, the very rich who hate income taxes, people with lesser education and skills who have lost once well-paying jobs due to technological changes and industry restructuring, deeply religious people who adhere to a rigid reading of the Bible, and rural populations in decline who have nowhere else to go. They are anti-abortion, anti-gay rights, anti-Muslim, anti-free trade, anti-immigration, and pro-military. They worry about the Iranians, ISIS, and the North Koreans, but not the Russians. They blame their own troubles on the snobbish urban elite that looks down on them, assertive minorities, Hispanic immigrants, and social deviants. They greatly fear violence in the forms of crime, riots, and acts of terrorism (but not so much school shootings). They see conspiracies everywhere and dread social upheaval. And yet, if the U. S. were to have a violent revolution or a new kind of civil war, wound it not come from the Trump supporters after the eventual political fall of their hero? After all, they are the people who are armed to the teeth and warn "Don't Tread on Me"
(C) 2018 Stephen M. Millett (All rights reserved)
Monday, July 9, 2018
The Great American Fearleader
President Donald Trump has emerged as the Great American Fearleader. He exploited American fears in 2016 to win votes and he continues to manipulate them for his growing political power and his own personal glorification. He consistently makes inflammatory statements and does things that further flame the fears that in turn solidify his political base. He then presents fake solutions to those fears that make him look like a great American savior. Whatever he does, he will claim that he has indeed made America great again.
Let's look at just three example.
In 2017, Trump denounced the North Korean dictator Kim Jong-un as the "Rocket Man" who threatened the U.S. with nuclear missiles. He flamed global fears of North Korea setting off a nuclear holocaust with massive American retaliation that might draw in China and Russia, too. Then Trump met with Kim in June 2018 in a highly staged diplomatic adaptation of reality TV and announced that North Korea no longer posed a nuclear threat to the U.S. He incorrectly claimed that Kim had in good faith assured him of North Korean denuclearization, but subsequent negotiations have shown that the North Koreans have no intension of abandoning their form of nuclear deterrence. Will the North Koreans eventually come to verifiable nuclear disarmament? We shall see.
Trump has said that unfair trade agreements have allowed foreign countries to exploit American consumers and workers. He claimed that trade with China, the EU, Canada, and Mexico was to blame for offshore manufacturing and the loss of millions of American jobs. To restore fair trade, if not tree trade, Trump has imposed tariffs on goods from these countries, which in turn have imposed tariffs on American goods that are likely to hurt further millions of American farmers, workers, and consumers. We have now a trade war. No doubt Trump will come up with some kind of solution that appears like a great American victory. We shall see.
In 2016 he condemned the flow of Mexicans into the U.S.: "They're bringing drugs, they're bringing crime. They're rapists. And some, I assume, are good people." He characterized illegal immigrants and furthermore all Hispanic immigrants as poor people and criminals who would victimize Americans because the U.S. had become the "dumping ground" for all the world's problems. He further warned of Muslim immigration that would allow terrorists into the U.S. to kill Americans. So Trump instituted by executive orders a ban on immigrants from selected countries. In 2018 he encouraged the give-no-quarter crack down on illegal immigrants crossing the Rio Grande River by separating children from parents. Now he promises to reunite immigrant families and still maintain border security. He asserts that nothing less than a wall will secure Americans from the exploitation of foreign people. We shall see. But how long will it take?
(c) 2018 Stephen M. Millett. All rights reserved.
Let's look at just three example.
In 2017, Trump denounced the North Korean dictator Kim Jong-un as the "Rocket Man" who threatened the U.S. with nuclear missiles. He flamed global fears of North Korea setting off a nuclear holocaust with massive American retaliation that might draw in China and Russia, too. Then Trump met with Kim in June 2018 in a highly staged diplomatic adaptation of reality TV and announced that North Korea no longer posed a nuclear threat to the U.S. He incorrectly claimed that Kim had in good faith assured him of North Korean denuclearization, but subsequent negotiations have shown that the North Koreans have no intension of abandoning their form of nuclear deterrence. Will the North Koreans eventually come to verifiable nuclear disarmament? We shall see.
Trump has said that unfair trade agreements have allowed foreign countries to exploit American consumers and workers. He claimed that trade with China, the EU, Canada, and Mexico was to blame for offshore manufacturing and the loss of millions of American jobs. To restore fair trade, if not tree trade, Trump has imposed tariffs on goods from these countries, which in turn have imposed tariffs on American goods that are likely to hurt further millions of American farmers, workers, and consumers. We have now a trade war. No doubt Trump will come up with some kind of solution that appears like a great American victory. We shall see.
In 2016 he condemned the flow of Mexicans into the U.S.: "They're bringing drugs, they're bringing crime. They're rapists. And some, I assume, are good people." He characterized illegal immigrants and furthermore all Hispanic immigrants as poor people and criminals who would victimize Americans because the U.S. had become the "dumping ground" for all the world's problems. He further warned of Muslim immigration that would allow terrorists into the U.S. to kill Americans. So Trump instituted by executive orders a ban on immigrants from selected countries. In 2018 he encouraged the give-no-quarter crack down on illegal immigrants crossing the Rio Grande River by separating children from parents. Now he promises to reunite immigrant families and still maintain border security. He asserts that nothing less than a wall will secure Americans from the exploitation of foreign people. We shall see. But how long will it take?
(c) 2018 Stephen M. Millett. All rights reserved.
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