Straight Story

America’s Paradox: Low Taxes on Corporations — and Higher Taxes on the Execs Who Run Them Could Stimulate U.S. Manufacturing

U.S. progressives call for higher corporate and personal taxes. Conservatives want no tax increases. Given that the Biden “green” plan at its core requires a robust American manufacturing sector, we need a more nuanced tax scenario.

The Biden campaign proposal to increase the nation’s corporate tax rate to 28 percent would leave that rate below pre-Trump corporate tax levels but still put the United States above most European rates and leave American manufacturing at a competitive disadvantage.

Would federal policies that mandate the purchase of U.S.- made products offset this disadvantage? Mandates work mainly for subsidized activities. These tend to involve insider contracts rather than promote entrepreneurship. Germany has become an international manufacturing powerhouse — with large foreign exchange surpluses but industrial wage and benefit levels nearly double what U.S. corporations provide — without such mandates. Germany has a corporate tax rate of 15 percent, plus a 5 percent “solidarity” assessment.

On personal taxes we have counterintuitive reasons for increasing progressivity in personal income taxes beyond Biden’s 39.6 percent. The first reason looks back to the 1970s when the United States suffered disproportionate deindustrialization. We hemorrhaged products and industries where we had traditionally excelled. Other European nations didn’t abandon traditional and new industries. Finland produces those beautiful cruise liners. Italy retains its shoe and clothing industries and leads in popular granite table tops and other stoneware. Sweden’s IKEA is the world’s leading home furnishings company, and Volvo ranks as the second biggest truck maker after Daimler. Sweden also shares with Denmark the distinction of having the world’s highest personal tax rates on high incomes. In the United States, we have one of the lowest.

The subsequent Reagan administration’s relegitimization of business may have been timely. But the Reagan reduction of top personal taxes from 70 to 28 percent led to executive pay becoming linked to corporate profits. This stimulated exponential increases in executive compensation (as well as lawyers’ and others’ pay) , and those increases, in turn, encouraged corporate executives to pursue short-term profits over long-term goals.

No U.S. top executive pursued short-term profits with more zest and celebrity than  General Electric’s CEO, Jack Welch, who would retire in 2001 with a record severance of $457 million. The culture Welch installed at GE created bubble growth and an ultimate crash for the historic manufacturing company.

In 2014 GE contracted to sell the last major U.S. suite of household appliances — its appliance division — to Sweden’s Electrolux, a move designed to gain cash for more profitable investments. Such investments earlier included high-finance and real estate ventures that brought GE profits along with a deemphasis on making products and meeting U.S. technological needs. GE’s German counterpart, Siemens, took a different course. It continued its traditional long-term strategies and today rates as a major global player across the technological spectrum, as well as a key partner in Germany’s proactive climate-change policies.

The learning I take from all this: America’s astoundingly high top incomes have a negative effect on our national productivity. Nor do top earners stimulate productivity. They buy expensive real estate like Bill Gates’ $147 million primary residence. They purchase foreign properties and luxury goods, art objects and Lear Jets, expensive security and financial services. They invest for personal income security and growth, but as Jack Welch demonstrated, investments for the highest possible returns do not necessarily serve national needs.

The incomes of our top earners have an additional negative impact. They grow our nation’s unsupportable inequality. Among advanced nations, we have the greatest disparity between rich and poorBefore 1970 the lowest income quintiles in the United States saw the fastest growth. In a post-war America where top-bracket personal tax rates never dipped below 70 percent, blue-collar breadwinners could support families on one income. Since 1970 incomes in our lowest quintile income have remained nearly flat in inflation-adjusted terms, with our bottom 50 percent owning a mere 1 percent of the nation’s wealth. Older families, the St. Louis Federal Reserve Bank reports, have 12 times the wealth of younger families.

These extremes have triggered record public support for more radical political policies, with disaffection concentrated among younger voters. We will have no economic and political stability in the United States until we correct these imbalances.

DONALD TRUMP’s “IGNORANCE”

Donald Trump’s lack of regard for truth during his presidential tenure, with (more than 20,000 documented lies and prevarications (Kessler et al, 2020), and behaviors that violated norms of democratic governance, are acknowledged even by his most articulate supporter, Victor Davis Hanson  (Hanson, 2019). Given Trump’s crudities and claims that he doesn’t read (e.g. Graham, 2018), it is understandable that people regard Trump as ignorant – including ignorance of the history and traditions of the nation he celebrates.  A Google Scholar query on the phrase “Trump ignorant”* in Nov. 2020 brought up more than 19,200 hits.

The above image is misleading. It poses the riddle of how a supposedly ignorant businessman who never held public office could manage the political and organizational feat of gaining the highest office in the United States – an achievement that has been denied to highly qualified and influential individuals of both parties. I suggest that there is good evidence that Trump was not stupid and was not poorly informed about subjects of interest to him until something like 2019. At that point successes and a gigantic ego evidently overrode over what was earlier a degree of caution and willingness to listen to people with diverse views.  He began firing appointees who showed differences from his views.

“It takes a lot of smarts to play dumb – (Trump, 2008)”

An ignorant image for Trump is fundamentally misleading because Trump wanted people to believe it. In the book, Trump Never Give Up  (Trump & McIver 2008, p 167 ) Trump states:  “. . .  it takes a lot of smarts to play dumb. Keep them off balance. Knowledge is power, so keep as much of it as you can to yourself as possible”. Appearing to show ignorance or crudity encouraged opponents and media pundits to overlook his strategies and tactics. Of especial importance, it also served to distinguish Trump from the academic, political, and media establishment in appealing to a disillusioned base.

So let’s take a factual look at Trump’s background. In the foregoing book (Trump & McIver, 2008), Trump cites a kindergarten teacher who referred to him as her most curious and questioning student. Increasing ungovernable behaviors in elementary school led father Fred Trump to move Donald to the New York Military Academy. During his five years of attendance there Trump came to thrive under imposed discipline, graduating as a cadet captain, the highest rank. It is clear that sports were his main interest. The school records show him as a star in baseball and football but also involved in soccer, bowling, and wrestling (Blair, 2005). However, he would have gained a solid secondary education including science, math,  and history or he would have not been promoted to the highest rank.  Following NYMA, Trump attended two years at Fordham University, a Jesuit institution where in the early 1960s, history including classics was a core requirement. While wires may have been pulled in getting him into the University of Pennsylvania’s distinguished Wharton School of Finance (Byrne, 2019), Trump would have gained a background in economics and finance, without which he would hardly have been able to gain prominence as a real estate mogul in New York City, or could seriously consider launching bids for the presidency.

Figure 1. Trump as cadet captain at New York Military Academy. Source: 1964 NYMA yearbook.

In another book (Think Like a Champion, Trump & McIver 2009) Trump cites a list of authors ranging from Pythagoras, Machiavelli, Thoreau, and Albert Schweitzer, to Bill Gates and Billy Jean King. His favorite book is the classical Chinese text, The Art of War, by Sun Tzu, which emphasizes the importance of surprise. Trump’s choices of quotations have a pattern. They tend to focus on achieving success.

The final argument against Trump being dumb is that he went from 3% in polls before he announced his candidacy for president on June 2015, to leading 16 credentialed Republican candidates one month later. His campaign operatives spanned the spectrum of Republican politics from assistants to Robert Dole to Tea Party activists. Though permanently tarnished by actions in the last two years of his presidency and brazen attempts to claim fraud in the election results of 2020, Trump is not an adversary to underrate.

REFERENCES

Blair, G. (2005). Donald Trump, Master Apprentice (2nd ed.): Simon & Schuster

Byrne, J. A. (2019, July 8). Trump Admitted To Wharton With Help From A Family Friend. Retrieved from https://poetsandquants.com/2019/07/08/trump-admitted-to-wharton-with-help-from-a-family-friend/?pq-category=business-school-news/

Graham, D. A. (2018, Jan. 5). The President Who Doesn’t Read: Trump’s allergy to the written word and his reliance on oral communication have proven liabilities in office. Atlantic Magazine, Retrieved from https://www.theatlantic.com/politics/archive/2018/01/americas-first-post-text-president/549794/

Hanson, V. D. (2019). The Case for Trump: Basic Books.

Kessler, G., Rizzo, S., & Kelly, M. (2020). Donald Trump and His Assault on Truth: The President’s Falseholds, Misleading Claims, and Flat-Out Lies: Washington Post.

Kranish, M., & Fisher, M. (2016). Trump Revealed: An American Journey of Ambition, Ego, Money, and Power: Scribner Book Company.Trump, D. J., & McIver, M. (2008 ).

Trump, D.J., & McIver. (2008). Trump Never Give Up: John Wiley & Sons 

Trump, D. J., & McIver, M. (2009). Think Like a Champion: Vanguard Press.

IT’S A CRAZY COUNTRY

U.S. leftists have deep suspicion about anything related to market methods; U.S. conservatives have little trust in government. The Europeans don’t have the U.S.’s manic creativity but value cooperation in their societies. That’s why European nations are world leaders in global climate change policy while the U.S. has become an international black sheep.  Among Democratic candidates for the presidency Elizabeth Warren has brilliant skills and commendable motivation. But she lacks openness to other perspectives and cooperative inclinations. Whatever their flaws, large corporations are mainstays of the U.S. economy. Is it smart to restrict communications and launch a broadside attack on them? If she maintained tough policies toward corporate abuses but also went to talk and learn from Thomas Donohue, president of the U.S. Chamber of Commerce, she could raise her ratings and might even pass Joe Biden as a presidential contender. What would she have to lose?

Wealth And Taxes From Aristotle To Today

American billionaires are unlikely to appreciate Aristotle’s observations about wealthy people (On Rhetoric: A Theory of Civic Discourse Book 2, Chapter 16Transl. by George A. Kennedy, Oxford Press, 1991).

  1. “The wealthy are insolent and arrogant, being affected somehow by the possession of wealth; for their state of mind is that of those who have all good things; for wealth is a kind of standard of value for other things, so that all things seem purchasable by it.
  2. And they are ostentatious and pretentious: ostentatious because of luxury and the display of their prosperity; pretentious because all are used to spending their time doing whatever they like and admire and because they think everyone else has the same values they do. At the same time, this feeling is not unreasonable for there are many who need what they have. Thus, Simonides replied to the wife of Hieron, when she asked whether it was better to be rich or wise: ‘To be rich for he sees the wise waiting at the doors of the rich.
  3. Another result is that the rich think they deserve to rule for they think they have that which makes one worthy to rule [i.e. Money]. In sum, the character that comes from the rich is that of a lucky fool.
  4. The characters of the newly rich and those with old wealth differ in that the newly rich have all the vices to a greater degree and in worse form, for to be newly rich is to lack education in the use of wealth . . . . . . . . “

In Aristotle’s time (384-322 BC) practically all wealth came from owning land. From it, one could produce goods that could be sold and traded. Aristotle might be a little more charitable about the United States, where wealth could be created by creative and industrious people who took risks. John D. Rockefeller was an industrial genius who created wealth for the nation as well as himself. Toward the end of his life, Andrew Carnegie gave away virtually all his wealth for socially beneficial purposes.

Taxes were trivial during the Gilded Age from 1870 to 1895. The U.S. moved to confiscatory tax rates on top income brackets during the Depression and World War II. 90% top tax rates remained in the 1950s. In Capital in the Twenty-First Century, the 2014 epic study of American income and wealth, French economist, Thomas Piketty observed that in the 1950s the U.S. had the lowest ratio of top incomes to worker incomes among advanced nations. Businesses nevertheless thrived, leaders valuing their status and identification with their business and industry more than high financial rewards.

This changed in the minimum-tax 1980s, when in the Reagan administrations top tax rates were slashed from 70% to 28%.  Compensation packages became a symbol of status for executives. In a paper in 2014 Piketty coworkers, Saez and Zucman reported that in 2012 the income of the top 10% topped 50% of the economy for the first time since 1927.  The change in time is  epitomized by the difference between  Lee Iacocca, who saved Chrysler Motors and was committed to workers, and Jack Welch, who transformed General Electric from one of America’s most advanced and sophisticated manufacturers to a banking giant. Welch became known along the way as “Neutron Jack” for his readiness to fire underproductive staff. His policies ultimately led to the unraveling of General Electric, which was dropped from the Dow Jones Index in 2018 after drastic decline in its market value. General Electric is said to have the most underfunded pension system among major American companies.

Werner von Siemens (1816-1892), founder of the German counterpart to General Electric, had a  different philosophy from Jack Welch. In 1872 he set up a comprehensive pension plan for Siemens’ workers and their families ten years before Germany’s national pension system was inaugurated. Siemens continues to advertise a philosophy of corporate responsibility that it implements in the developing nations where it operates.

Formerly socialistic Scandinavian nations were influenced by the United States and the spectacular growth of free-market Japan to adopt market methods in the 1980s. In 1986 Japan temporarily passed the U.S. in per capita income. The Scandinavians retained high personal income tax rates. Sweden, Japan, and Denmark have the highest top individual rates, but Belgium and Germany (a manufacturing powerhouse) have the highest average personal tax rates of 39% (Forbes.com and World Atlas.com). The president and CEO of Siemens has a salary of 1.2 million Euros per year. In comparison, a Wall Street Journal study in 2017 found the median salary of top executives of S&P 500 companies was $12.1 million.

 I have no interest in arguments about socialism vs. capitalism. However, it seems appropriate to quote one of Aristotle’s principles: virtue carried to excess becomes a vice. I suggest that the U.S. experience in carrying financial rewards for performance to extremes has run afoul Aristotle’s maxim.

When NPR shut down its user comment line in 2016 it missed a major opportunity

Summary

NPR’s comment line was obviously troubled when it was shut down in 2016. But there had been no  guidelines for contributions to it. Nor were significant corrections made when abuses began clogging the system. As the premier U.S. public radio news network I suggest that NPR should have taken on a generic problem facing comment lines nationally – especially for news media. Rather than giving up it should have developed strategies and led in raising national standards for comment lines. I suggest it can be successful if it readdresses the problem in a new comment line.

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History: On August 23, 2016 National Public Radio shut down its comment line. According to a statement by NPR’s ombudsman (Jensen, 2016) NPR took this action after reviewing  statistics showing that in July 2016 there were 491,000 comments from only 19,400 commenters. Letting cliques of users treat NPR’s site like a personal chat line was clearly not tolerable.

NPR statements: NPR claimed it lacked money for moderators and that other news programs had taken similar action. It suggested social media like Facebook might be better sites for discussion. I find these arguments inexcusably superficial. They overlook the rhinoceros in the room: is it a good thing for the federally supported, premier U.S. public radio network to eliminate opportunities for meaningful public comment and discussion?

Sure, viewers can send an email to NPR program managers or hosts, getting a form response like “thank you for your expression of opinion”. But let’s be realistic. Most people with meaningful things to say will no more choose to waste their time sending mail to faceless administrative staff than to participate in the earlier comment line – degraded as it became by trivial input or worse. Lack of meaningful input through NPR’s current contact addresses may lead program managers to assume that there little need or useful value in reopening channels for public comment. Wrong!

I don’t say NPR has the same policies as the Lenya.ru, a leading Russian radio program that delivers sanitized news and commentary. However, it now shares a no-public-input  policy with the Russian program.

Critical omissions: NPR placed no limits on contributors. Ombudsman Jensen reported that in June and July of 2016 4,300 commenters contributed an average 145 comments apiece! Correction of this kind of problem could be straightforward: Kojo Nnamdi’s WAMU radio interview show from Washington D.C. limits comments to one a month. It doesn’t require live moderators to monitor comment frequency. That can be done by software.

Neither did NPR provide clear guidelines for contributors, e.g. stating  priority for comments offering corrections, alternative arguments, new information, or personal experience. Expressions of gut-level opinion can be found on a vast number of web sites. On NPR’s website such expressions add no value. On the contrary, they guarantee that though many people may be attracted by the site (NPR recorded 33 million unique users in July 2016) people with meaningful things to say will not read or contribute to the comments line. As with repeat commenters, software could go far to screen out brief, crude posts or, say, a report about a sick cat.

When problematic posts began to clog the system NPR leadership did not take meaningful action. It apparently learned nothing from 2016 because in March 2018 NPR also ended its Science Commentary Blog (Jensen, 2018).

Yes, it’s a widespread problem: Ombudsman Jensen was right in referring to other news sites that had dropped comment lines. One of the early sites to take this action was Popular Science (2013). Others are CNN, NBC, and VOX, It’s not just an American problem. Stephen Pritchard, editor of The Guardian, a left of center UK newspaper, wrote in an article that at one point the paper’s comment line ballooned to a hopeless 65,000 emails (Pritchard, 2018). Pritchard said that in the future

“Subjects such as race, immigration and Islam too often attracted toxic commentary, so henceforth they would only have comments open if a moderated, positive debate were deemed possible – one without racism, abuse of vulnerable subjects, author abuse or trolling”.

It appears that as in the case of NPR The Guardian did not have strategies in place to minimize “toxic” posts and chose to give up on an open comments line.

A perceptive Australian economic blogger describes toxic comments as a problem of incentive structure (Murphy, 2015):

For some idiot with anti-social views, this is his one chance to get his views amplified. The pay-off here is high. Normally he can’t get anyone to listen. But if he quickly writes something inflammatory, he can spend a happy afternoon jousting with people he made angry.

Murphy advocates the solution used by Reddit (Wikpedia, 2018), an American website that features aggregated websites on a variety of subjects. Its solution to undesirable comments is to have up or down votes. Up votes will raise the visibility of comments. Down votes will lower it and 5 down votes extinguishes a comment.

There are two problems with Reddit’s approach for more thoughtful news and commentary sites. Popularity has never been a reliable criterion for vision in statesmen or quality in comments on complex or controversial issues. Abraham Lincoln was widely reviled in 1863. Further, the Wikipedia article describing Reddit notes that the site requires significant effort from moderators.

NPR’s leadership responsibility and opportunity: There’s no getting around the fact that contemporary public response to comment lines of serious news and commentary media is often problematic. Crude or thoughtless comments not only drive away thoughtful readers. They can add to an unrealistic sense of social chaos and fragmentation because respondents attitudes may disproportionately reflect attitudes held by radical fringes not representative of the majority of audiences.

In my view the first thing needed is for program managers to openly address the realities. In seeking to restore a comment line they need to call on listeners for input on guidelines and to help make the opportunity to present comments  substantive and useful. Relatively simple and cheap measures can filter out a large proportion of posts that don’t meet stated standards. However I also suggest that even contributors of coarse or trivial posts should be treated courteously and invited to come back in the future, taking advantage of constructive suggestions. 

Another measure to attract useful comments may be a category for superior comments. Meaningful posts too long to meet normal guidelines may emerge if more serious and knowledgeable individuals begin to be attracted. Instead of simply cutting off their inspirations, contributors who go past standard length limits could provide summaries that will be posted on the main site while the full comment can go to a special address. Such comments might involve documentation for alternatives challenging ideas of commentators or guests. I often find that talk shows nominally featuring “both sides” of controversial issues overlook important factors. This may be a way to get these into the discussion.

No doubt, robust comment systems need managers committed to bringing in valuable input from the public. Why give up and say they are unaffordable? I argue that a first-rate comment line could enhance the value of NPR and provide a model that may help upgrade comment lines more generally. Wouldn’t that be a worthy goal for National Public Radio? PBS gets support for ambitious programs from a large group of wealthy individuals and foundations. Would not the prospect of restoring meaningful public comment to NPR attract culturally oriented foundations or organizations like the Pew Trust?

REFERENCES

Jensen, E. (2016, August 17, 2016). NPR website To Get Rid Of Comments. Retrieved from https://www.npr.org/sections/ombudsman/2016/08/17/489516952/npr-website-to-get-rid-of-comments

Jensen, E. (2018). Shifting Opinions: NPR Ends Science Commentary Blog.

Murphy, J. (2015, 2015/09/14). Thomas the Think Engine. from https://thomasthethinkengine.com/2015/09/14/the-problem-with-online-comments-solved/

Pritchard, S. (2018, Jan. 13, 2018). The Observer: The readers’ editor on… closing comments below the line, The Guardian. Retrieved from https://www.theguardian.com/commentisfree/2016/mar/27/readers-editor-on-closing-comments-below-line

Wikpedia. (2018). Reddit. from https://en.wikipedia.org/wiki/Reddit

The real story under the controversy over offshore drilling

On January 4 2018 Interior Secretary Zinke announced a plan to open up 90% of the U.S.’s offshore Exclusive Economic Zone, equivalent to more than three quarters of the land area of the United States to commercial recovery of oil and gas. The report (https://www.doi.gov/pressreleases/secretary-zinke-announces-plan-unleashing-americas-offshore-oil-and-gas-potential) stated that current moratoria put 94% of the this area under moratoria. Florida was to be excluded from the proposed open areas.

The Interior announcement set off heated opposition from environmentalists and governors of many states. Lena Moffitt, senior director of the Sierra Club’s Our Wild America campaign, said Monday in an email. “This debacle has further highlighted Donald Trump and his administration’s incompetence and failure to take the health, safety, and economic well-being of coastal communities seriously” https://thinkprogress.org/ryan-zinke-goes-rogue-1f353bd0fa5d/.

As a long-time researcher on offshore environmental policy I suggest that current objections to offshore drilling have less to do with real environmental hazards than with a unique US ideological conflict that emerged in the 1980s. Democrats became the party of environment and Republicans became the party of industry. Opponents to drilling declare that drilling will devastate the coastal environment and economy and throw every possible argument against it, justified or not. Industry and its conservative supporters are no angels either. They long ago abandoned public debate in favor of lobbying and behind the scenes networking on short-range goals.

Compare the 94% of U.S. under offshore moratorium up to the recent Interior Department action with Norway, an international environmental leader. Norway leases all potentially productive offshore areas except off the Lofoten Islands, north of the Arctic Circle, where there are cod spawning grounds. Its offshore oil industry coexists with Norway’s important fishing industry. Norway’s huge fund from petroleum revenues now covers the national pension system.

U.S. Geological Survey assessments show that potential hydrocarbon resources off Maryland are in the Mesozoic Taylorsville basin off Virginia and southern Maryland. They are primarily natural gas, not oil. Had Virginia and Maryland leased their offshore areas years ago and dedicated revenue from lease sales to renewable energy projects like offshore wind turbines and carbon burial they could have been national environmental leaders, even if no commercial production resulted (see state offshore sectors in figure from the Bureau of Ocean Energy Management (BOEM) http://www.virginiaplaces.org/boundaries/ocs.html..

If the U.S. had not become embroiled in our battle-to-the-death conflict over natural resource policy it would now probably be a world leader against global climate change instead of a black sheep – with nearly the lowest proportion of renewable energy to total energy consumption among advanced nations. Whereas 3200 offshore wind turbines operate in European waters our regulatory and ideological impasses mean that we recently only got our first offshore wind farm off Block Island in 2016. Is it time to crawl out of our ideological caves and start acting rationally?

Confederate Monuments, Road Signs, And School Names: Don’t Put Them Out Of Sight And Mind

Why I’m writing about this subject. Current actions to remove Confederate statues and change the names of schools are in the news in Virginia. I have special reasons for offering suggestions on these sensitive issues.

In 2005 I had a “born-again African American experience”. An emeritus professor of chemistry at the University of Missouri, Kansas City and I unexpectedly discovered information buried for 50 years. We found that two former segregated black high schools in Kansas City Missouri and Kansas had dominated national science awards for all schools in Greater Kansas City through the 1950s and to 1965 (Manheim and Hellmuth 2006). This experience indirectly led me to greater insights about the Civil War.

Growing up and attending school in Kansas City MO during segregation, I remember wondering what education in the black schools was like. I took it for granted it would be second class. Classmates and I confidently assumed that our elite white high school was the best in Kansas City. So when research in 2005 showed that black schools had topped my and the other white schools in my fields of interest, chemistry and science, it shocked me to the core. How did they do this against the odds of discrimination and other handicaps of the times? It transformed and opened me to the black experience in America.

Getting back to high school days, I was fascinated by Civil War history. I knew slavery was wrong but am now ashamed to admit that I mentally separated the slavery issue from the military campaigns. I rooted for underdog Confederates and their colorful leaders like J.E.B. Stuart. I am afraid many Americans still separate Civil War battles from slavery.

The true horror of the Civil War. It’s only sixteen years ago that I grasped the true nature of the Civil War. Think of the death of 600,000 soldiers, many through infected wounds before Louis Pasteur’s germ theory of disease become known in the 1870s. Six hundred thousand men in 1864 is equivalent to 5.4 million in today’s population. Can we even begin to imagine the agonies of the men and the collective grief of affected families who lost sons, husbands, and fathers?

Unfortunately, that’s not the last word on this ghastly time in the nation’s history. Consider that half the nation went to war to defend the hideous institution of slavery at a time when Canada, Mexico, and European nations had already banned it – some (e.g. France) before the 14th Century. Great Britain’s Abolition Act banned slavery throughout the empire in 1834. Confederates did not die for a noble cause. Apologists have claimed that they fought for their culture, not slavery. That shallow argument won’t wash. Slavery was the only real bone of contention that separated the North and South. The Confederate states rebelled, seceded from the Union and began hostilities at Fort Sumter, South Carolina. Grievous failings in judgment lay with leaders and literate citizens of the South, as well as southern churches that justified slavery.

Robert E. Lee is on record writing that “slavery is a moral and political evil”, and regretted Virginia’s secession from the union. But he took the evil lightly, made excuses for it, and placed loyalty to Virginia and his perception of “honor” above human values asserted in the Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal”.

Lee and J.E.B. Stuart were intelligent, educated men who swore allegiance to the nation as part of their officer training at West Point. What were they thinking when they abandoned their nation and assumed leading roles in defense of the reprehensible institution that subjugated African Americans?

The chilling answer – already articulated in the classic book by Alexis De Tocqueville, Democracy In America (1835, 1840) – is that Americans from early early history have been uniquely prone to be swept away by beliefs of the moment. The Founders knew about and feared this tendency. It’s the reason why they instituted multiple checks and balances in the Constitution. Don’t we see it continue to be displayed in today’s political developments?

So the Civil War is a bigger thing than most people realize. The last thing we should do is bury it out of sight and mind. That would sanitize the awful stain on the nation and let people forget the fateful mistakes in judgment that brought about events whose consequences have still not been completely overcome.

I suggest that – if we have the wisdom to face the realities – we preserve those monuments in museums or other well-kept places, accompanied by carefully crafted commentaries that remind of the costs of ignoring history and reason. Preaching would be counterproductive – unsparing, nuanced reality would be most effective. The lessons of history will be stronger and more acceptable if we allow that men like Lee and Stuart had estimable qualities as well as flawed judgment. African Americans should contribute their insights to such projects – since they have the greatest stake and insight into that history.

What about the names of boulevards and roads? Keeping names of notables linked to the Confederate rebellion could be an important educational opportunity – if the same kind of clarification were provided. Lee-Jackson Highway close to our house in Fairfax Virginia memorializes Robert E. Lee and Thomas Jonathan (“Stonewall”) Jackson, for whom the highway is named. Present and future generations need to be aware not only that they were great generals, but that they misguidedly led a bloody war defending an inhuman institution. Quarterboards or distinctive metallic plaques like those commemorating battlefields could remind future citizens of the ease with which decent humans can be drawn to inhuman causes.

School names often honor individuals in ways designed to offer inspiration for future generations. Confederate generals fail these standards in the contemporary world. It’s therefore only common sense to replace names of notables linked to the Confederacy. However, original names should be nevertheless be prominently displayed inside schools. They could be placed in smaller letters underneath the new name along with appropriate messages that remind school children of history and the damage that bad human decisions in the past did.

I have seen letters to editors of local papers belittling the idea of attaching signs to monuments. Yes, it would be uncomfortable and doing it right isn’t necessarily an easy job. But neither putting monuments out of sight nor facile expressions of guilt are what’s needed. Monuments ought to go into actively-visited museums or historical sites; soul-searching and artistic expression are called for if we want future generations to learn from the past while truly burying the pain and conflict associated with it.

Reference: Manheim, Frank T., and Eckhard Hellmuth. 2006. “Achievers Obscured by History ” U.S. Black Engineer June-July 2006.

A premature goodbye to Gwen Ifill, stellar journalist

I was shocked beyond words to lose Gwen Ifill so early, so prematurely at 61. Quite aside from being a pioneering African American Gwen was a towering presence among journalists. It was impossible to determine what her political views were, because she was equally perceptive, candid, gracious but no nonesense with people of various political persuasions. She asked core questions – didn’t skate around the peripheries or push human interest conflict. She wanted to KNOW, and let viewers understand. And at the same time she was human. Her signoffs to her Washington Week shows were personal and regretful, not pro forma. She would have liked them to continue and I did too.

Someone said no one could interrupt more graciously than Gwen. I’d like to know what the family influences were that could shape such a balanced, keen and warm person and intellect. She took advantage of the breakthrough achieved by the MacNeil-Lehrer show. It was not only the first balanced political show. They also showed that the leaders weren’t one-of-a-kind. They could clone balanced, even-handed news analysis hosts. We realize it takes work and the skills must be honed. I remember that initially Judy woodruff wasn’t the polished professional she is now, but subtlely showed liberal biases though she tried hard not to. That was even true of Jim Lehrer who had to really exert efforts not to display his distaste for Richard Nixon when he interviewed him after Watergate.

I still think our news journalism is far from what it needs to be, but Gwen was in the vanguard, and if one had suggested that our public TV and radio could break new ground in getting beyond horse race journalism and a thumb on the scales for sensation she could have been the person to pull it off. I’m a policy researcher and an senior male but feel like I’ve lost family and have been intermittentlly teary off and on since the news broke.

Finally, congratulations to the News Hour for recognizing and giving us so much of Gwen. Please be out there looking for younger talent – especially African American – who can follow in her footsteps. Is there a foundation or a one percenter out there somewhere who could sponsor scholarships for bright high school students who show promise of cultivating the kind of talent and humanity that she had?.

Trump’s audacious campaign and Achilles heels

In spite of Donald Trump’s lead in the Republican primary campaign, until December 2015 there was wide scepticism that he would survive. His bombastic speechmaking, carelessness with facts, and outrageous claims earned him comments like “feckless blowhard” (editor of the Des Moines Register), “crass, bigoted bully with a narcissistic personality disorder” (Frank Rich New York Magazine), and “dangerous to democracy” (Washington Post Op-ed by former President G.W. Bush’s press secretary, Michael Gerson).

Nevertheless, my new working paper (1)  supports the conclusion in an earlier paper (2) that, barring unforeseen circumstances, Trump is likely to become the Republican nominee. The new paper provides more detail on the extraordinary strategies that Trump appears to have employed  to overcome past associations with Democratic politicians and causes, including support for Hillary Clinton. This record would have rendered a campaign as a Republican unthinkable for most politicians. But lacking ideological blinders – conservative columnist Charles Krauthammer referred to Trump as having “no coherent political philosophy, no core beliefs at all” (3) –  and experienced in psychologically strategizing business deals, Trump launched a bold campaign in 2011. He first got media attention with “birther” claims about Barack Obama. He then systematically cultivated relationships with conservative Republican groups that included the Tea Party.

Announcing his candidacy in June 2015, Trump issued deliberately inflammatory statements on illegal immigration from Mexico. These gained him wide media coverage, projected the image of an unintimidated candidate willing to take on real-world issues that other politicians ducked, and helped obscure Trump’s past political background. This triple strategy let him  surge ahead of other candidates in the polls. Subsequent aggressive positions and actions continued to create headlines and build grassroots support – as well as cause deep concern among some Republicans.

Going into the Iowa caucus with ratings in the high 30s, Trump ended up second to Ted Cruz with 24% of the Iowa vote. Pundits and pollsters were  misled and saw this as a major setback for the Trump campaign’s supposed reliance on a winning image. They overlooked the possibility that evangelical Christians who made up 64% of Iowa Republican voters might see a mismatch between Trump’s persona and Scriptural passages like Matthew 19: 23 “ Truly I say to you, it is hard for a rich man to enter the kingdom of heaven”. Trump reasserted his clout in a decisive win in the New Hampshire primary.

Prior to the Iowa caucus an adaptive shift in the future Trump campaign was  signaled by a radical change in presentation of policy positions on his campaign website. Quotes from speeches dating back to Trump’s earlier campaign were  replaced by more formally crafted articulation of five issues including tax policy, immigration, and Second Amendment rights.

Trump’s Achilles heels are interpreted to include an obsessive need for grandiose achievements, public visibility and approval, and a less than dignified leadership image.However, although the  primary election is still in early stages, my assessment concurs with commentator Frank Rich’s conclusion that Trump is “exposing the phoniness and corruption” in our political processes, and will have permanent impact on the system.

REFERENCES

1. Manheim, Frank T. “Trump Cards II: Significance of the Donald’s Rise, His Audaceous Two-Layered Campaign, and His Achilles Heels” (February 9, 2016). Available at SSRN http://ssrn.com/abstract=2729989

2. Manheim, Frank T. “Underestimated Strategies Beneath Candidate Donald Trump’s Presidential Campaign” (October 15, 2015). Available at SSRN: http://ssrn.com/abstract=2674826

3. Krauthammer, Charles “The establishment nonesense” Op-ed, Washington Post”, Feb. 4, 2016

4. Rich, Frank “The importance of Donald Trump”, New York Magazine, Sept. 21, 2015

TRUMP CARDS

Why Donald Trump leads Republican candidates in spite of breaking all the rules

Trump confounds the political experts

The conventional wisdom of political columnists up to recently has been that despite strength in the polls, real estate magnate Donald Trump had little likelihood of becoming the Republican nominee, let alone president; e.g. Sarah Fagen “The beginning of the end for Donald Trump” (1). When we look at the below aspects of “The Donald’s” campaign, it’s easy to see the pundits’ logic. No major candidate in memory or history has offered a richer target for criticism. Any one of the below items might have been enough to finish off ordinary candidates.

  1. Trump has a massive ego, refers constantly to his own importance and skills, and asserts magical power to correct national problems.
  2. His past and present positions and statements, usually presented casually, are often contradictory and unnuanced. His numbers can often be shown to be inaccurate or wrong.
  3. He makes extravagant and highly controversial claims about what he would do; he created outrage by his depiction of Mexican immigrants.
  4. He has insulted or casually belittled prominent people, including the war hero status of Senator John McCain, and assigned partial responsibility to President G.W.Bush for the 9/11 attack.
  5. He has made crude remarks
  6. He would make deals with authoritarian rulers like Putin and Assad.
  7. He has supported people and causes in opportunistic ways.
  8. It is hard to picture a man with his style as Commander in Chief of U.S. armed forces, with the responsibilities these roles entail.
  9. He has the largest negative poll ratings among candidates.

In spite of the above, polls (below table) show that Trump’s popularity has risen and stayed high. Recent polls show him moving above 30% since his speech at a reform conference on October 12. Diverse explanations of this strength vary from force of personality (2), to a lengthy article in The National Journal (3) that sees Trump tapping a new middle American radicalism in common with George Wallace, Ross Perot, and Pat Buchanan. Looking under the heady surface of Trump talk I explore underexamined assets.

Rankings of Republican presidential candidates

Modified from Real Clear Politics (1)

[table id=1 /]

*RCP refers to an average of polls from 9/20 to 10/8, 2015

The No Labels Problem Solver Convention, October 12, 2015

No Labels (http://www.nolabels.org/) was founded in 2010 by moderate Democrats and Republicans concerned about the Congressional gridlock and political polarization that has paralyzed the ability of the nation to deal with serious problems. The October 12 convention, cochaired by former Utah Governor and Republican candidate for president Jon Huntsman, and former Senator and Democratic Vice Presidential candidate, Joe Lieberman, chose problem solving as its theme. It invited presidential candidates to offer substance rather than campaign rhetoric. Presidential candidates besides Trump who spoke at the convention (covered gavel to gavel by C-Span) were Bernie Sanders, John Kasich, Martin O’Malley, Jim Webb, Lindsey Graham, Chris Christie, and George Pataki, as well as the Democratic and Republican Party chairs for New Hampshire.

The Washington Post summary of the No Labels conference referred to Trump’s speech mainly as “standard talking points” (5). In contrast I suggest that underneath Trump’s characteristic style some of his underexamined and underrated assets got  exposure. I explore them further below.

Trump began by stating that he was “a believer” in No Labels’ goals. He offered new detail on his dealmaking, including a striking story about the Wollman Skating Rink in New York City. He said he was appalled that after failure of years of renovation efforts in the City’s project a new plan was to be prepared for the skating rink. He offered and was allowed to take over the project. It was completed in only 18 months in 1986 – before a previously contracted plan was even scheduled to be delivered.

Trump’s overlooked “scientific dealmaking” and other assets

The most underestimated factor in my judgment lies in Trump’s characterization of himself as a dealmaker.  Let’s think about what a “deal” implies. It’s an agreement among two or more people or organizations. Trump’s intensive focus on negotiation differs fundamentally from the political style of most candidates of the right or left. They are mainly concerned with their own special commitments and vision on political issues – rarely about alternative approaches and perspectives, especially that of opponents.

At the Problem Solvers Convention Trump went beyond previous speeches to describe how he makes deals. His approach is to get affected parties together – or develop relationships with and knowledge about  persons or groups with stakes or expertise in the issue at hand. Talking about his rescue of another failed project in New York, he said “…. I needed the Mayor; I had to go to the city council, all the unions. I got everybody together”.

The most coherent description of Trump’s approach to dealmaking is not in his The Art of the Deal (6) or his other 13 books. A book by a long-term partner, George H. Ross (7) reveals an eight-point negotiation strategy closer to that of a military planner than that of a gut-level entrepreneur. It emphasizes the importance of flexibility and creativity in coming up with successful deals. In his October 12 speech Trump called special attention to the ability of President Clinton and Speaker Newt Gingrich, and President Reagan and Speaker Tip O’Neill, people with very different points of view, to get things done because they were dealmakers.

Trump doesn’t wear America-centric blinders and makes unconventional observations. Referring to relationships with people and companies all over the world as background for discussing the U.S.’s decaying infrastructure, he said that in Qatar, Bahrein, and Saudi Arabia even temporary airports constructed to handle traffic while building new airports are “a hundred times nicer than ours.” He not only feels that the U.S. made a mess by intervening in the Mideast and removing Saddam Hussein, but also said it was a mistake to fixate on removing Syrian president Assad. He asked: who would replace him? Do people really believe elections for a new leader would create peace and stability in Syria [think of Iraq]?

Election prospects

So what about his campaign? What has given him a leading position in the Republican primary?

Trump’s colorful and uninhibited language and unpredictability give him high visibility. The article by John Judis (2) cites support for his anti immigrant and anti free trade statements.

His “self-financed” campaign means he is free to take positions unconstrained by funding sources.

Less obvious is Trump’s ability to project himself vigorously into problems and human issues not related to his assumed preoccupation with wealth and dealmaking. In talking about unemployment he expressed concern about urban areas where African American youth have “60-70% unemployment” with the same attitude of engagement and urgency that he displayed in talking about major deals in New York City – implying that he could and would do something about this.  He has blasted hedge funds and PACS, and parted company with conservative proponents of flat tax plans that would tax the ultra wealthy at the same rate as ordinary workers. He hammers on the theme of bringing American jobs back home from abroad.

Trump has an eye for talent. He chooses employees and advisors for their abilities, even if they opposed him or were on a different team earlier. A striking example is October 2 news that Trump had hired Republican campaign strategist Corbin Casteel as his campaign director. Two months earlier Casteen told the San Antonio Express-News “I believe it’s a universal view that Donald Trump is a joke” (8).

In the primary campaign Trump should not be vulnerable to the kind of gaffe or lapse that brought Texas Governor Rick Perry down in a fateful 2012 Republican primary debate. Supporters acknowledge his freewheeling style and don’t necessarily take specific  statements  seriously. Criticisms have obviously not held back his popularity. When they come from media pundits they may enhance his visibility.

His apparent rock-like self esteem and confidence based on successes in unconventional initiativees have encouraged him to speak candidly about issues that normal politicians shroud in caution or political correctness. This exhilarates citizens who are fed up with concealment and avoidance of issues, worn-out slogans and phrases they hear from politicians.

By expressing himself freely– even outrageously – about candidates or other well-known figures, sometimes having to backtrack or take contradictory positions, Trump has created a unique style. People can cite errors in fact, exaggerations or contradictions in his statements and it doesn’t slow him down. It’s just part of his persona as a dealmaker – whose positions are not final until the deal is signed and sealed. That the dealmaker retains a strategic sense about what is going on is suggested by his response to a female questioner after his No Label talk. She referred to his brash style and asked if he expected to win with it. He responded that he would probably become less divisive as the number of candidates got smaller.

If the Republican campaign were about documentable achievement in public leadership positions Governors Jeb Bush (Florida) and John Kasich (Ohio) would have a clear edge. But the  popularity of Dr. Ben Carson, a distinguished African American brain surgeon with no political experience, demonstrates that personal qualities of the candidate and subjective feelings of voters have powerful influence. From everything said above, it’s hard to see anything except completely unexpected factors that might prevent Donald Trump from maintaining his lead in the Republican primary.

From here on we’re on more speculative ground. We know from repeated statements in his books that Trump recognizes and has successfully exploited the media’s hunger for good stories – the more sensational the better. But even if there is method in his madness  how much of his unconventional behavior is spontaneous? Has he piled up so many flamboyant and unpresidential images that, even if he becomes the Republican nominee,  they will be fateful later? It would be inconsistent of Trump not to be thinking about future strategies. But to what degree could headiness obscure his judgment?

As we move into the presidential election the picture changes dramatically, beginning with major ideological and political differences between Democratic and Republican voters. The more superficial and “entertainment” side of Trump, and the sympathy of many Republicans to candidates who are not professional politicians will no longer be the factors they are now. The question of gravitas befitting a president will emerge. Debates will get into major issues like climate change, income inequality, regulatory policy and immigration. And finally there is Trump’s rough treatment of Mexican immigrants – the Hispanic factor – that seems not to have worried him up to now. If Trump does become the Republican nominee it will be interesting to see how dealmaker Trump adapts to challenges associated with the biggest deal in his career.

For greater detail see Ref. 9.

References

  1. Sara Fagen. “The beginning of the end of Donald Trump”, Politics, CNBC.com, Sept. 17, 2015
  2. Michael Barbaro, Nate Cohen, and Jeremy W. Peters. “Why Trump won’t fold: polls and people speak”, New York Times, Politics, Aug. 22 2015
  3. John B. Judis. “Return of the middle American radical”, National Journal, October 2, 2015
  4. Real Clear Politics.2016 Republican Presidential Nomination”; http://www.realclearpolitics.com/epolls/2016/president/us/2016_republican_presidential_nomination-3823.html, 2015
  5. Jenna Johnson. “An Event for Both Sides of the Aisle”, Washington Post, Oct. 13, 2015, p. A4, 2015
  6. Donald J. Trump and Tony Schwartz. The Art of the Deal, Ballentine Books, 384 p. 1987; updated edition 2004
  7. George H. Ross. Trump-style Negotiation: Powerful Strategies and Tactics for Mastering Every Deal, Wiley & Sons, 288 p, 2008
  8. Mike Ward, “Trump names former critic as his Texas campaign director”, http://www.chron.com/politics/election/national/article/Trump-names-Texas-campaign-director-6545451.php October 2, 2015
  9. Frank T. Manheim, “Underexamined strategies beneath candidate Donald Trump’s presidential campaign, Working Paper,  Social Science Research Network,  accessible at http://papers.ssrn.com/abstract=2674826