Trump Overseas: The President Returns Home

President Trump, eager to remove himself from the accumulation of scandals, snafus and bad judgement that so far comprise his presidency, decided to take a tour of Saudi Arabia, Israel and Europe to provide himself with some much-needed distraction. Saudi Arabia and Israel went according to plan. Europe not so much.

The Middle East

Saudi Arabia seems perfectly suited President Trump’s sense of style: grand palaces, lots of gold and fawning hosts whose archaic laws repress any possible protests. He danced with swords and told his hosts that he was not there to lecture them about their troubling human rights record, but rather to assure them of America’s strong support.

He did, however, see fit to berate Iran as world enemy number one. Irandoes not bring clean hands to the party and certainly bears responsibility for sponsoring some bad actors in the Middle East. Iran had, though, in an irony no doubt lost on President Trump, just held elections and opted to re-elect the (relatively) moderate Rouhani.

President Trump moved right through the irony to the approval of an arms deal for his hosts, noting that “no discussion of stamping out this threat would be complete without mentioning the government that gives terrorists…safe harbour, financial backing and the social standing needed for recruitment.”

However, as Fareed Zakaria points out in his recent Washington Post column, responsibility for over ninety percent of the terrorist attacks since 2001 lies with Sunni jihadists – ISIS, al-Qaeda – and virtually none have been linked to Iran and its Shiite brand of Islam.

Saudi Arabia’s brand of Islam – Wahhabism – is especially radical, promoting the supremacy of Sharia law and violent jihad. Saudi money is helping to proselytise these ideas in other parts of the world, including Europe.

The Faustian bargain with Saudi Arabia is not President Trump’s. It dates back to 1933 when full diplomatic relations were established. The US and Saudi have partnered in resisting communism (pushing the Soviets out of Afghanistan) and in striving for stability in oil price and supply. They have disagreed on Israel, the invasion of Iraq in 2003, the Iran nuclear deal and certain aspects of the war on terror. As President Obama said in 2014, the relationship is complicated.

In striking a nuclear deal with Iran, the US has clearly started a process of potential rapprochement with Iran, which is not a bad idea for all sorts of good reasons. It does, however, put the US in a complicated position with two of its allies: Saudi Arabia and Israel. Both opposed the Iran nuclear deal, and neither has good relations with Iran.


President Trump went from Saudi Arabia to Israel, where he enjoyed another warm reception. Israel’s Prime Minister, Benjamin Netanyahu, had a famously bad relationship with Barack Obama. Improved Israeli-American relations under President Trump were inevitable and the Israelis were not disappointed.

President Trump made encouraging noises and, despite lacking any substantive reason to say so other than his limitless faith in his own deal-making skills, he again proclaimed his hope for an Israeli-Palestinian peace deal.

The essence of Prime Minister Netanyahu’s problem with President Obama was not that Obama was not smart or thoughtful or that he lacked a sense of history. Rather it was that Obama was, in Netanyahu’s view, ignorant of the underlying tensions between Israel and Palestine, and arrogant and legacy-focused in his approach to seeking peace.

While Prime Minister Netanyahu has much more in common with the US Republican party and, by extension, President Trump, it is as yet unclear that he has confidence or trust in Donald Trump.

Netanyahu and Abbas also share the same problem with Trump with many people: Trump is not thoughtful; does not read or digest information from serious sources; does not appear to have a sense of history; is impulsive in speech and behavior; has a casual relationship with the truth and appears to have difficulty factoring in much beyond his own immediate need for adulation and affirmation into his decision-making.

In the same way that Saudi Arabia is the ally that the US has rather than the one it wants, so Donald Trump is the ally that Benjamin Netanyahu is supposed to be able to rely on, rather than the one he truly seeks.

On Israel, the jury is out, but the superficial atmospherics are so far good. There is, naturally, more irony here too. In stating that he never mentioned Israel as the trusted intelligence source in his meeting with the Russians, President Trump unintentionally confirmed that Israel was, in fact, the source in question.

On to Europe

If President Trump’s negotiating style in the Middle East was conciliatory and more subtle than usual, he returned to his more abrasive self during his visit to Europe.

His first stop was Rome for an audience with Pope Francis. The Pope is a modest man who forsakes the traditional papal accommodation for something more modest. Donald Trump once tweeted that he did not like the idea that Pope Francis stood in line to pay his own hotel bill – “It’s not Pope-like!”.

Pope Francis must have been interested to finally meet the US’s prime-time showman. Both men have a strong sense of their message: the Pope to spread a broader message of love and forgiveness to a market of souls that is proving increasingly elusive; Trump to spread a message of empowerment to a demographic that has come to feel disenfranchised.

Trump smiled broadly, confessing that he had learned a lot and emerged with a strong determination to achieve peace. Pope Francis looked less enthusiastic. He probably also learned less.


Having pushed his way past the Prime Minister of Montenegro to his rightful position of prominence in a NATO photo shoot, President Trump settled into Brussels.

Eschewing the courtesies that European allies have come to expect from a US president, President Trump failed to say that which was appropriate – affirming Article 5 of NATO’s founding documents (presumably briefed that the first time NATO solidarity had been invoked was in favor of the US after September 2001) and instead berated fellow NATO leaders for failing to live up to their financial obligations.

Continuing to test Angela Merkel’s good nature and patience for foolishness, Trump showed a poor understanding of trade and criticised Germany for the millions of cars it sells in the US. From its $7bn plant in South Carolina, BMW produces 400,000 cars and is the top automotive exporter in the US.

Facts are stubborn things but rarely do they derail President Trump’s narrative.

G7 Summit

Returning briefly to Italy, President Trump’s final act of intransigence was to decline to sign on to the climate section of the communique that was the official dispatch to end the summit.

While it is not clear that President Trump has thought deeply about the challenging issues of climate science, he is nevertheless not prepared to join his European colleagues in a principled stand to address the problem. The Paris accord, while far from perfect and perhaps not even enforceable, represents a serious approach to a serious issue.

President Trump, however, claimed he had more thinking to do.

Back Home

On his return to the US, President Trump decided to re-engage with his Twitter account and continue his battle with “FakeNews”.

The tragic-comedic aspect of this trip abroad, as it is with the President’s domestic presence, is that the media must engage with him and write about him. Many, many, talented, thoughtful, analytical, concerned, professional journalists must write about someone whose only real talent is self-promotion. Because he is President of the United States, Trump must be reckoned with. The presidency is not a dry run: it is loaded with live ammunition.

There is no better way to end than this article than with a quotation from the editor of Der Spiegel, a highly respected German weekly new magazine whose cover is stunning:

Donald Trump is not fit to be president of the United States. He does not possess the requisite intellect and does not understand the significance of the office he holds nor the tasks associated with it. He doesn’t read. He doesn’t bother to peruse important files and intelligence reports and knows little about the issues that he has identified as his priorities. His decisions are capricious and they are delivered in the form of tyrannical decrees…”

As J.K. Rowling put it on her own Twitter account in reference to Trump pushing past the Prime Minister of Montenegro – the “tiny, tiny, tiny little man” is home.

Fearless Girl vs. The Wall Street Bull

Yesterday’s New York Times features an article informing us that the sculptor of the Charging Bull is insulted by the presence of the statue of the Fearless Girl, the work of sculptor Kristen Visbal that was commissioned by State Street Global Advisors and installed in March of this year. Fearless Girl vs. Wall Street Bull

Background to The Charging Bull

The statue has attracted considerable attention since it was placed facing the Charging Bull in a posture of defiance, or, as one commentator has said, of finger wagging.  The Charging Bull was placed in its current location in 1989, having been fabricated by its sculptor, Arturo Di Modica, at a cost estimated at over $3o0,000. The 3.5 ton Charging Bull was initially placed by the sculptor on Broad Street in front of the New York Stock Exchange with no permit and without permission from the city (The Charging Bull) as a symbol of Wall Street’s strength after the crash in 1987. It was impounded by the police and, after some outcry, placed in its current location just north of Bowling Green, with a temporary permit. Thirty years later, the statue seems quite permanent.

Some have argued that the temporary permit granted to the Fearless Girl statue should also be extended. The Charging Bull sculptor apparently feels that the presence of the Fearless Girl undermines the message of his statue, which, he states is one of freedom, peace, strength, power and love. He believes the Fearless Girl stands in opposition to the Charging Bull making its presence a negative one.

Art in Context

This argument raises some interesting questions. Since, as a legal matter, the Charging Bull’s presence is also subject to a temporary permit, it is not clear what rights the sculptor is asserting to the space surrounding his sculpture; or whether those rights are different from or greater than the rights enjoyed by the Fearless Girl sculpture and its sponsors. If the legal right is not the issue, perhaps the issue is more artistic in nature. Does the creator of art placed in a public place have any rights to assert a particular intended meaning? Perhaps, as a matter of information and context. It is not clear that any artist may insist on his or her understanding of a piece of art being of such importance that the context in which the art is located must remain undisturbed by anything that might, in the artist’s opinion, detract from that understanding.

Context is important, but meaning is surely subjective. Once placed in the public domain, any work of art may be subject to as many interpretations as there are viewers. The artist has, in large part, lost control.

The Fearless Girl: Friend or Foe?

It is interesting to reflect on the context of the Fearless Girl. State Street Global Advisors motivation in placing the statue on the eve of the International Women’s March was apparently to represent the power of women in leadership. Among the many comments made in the New York Times piece about whether the statue of the Fearless Girl should stay or go, two are, in the opinion of this author, noteworthy. The first invites an inclusive and contemplative reaction:

“Art is a dialogue. Invite the unexpected. The bull and the little girl, they are already friends. Quiet yourself and listen to what they have to say.”

— Landon Rose, 66, Brookline, Mass.

The second points out that history is forever changed by the juxtaposition of the two statues:

“As a lawyer, woman and minority, I believe that no matter what the outcome, demanding that ‘Fearless Girl’ be removed is a losing battle. If ‘Fearless Girl’ is removed, the bull will become even more representative of men trying to stop women from achieving equality.”

— Elizabeth Veit, 35, Alexandria, Va

Evolution of Meaning

To attempt to claim a continuity of meaning for the presence of the Charging Bull thirty years after its placement as guerilla art seems naïve. Wall Street has changed dramatically over this period. The culture has evolved, its shortcomings well documented in many movies and court cases and its daily routines reshaped by technology. The role of women in financial services and in the broader economy remains a work in process and falls well short of parity. The Fearless Girl suggests that change has occurred and is continuing. The Charging Bull is not humbled or disparaged:

“I do not see the bull in a negative way now that the ‘Fearless Girl’ has shown up. Rather, the bull is now confronted with a formidable counterpoint to an emerging vision of a new kind of power.”

The Nature of Conflict

Is our default state harmony or conflict? A post-Eden view might suggest conflict. We seek harmony but in a flawed way through our flawed selves. We desire closeness in relationships but are inclined to lapse into dysfunction. Until what? What is the contingency that will unravel this Gordian mess?
Consider the ideal state of a market economy: all rational economic actors motivated by their own self-interest magically contributing to an outcome that, in the aggregate (if not for everyone) is beneficial to the whole economy. Out of self-interest comes harmony – benign conflict. The wisdom is in the multiplicity of individuals struggling to optimize their own outcomes. No higher purpose; no overarching social good. Such big picture goals are doomed to fail because not all outcomes are knowable. Strategic goals are like supertankers: slow to navigate obstacles. Strategy architects become invested in target outcomes and are therefore biased against course corrections that undermine the original blueprints.
Alternatively, we need a strategy. Societies and economies are long-term projects. Absent vision and well-thought policies, outcomes are too haphazard and will ignore stewardship of natural assets such as biodiversity and the ability of the planet to absorb carbon dioxide. How does the tragedy of the commons unfold in circumstances where all pursue exploitation of available but exhaustible resources? Rising above immediate self-interest to take an enlightened view of an interconnected economic reality requires an effort of imagination.
Corporations are inherently selfish stewards of their shareholders’ interests – in theory. Notwithstanding their legal personality, corporations comprise self-interested employees whose incentives are diverse. Arguably, as the pyramid broadens, the incentives are less aligned with shareholder interests and more with the maximization of take-home pay and minimizing the effort required to ensure continuity and longevity. C-Suite incentives are typically designed to be different: compensation is higher and expectations of strategic thinking are greater. Moral deficiencies are in sharper focus and can undermine not only shareholder interests but the interests of all stakeholders, destroying the goodwill and trust on which corporate employment is built.
Corporations are larger scale, institutional, individual rational economic actors that have greater leverage in shaping economic outcomes. Politicians are supposed to ensure a level playing field and supervise fair play. Their behaviour does not always reflect this ideal…
Back to conflict. In Congress, State Legislatures, Local Government (Zoning Boards), churches, country clubs, conflict abounds. The nature and extent of this conflict does not correlate to the purpose of the body. It is a function only of the presence of people, the individual agents of conflict. Some find it energizing; most find it stressful, lose sleep, seek to avoid.
The field of psychology holds these truths to be inalienable: people must feel understood, appreciated, be given the benefit of the doubts, be treated as an equal, be treated respectfully and have the freedom to decide. These truths might be described as conflict mitigants. Why are they not more widely used as such? Ignorance perhaps, together with the illusion that imposing one’s will on another is some kind of personal victory. Arguments to justify this behaviour are plenty. Typically, a core belief is cited to justify the end. This might be political philosophy; it might be a core religious or moral belief. If abortion is bad, then stopping abortion is good and all who hold an opposite point of view are also advocating something bad. And so it goes.
In a book called “Living” by Kerry Egan, the author advocates a world view more tolerant of the grey zone, as opposed to a world view that is either black or white. Rarely are difficult and complex issues of human action and interaction black and white. Grey is itself a kind of harmony, a blending of black and white, a denial of either extreme as the defining picture.
The vision of the Garden of Eden was black and white: you may eat of all the trees in the garden except this one. Simple, clear, unattainable. Perhaps mankind was simply not designed for black and white. Black and white is always conflict. The mission is to listen, to blend, to embrace the grey. Respecting the dignity of every human being is challenging. It involves embracing the nuances of individuals and their tendency to go awry. It involves recognizing that the weakness one finds in oneself is likely the weakness that exists in others and giving them the benefit of the doubt.
Our default state is neither conflict not harmony. We are wired for both.

Playing Russian Roulette with Our Future

I have wondered why I have not felt motivated to add anything here recently. The truth is, the slow train wreck that is the Trump administration and the attendant coverage is an energy black hole.

Seriously weak and I should get over it. So here goes. Why am I angry? Clearly, as readers of this blog know well by now, Trump was not my candidate. Sometimes you lose. Obama was not my candidate in 2012 – Romney was. I didn’t feel angry or dispirited then. Why now?

The mountain of lies is discouraging. The re-awakening of the viler aspects of our society – racists, bigots etc. – is discouraging. The sense of fear in the immigrant community about not only the racism but also the prospects of deportation is discouraging. The deadly mixture of arrogance and ignorance that our President displays is troubling. The sense that he is too arrogant and narcissistic to know that he is being manipulated by dark characters such as Steve Bannon is troubling. The fact that he may just back us into a corner in some area of foreign policy is concerning. The fact that he may, through inattention to the available information on climate change and favors promised to the energy lobby, contribute to a huge backward step in managing our relationship with our environment is disappointing. The hypocrisy of championing states’ rights regarding transgender bathroom access and yet suggesting inserting Federal law when it comes to state laws on recreational marijuana is embarrassingly laughable. Dismissing reports from DHS when they don’t confirm the President’s bias is a sign of shutting down inquiry and debate based on facts, as is selecting the news organizations who are given access. There is more and I could go on. The daily news – the mainstream media he despises – is full of the latest despicable steps taken by the Trump administration.

Am I happy that he is planning to dismantle some of the regulatory machinery that has grown up over decades? As someone who is fundamentally libertarian, I approve of that to some degree – depending on the specifics. Am I happy that he is allowing the Dakota Access Pipeline? Generally yes. I believe that was a terrible cause driven mostly by the fact that the Standing Rock tribe did not get the economic deal they wanted and decided to fight. It is a project that should happen. We will be better off having that oil move through a pipeline than across road and rail. There are some things that the administration is doing right. A broken clock is right twice a day.

Above all else, what bothers me and unsettles me every time I hear Trump’s voice, is the abuse of truth and language. He uses words and sentences at a grade school level. He tells lies as if the truth does not matter. He is singlehandedly dragging public discourse back to the stone ages – pictures would be preferable (think Moose Lamb – thank you Melissa McCarthy). Not only does he abuse truth and language wantonly, but he celebrates the cloud of ignorance it produces as a populist victory against those he claims comprise an arrogant elite. To protest the abuse is, in his eyes and in those of the masses he energises, further confirmation of the change that needs to be wrought.

What about those who are complicit in his administration? The Sean Spicer and Kellyann Conway jokefest? Gary Cohn, Steve Mnuchin, Rex Tillerson, James Matthis? Perhaps some of them are convinced they can make a difference by restraining some of Trump’s worst inclinations. Perhaps they are right. Some have impressive credentials and are clearly trying to bring order from chaos.

To some degree, one is bound to normalize a President. They are elected by a process that we honor and respect.  We should all calm down perhaps. Perhaps Trump will do himself in as Milo Yiannopoulos did. Perhaps. Language and truth are important. They offer a standard and a medium of communication that serve us well. If  lose our grip on truth and debase our currency of communication, we are cast adrift as shapeless utterances in a chamber of lies – travelers with no compass listening to discordant sounds with no redeeming musical elements. A wasted opportunity and a waste of time.

Sad to see Pence as a better option. Terrible. Wrong. Bad. Fix it!


Changing Perspectives

A good friend recently commented that it was a shame I was not blogging 10 years ago so we could discern how my opinions have changed. He is right: they have changed. It is worth reflecting on why.

I can trace this evolution through a number of books. The first, Winner Take All Politics, made me reflect on the political process and on how it is influenced by money. Essentially, this is an art that has been learned by both parties and has led to the growth of the corporate lobbying business and the relative decline of the voice of unions in shaping public policy. This is not a good thing.

The second is a book that expands on this theme – Ratf**ked. It describes the extremely efficient gerrymandering carried out by the Republican party following the redistricting that took place after the 2010 census. Gerrymandering is something both parties have done. In 2010, with the benefit of some very effective software tools, the Republicans did an extraordinarily “good” job of ensuring that the their House majority would be practically unassailable at least through the 2020 census. Unassailable majorities  compelling candidates to worry more about primary challenges (a process that tends drive candidates to more extreme positions) are not a good thing for our democracy.

The third book is one written by Rana Faroohar called Makers and Takers. It traces the evolution in the role of the capital markets from one of transmitting the capital from investors to main street to one where the financial markets circulate over 90% of investment capital within the financial industry. She describes, through various case studies, how many corporations have become enslaved primarily to the short-term demands of the stock market and have failed to pay attention to the long-term interests of all stakeholders including those of human capital. This is an unhealthy trend.

Next on the list is a book that deserves to be read as a companion to Hayek’s The Road to Serfdom. It is called The Great Transformation by Polyanyi. Its thesis (I am still reading) is that markets cannot and should not be “disembeddied” from society. By this, he means that markets should not be elevated to the role of shaping our society, but rather seen as something that serve society and are viewed as a tool of public policy.

Finally – on a slightly different topic – the book, The New Jim Crow (written in 2012 before the arrival of BLM), describes the emergence from the many civil rights victories of the last 150 years of a new racial caste system. It started most conspicuously in the mid-eighties with the beginning of the War on Drugs, grew through substantial federal funding of local law enforcement to wage the war on drugs, was exacerbated by the gradual weakening of the Fourth Amendment (search and seizure) and the rise in civil forfeiture and is now manifested in the massively disproportionate incarceration of the black male population. I will review this book in a separate post in due course but so far it is shocking.

All of the above reading has taken place in the context of an election process that has been particularly nasty and divisive and brought to the forefront discussions about women’ rights, minority rights, class divisions, industrial policy, political corruption along with many other emotionally charged social justice issues.

With new information, views may change. Mine have. In part, this is because, in an election cycle, one must take sides. Donald Trump may be the worst candidate who has ever run for the office of President of the United States. Hillary Clinton was not good enough to beat him. (Discussion of the popular vote is largely pointless because we do not elect our presidents that way. It is, however, informative. I do not believe that, if the system had been based on popular vote, that Donald Trump would have run a different campaign and won anyway. What I believe on this subject is irrelevant).

In choosing “not the Republican party” because they nominated such a reprehensible candidate, I took a closer look at the platform of the Democratic party.  There are things to dislike about both the Republican and Democratic platforms. While the Democrats cozy relationship with teachers’ unions is disappointing, the platform’s 55 pages contain much I applaud and support on the environment, voting rights, social justice issues, immigration and money in politics. The Republican Platform has many sentiments I agree with in the area of government reform and reduction in regulation, but its positions on abortion, reversing the progress made on same sex marriage and the perpetuation of the conspiracy theory that the majority of climate scientists are engaged in massive deception and ideological coercion are unsupportable. The language of restoring constitutional government and restoring America’s greatness seem to me more about protecting a status quo that serves well those who have benefited from it.

Obviously, there is a lot to unpack here and I aim to do so over the coming months. I am impatient with all too common chants of “left” and “right” believing or standing for certain issues. The substantive conversations that need to be had concern efficient, comprehensive healthcare, the size of the social safety we are prepared and able to support, proper stewardship of our environment, the size of our prison population, the incentives needed for efficient allocation of resources (capital, natural, human) and the manner and extent of government intervention to ensure a level playing field for commerce to operate. The level of thoughtfulness so far displayed by our President-elect about these matters is evidence enough why he and the party that supported him caused me to think again. For that at least, as I have said before in this blog, I concede I am grateful to Donald Trump. Happy New Year.


Trump – Hysteria Exhaustion

I have read “In the Garden of the Beasts” and am aware that vigilance is appropriate. Trump has said so many bad things during the course of his campaign that all manner of worry and concern is justified. The incidence of prejudice attacks and speech has increased post-election. It came from somewhere; and that somewhere is a dark place we all hoped had gone the way of smallpox.

However, we need to pause and think where we place our outrage. Recognizing that the NY Post did endorse Trump, the following article is worth a read:

Muslim Registry-Fake News

Their point, essentially, is that this is a weak story. If, aided by George Takei (of Star Trek fame), the mainstream media is reaching internment camps from this starting point, it is going to sacrifice yet more of the credibility it has already depleted in the ‘echo chamber period’. There are only so many strawman arguments that can be had (and Trump’s campaign has seeded many) before the mainstream media becomes a house of straw itself and cedes readership to the blogosphere.

If Trump begins to implement some of the awfulness his campaign presaged when he is actually President, there will be substantive reason for the outrage. Resistance, if that is what is warranted, must be well designed and strategically planned. In the meantime, people ought probably to stop posting “Not My President” to FaceBook.

The mainstream cannot, as Dave Pell put it so well in his “Next Draft” summary of November 21, 2016, crowdsource its editorial judgement. He was referring to the furore over President-elect Trump’s tweet demanding an apology to Mike Pence from the cast of Hamilton, but he could have added this story to the mix.

It seems we may still be experiencing the after-shocks of the campaign and post-campaign. The interview with the NY Times is a great example of this. It was scheduled, canceled by Trump out of what seemed remarkably like petulance and then rescheduled. It took place and Trump said he had great respect for the NYT but had found their coverage ‘rough’; said he would not pursue Hillary Clinton or the Clinton Foundation; had an open mind on Climate Change; and suggested people would be very happy with his first amendment stance. What next? Maybe he will nominate Mitt Romney as Secretary of State (#burythehatchet)…..

In closing, one more link worth reading:

Understanding Donald Trump’s victory

Not sure this has been quite so succinctly expressed in the US media.

This one is for Janet….

This is for my good friend and fellow parishioner, Janet D. Janet, you are kind enough to admit that you occasionally read my blog posts. You have asked whether I have been writing in this tortured period of election politics. The answer is that I have, but on the private side of the firewall that separates my journal from my blog.

So, crossing over to the public side, here you go.

I was saddened by the outcome. I really disliked the Trump campaign. I need not repeat the reasons – they are well known. I had managed to convince myself that Hillary was a supportable candidate who deserved to win. I was good with that. I loved the fact that we were going to have a female president (#overdue) and I loathed what I saw as a clear double standard in many of the critiques of Hillary.

She was the better candidate, in my opinion (and that of 61 million Americans). But she was not a great candidate. The values she stood for were very much aligned with the Christian values we share and that Bishop Dietsche set out in his recent letter to the parishes in the Diocese of New York:


I would not have been nervous and fearful as I now am if Hillary had been elected. I would not have been fearful about the safety of those whose rights and concerns have been lifted up over the past 8 years. I would have been more hopeful about improvements in women’s lives. I would have been hopeful about continuing focus on climate change.

However, I believe that the forces of the progressive left – I hate labels but that will have to do for now – have a large measure of responsibility for the position in which we now find ourselves. The near obsession with shutting down speech that has been deemed offensive; the celebration of safe places in which one can hold one’s politically correct views without fear of being challenged or triggered have created something of an echo chamber in which all are in agreement. Within this echo chamber all adherents are affirmed and all who are outside are just wrong. The news media, also, on the whole, horrified by Trump, provided further affirmation for this echo chamber. The polls took the pulse of the world according to the respectable news media and found it to be healthy.

Settled upon the chosen candidate and affirmed in our belief that what was right was good and that Hillary ought to be elected, we marched to victory.

Along the way, we managed to convince ourselves that, because Hillary was our choice, she was a good choice – the best choice in fact. But she really wasn’t. People hated the email and the inside the beltway politics as usual. We all knew she was not inspiring, but we told ourselves we were done with inspiring. Competent, detail-oriented, serious, committed to worthy things would do.

Not enough. We needed a better candidate who could appeal more broadly to the WWC (white working class). WWC did not enjoy being referred to as deplorable – who does? Labels are the language of division and we were (are) divided enough. Not enough inspired, enthusiastic support; too much hatred. Hate trumped “good enough”.

So now we have to pray that this new president clears away the brush without starting a forest fire we cannot contain. We have to pray (and take appropriate action to ensure) that the institutions of our democracy are robust enough to contain the worst potential excesses of a Trump administration.

We have to try to recover some civility and mutual respect in our national discourse because courtesy, respect and civility are the necessary ingredients of the infinitely connected lives we all lead (#ubuntu).

I hope that’s helpful Janet. Continue reading This one is for Janet….

Financialisation And Politics: Why We Need To Rethink Our Metrics

I recently posted the following to “TheMarketMogul” , a relatively new publication. It was a different experience – my first of being subject to editorial review before publication….

Here is the link:

I have reposted below for convenience, but the site is worth a look.

In George Monbiot’s How Did  We Get Into This Mess, he discusses the failure, as he sees it, of Neo-Liberalism. As one considers the history of the financial crisis and the talking points it has provided for the candidates in the recent Presidential election in the United States, it is a subject worth pondering – an emerging theme.

Friedrich Hayek’s The Road to Serfdom has some great insights. Capitalism, he says, is very much aligned with human nature: it relies on the creativity of the majority outside the government to figure out, in the free market, the best allocation of resources. Friedrich Hayek details the deep flaws of five-year plans and the tendency of a centralised government to gather ever more power to itself to reinforce its goals and, when they go awry, to cover up the mistakes. Remember the time he was writing: WW2, fascism, totalitarianism, the rise of communism. He correctly describes the tendency of socialism to evolve into totalitarianism.

Markets Compromised

Hayek’s insights are as relevant today as they were when he was writing. However – and there is a risk that this sounds like the same apology that socialists made that the system was never properly implemented – the problem is that Friedrich Hayek’s philosophy depends on free markets. In many areas, the scales are tilted. People, whether in government or the private sector, have a tendency to want to accumulate power and protect it. Monopolies are a good example. Libertarianism deals very specifically with this, setting out certain areas where monopolies are indeed more efficient and must, therefore, be regulated. The book Winner Take All Politics describes how the system is “rigged”. It talks about how, traditionally, trade unions have provided a counterweight to the power wielded by corporations over workers and that the demise of unions has been to the detriment of workers. In this sense, the Bernie Sanders diagnosis has a lot of truth to it.

There is lots of good diagnosis and remarkably few prescribed cures. If you want to know why people are having a hard time getting things done in the US, take a look at a book called Ratf***ed. The argument is not that the Democrats are free of blame – rather that the Republicans have done a very good job of doing a very bad thing.

Even someone who has benefited from the financialisation of the last 30 years may feel ambiguous about all this. The Hayek model is appealing and receives wide support in the financial community, a community that aligned closely with Thatcherism and Reaganism mostly out of self-interest. Even within this community, though, there are many who, thinking about the next generation making its way in the world (frequently advising career paths outside financial services), are pausing to reflect and find it hard to ignore the anger of those who have been left behind. Support for President-Elect Trump was born out of this anger.

Playing Into Biases

Trump, Clinton and Sanders certainly polarised the electorate and it has been hard to distill the distinct arguments from the passions surrounding the campaigns. There is undoubtedly a tendency to select information that confirms biases. The discussion between the media and elite bubbles is currently heated. Perhaps, a letter-writer to the NY Times suggested, the NY Times should stop telling people what to think and how to behave and report more of how people are feeling and behaving.

Exploring opinions from all sides is important but requires discipline and a willingness to hear points of view that may change one’s own. The credibility of the writer is, of course, important. The books “Winner Takes All Politics”, “Makers and Takers” and “Ratf***ed” are well written, well researched and, while not without a point of view, cannot be dismissed easily. The book “Hillbilly Elegy” is an important insight into a social group very foreign to those not familiar with Appalachia.

The ultimate challenge is to figure out how to create a playing field that is sufficiently level to embrace a broad distribution of wealth. If there are too many people in the cart and no-one to pull it, the cart falls over. The purpose of economic growth cannot be an unfocused celebration of the path without any idea of where that path leads. The greatest good for the greatest number sounds great provided there is clarity about what “good” is. It does, of course, imply something of an enlightened elite to promote the greater good.

As the recent election in the US shows, there is tension between elites and others. “WWCM” (white, working class males) have clearly found a voice in this election. Traditional party affiliations are shifting. Those policymakers ignore this at their peril. Enlightened self-interest should inform our behavior and shape our actions. Enlightenment may need a little more attention.

What Markets Are Signalling

Traditionally, the financial markets have been thought to provide an objective point of view, reflecting the enlightenment of millions of transactions, millions of decisions about current events and their implications for the future. Monbiot asks people to consider that this point of view may not be as representative as it should be of all the viewpoints one needs to achieve a balanced assessment of how well the economy is doing for all its stakeholders.

Financialisation is the term used to describe how the markets may have lost their way in their mission to aggregate and disburse capital to productive ends. One key data point is that, over the last decade, factoring in dividends and buybacks, net equity issuance has been negative $416bn per year. Main Street, in other words, has been starved of equity capital as this capital has been returned to the financial sector. Has corporate America become too much in thrall to the short-term concerns of its shareholders and forgotten how to build long-term shareholder value, valuing and investing in all capital including its human capital?

Another academic, Thomas Philippon, discusses the cost of financial intermediation and notes that its cost has remained remarkably stable for over a hundred years: 2%. The implication that rent-seeking behavior in the financial sector has been at work for many years is clear. Given the fact that most large banks and investment banks are currently valued at below liquidation value (pace Trump rally), it suggests there may be room for disruption – hence the Fintech ‘revolution’.

In conclusion, Monbiot has a point. Financial markets can go awry, banks can do very bad things absent thoughtful regulation and well-designed incentives, corporations need to pay attention to a more diverse set of interests than just those of the capital markets and politicians must pay attention to leveling the field of play to ensure the market, broadly defined, can do its job in distributing wealth and avert the need to re-distribute through taxation.

The assumptions that markets are the best arbiter of economic outcomes, that thoughtful government policy always represents unwelcome interference need to be questioned without fear of being labelled a liberal heretic. If people fail to pay attention, there are more surprises ahead.

Post Brexit – The Curse of Democracy

Thoughts on why people need to earn their vote. This sounds oppressive and intolerant, but seriously…there should be a minimal level of competence before wielding a pen at the voting booth.

Troubling spike in Google searches related to the consequences of Brexit  – after the polls closed.

We know that democracy is the worst system – apart from all others. But we should try harder – shouldn’t we?

I mentioned Fukuyama’s End of History in my last post – I am still reading it so there will be more. The thesis is that History ends with liberal democracy as the system most able to deliver everything the heart desires. History ending does not mean history stops – just as finding the perfect diet does not mean life ends. It means, we can stop struggling to find the perfect diet and instead just exercise the will to stay with it.

Similarly with liberal democracy. It works. We just have to keep it intact. Why does it work? It works because it provides the optimum environment for the expression of our productive capabilities as human beings. And so, it allows us to create economic growth and wealth – the currency that allows us to sustain the other key ingredient that sustains our life as humans: recognition. Fukuyama draws on Hegel here to tell us something that seems obvious when we hear it: we seek recognition of our humanity, our equality, the worth of what we say and do, what we achieve. Everybody wants to feel heard.

Our Episcopelian baptismal covenant urges us to respect the dignity of every human being. So simple and self-evident.

And yet, recognition contains a little tension. We strive for recognition and that involves status. Status is relative and abilities are not equally distributed (life isn’t fair). So striving may end up with competition for recognition. Only one Steve Jobs, Elon Musk. We may have to live with a little inequality in our equilibrium. Multiculturalism celebrates the identity of a specific group and allows recognition to group members who previously have been ignored or suffered some form of social or political oppression. It may, however, erode the bonds of an integrated society. Tension.

The identity and group aspirations of EU members obviously contain tension. The means of resolving those tensions has apparently become too much for one of its members – hence Brexit.

Rejecting the broader goals of the EU group – or any group larger than an individual group member with a sub-group identity – is complex and dangerous. Groups such as the EU come together slowly, with consensus and mutuality. Independence is historically associated with independence from a previous oppression or conquest (think Commonwealth or Roman Empire, or Yugoslavia) – not as idiot, Nigel Farage, claimed, independence from the EU (freely entered into).

So, we have representative democracy, designed to provide a more deliberative process for making laws and policies, to avoid the process whereby direct democracies may succumb to passions and short-term considerations, ill-considered and manipulated by voices and influences motivated by unworthy goals.

Changing the US constitution requires a two thirds majority in House and Senate and ratification by three quarters of State Legislatures. Brexit required a simple majority. It didn’t have to be that way. Hence my sadness at the failure of leadership – a self-inflicted wound.

Participation of 100% all voting entities and individuals in a constitutional change would be virtually assured, so the super-majority provisions were designed to make it a very high bar. In the Brexit referendum, 72% of the population voted. So, 52% majority means that 37% of the population is causing the UK to withdraw. Democratic, as defined, but ill-conceived.

The continued success of liberal democracies requires considerable effort. Progress is not assured. The 19th century was an optimistic century full of promise for the advancement of mankind through science, technology and education. The 20th and 21st so far were and are less optimistic and contained many setbacks: wars, conflicts, Nazism, Communism, Totalitarianism, terrorism. How could Providence and a benevolent God survive the Holocaust (see earlier post on The New Atheism and one to come shortly, specifically on Providence)?

There is wisdom in crowds but danger in mobs. We live not so far from a very dark version of ourselves (imagine three days without electricity). People ‘get’ to vote when they reach the age of majority. (In the US, by the way, we seem to consider this something less momentous than acquiring the right to buy and consume alcohol…). Sometimes, though, we can become ‘drunk’ on democracy and suffer something similar to a hangover. As Kingsley Amis put it in Everyday Drinking, there is the physical hangover and also the metaphysical hangover – “that ineffable compound of depression, sadness (these two are not the same), anxiety, self-hatred, sense of failure and fear for the future”.

So, having needlessly handed a decision to an electorate that would probably have been happier without it, received an unexpected result, experienced ensuing trauma, one is left with the impression that we need some adults in the room to do what elected representative are supposed to do: calmly and deliberatively figure a way out of this mess.

It might be better if the men stepped aside for a while and stopped playing their university power games. Could we maybe have Angela Merkel and Theresa May work something out?





Brexit – Why Am I so Sad

Markets hate surprises. So do I. But markets will sort out their level in due course and the economic impact outside of Britain may not be as bad as today.

What bothers me is the social trends that led to this – they still exist. Left-behinds is the term. Those for whom capitalism over the last, say, 10 years has simply not delivered. They have no houses on the monopoly board, have not passed “Go”, did not pick up $200. Why not turn it over and storm out of the room?

Call it distrust of experts: politicians, economists. A feeling that banks and corporations no longer care about their employees.

The poor in England have increased by 64% from 1980 to 2010; the rich by 36% and the middle-class has declined by 26%.

In the US, the Federal Reserve conducts an annual survey to gauge economic health. It found 47% of Americans would either have to borrow, sell something or simply had no means of coming up with $400 to cover an emergency.

Existential questions of human rights, gender rights, fiscal union, EU free trade and movement of goods, the EU project of combining into a larger sovereign negotiating block, preventing the fractures and disputes that led to a millennium of wars and conflict do not matter if you are stressed about living paycheck to paycheck. Brecht said, in the Threepenny Opera, “First comes a full stomach, then comes ethics.”

Why am I sad? I am sad because the arc of history is supposed to bend towards progress: education and the advancement of knowledge should lead to better ideas, more productivity, better stewardship of our resources, better economic outcomes for more or the world’s population, more understanding, better relationships – international, national, group and individual. Sometimes it’s not so obvious it does.

A friend explained today his view of Brexit and the rise of Trump in the US as a repudiation of bureaucratic liberalism in favor of populism/nationalism. He concluded that, since people “hate having sanctimonious liberalism” rammed down their throat, they are prepared to make impulsive decisions to register their anger and frustration.”

Since 1980, non-financial corporations have returned an average of $376 billion per annum in dividends and share buybacks to the stock market. In the decade 2003-2012, the 449 companies in the S&P 500 Index in January 2013 that were public listed in 2003 expended 54% of net income ($2.4 trillion), on stock buybacks and another 37% of net income on dividends. That left 9% for new investment in productive capabilities (such as R&D), or profit sharing with employees through increased remuneration.

This financialization of the economy has been profoundly damaging, has led to an increase in debt capital and that has become associated with higher risks of cyclical financial shocks.

I am sad because I have not informed myself about this until recently. Have I been asleep?

I am sad because this is messy to fix. There is a wall of special interest money standing in the way of change. Maybe it takes the zealotry of an Elizabeth Warren to make this change.

I am sad because this is a world we are bequeathing to our children and we have not been good stewards.

I am sad because Brexit reminds me, sitting in the US, a dual US-UK citizen, that a democracy much older than the US, is struggling; that maybe, Fukuyama’s vision in the End of History  of the eventual global triumph of political and economic liberalism is not as certain as I would have liked.

It may be that the tendency of liberal democracies is to reach a point where the accommodation and recognition of the equal needs of all leads to a kind of impotence to act because meeting the interests of so many becomes too complex and too entangled.

It may also be that we are just on a bumpy patch and that the culprit is inequality – our failure to harness technology and innovation to increase the well being of all. If we can fix this, the vision will be restored.

Combatting inequality as we experience it today in America and Great Britain will require politicians of vision prepared to work together to achieve a common goal. Who are they?

And here is the final reason for Brexit sadness. I had thought the quality of leadership in Great Britain to be superior to that we are currently suffering in the US. Evidently not.

A sad day – at least for me.