PROGRESSIVES HIT A BIG BUMP

Freedom is just a word for nothing left to lose. ~ Janis Joplin

At this point, the quadrennial task surrounding development of practicable political strategies to win presidential and Congressional elections in America is unmistakably facing the Democrats. Big time. Given the Trump administration’s astonishingly frenzied, disordered, tumultuous record so far, you might think it could be an easy task. I doubt it.

How bad is it now for Democrats? Let me count the ways. Republicans hold a 241-194 majority in the House of Representatives and a 52-48 majority in the Senate. The Democrats’ Congressional representation is very concentrated. More than 50% of the House Democratic caucus members come from just six (12%) of our states. One of every four House Democrats is from either California or New York. At the state level, Republican governors now exercise power in 33 states. Republicans now control 66 of the 98 legislative chambers in the country. Republicans control 32 state legislatures, including 17 with veto-proof majorities. Those 32 states account for 61% of the U.S. population. Republicans now have total political control over 25 states outright and another 2 where they can override a Democratic governor’s vetoes. The nation hasn’t seen this level of Republican dominance in our political process since Herbert Hoover was president.

Despite this unassailable Republican domination, during the past weeks much of the liberal media has been running stories about how Rex Tillerson, Betsy DeVos, Jeff Sessions and Steven Mnunchin could be denied the cabinet positions He Who Shall Be Named Micro-Man nominated them for. Hope springs eternal and all that, but the laws of Senatorial mathematics unsurprisingly crushed those less than faint Democratic hopes. As of Feb 14, each of these questionable, unfitting nominees has become a Senate-approved cabinet member, as expected. Oops, I wrote too soon. On Feb 15 Andrew Puzder, the president’s nominee for Labor Secretary, resigned after numerous Republican Senators expressed dissatisfaction with him. Micro-Man remains a laggard. So far he has barely filled his roster of senior administrative jobs; he has nominated just 35 people to fill the roughly 700 positions that require Senate confirmation. Are these the results of "a fine-tuned machine"? I think not. 

During the past year well-founded, “identity”-based issues raised by progressives were thrust into the nation’s social, legal and political limelight. These issues included “visibilzing” the 0.6% of the population who identify as transgender. [Yes, visibilizing doesn’t appear in the dictionary; the term is used by used by the LGBTQIA community.[1]]  This limelight engendered a diverse set of personal and political reactions across the nation, including support and outrage. What happened from these reactions? Among other things, the Nov 8, 2016 federal election happened with calamitous results for the Democrats’ social liberals, among others.

There are many ideas floating in the political ether about what contributed to this election’s surprising outcome, now that the Democrats are WOPPed – wholly out of political power – in Washington DC and many states. I think 3 of the reasons Democratic social liberals/progressives fared badly are: a lack of motivating, emotional connection of enough voters with Democratic candidates’ goals and priorities; geographically-concentrated, heavily urbanized backing; and fractionalizing minorities central to the Democrats’ base.

The Democratic coalition that twice elected Barack Obama nosedived this time around. During the campaign there was much talk about the increased prominence of minority voters and their amplified importance for Sec. Clinton’s success. Demographically, that was true for her campaign, but not the nation. According to Census projections, no one racial group will be a majority of the country by the year 2044, which is 27 years in the future. But right now, non-Hispanic whites represent 70% of eligible voters and they vote more reliably than any ethnic or racial group. The Democratic campaign tactics seemingly forgot this; the election’s actual vote count reflects this gross oversight. Micro-Man won 58% of the total white vote and 63% of the white male votes.

Despite being unwaveringly tooted by Democrats, Hillary Clinton failed to win a majority of white women voters. Also, Millennial, Hispanic and African-American voters failed to vote for Sec. Clinton in sufficient numbers in enough states to ensure her victory. Critics mention that Sec. Clinton’s campaign emphasized far more why voters should not cast their ballots for Micro-Man, and not a strong or alluring enough message to voters about why she deserved their votes. There was too much pessimista and not enough optimista in her campaign. It seemed like her campaign forgot, in a stunning error, about the primacy of our outdated Electoral College mechanism. An example of this misguided bungle was her spending campaign effort in Arizona and Texas (among the reddest of all states), rather than Michigan and Wisconsin. OMG.

Here’s a personal example attesting to why Democrats now inhabit such a dark political space. Recently my wife and I had dinner with some friends and inevitably talked about the despairing situation we and our nation are facing because of He Who Shall Be Named Micro-Man is president. Recalling former times when progressives were actively headlining the news, one of us asked “What was the name of that group who was protesting Wall Street.” It took us a while to remember the answer: Occupy Wall Street.

The Occupy movement was formed in late 2011 to demonstrate against inequality and the deluge of financial disruption for millions of Americans during the Great Recession. It popularized the phrase “we are the 99%,” reflecting the continuing struggles inequality poses on people who are neither wealthy nor rich (the 1%). In 2011 at the height of its influence, the Occupy movement had palpable difficulty stating its principal objectives because of its commitment to “participatory democracy.” Perhaps as a consequence, its legacy does not include demonstrable electoral political success.

In contrast, it takes much less time to remember the Tea Party, and its movement’s widespread (and all too successful) influence on American politics since 2009. In 2010 the Tea Party Caucus (that has since morphed into the Freedom Caucus) in the House of Representatives was formed after conservative candidates it directly supported had won 48 seats in the House. In a real sense the Tea Party’s legacy includes the populist ground-roots political activism that helped elect the current president as well as very conservative members of the House and Senate.

The Democrats have had no counter to the well-organized political movement that has provided total control of Congress and the Presidency to the Republicans. In a sense, now that the Democrats have virtually nothing left to lose, they have the freedom to create a fresh, new strategy and tactics for future success.

The average age of the 4 Democrats’ Congressional minority leaders is 73 years. The Democrats are now electing much-needed, new leadership of the Democratic National Committee (DNC). The DNC, like Democrats in the majority of states, has no unified political power base. Creating such unification will be imperative.

Notable exceptions to the Democrats lack of power include their 5 state trifectas (states where one political party controls both legislative houses and the governorship): California, Oregon, Hawaii, Connecticut and Maryland. Nevertheless, as mentioned above, Republicans enjoy having 25 state trifectas, as well as the all-important federal trifecta. As one journalist put it, Democrats and the DNC are “leading from behind.”

In effect, the DNC is now searching for relevance as well as a plan for 2018 and beyond. They would do well to learn from the successful efforts of the Tea Party and other political crusades. In the short time available for next year’s House elections, this plan needs to entice majorities of voters to elect Democratic candidates in local, state and Congressional elections. Creating such a plan will require discipline and focus – something Democrats have found difficult in the past to master. The DNC will need to finally acknowledge the obvious; that the world beyond the Washington DC beltway is a much different place than they thought it was.

The Democrat’s plan for success also should include direct financial and political support for the growing number of grass-root organizations that already have empowered thousands of people’s “resistance” to Micro-Man’s chaotic, painful changes. The DNC and Democrats will need to build upon the initial successes connected with the Women’s March, the airport demonstrations and town-hall meetings to form a viable, enduring movement founded on a new, expanded, easily-repeatable message that emphasizes inclusion, human rights, safety and opportunity.

In fact after being WOPPed 4 months ago, messaging is the only leverage Democrats now have at the federal level. If successful, such communication – from strong, distinctive and broadly empathetic candidates – coupled with resistance and other action, can induce more people to actually vote for Democrats. Only then may there be a sparkle of light at the end of the dark tunnel Democrats now find themselves in. What do we now have left to lose?  

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[1] The better-known abbreviation for the Lesbian, Gay, Bisexual, and Transgender (LGBT) community has been amended to LGBTQIA as a term used to refer to the now more multi-faceted community by explicitly adding the Queer, Intersex and Asexual communities. 

GROWING, GROWING, GONE?

He looked at us, Dean and me, with an expression that seemed to say, “Hey now, what's this thing we're all doing in this sad, brown world.” ~ Jack Kerouac, On the Road

We’ve barely begun to travel on the president’s road to alleged greatness and it has already turned into quicksand.

Mostly because of the president’s flurry of ukases – aka, executive orders (EOs) – that have closed our borders in the guise of “national security” and begun to dismantle the Obama accomplishments. These executive orders are not like those of the past. They appear to be uncoordinated, skeletal, rushed tweet-like summary statements rather than well-considered, substantive pronouncements, as past presidents’ ones have been. No real core, no measured assessment, no pre-coordination with affected agencies; nothing but a glorified headline press release that employees of executive agencies have to guess what they mean and what they’re supposed to do as a consequence. Pundits have told us that DJT “thrives on chaos;” now we’re all suffering from it; wondering how to make “You’re fired” mean something.

At this point, the prime example is he-who-must-be-named Micro-Man’s Jan 27 EO on immigration that indefinitely barred Syrian refugees from entering the United States, suspended all refugee admissions for 120 days and blocked citizens of 7 Muslim-majority countries, refugees or otherwise, from entering the United States for 90 days.

This decree has unleashed confusion and turmoil throughout the immigration system, including airports in the US and overseas. It prompted protests and legal action. Emigrating Christians appear to be spared these administrative shackles that seem only applicable to Muslims, despite frantic counter-statements by the president’s embattled cohorts. Ah, chaos.

But let’s travel on the road beyond SFO, LAX, OGG and JFK and head to making America great again through Micro-Man’s promised, magnified economic growth.

A large part of post WWII American greatness is tied to our impressive macroeconomic growth. In real (inflation-adjusted) terms, our 2016 GDP is almost 4 times larger than it was 50 years ago, quite an accomplishment, which averages to yearly growth of 1.4% through the ups and downs of our last half-century of business cycling. The chart below shows annual real GDP growth for each president since Reagan in 1981. The growth rates for the two most recent presidents, Barack Obama and George W. Bush, are noticeably lower than that of either Bill Clinton or Ronald Reagan. Where has all our growth gone?

Source: Bureau of Economic Analysis

Micro-Man has stated that as president he will oversee “tremendous” economic growth. In September 2015 he said, “We're looking at a 3%, but we think it could be 5%, it could even be 6%.” Twelve months later his campaign estimated that the economy would expand at an annual rate of between 3.5% and 4%, following his proposed overhaul of the tax code. Then one month later, during his Las Vegas debate with Hillary Clinton, he tenaciously doubled down on producing increased annual GDP growth, “I actually think we can go higher than 4%. I think you can go to 5% or 6%.” After his election victory, Steven Mnuchin, who DJT has nominated to lead the Treasury Department, and be responsible for implementing the president’s economic agenda, backtracked on his boss’s Olympian growth goals, and stated in an interview, “I think we can absolutely get to sustained 3% to 4% GDP [growth], and that is absolutely critical for the country.”

Because so much depends on it, I hope our economic growth will increase, but seriously doubt it can happen at the fantasy-levels of 5% or 6% per year, given the policy ideas DJT and real Republicans have already declared. For some perspective, even 4% annual nominal GDP growth means the US would need to add $754 billion – slightly larger than Turkey’s GDP (ranked 18th largest in the world, with a population of 80.3 million) to our GDP. That yearly increase would be a very heavy lift and require policies that will not be considered even in a tweet by Micro-Man.

Economists generally agree (I know, I know, it’s almost oxymoronic to state that economists agree on anything, but…) that sustained macroeconomic growth requires increases in the number of employed workers, increases in capital stock (e.g., factories, machinery and equipment), increases in labor and capital productivity (aka, total factor productivity) and technological advancement.

By examining each of these key drivers of growth during the recent past, we reach a somber conclusion: US macroeconomic growth will not soon increase from the most recent 1.5% to 2% annual rate to even 4%. If Republicans reduce government support services as expected, this will mean serious economic challenges for millions of Americans that have nothing to do with growth. 

Increases in the number of employed workers will fall due to policy and demographics. Donald Trump and his Republican supplicants are all too busy denying visas, closing borders and building walls that will prohibit immigrant labor – be they unskilled, semi-skilled or those with H1B visas – from entering the US. The rising retirement of Baby Boomers means the number of US laborers will be barely growing, despite Millennials’ additions. The labor force is anticipated to grow at an average annual growth rate of just 0.5%, from 2014 to 2024, the lowest in several decades. The US total fertility rate now is at its lowest in a long time – 1.87 children per woman. So much for expecting the number of employed workers to increase. More positively, the US capital stock has steadily increased for decades. The St. Louis Federal Reserve Bank estimates in 2014 that the US capital stock was $51.2 trillion. But capital stock increases alone cannot pull growth rates up.

Total factor productivity (TFP), which combines productivity changes in labor with that of capital, has been growing at a smaller rate than previously. Over the past four quarters ending in the third quarter of 2016 the Federal Reserve Bank of San Francisco calculated that TFP grew at a diminutive annual rate of just 0.32%. Because TFP encompasses the benefits derived from technological improvements, economists believe it is a central source of growth within an economy. So the decades-old reduction in productivity growth is a significant and puzzling concern for economists and policy-makers, excluding today’s president.

One likely drag on productivity growth is the enduring reduction in government-funded non-defense R&D spending. The Obama administration’s proposed FY2016 budget called for a modest increase in R&D funding over last fiscal year. This proposed budget now is no longer relevant and a new, summary one may be produced by the new president. Outlays for all R&D would have represented 3.5% of all federal spending in FY2016, continuing a long decline.

Professor Robert J. Gordon has made a compelling case that the days of 3% to 4% annual growth for the US are behind us. Historic growth rates are gone. His captivating book, The Rise and Fall of American Growth, comprehensively documents the reasons for his dour prognosis. Prof. Gordon’s calculation of total factor productivity shows that for the decade ending in 2014 the annual change in TFP was a small 0.7%, the second smallest since the decade ending in 1930. There are 4 general reasons, which Prof. Gordon labels “headwinds,” that are now flying in the face of growth. They include rising inequality, poor-quality education, our aging population and rising government debt that can reduce productivity gains relative to increases in people’s standard of living. He forecasts that average growth in real income per person over the next quarter-century will be a minute 0.7% per year—almost one-half the already-small 1.3% per year rate realized in the 2000–2015 period.

Thus, looking at the near future, it’s unlikely that US economic growth can rise to historic levels, say even 3% per year. It’s gone unless public policies are enacted to reduce inequality, improve public education, increase labor-force size and participation and reduce government debt including the oncoming onslaught of baby boomers’ Medicare/Social Security transfer payments. If enacted, such policies could increase productivity and standards of living. But they won’t be by Micro-Man. His flighty day-by-day policy agenda offers no hope of that happening. It’s likely we’ll revert to Kerouac’s sad, brown world with unknown, unintended consequences.