The illusion which exalts us is dearer to us than ten thousand truths. –Aleksandr Pushkin, poet, novelist, and playwright (1799-1837)

There is a general consensus that our political system is broken. The electorate views with disdain the inability of those in charge of our government to treat opponents with civility, let alone to govern efficiently, forgetting all the while that it is we who continuously place such people in office. We thus now, to paraphrase Robert Louis Stevenson, are having to sit down at our banquet of consequences. Among citizens, those on opposite sides of issues often also fall on each other like wolves. As illustrated in the following table, the irreconcilable policy chasm between our two political parties has now reached seismic proportions.

Percentage who rate their support for issues at 8-10 on a 1-10 scale

Source: Wall Street Journal/NBC News poll, taken in mid-December (Margin of error = +/- 4.9%)

Traditional Definition of Marriage 69% 25%
Support Gay Rights 14% 63%
Support “Right-to-Life” 57% 23%
Supporters of “Black Lives Matter” movement 6% 46%
Support the NRA 59% 11%
Combat Climate Change Immediately 13% 62%
Support Unions 15% 52%
Support Business Interests 49% 26%

Worse still, the disrespect that each party has for the other further jeopardizes the possibility of any meaningful dialogue. According to a 2014 PEW Research Study, 79% of democrats hold an unfavorable view of republicans, almost half of whom (38%) harbor a “very unfavorable” view, and over a fifth of whom (27%) view republicans as being a threat to the country. Similarly, 82% of republicans view as unfavorable the democrat party, over half of these (43%) hold a “very unfavorable” view, and 36% (nearly 45% of those in this category) view democrats as a threat to the country.

Look closely, however, and the eight major issues of contention in the above table. What problem do any of the positions solve? Does what the proponents and opponents of each issue advocate serve the principles of American constitutional traditions? Moreover, most of those positions are empty slogans. “Right-to-Life” is not opposed by “pro-choice” advocates; it is simply that the latter deems the quality of life of the mother as a higher priority. Similarly, “Right-to-Life” proponents are hardly anti-choice; it is just that their choice is the one that they believe should be enforced. A larger, wholly ignored, issue however is that there is no agreement on what “life” is. How is it possible to resolve the controversy of legalized aborton when some define life as beginning at conception, whereas others view it as being when the fetus takes its first breath. If we could first come to an agreement on what is life, the debate might well be different.

What we are witnessing at work however is a focus on issues that is the product of ideological simplification. By definition, an ideology is a worldview that explains why things are and how things work. It is not, therefore, a hypothesis that was arrived at through empirical research and trial and error, nor is it the product of a non-result-oriented search to discover what works. It is, however, a simplified, top-down approach to address infinitely complex problems; problems which, because of the myriad of actors within a society, each of whom influences and changes the behavior of others, cannot possibly be correct all the time.

The damage of ideological decision making is not limited to occasional failures. It also exacerbates problems in two crucial ways. First, as a belief system an ideology is a self-contained set of principles built upon one or more major premises or values. These major premises or values are taken as “givens” and thus are not subject to contestation. Thus, each side of the ideological divide cannot debate each other as neither will critically analyze the propriety of their own fundamental postulates. This, of course, leads to the ad hominem assaults that now permeate our political debates. As the Italian economist Vilfredo Pareto observed, “Men follow their sentiments and their self-interest, but it pleases them to imagine that they follow reason. And so they look for, and always find, some theory which, a posteriori, makes their actions appear to be logical. If that theory could be demolished scientifically, the only result would be that another theory would be substituted for the first one, and for the same purpose.”

Second, and both more troubling and fundamental, ideologies lead to a focus on the wrong issues, issues that are not the problem. In the words of Thomas Pynchon, “If they can get you asking the wrong questions, they don’t have to worry about the answers.” Perhaps the clearest example of this is the current debate between the progressives and the conservatives on the benefits and detriments of socialism versus capitalism. This is a false debate. As will be shown in the balance of this piece, socialism is not an alternative to capitalism; under our American system, it is an alternative to liberty.

To begin with, capitalism is a policy pursued in all socialist countries, such as in the United Kingdom, France, Sweden, etc, while the United States, a country that primarily pursues capitalist principles, has also adopted some socialist programs. Thus is it clear that capitalism and socialism are neither opposites nor necessarily incompatible with each other. However both socialism and liberty, as the latter term is defined under our American constitution, are approaches to how our society deals with and protects rights in property, and that is precisely where the conflict arises. The types of rights that are the focus of socialism, for example, are the right to a free education, the right to a guaranteed income or minimum wage, and the right to healthcare. By its very definition, however, since such “entitlements” do not fall like mana from heaven, socialism operates by making claims on property of others.

Our Founding Fathers drafted our Constitution with a focus on property rights. Contrary to current, progressive misconceptions, this was not because they were primarily “propertied” – as we use that term today – patricians. Rather, the term property encompassed all rights to which a citizen was entitled as a matter of natural law, whether tangible or intangible, as a consequence of being a member of a republic that cherished liberty above all things. Indeed, the most valuable “property right” within a free society was not material wealth, but access to knowledge, the principal protector of which is the “property” right of freedom of speech. As succinctly stated by John Adams in his 1765 “A Dissertation on the Canon and Feudal Law:”

Be it remembered, however, that liberty must at all hazards be supported . . . cannot be preserved without a general knowledge among the people . . . And the preservation of the means of knowledge among the lowest ranks, is of more importance to the public than all the property of all the rich men in the country.

The application of this approach to property was expressly set out by James Madison in his March 29, 1792 essay in The National Gazette entitled “Property.” In it he established that under our American system of government, “property” is connected to all of our rights, including things such as freedom of speech and freedom of religion. The truly American thinking of Madison’s day was that a person’s rights in general – separate and apart from material possessions – were also an extremely important, if not the most valuable, part of his property; that, in Madison’s words, one has not only a right to property but a property in his rights. It is worth setting forth the opening of this piece at length:

This term in its particular application means “that dominion which one man claims and exercises over the external things of the world, in exclusion of every other individual.”

In its larger and juster meaning, it embraces every thing to which a man may attach a value and have a right; and which leaves to every one else the like advantage. [The emphasis is Madison’s.]

In the former sense, a man’s land, or merchandize, or is called his property.

In the latter sense, a man has a property in his opinions and the free communication of them.

He has a property of peculiar value in his religious opinions, and in the profession and practice dictated by them.

He has a property very dear to him in the safety and liberty of his person.

He has an equal property in the free use of his faculties and free choice of the objects on which to employ them.

In a word, as a man is said to have a right to his property, he may be equally said to have a property in his rights.

Where an excess of power prevails, property of no sort is duly respected. No man is safe in his opinions, his person, his faculties, or his possessions.

Where there is an excess of liberty [and here the expression “excess of liberty” refers to license], the effect is the same, tho’ from an opposite cause.

Madison’s expansive definition of property therefore was a reflection of his firm belief in his holistic view of human beings as a fully integrated and inseparable combination of both body and soul. The Constitution therefore was specifically constructed to adopt as its primary values, from which all of its specific provisions both were derived and intended to serve, the four cardinal virtues set forth by Plato in his Republic and adopted as an essential part of the Christian tradition; namely, courage, temperance, justice, and prudence.

This formulation of our property right of freedom necessarily deprives us of the false security and veneer of certainty that follows from ideological dogma. But then as Søren Kierkegaard noted, “Anxiety is the dizziness of freedom.”

The ideologues of the left and of the right thus seek to save us from this dizziness that only freedom can offer and seek to give us the inferior substitute of license. As the noted jurist Learned Hand warned,

I often wonder whether we do not rest our hopes too much upon constitutions, upon law and upon courts. These are false hopes, believe me, these are false hopes. Liberty lies in the hearts of men and women; when it dies there, no constitution, no law, no court can save it; no constitution, no law, no court can even do much to help it. While it lies there it needs no constitution, no law, no courts to save it.

© Richard L Wise and 2013. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Richard L Wise and with appropriate and specific direction to the original content.

If a man will begin with certainties, he shall end in doubts; but if he will be content to begin with doubts, he shall end in certainties.  –Francis Bacon, essayist, philosopher, and statesman (1561-1626)

Let me try to simplify the choice we have to make in analyzing the two principal candidates for the presidency.  Unquestionably we have two, highly principled men.  For me, however, the core consideration is not their philosophy of what should be done, their personal views on life or even what their specific policies may be.  All candidates once elected invariably move towards the center.  All candidates make promises that they do not, and perhaps even never intended to, keep.  The central issue, it seems to me – as a long-time admirer of Coach Belichick – is how each adjusts to the challenges of reality that appear to conflict with their stated “positions.”

This analysis, I submit, requires us to focus more on the core, essential methodology of a man rather than on the veneer.  The strengths and weaknesses of platitudes that may appeal to one constituency or another do not become apparent until tested in the fiery crucible that reality’s challenges present.  This should therefore cause one to assess the choice that a candidate must make when his philosophy conflicts with empirical results.

Historically, there are but two choices:  top down or bottom up.  Thus, one may start with the premise that one’s principal approach, one’s fundamental tenets, are reflective of the truth.  Thus contradictions between expected results and reality is a consequence of not being within a frictionless environment, of having to compromise in order incrementally to achieve partial victories, and thus only minor adjustments are necessary.  Under such an approach, ultimate success, and hence happiness, will be  achieved only by perseverance in the fundamental overarching, central plan.  

The alternative approach is one where a person may still hold a fundamental belief in the correctness of his beliefs, but elects to put them aside for a time because his “being right” is viewed as less important than solving a dangerous threat to everyday happiness.  Such individuals’ hard wiring is simply to focus on “what works” when faced with life’s challenges.  One may categorize such an approach as “flip-flopping” on one’s principles if one is inclined to be mean-spirited, or one may view such changes as a reflection of inner confidence and humility resulting from an acknowledgment that they will never be able to understand the full panoply of existence.   I grew up with World War II veterans who hated guns and killing, who throughout their lives were pained by the men they had killed, but who nonetheless  knew that they had to do what they did.  They resigned themselves to being most imperfect men having to deal imperfectly with forces beyond their control. 

Thus in most cases when one must choose between two morally and caring upright men, I find their stated positions to be less relevant than their methodology in responding to failure. 

This, of course, brings us down to the present two candidates. 

I do not think there is much disagreement about whose words are more appealing.  Mr Obama surely presents a warmer, more caring and empathetic view of how we may wish reality eventually to be.  Even Mr Romney’s Republican supporters acknowledge that there is an issue with his being less “likeable” – whatever that may mean – than Mr Obama.  Moreover, Mr Obama is clearly the better orator; a man who engenders passions of hope in most of us.  Thus, those who support Mr Obama and who are not mere sycophants generally acknowledge that he has made many bad decisions and mistakes in dealing with both foreign and domestic policy, but assert that as he is extremely bright – a conclusion that should be obvious – he has learned from his mistakes and his resulting experience, combined with the fundamental correctness of his basic philosophy, give him credentials that Mr Romney cannot duplicate.

I do find it ironic that this argument’s reliance on experience is diametrically opposite what Mr Obama asserted in the last election commended him for the office of president.  Nonetheless, it illustrates the “top down” approach to governance.  It requires one to conclude that four years is not enough of a sample by which to judge Mr Obama.  It further requires one to evaluate the candidates on what they say, versus on the basis of what they have done.  Clearly, Mr Romney comes up short on the basis of that analysis.

On the other hand, if we judge each of the candidates on the basis of what they have accomplished, what they have done, Mr Obama appears to be the Lilliputian in such contest.  Mr Obama has no comparison to Mr Romney’s unbridled successes at Bain Capital, as a Bishop in his Church, in reorganizing a bankrupt US Olympic committee, and in governing a state controlled by the opposing party.  Thus supporters of Mr Romney naturally assert that four years is enough time for us to see what Mr Obama can do, and urge voters to choose by focusing more on what a candidate has done than on what he may promise.

Supreme Court Justice Oliver Wendell Holmes was fond of saying that “when you go to court you don’t get justice, you get law.”  Any experienced practitioner will tell you that because this is not understood by the newly-minted lawyers who show up in firms every fall thinking that they understand the law, their work product can easily be torn to shreds.  This is because law schools do not turn our lawyers, but rather only law students.  And whether one aspires to become a lawyer, a doctor, an engineer, programmer, mechanic, chef or whatever, one learns that there is a “black art” that must be mastered if one is to become successful in one’s trade; that is, techniques that one can only learn empirically from daily exposure to the subtle nuances of reality and which enable one to form a dowser’s sixth sense how to address a given situation.  As the great pianist Artur Schnabel observed, “The notes I handle no better than many pianists.  But the pauses between the notes — ah, that is where the art resides.”

In reflecting on Republican monetary policies of the recent past, Mr Romney acknowledged that “we let the nation down.”  That statement is reflective of his businessman’s empirical approach to problems, and of his faith in the supremacy of what works over his own personal predilections and ideology.  Mr Obama’s approach, befitting his professorial roots, is that of Plato’s Philosopher King: that in the long run, his ideology will be proven to be the best for us.

Those are the choices that are ours, as will be the consequences of that choice. 

Let us be careful what we wish for.

© Richard L Wise and 2012. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Richard L Wise and with appropriate and specific direction to the original content.

I have often commented laconically that the older we get, the more we become like ourselves.  We all have tendencies and predispositions, and in part through trial and error, over time we settle on approaches which seem right to us.  And this is true both in our personal and professional lives.

A corollary of this rule is that, over time, others who have had the opportunity to observe an individual’s actions, words and decisions have the ability better to discern just who that individual really is.  Whilst I am (thankfully) for the most part shrouded in obscurity, the president of these United States lives and operates at the other end of the visible spectrum.  Hence each of us has the opportunity to gain increasing insight into what makes Mr Obama tick with each new rise of the sun.

It is with this perspective that I now must comment upon Mr Obama’s press conference of a few weeks ago.  The Republican’s are jumping all over his ill-advised comment that “the private sector is doing fine.”  However what concerns me far more is the context in which he made that statement, for it reveals a fundamental macroeconomic philosophy that is both frightening and, to my mind, antithetical to fundamental American culture.  I say this in conjunction with the observation that, as a purely technical matter, Mr Obama’s statement put in context is also completely correct as a matter of basic 101 macroeconomic theory.

To explain this apparent contradiction, I must regrettably restate briefly some of the fundamental principles of the “Grim Science” (i.e., economics).  (To the extent that the two paragraphs that follow are accurate, it is due to the profound teaching of distinguished Professor Carsten Kowalczyk; to the extent there is any inaccuracy, it reflects my own limitations.)

Mr Obama was talking about Gross Domestic Product (GDP).  This term refers to the sum of all goods and services produced by a country in a year (or other designated period).  There are differing ways of calculating this number, but the most common and direct way is the product approach, based on expenditures.  Prior to Keynes, GDP was calculated as the sum of (a) consumption, plus (b) investment, plus (c) all exports minus all imports.  Formulaically, GDP = Consumption + Investment + (Exports – iMports).  [Note:  Historically, imports are represented by the letter “M” to distinguish it from the letter “I” which is reserved for investments.]

After Keynes, this formula was refined, as it was recognized that there are really two, very different types of consumption:  private sector consumption (namely what people and companies spend) and public sector consumption (namely what the government spends).  This was because economists’ principal concern was whether the people in a society were better off, happier, and thus what the government spent was technically outside of (or, to use the economists’ term, “exogenous to”) that calculation.  Thus today’s formulation of GDP is:  GDP = Consumption (private) + Investment + Government consumption + (Exports – iMports).

For those of you still awake, what all this means is only that, under classical (and accepted) macroeconomic theory, government spending is one of the four components of GDP.  Thus, GDP is directly related to increases and decreases in government spending.

Let me now return to what Mr Obama was trying to say.  Mr Obama was commenting upon the measly 1.9% growth in GDP this past quarter.  What his point was that because his approach had “created 4.3 million jobs over the last 27 months, over 800,000 just this year alone,” the problem was not with private sector consumption (“C”)   Rather, the problem is with the decrease in public sector spending (“G”).  “Where we’re seeing weaknesses in our economy have to do with state and local government—oftentimes, cuts initiated by governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don’t have the same kind of flexibility as the federal government in dealing with fewer revenues coming in.”

Let me translate this:  Mr Obama is saying that as a matter of first policy priority, in order to increase GDP the federal government should borrow or tax more so it can then finance more hiring by state and local governments.  Spur the economy by growing the size of government.

While Mr Obama is correct as a matter of introductory macroeconomics, it is reflective of his apparently never having taken, or taken seriously, more advanced economic courses, or any course in microeconomics.  (As a matter of fair disclosure, let me state that I believe macroeconomic theory to be a failure and have observed that it is generally followed only by governments that are controlled by elitist central planners.  For those of you unfamiliar with the term “central planning” – and I know that his will offend my liberal colleagues – it is the economic philosophy followed by the communist approach to growing an economy.)

While it is true that because government spending is a major part of GDP, more government spending will increase GDP on a dollar-for-dollar basis.  The problem is that government spending adds no lasting, sustainable expansion of the economy.  It is temporary.  Look, for example, at the lesson of the stimulus, where hundreds of billions of dollars was gifted as aid to the states, but whose effect has now has now faded.  Thus, this approach is no different an approach than that of so many CEO’s of private companies who lawfully “cook the books” in accordance with proper accounting principles to give the impression that things have gotten better, or that they have done a better job turning around a company, so that they may claim entitlement to higher compensation.  Mr Obama is similarly attempting to cook the books of GDP calculation so as to get elected for another four more years.

More specifically, local government layoffs are not the result of falling state revenues.  Those revenues have actually increased by around 6% over the past two years according to the Census Bureau.  Rather, because the cost of benefits that governments are paying their own workers is increasing far faster than their revenues, they have had to lay off workers to pay for rising pension and health care costs.

And it gets worse.  Look at those states, such as California and Illinois that refuse to follow Wisconsin Scott Walker’s lead and alter the benefits that they pay or reform collective bargaining.  In essence, Mr Obama’s suggestion is that Congress needs to tax Americans from every state more, and borrow more from China, in order to send money to states that have been the most spendthrift.

In summary, Mr Obama’s lack of any private sector experience, and his adherence to simplistic macroeconomic theory, has resulted in his view our current economic woes can best be solved by having our government control and regulate our production.  While such an approach may have worked well for post-war Korea and for China, it is just not in accordance with American culture.  But Mr Obama has already demonstrated, by his ramming Obamacare down our throats despite the overwhelming objection of the American public, that his vision for America is not one that need be in harmony with our cultural hard wiring.

Of course that’s just my opinion, I could be wrong…………… 

© Richard L Wise and 2012. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Richard L Wise and with appropriate and specific direction to the original content.