Platt Perspective on Business and Technology

Bernie Sanders and Donald Trump, and their challenge to the breaking of the Great American Social Contract

Posted in macroeconomics, social networking and business by Timothy Platt on July 10, 2016

America: the United States of America was built on a dream of opportunity. It is a land of immigrants and their descendants, the majority of whom came here in hope of brighter futures for themselves and their families. That can probably even legitimately be said of Native Americans, whose ancestors walked into what is now know as North America, across a Bering Straits land bridge that existed during the last ice age. They were almost certainly looking for greener pastures, more plentiful game to hunt and a better way of life too. And even the descendants of those who came here against their will as slaves, can and do and should be able to claim the promise of this dream for themselves and their families, and even if their original ancestors to arrive here could not. America as a nation is predicated on a principle of opportunity and on the ongoing reliable validity of what might be called the Great American Social Contract:

• If you work hard and pay your dues, you can succeed and to the fullest of your ability and ambition, and both in improving your own life and quality of life and in building a better future for your family.

That basic assumption underlies the American dream, and expectations of what life should be like in this country. The path to living that dream has not always been open or straight, and certainly not for all. But the history of this country has in many respects been a history of this dream and of its becoming more and more widely accessible, and for more and more of us and with an overarching goal of it becoming attainable for all.

This is my third installment to a brief series that I have recently been offering, and both in response to emerging social turmoil in the United States, and in anticipation of the 2016 national conventions of its two major political parties:

• The Republican National Convention which will be held in Cleveland, Ohio at the Quicken Loans Arena from July 18th to the 21st, and
• The Democratic National Convention which will be held in Philadelphia, Pennsylvania at the Wells Fargo Center from July 25th to the 28th.

I wrote in Part 2 of this discussion, of a still unfolding, fundamental challenge to that dream as a possible goal for all. And I wrote in it of the frustration and discontent that has taken hold of this nation and on both the political left and right, going into those soon-to-occur national political showcase events. And I at least briefly wrote there about some of the key trends and forces that have led to this sense of alienation and anger on the part of so many Americans – and how they are acting out their frustration through support of political mavericks who proclaim their challenge to the current political status quo and all that has sustained it, and who have done so as the core message of their political campaigns for office and their sole source of justification for their being voted into office.

And I wrote in Part 1 of this series, about the barriers to effective communication that we face in the United States where at closest and best, we only seem to talk past each other across our strident, wide political divides.

To pick up on a set of points that I made towards the end of Part 2, and with that Part 1 discussion in mind, after briefly noting Donald Trump and his followers, and Bernie Sanders and his, and how both groups of followers share more in common with each other than they would readily acknowledge, I noted that:

• Trump and Sanders might be very different as people, but they seek to strike what amounts to a common chord in addressing this country and its challenges and in reaching out for voter support (n.b. through their direct and strident challenges to the political status quo and condemnation of those who sustain it for their own personal benefit.)
• Their respective supporters comprise groups that most probably cannot and will not come together, at least this election cycle in the United States.
• And it is quite possible that with this vast potentially-single voice of dissent divided, a more traditionalist Hillary Clinton will capture both the Democratic nomination and the White House. If she does, she will likely win a second term of office too.
• But when (… not if, but when) this larger community does come together, under the yes: probably still largely caricature leadership of some new voice, nothing will stop it.

The second bullet-pointed comment that I added there, is valid precisely because of the communications chasms between left and right politically, that I focused upon in Part 1, splitting that “vast potentially-single voice of dissent.”

• And it is going to take a successful bridging of that communications gap
• To make it possible for those who see themselves as conservatives and ultra-conservatives, and those who call themselves liberals and progressives,
• But who all see themselves as being left out (and from the breaking of this great social contract),
• To finally see themselves for how and where they share common ground.
• And when they do enter into real dialog together and when they come together through realization of what they share in common, nothing will be able to stop them.

But I did not chose to add this third series installment to this narrative, simply to highlight the connections between my earlier two installments in it to each other, as important as that might be in clarifying why I would write all of this here in the first place. My goal here is to more fully discuss and consider the pivotally defining social contract: that basic societal contract that underlies and shapes the overall American dream and for so many – the dream that so many have come to see unraveling before their eyes, leading to groundswells of support for Trump and Sanders. And my goal here is to at least briefly discuss how this dream and the promise behind it have become broken and systematically so and for so many.

And I begin that by picking up the narrative thread that I began early in Part 2, and with technological change. I wrote of three basic puzzle pieces there, that have collectively and I add synergistically contributed to the societal challenges that we now face, that have created our current national discontent. And technological change was offered as the first of them. To put this in the historical perspective that I cited in Part 2, our current technological change has its direct counterpart in the tidal wave of technical innovation and industrial development that created the first industrial revolution and the emergence of Ned Ludd and Ludditism, as a reactive backlash. And in both cases: then and now, flows of rapidly successive disruptive innovation and its widespread implementation serve as societal stressors. But it was and is the political and politically driven and sustained concentration of more and more power and wealth into fewer and fewer hands, leaving everyone else feeling left out that really drives the type of unrest that we face today. Political decisions and actions could have, alternatively, been developed and followed through upon in ways to buffer and limit the more societally disruptive sides to massive ongoing technologically driven change, reducing the numbers of citizens who would come to find themselves left behind.

But let’s step back from possible “alternative reality for up to now” solutions to the societal predicament that we face. Let’s start with the initial triggering changes that started this, and that our current and ongoing political status quo has been built upon. Technical change, and certainly disruptive technological change can and does create both opportunity and for many, and casualties. And it creates those casualties out of those who cannot adapt to it and for whatever reasons. But sociopolitical forces and political decisions and actions taken, determine the levels of negative impact faced and the numbers of those casualties. And focusing here on our current, early 21st century and its changes, it is the breaking of the Great American Social Contract at a time of technological upheaval that has left so many as casualties in this country from that change. And it is this covenant breaking that has brought so many to come to see themselves as casualties there, and as avoidable casualties too.

In Ned Ludd’s day, a great deal of this anger was directed toward the underlying technological change that was taking place per se. Now: this time around, the vast majority of this anger is directed at politicians and at the small percentage of business leaders and their political allies who have gained the vast majority of economic benefit out of it, leaving seemingly everyone else out, or at least marginalized for the relative levels of overall benefits that they can claim from this.

I wrote in Part 2, at least in brief outline, about the general economic principles behind all of this. I turn here to consider a few specific actions that a largely Republican-led US Congress and an “ultra-conservative” Supreme Court have taken. And I focus, by way of example, on two complex issues there that directly feed into this national unrest and that in fact have significantly made it both possible and even inevitable:

• Tax policy, and as it has been enacted and as it is publically perceived, and
• The Citizens United v. FEC Supreme Court decision, and its impact on skewing elections: biasing the selection of who can become either candidates for office, or elected officials.

It is perhaps telling that every single candidate for President of the United States who has run for either the Democratic or Republican Parties, and for generations now, has at least given lip service to the proclaimed need to simplify US tax law and make its rules clearer and fairer. This and the seemingly universal presidential candidate proclamation that it is imperative that tax forms be made simpler and easier to fill out, and without loss of legitimate tax deductions or similar benefits, can always be counted on in any election year. We have not yet reached the national conventions yet, at least as of this writing, for either the Republicans or the Democrats but all three remaining nominees who seek to become official party-backed candidates for election have already spoken up for tax reform in this way. But we still face a taxation system where one of the wealthiest people in the United States, and in fact in the world: Warren Buffet, can accurately state that the system is so skewed and faulty that he pays taxes at a lower rate than do the people who clean his office. And it has repeatedly, recurringly been published and noted in news coverage that some of the wealthiest people in this country, who bring in the largest gross incomes pay nothing in federal income taxes after taking their largely special exception, loophole-based tax exemptions. (Note that this includes at least a few who literally claim over one billion dollars a year in gross personal income.) This is the general public perception: that the wealthiest few, as enabled by their politician enablers can and do game this system at the expense of everyone else and to their sole and exclusive benefit.

And to summarize Citizens United, at least for purposes of this discussion, that Supreme Court decision has very widely come to be seen as a fundamental breaking of the democratic process, in which a system of “one person, one vote” has been largely functionally replaced with a system of “one dollar, one vote.” And the court sustained development and proliferation of Super PACs and related funding entities that now allow essentially unlimited political campaign donations from deep pocketed individuals and with essentially complete opacity as to who is donating what, for what, and to whom has completed that process. The general perception coming out of all of this, is that the electoral process has been fundamentally hijacked. And this is increasingly the perceived understanding of a great many in the United States – including essentially all of both Donald Trump’s and Bernie Sander’s followers, and I add a great many of Hillary Clinton’s as well.

And I end this posting by returning to the set of bullet points that I ended Part 2 of this brief series with, and with the last two of them in particular:

• And it is quite possible that with this vast potentially-single voice of dissent divided, a more traditionalist Hillary Clinton will capture both the Democratic nomination and the White House. If she does, she will likely win a second term of office too.
• But when (… not if, but when) this larger community does come together, under the yes: probably still largely caricature-leadership of some new voice, nothing will stop it.

I wrote at the end of Part 2 that the rest of this year, 2016 will prove to be interesting, choosing that word as intentional understatement. We are, in fact entering a much longer and more pronounced period of change and of fundamental change. And the technological change that we are living through and the societal unrest and discord that is currently accompanying it will drive profound sociopolitical change too – and even as our current political leaders seek to deny that reality.

I will probably write more on this, after the July national political conventions. Meanwhile, you can find this and related postings at Social Networking and Business 2, and also see that directory’s Page 1. And I also offer this and related material at Macroeconomics and Business and its Page 2 continuation. (And I completed this posting for upload on May 24, 2016, acknowledging here that events and even unexpected ones will continue to unfold and certainly between now and November, and even just between now and July 18.)

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