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Bald Eagle in Anchorage, Alaska

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Tuesday, April 11, 2017

Taxes on Wages and Capital Returns

The next major domestic policy initiative of the Trump administration and Republican Congress is expected to be tax reform.  Practically everyone would agree that our Federal tax system is hopelessly and needlessly complex, inefficient and unfair.  You might think that reform would be simple.  But the parties are in complete opposition about the direction needed for reform.  I hope that the work below can help inform the discussion of the appropriate direction for tax reform.

This post was originally published on the blog Wonky Thoughts.
http://dougrobbins.blogspot.com/2017/03/taxes-on-wages-and-capital-returns.html

Summary:
The total economic productivity of the United States in 2015 was 18 trillion dollars.  Of this total, $7.7 trillion was paid to workers as wages.  The remaining 10.3 trillion accrued to owners of capital.   Although Federal taxes are paid in several forms, the total tax burden on wages is 25 percent, while Federal taxes paid on capital returns is only 12.5 percent, half of the rate paid by wage-earners.
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Wages and Return on Capital
Economic productivity can be divided into the contributions of Labor and Capital.  More accurately, Labor and Capital, working together, both contribute to productivity.  Labor requires Capital to be productive, and Capital requires Labor to be productive.  But the benefits of productivity are divided – Labor and Capital are allocated different shares in terms of earnings, and carry away different piles of money.  The shares allocated to Labor and Capital are largely determined by actions of the free market, modified somewhat by regulations such as the minimum wage law.   But taxes on earnings of Labor and Capital are entirely arbitrary, determined by the complex rules of the Federal tax law.

The United States produced about 18 trillion dollars of income in 2015.  The measure, Gross Domestic Income (GDI), is roughly equivalent to Gross Domestic Product, (GDP).  Wages and salaries comprised 42.9 percent of GDI, or $7.7 trillion (source: Federal Reserve Database).   Capital returns represent the remainder, or about $10.3 trillion.  It should be noted that capital returns do not include unrealized capital gains.

Labor’s share of Gross Domestic Income has fallen from 51% in 1970 to about 43% today.

                    Gross Domestic Income ($MM)
Wages
Capital Return
7,758,250
10,326,250

Federal Taxes
Federal taxation is complex.   Wages are subject to individual income taxes and payroll (social insurance) taxes.   Wage earners also pay most excise taxes, such as tobacco, alcohol, gasoline and health insurance taxes.

Capital Returns are taxed as corporate income taxes, and taxed again as individual income taxes on dividends, interest, and capital gains when returns are distributed.  Corporations also pay a share of payroll taxes equal to employee contributions, and pay a variety of Federal taxes and rents such as mineral royalties.  

In 2015, the Federal Government collected 3.25 trillion dollars in taxes, out of 18 trillion dollars in GDI, for a total Federal take of 18 percent.  Of those taxes, about 2 trillion dollars were paid out of wages and salaries, and 1.3 trillion dollars were paid out of capital returns.

Taxes on Wages and Salaries, millions of dollars

Individual Income Taxes
1,325,860
Payroll (Social Insurance) Tax
532,629
Excise Taxes
98,279
Total
1,956,768


Taxes on Capital Returns, millions of dollars

Corporate Income Tax
343,797
Corporate Payroll Tax
532,629
Capital Gains Tax
141,754
Dividends & Interest Tax
73,188
Other
201,751
 Total
1,293,119


The Federal Government taxes Capital Returns at 12.5 percent of earnings, on a 57 percent share of GDI, collecting a total of 1.29 trillion dollars.

By contrast, the Federal Government taxes Wages and Salaries at double the rate of Capital Returns.  The government taxes Wages and Salaries at 25.2 percent of earnings, on a 43 percent share of GDI, collecting a total of 1.96 trillion dollars.
Conclusion
Individual workers are receiving a smaller share of the nation’s productivity than owners of capital.  Moreover, Wages and Salaries are taxed at double the rate of Capital Returns.  This disproportional taxation doesn’t seem fair, or in the best interest of the economy.  The distribution of earnings to working-class households is more likely to see those dollars recycled into consumer demand than dollars distributed as investment earnings.  In the interest of economic fairness, economic efficiency, and the reduction of wealth inequality, it makes sense to raise taxes on capital returns, and give tax relief to wage-earners.

Note: This study did not include unrealized capital gains, which allow the owners of capital to roll-over gains from year to year without paying tax.  So, the effective tax rate paid on capital returns is actually less than reported in this post.  Taxes on unrealized gains are effectively never paid if the underlying assets are never sold, unless taxed at death by the estate tax.   I have not yet figured out a clear way to calculate (or efficiently tax) unrealized capital gains. 

-----------------------------------------------
Calculations and Assumptions

Income (Federal Reserve Database)
Income attributed to Wages includes 42.9 % of Gross Domestic Income,
Income attributed to Capital is GDI minus income attributable to wages.

Taxes (Tax Policy Center and JustFacts.com)
     Taxes attributed to Wages include:
  • All individual income taxes, minus 9.2 % for capital gains, and 4.75% for dividends and Interest.
  • Employee payroll taxes (Social Security and Medicare)
  • Federal excise taxes (alcohol, tobacco, fuel and health insurance).
     Taxes attributed to Capital Returns include:
  • Business income taxes
  • Corporate payroll taxes
  • Individual capital gains taxes
  • Individual dividends and interest taxes
  •  “Other” taxes, representing diverse sources such as mineral royalty payments
 Assumptions
  • The 2016 component percentages of individual taxes (wages, capital gains, dividends and interest) were assumed to apply to 2015 taxes.
  • The percentage of taxes paid on capital gains was applied to dividends and interest.
  • Federal Excise taxes were entirely allocated to Wages.
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References:
Federal Tax Receipts by Source, 1934 – 2021 (forecast from 2016)

“* In 2015, 9.2% of federal individual income tax receipts came from capital gain taxes.”
“* For 2016, the Joint Committee on Taxation projects that 6.2% of gross income earned by individuals will come from capital gains, 2.2% from dividends, and 1.0% from interest income.”

Tables on Gross Domestic Income, and Wages and Salary share of GDI. 

Saturday, March 25, 2017

What to do....

Today's post is by a guest author, my son.  I edited the post very lightly.  
What to do...

Trumpism will expand its base of believers and practitioners if it is not strenuously opposed, just like Nazism, Communism, Capitalism, Liberalism, and every other -ism. Trumpism is an idea. Ideas can only be defeated through the greater popularity of a competing, alternative idea.

Ideas have currency because of the moral values which underlie their motive, reasoning, logic, and their intent. Ideas can also sometimes have currency due to the experienced reality of the outcomes of actions based on them, but that comes later (it takes time) and is frequently overlooked through selective perception and/or other cognitive biases.

Still, there are concrete steps which can be taken and are not token echo chamber participation.

The Lies Must Die

Without truth and agreed upon knowledge of reality, we are truly doomed. A democracy cannot function meaningfully without an informed citizenry – they wouldn't know what they are voting for. No organization can function effectively without accurate knowledge of the state of the world – including corporations and governments. Employees are citizens too! If citizens are not informed then neither are the bureaucrats and employees because we are the same.

We must be pro-truth. We must fight "alternative facts". We must build defenses against lies intended to be recognized as lies, and against lies which we desperately want to believe. We must increase trust and understanding.


I propose creating the Foundation of Truth – Snopes and Politifact on steroids – a nonprofit NGO institution with the goal of nothing less than being sufficiently credible and authoritative to be an original reference source for Wikipedia articles, journalism, student homework, and academic papers.

The truth, the whole truth, and nothing but the truth, made freely available to everyone.

·         It needs to be squeaky clean and utterly transparent.
·         It must be entirely funded privately (no funds from any government) and publicly (every donation recorded publicly). Initial funding will probably have to come in the form of a large grant from one or more philanthropic foundations.
·         The board must be independent and competent beyond reproach – nonpartisan, experienced in effective management, experienced in logic and science, without conflicts of interests, without scandal, etc.
·         Its operations should strive to be inclusive at the grassroots level. Everyone should be encouraged and empowered to ask questions, submit evidence, and suggest and review answers. Technically, this would probably look like a cross between a wiki (see: Wikipedia) and a Q&A site (see: StackExchange).
·         I would like to see it get cutting-edge machine learning to sniff out forged information (e.g. shopped photos and videos), and search out original information sources (e.g. identify where viral shares originated).
·         I would like to see it create a worldwide network of journalists and scientists – people whose careers and lives are dedicated to searching for and explaining truth.
·         I would like to see it making its own grants to those willing and able to answer interesting and important questions.

Proof of Popularity

People are more likely to publically espouse thoughts which they personally perceive to be popular, and are less likely to publically support positions which they believe are unpopular. Politicians are people and will also bend their representation towards perceived popularity (at least among those who matter to their reelection). Marches, protests, and communication campaigns (e.g. phone calls), among other actions, communicate a proxy for popularity (the squeaky wheel gets the grease). Voting communicates popularity more directly.

Counter-Memeing

The culture of the alt-right among younger people is expanding. As some have mentioned, this is bad.  The alt-right culture often propagates its views through internet memes – crude humor that encapsulates racist, religiously bigoted, culturally bigoted or misogynistic views.

"Breaking down the barriers of acceptability through humour is now a deliberate tactic of the far right", (George Monbiot).  This has to be dealt with, and shutting down free speech / free expression isn't the way to do it (and it probably wouldn't work – attempting to ban it would only increase its subversive humor value).

Most of the people who enjoy this content are not evil.  They just have a dark sense of humor and do not have the life experience to personally understand that “what makes other people upset" does not  equate to comedy gold.  A good comedian tells jokes for the audience, but many internet posters are posting for themselves. Declaring something the originator considered to be a joke to be unacceptable only reinforces the originator's certainty that "makes other people upset" is true, that they've broken a taboo or norm.

The content is not innocent, but it is not treated as propaganda within the communities which are generating it. It is mostly created in order to gather positive internet feedback (upvotes, likes, shares, reblogs, etc.) in certain communities which find basically all transgressive content (e.g. rape jokes, pedophile jokes, racist jokes, sexist jokes, genocide/holocaust jokes, suicide jokes) to be funny. There needs to be a cadre of people who go online to where these are originating from and submit better (more popular) yet acceptable content – the antithesis to paid trolls; create and upvote good stuff, downvote bad stuff, and report the literally illegal when it shows up.

Political Social Media Site

People need a common place to engage with politics, safe from retribution by their real life social network (semi-anonymous), with ready access to facts and expert opinion (tooled and moderated), and structured to be an outlet by which elected officials can be reliably informed about people's thoughts and preferences.

Third and a Half Party

Lobbyists and special interest groups (see: NRA) are very successful in America. Third parties are not. While it may be tempting to organize an insurgency into the Democratic party the way the Tea Party mutated the Republican party, this would likely only make the 2-party system even more divisive. We need to split the difference to be effective on the requisite scale.

I propose creating a political organization with a complete platform of values, a comprehensive set of preferred policies, and willingness to compromise on policies in ways which do not outright violate the platform values. Although it may eventually raise up its own candidates, it will start by funding elected officials who successfully promote the platform values.

The Candidate We Need

Four years may seem like a long time, but it is not. We need to find a 2020 candidate. We need someone who is not a different billionaire (Bloomberg, Zuckerberg). Not a "swamp" insider (pretty much anyone in DC from before 2008). We need someone who is as likeable as a comedian / talk show host, and preferably someone young enough to fill a post-presidency role in supporting and promoting civic values and greater positive political engagement (see above organizations).

Sunday, February 26, 2017

Hard Lessons for Democrats

Winning
You have to win elections.
Resistance is (mostly) futile.  Winners set policy, nominate judges, direct agencies, define our government and set the direction for the country.  Losers march in the streets.  For the progressive agenda to succeed, it is necessary to win elections.  The time and energy being put into marches and protests would be better spent in organizing campaigns for the next election.


The Progressive Agenda
The progressive agenda is more important than any individual candidate.
The political agenda of the progressive movement is more important than any individual candidate.  The Democratic National Committee became enamored with the candidacy of Hillary Clinton, then risked – and lost – the progressive agenda in the attempt to elect her.

Corruption
Don’t run corrupt candidates.
It is not acceptable to run a corrupt candidate, or a candidate with a reputation of being corrupt.
Hillary Clinton developed a well-deserved reputation for corruption in her earliest days as First Lady of Arkansas*.  Hillary and Bill Clinton accumulated over $150 million dollars in sixteen years after Bill Clinton left office from speaking fees alone.  Hillary Clinton collected over $20 million of this total in between the time she served as Secretary of State, and before she officially campaigned for President.  This pile of money places the Clintons in the 99.9th percentile of American families by wealth.

To amass so much wealth as a consequence of holding public office is simply not acceptable.  Holding high public office in America should not be a springboard to immense wealth.  It invites corruption, and carries the appearance of corruption.  The Clintons and their supporters may feel that these earnings are justified, but to the American public, “Speaking Fee” is just another term that means “bribe”.

*  See my previous blog post, “Why Hillary Lost”.  http://debatablypolitical.blogspot.com/2016/12/willful-self-destruction-democratic.html

Popularity
Don’t run disliked candidates.  Didn’t anyone run a focus group on Hillary Clinton?
Especially, don’t run a candidate disliked among your own party members.  I do not understand why Hillary Clinton was the Democratic candidate for President.  I don’t understand why she was given development posts of Senator and Secretary of State.  Didn’t anybody in the party run a focus group?   From the 1990s, Hillary Clinton was extraordinarily disliked by Republicans, and generally disliked by men of her own party.  The party should have realized that she was a weak candidate very, very early.  Her development assignments as a candidate blocked the potential development of other, more electable candidates.  I fault the party, Barack Obama, Debbie Wasserman-Schultz, and Hillary Clinton herself for advancing a failing candidacy, and losing the progressive agenda.

Losing Issues
Don’t run on losing issues.
Gun control is a losing political issue.  You should realize that every time you talk about gun control, you lose elections.  When you lose elections, you set your entire agenda back by decades.  In the 1990s, the country appeared to be approaching a consensus on gun control.   A distinct majority favored some restrictions on guns.  But there existed (and exists) a fervent minority which opposes any restrictions on guns.  That minority contributed substantially to the Republican Party in donations, energy and volunteer hours, and defeated the Democrats in the 1996 Congressional elections.  Republicans overturned 40 years of unbroken Democratic control of the House of Representatives on this single issue.  And as any single issue could have turned the 2016 election, the gun control issue lost again for the Democrats in the 2016 presidential election. 

Look – you hate guns.  I hate guns.  Guns kill about 30,000 Americans every year, with about 2/3 due to suicide.  There are many, many preventable deaths due to guns.  But Democrats do not win elections when they campaign for gun control.  The next time there is another atrocity due to guns, the Democratic leadership should simply say, “We are waiting for the Republicans to propose safeguards to prevent a recurrence of this tragedy.”  Put it on the Republicans, and leave it.

Competitiveness
Compete in Every Race
It is necessary for the Democratic Party to have a national presence in every race, and in every domain – in government, in culture, and in information.  The Party (or the Progressive movement) must compete on message everywhere, and cannot cede territory anywhere.

You have to have candidates running in every race at every level, if you are to compete on message everywhere.  And the message must be the moral rightness of progressive policies – towards ourselves, our neighbors, around the world and to generations yet unborn.

It is necessary to have a strategy for rural states.  Our system is biased to give sparsely populated states disproportionate power.  That’s the way the system works, and you have to win the Electoral College.   You have to convince voters in those states of the rightness of your cause.

Candidate Development
You must develop promising young candidates.
Early in the 2016 campaign, I made a list of prominent Democrats with national name recognition, looking for an alternative to Hillary Clinton.   I was surprised to find that there are very few young, prominent Democrats.  Here’s my list.

Dianne Feinstein
81
Jerry Brown
77
Patrick Leahy
75
Harry Reid  
75
Nancy Pelosi
75
Michael Bloomberg
74
Barbara Boxer 
74
Bernie Sanders 
73
Joe Biden
72
Edward Markey
68
Tom Udall
66
Elizabeth Warren 
65
Charles Schumer
64
Al Franken
63
Andrew Cuomo
57
Corey Booker
45

The list of nationally prominent Democrats younger than 55 should be longer than one name.  You have to organize to produce, develop and fund those candidates.  I am convinced that the Republican Party has been grooming candidates for the US Senate for at least two decades, starting with bright students at ivy-league universities.  Senator Dan Sullivan of Alaska is one product of the system, as is author J.D. Vance, future Senator from Ohio.  Democrats have been woefully inadequate in vetting, grooming, or funding potential candidates. 

Winning Opposition Voters
1.        Break the Republican Block
Republicans have a solid hold on their voting base.  The loyalty is almost tribal or religious.  This tribal loyalty is aligned to a political paradigm of beliefs, which are so deeply entrenched that they defy fact-checking.  Disdain of Democrats is firmly entrenched in the paradigm and reinforced by conservative media.  As long as the Republican block is intact, it will be very difficult for Democrats to govern, even when they are elected to the highest offices, as we learned from Barack Obama’s tenure as president.  I don’t know how to break the Republican voter block, but it is necessary to win elections and govern with a progressive agenda.

It is difficult to reconcile some progressive values with the values of conservative voters.  The difficult issues are abortion, guns, religion, and sexual identity.  The progressive movement must lead, but not be so far ahead that voters do not follow.  The progressive movement successfully led the country to acceptance of gay marriage.  The acceptance of transgender bathroom access may have been a bridge too far.  You don’t lead anybody if you don’t win elections.  Democrats must think very carefully about the policy compromises which are necessary to reconstruct a winning, dominant coalition.

2.       Break the Republican Paradigm
Republican voters hold a set of beliefs as a self-evident set of truths with almost religious devotion.  [So do Democrats, but that is a different discussion.]  These beliefs are enshrined as conservative principles, repeated frequently and given a revered, unquestioned status.  Here is an incomplete list:

Taxes are too high.
The taxpayer shouldn’t have to pay for anything that doesn’t directly benefit him.
The free market is the answer to everything.
Government is the source of our problems.
Government doesn’t do anything well.
Welfare recipients (blacks & Latinos) are just lazy, and welfare keeps them dependent on assistance.
Welfare is the reason our government runs deficits.
Blacks and Latinos are violent people and account for most of our crime.
We should lock up anyone who breaks laws, and keep immigrants out to keep our country pure.
Muslims are very violent people who have no place in our country.
Christianity is the true religion of our country, and Christianity should be the foundation of our laws, our courts, and our schools.
Abortion should be banned.
Gun ownership is the foundation of our freedom.
Sexual conduct outside of marriage is sinful; birth control is a woman’s problem.
Unorthodox sexuality is deviant and should be repressed.
Women should play a traditional role in society, raising children and keeping the home.
There is not enough discipline among young people.
The military and the police should be honored and glorified.
A strong military response is the answer to all of our problems of foreign relations.
Science is not to be trusted; scientists are just after money.
Democrats (aka liberals, feminists, libtards, warmies, snowflakes, etc.) are misguided and evil.
The news media is liberal and lying to us.
The lands, oceans and environment exist to be used, and to be exploited for profit.
We don’t need foreign trade; foreigners are just stealing from us.

These views, whether spoken or unspoken, exist as a monolithic paradigm in the minds of conservatives.  To win elections, it is necessary to get votes, and to get votes, it is necessary to change the hearts and minds of the people who hold these beliefs.  It may be an impossible task, when they reject the bases for changing beliefs – news and evidence-based truth.  But changing hearts and minds is the core challenge for Democrats. 

It is necessary to portray Democrats in a positive light to conservative voters.  It is necessary to project a message that appeals to both a higher morality and self-interest.  Teddy Roosevelt did this in portraying conservation as protecting the environment as the inheritance of our children.  Bill Clinton successfully crafted a message of improving the economy through business/government partnership.

It may be necessary to rename, rebrand, or redefine the mission of the Democratic party to gain a clear national majority.  It will be necessary to get rid of the older leadership of the party (Nancy Pelosi and Bernie Sanders, step down!).  Every older leader without future potential, from "safe" Democratic districts, is blocking the development of a future Democratic leader.

Fight Propaganda
Find a way to discredit FOX News, Breitbart, OAN, Rush Limbaugh and right-wing radio
There has been a frightening change in society in the past 20 years.  News media and politicians have abandoned any pretense of objectivity and freely spout falsehoods for political gain.  Credulous partisans unquestioningly accept the pronouncements of their chosen oracles.  Conservative television and radio outlets spew lies by distortion, innuendo, omission, misdirection, and outright falsehood.  Liberal media cover only those stories supportive of their political orientation.  Conservative voters discredit genuine news organizations (“the mainstream media”) as liberal and partisan.  Likewise, the Trump administration has labeled the most responsible news organization in the country as fake news, in the way that authoritarian regimes have always discredited the news media.  And voters of both sides develop distorted world views through confirmation bias. 

Perhaps the most difficult tasks for the progressive movement is to find a way to combat conservative propaganda.  Conservatives have “weaponized” propaganda a key part of their political campaign, and liberals have found no answer for this tactic.   The claims by conservative media are objectively, demonstrably false, but it doesn’t matter.  Democrats need to find an compelling way to drive a wedge between conservatives and their propaganda, but I don’t know how to do that.  Fact-checking (Snopes) is ineffective; alternatively-biased media (MSNBC) isn’t helpful; and truthful media (NYT) are ignored.  Somehow, Democrats need to find a way to better fight the misinformation war.

Conclusion
The Failed Enlightenment of the Obama presidency
History lurches from periods of enlightenment to dark ages.  From 500 BC to 400 BC, ancient Athens produced more science, philosophy, governmental theory, art, and literature than the rest of the western world for the next 1000 years.  But every period of enlightenment has eventually ended, and our period of enlightenment, the longest in history, will also someday end. 

In a smaller sense, the country goes through periods of enlightenment and dark ages.  Teddy Roosevelt’s presidency was a time of enlightenment, when workers’ rights were recognized, consumer protections established, and national forests and parks were created to preserve the environment.  The Taft administration that followed rolled back many of those gains.

The Obama administration was a failed enlightenment due to a combination of political opposition, misplaced priorities, errors in foreign policy, and failure to establish a winning succession.  Democrats are now facing their weakest political position in two generations, and the Trump presidency threatens to be a dark age of at least four years, and possibly something considerably worse.

The work in front of us is to correct the problems and reverse the political winds that led to this defeat.  It will not be an easy task.  We need to do more than simply build a narrow winning electoral margin.  A reformation of the party is needed.  Democrats need to win the respect and votes of a completely dominant majority to govern well and lead to the next enlightenment.  

Thursday, January 12, 2017

Fifty Years from Selma to North Carolina's Voting Law

Fifty years is a long time. It was fifty-three years from the Sopwith Camel to the Boeing 747. 

I'm watching "Selma", the movie about the civil rights marches of 1965. The marchers were protesting systematic barriers to voting registration for black voters.  It is a good movie, telling an important story.



And I'm thinking about North Carolina's voter law HB 589, which was overturned by a Federal Court in 2016, fifty-one years after Selma.

The North Carolina legislature used state records to identify black voters in North Carolina and designed the law to exclude them. 

The Federal Court decision called HB 589 "the most restrictive voting law North Carolina has seen since the era of Jim Crow", and that the law was passed with “racially discriminatory intent” to “target African Americans with almost surgical precision.”


Fifty years is a long time.

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References:



Saturday, December 31, 2016

A Book Review of "Hillbilly Elegy", by J.D. Vance

Book Summary
Hillbilly Elegy is the first-person account of a multi-generational dysfunctional family.  The author was born August 2, 1984, in Middletown, Ohio, the grandson of economic migrants from eastern Kentucky.  The author connects his personal values and difficulties to his heritage from Appalachian people.  According to Vance, the attributes of Appalachian culture include fierce independence, patriotism, suspicion of outsiders, loyalty to family, and violence.  Religion is a value that is espoused, but less often observed.

The author was raised principally by his grandparents in Ohio, but maintained a connection to Kentucky through frequent family visits.  The grandparents had raised their children under conditions of alcoholism and domestic violence.  The author’s mother raised her family while engaging in drug addiction, revolving door relationships, home instability and domestic violence.  By the time the author was born, the author’s grandparents had cleaned up their behavior, and they provided a safe haven for Vance as a child.

Vance characterizes the Appalachian culture as suffering from poverty, unemployment, and hopelessness.  He implies that these problems underlie the personal issues of substance addiction, domestic violence and apathy.  Near the end of the book, Vance brings in a political dimension when he rejects most government policy solutions for the problems of this culture, reflecting his generally conservative world-view.  Vance also provides no solutions for the systematic problems of the Appalachian culture.

Viewpoint
Throughout the book, it was difficult for me to accept that the author is writing about recent times, and not the distant past.  It took me some time to realize that I was his parents’ age, and J.D. Vance is of my children’s generation.

I knew the children of the Appalachian economic migration when I was in elementary school in the 1960s.  The children were blond and spoke with southern accents.  We who were natives of Indiana told cruel jokes about the children from Kentucky; the children from Kentucky told jokes about the children from Tennessee.

Hillbilly Elegy generalizes the problems of the Appalachian culture to the white working class.   The white working class is of intense political interest, due to the shift of allegiance of this group from the Democratic Party to Donald Trump.  Joan C. Williams, writing in the Harvard Business Review, discusses that shift in an insightful article.  (https://hbr.org/2016/11/what-so-many-people-dont-get-about-the-u-s-working-class)

I think that Hillbilly Elegy is correct in characterizing the white working class as a pessimistic culture.  This explains many of the traits of middle America.  Drawing on the writings of physicist David Deutsch, pessimistic cultures expect change to bring something bad.  Outside influences and higher education are feared, because these can bring change.  Pessimistic cultures desire authoritative government and institutions, and revere the military and police.  Pessimistic cultures encourage conformity and discipline, particularly in education.  Pessimistic cultures are also religious; relying on divine protection from dangers in a world that they fear.

Reading Hillbilly Elegy, one is left with the impression that dysfunctional families, alcoholism, domestic violence, and xenophobia are characteristic of Appalachian culture.  I’m not sure that is correct, or fair.  Vance’s description of Appalachian families suggests that alcoholism is common.  But a map of national alcohol consumption shows the opposite – Appalachian states are reported to have among the lowest rates of alcohol consumption in the country.  (Unless this is an artifact of biased self-reporting, which Vance mentions in passing, regarding church attendance.)

Vance sometimes uses the term “elites”.  Certainly, Vance has left the socio-economic class of his birth, and achieved the highest levels of education, financial success, and status that is possible in American society.   J.D. Vance has become one of the elite members of our society.  Nevertheless, I dislike the term “elites”, for the same reasons that I dislike the term “radical Muslims”.  Both terms are broad and vague.  Both terms aggregate groups with widely differing values, goals, and reasons for association.  There are different kinds of elites, and there are elites that are in absolute opposition to each other.  There are business elites, political elites (on both sides), educational and intellectual elites, pop-culture elites, social elites, inherited wealth elites, scientific, sports and religious elites.  It just isn’t very meaningful to talk about “elites” as a group. 

Vance recognizes himself as changed; an optimist.  Nevertheless, Vance is not as changed as he thinks.  In his conservatism, Vance shows the pessimism of his origins.  I read passages such as this one: “We can’t trust the evening news.  We can’t trust our politicians.”   [Pg. 193.]  It isn’t clear whether Vance is speaking for himself, or for his constituency of the white working class.  Either way, it reflects a deep pessimism about our culture. 

Policy
Vance often makes reasonable observations and conclusions.  But he shows a worrisome tendency, typical of other conservatives, to reject academically based knowledge.  This quote is an example from an interview with NPR: “And the only way to do that I think is not by - you know, not just by reading studies and academic research on what's causing this problem, but to actually get out there and talk to people who've been affected by it.”

Vance is critical of existing welfare policies, such as food stamps.  But he offers no policy alternatives for vulnerable groups, such as children, the elderly, the homeless, mentally ill or addicted.  In interviews and in the book, Vance suggests “listening”, and admits that solutions are “complicated”.   In my view, Vance should already have some suggestions about what policies will work, and evidence that those policies will work better than the policies he would replace.

Misinformation and Belief in Nonsense
Vance recognizes the problem of misinformation in society in a striking passage from page 190 to page 195.  He faults both the fake news media and the credulousness of conservatives in believing nonsense.  But he participates in exactly the behavior that he disparages, when he says, “I don’t doubt that the Obama economy has affected many….” [negatively].  Why would Vance say such a thing?  This is nonsense.  First, presidents have little control over the economy – there is no “Obama economy”.  And certainly, the Republican Congress shares equal blame or credit with the President on the state of the economy.  Third, during Obama’s tenure, the economy has undergone one of the best extended periods of job growth since World War II, ending in full employment.  The Dow Jones Average rose from 8077 to 18873, from President Obama’s inauguration, until before the election of Donald Trump.  That is approximately a 10 percent rate of return, compounded. 

Vance is also an apologist for Fox News, writing “even the oft-maligned Fox News has always told the truth about Obama’s citizenship status and religious views.”  NO.  The TRUTH is that questions about President Obama’s citizenship and religious views are NONSENSE.  Fox News gave legitimacy to these views through their coverage, treating the questions as worthy of consideration.  Fox News gave airtime to the proponents of these questions, and presented these critics as something other than idiots.  The standard operating procedure for Fox News is to delegitimize their political opponents with false innuendo and oblique slander.  That is why Fox News cannot be regarded seriously as “news” media, but rather a propaganda outlet.  And J.D. Vance is wrong to represent Fox News as a news organization.

Networking in the American Meritocracy
Near the end of the book, Vance writes about his transition from law student to law clerk.  Vance freely admits that he lacked the basic social skills to succeed in the professional world.  Vance and his professional future were saved by networking – the intervention of professors and friends with those who would determine his future.  Vance writes: “At Yale, networking power is like the air we breathe – so pervasive that it’s easy to miss.”

Vance writes extensively about how the white working class is cut off from upward mobility, and has lost faith in the American meritocracy.  Yet in the context of Vance’s conflicted belief in the American meritocracy, the kind of assistance he received at Yale seems like something else   When success systematically depends on who knows whom, and a promising future depends on personal intervention on behalf of favored individuals, it seems to me the system is not a meritocracy, but corruption.  Vance was given a chance despite his deficits, but also benefited from a system that has cut off individuals from schools other than Yale from the highest levels in American society and government.  And that isn’t right.

The Future of J.D. Vance
It is clear to me that J.D. Vance has political aspirations, and sponsors who are promoting his career.   Vance’s rapid advancement to a principal of Mithral Capital Management, headed by conservative billionaire Peter Thiel, convinces me that he has significant sponsorship in his ambitions.  Vance recently left California to return to his native state of Ohio, a reliably Republican state in recent years.  Vance plans a “listening tour” around the state of Ohio, including speaking to a number of Republican party county chapters, lectures at Ohio State campuses, and other appearances around the state.  Vance is being assisted by a long-term advisor to Governor John Kasich. 

It seems to me that the Republican Party develops candidates for national office, focusing on Ivy-League law-school graduates.  These candidates are groomed through developmental assignments in both state governments and private finance companies.  J.D. Vance’s book, which has given him a sympathetic public persona, is part of that process.  Ironically, this process promotes the “elites” that Vance identifies as part of the problem of American politics.  Nevertheless, the process is effective in electing Republicans.  By contrast, the Democratic Party does not appear to have any effective program to develop candidates for national office. 

I predict that Vance will run for Democrat Sherrod Brown’s Senate seat in 2020, and that he will win. I could easily believe that Vance has Presidential aspirations, as well. 


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References:
Hillbilly Elegy, by author J.D. Vance, published June, 2016.





Thursday, December 15, 2016

Why did Hillary Clinton Lose?

This post is a “post-mortem” of the 2016 presidential election.  This was a winnable election for the Democratic party.  This post analyzes the reasons for that loss.

Short Version
Hillary Clinton was groomed for a presidential run since 2001.  The decision to develop her as a leading candidate inexplicably ignored her known unpopularity.  Since the earliest days of Bill Clinton’s administration, Hillary Clinton has been a lightning rod for conservative opposition.  For the past 25 years, few other people have motivated and energized conservative opposition as much as Hillary Clinton.   Beyond conservative opposition, many people across the political spectrum found Secretary Clinton unpleasant.  (I asked my wife for a single word which described Hillary Clinton, from the time before her candidacy.  This is the word she chose.  This is the same sentiment that I heard from many of my acquaintances, who nevertheless supported Clinton in the election.)

Hillary Clinton’s tenure as Secretary of State must be judged as a complete failure on the basis of results.  There are civil wars in Ukraine, Syria and Libya, and unresolved conflict in other parts of the world, strained relations with other world powers, and disruption of the European Union.  The humanitarian disasters resulting from failure to curtail these conflicts threaten to overturn Western nations and progressive values.

In particular, Hillary Clinton demonstrated a blindness to real and apparent conflicts of interest.  In event after event, Secretary Clinton and her family enriched themselves far beyond any reasonable compensation.  The appearance of systematic corruption was a clear factor in her defeat.

Secretary Clinton lacks the personal charisma and speaking ability of other presidential-caliber candidates.  People in a number of different demographics groups found her personally unlikable. 

Despite these serious negatives, Hillary was the presumptive candidate from the earliest days of the campaign, with committed support from the great majority of party super-delegates.  Clinton’s ability to direct SuperPAC money to state party organizations raises more questions about corruption.

Secretary Clinton and President Obama pursued issues on the liberal agenda that alienated many conservative voters.  Leading Democrats should have recognized which battles are worth fighting, and which battles might lose the war.

Finally, there are external factors in the Democratic loss.  American political sentiments swing like a pendulum, and conservative sentiment was rising in 2016.  Also, right-wing propaganda has become a routine feature of our cultural landscape.  Misinformation and distortion are heard from major candidates, from leading news organizations, on social media, and from fake news sites.  The Democratic Party found no way to fight the onslaught of propaganda. 

In conclusion, the Democratic Party nominated a flawed candidate.  Secretary Clinton had a known and deserved reputation for apparent corruption, and became an easy target for the opposition.   Surely focus-group studies in critical states and in critical demographic groups would have shown her weaknesses.  The nomination of Secretary Clinton was an act of almost willful self-destruction by the Democratic Party.   It is difficult to understand why Clinton persisted in her campaign, and why she had the support of the Democratic Party leadership in seeking the presidency.  Secretary Clinton’s loss in the election will set back the party, the nation, and the causes which she worked to advance.



Long Version
Amid the cacophony of voices analyzing the recent election, perhaps there is room for one more.  I have thoughts that I have not seen elsewhere, so it might be worthwhile to write another article. 

Democrats have been asking the question “Why Did Hillary Lose?”  It’s a good question, and a question the Democratic party must answer if the party wants to win presidential elections.

This was a winnable election for the Democratic party.  Donald Trump was initially seen as a joke, as sideshow freak, a reality-show imbecile.  Trump was the butt of jokes among late-night comedians, politicians, and liberal communities on social media.  In pre-election polling, Trump had the highest unfavorability rating since such figures were first gathered in the 1950s or 1960s.  And yet he won. 

In an act of almost willful self-destruction, the Democratic Party ran the candidate who was most likely to lose.  Hillary Clinton had the second-highest unfavorability rating of any modern candidate.  The blame for nominating an unsuccessful candidate must be borne by the entire Democratic Party, but especially by Barack Obama.  The President is the de facto leader of the party, and more than anyone else, bears the responsibility for choosing and grooming candidates for succession.  The choice of Hillary Clinton was a poor decision.

Grooming for Presidential Candidacy
Hillary Clinton was groomed as a candidate for president from the last day of Bill Clinton’s presidency.  She was given the nomination for Senator in the deeply Democratic state of New York, which virtually guaranteed her election to the Senate.  After her unsuccessful run for the presidency in 2008, she was named Secretary of State, presumably to improve her foreign policy credentials for a run in 2016.  Following the Benghazi embassy attacks and subsequent criticism, Obama replaced Clinton as Secretary of State – perhaps before events could do further damage to her chances for election. 

It seems to me that both posts – Senator and Secretary of State – were handed to Hillary Clinton on a silver platter because she was the wife of the former president.  She did not earn these posts by merit, and was not sufficiently tested by the process of competition.

Tenure as Secretary of State
U.S. foreign policy under Clinton as Secretary must be judged in terms of results.  Clinton established policies that elevated human rights and women’s rights as critical to U.S. interests.  Clinton and Obama continued the aggressive promotion of democracy begun during the second Bush administration.  Key events in her tenure included the uprisings of the “Arab Spring.  Also, an initial effort to “re-set” relations with Russia failed after the U.S. State Department actively promoted the eastward expansion of the European Union into Ukraine.  Clinton advocated aggressive responses to tyranny and oppression, supporting military intervention in the Libyan civil war and by training and arming the Syrian rebels. 

I have to wonder whether Hillary Clinton’s aggressive policies as Secretary of State arose from idealism, pragmatism, or from a desire to burnish her record as a tough leader, for her eventual presidential candidacy.  In any event, the results of her tenure have been terrible.  The prospect of improving Ukraine’s ties to the west ended in a brutal civil war and the annexation of Crimea by Russia.  Libya and Syria have collapsed into chaotic and ongoing civil wars threatening global peace.  One-third of the population of Libya has fled the country.  In Syria, hundreds of thousands have died in the fighting, and twelve million refugees have been displaced from their homes.  About five million refugees have sought shelter in neighboring countries, and about one million have sought shelter in Europe.  The refugee crisis has contributed to a backlash in Europe, threatening the unity and stability of the European Union.  By any measure, Secretary Clinton’s legacy in foreign relations is a disaster.

Appearance of Conflict of Interest
Secretary Clinton carries a reputation that she is dishonest and untrustworthy.  In polling leading up to the election, as few as 11% of voters characterized her as honest and trustworthy.  That reputation was established very early in her public life, and her actions during the years leading up to the election did little to dispel that perception.  I will discuss only the earliest and the latest of scandals involving Secretary Clinton; there were many in between. 

Commodities Trading Scandal, 1978 - 1979
Hillary Clinton was involved in a commodities trading scandal in 1978 and 1979, beginning just weeks before Bill Clinton’s election to Governor of the State of Arkansas, and continuing for most of the first year of Clinton’s term.  The general counsel of Tyson Foods (the largest employer in Arkansas) encouraged Hillary Clinton to trade in commodity futures, although Clinton had no experience in such trading.  Clinton made an initial investment of $1000, which over the course of ten months was successfully parlayed into $100,000.  This is about a 12,000% annual rate of return.  Needless to say, that is unusual.  An economics journal calculated the likelihood of her results at one in 31 trillion. 

Clinton did not make the trades herself, but allowed her broker to make the trades, often without her knowledge.  The broker was a former Tyson executive.  The broker placed trades for various clients, betting both ways against the market.  At the end of the day, the broker would assign winning trades to Clinton, and losing trades to the other clients.  The broker was later investigated by the SEC for various technical violations, fined and suspended from trading for three years.  Clinton’s supporters at the time defended the legitimacy of her trading. 

What I find unbelievable is that this smart woman, this Yale Law School graduate, was apparently unable to recognize a bribe when it was given to her.  Tyson Foods was one of the largest businesses in Arkansas, and necessarily had many regulatory issues before the state government.  Through illicit means, the company found a way to funnel $100,000 (about $300,000 in today’s money) directly to the newly elected governor’s wife.  But Hillary Clinton never renounced the gains, and never admitted any wrongdoing on her own part, or the part of Tyson Foods or its associates. 

Speaking Fees
Speaking fees are a fixture in Washington DC.  It is customary for public officials to receive exorbitant fees for giving speeches.  Bill and Hillary Clinton have been masters of this process of accumulating wealth.  Bill Clinton received $131 million dollars for speeches given after leaving the presidency in 2001, until 2015.  Hillary Clinton earned an additional $21.6 million, in less than two years, between 2013 and 2015.  For reference, a net worth of $150,000,000 is five times the threshold for the 99.9th percentile in net worth in the United States. 

Hillary Clinton’s minimum speaking fee is $225,000.   A large majority of the organizations who engaged her are also engaged in lobbying the Federal Government; many have Federal contracts and/or previously lobbied the Clinton State Department.  About 40% of the organizations engaging Clinton were trade organizations; financial institutions were the second-largest group. 

These are enormous sums of money.  And the organizations paying these speaking fees had reason to look for favorable treatment in the event Hillary Clinton became president.  It gives the appearance of a quid-pro-quo.  

                Chelsea Clinton’s Contract Earnings
Chelsea Clinton is no longer young; she is an independent adult in her mid-thirties.  Nevertheless, she is a Clinton. In 2014, NBC News signed Clinton to a one-year contract for $600,000 as a news commentator.  Simultaneously, in that year she earned $300,000 as a board member for IAC/Interactive Corporation, a media company.  She was a board member for other organizations, and presumably also received compensation for that work.  Also in 2014, she earned a PhD in International Relations, and gave birth to her first child.  One can only wonder how she divided her time in each of these endeavors. 
It is unusual for someone to earn $900,000 or more in a year.  It is clear that Chelsea Clinton was given these contracts and compensation because she was a Clinton.  It appears to be another way of currying favor with a powerful family.

Clinton Foundation Scandals
Let me first say that the Clinton Foundation is a legitimate charitable organization, doing good in the world.  That is not at issue.  The issue is that contacts established through donations to the Clinton Foundation appear to have carried over to the Clinton State Department.  Clinton’s personal secretary fielded requests from Clinton Foundation donors for access to Secretary Clinton.  While some of the requests were denied, it seems that there was a back-door to official channels at the State Department.  The existence of the Clinton Foundation set up the potential for conflicts of interest in performing the duties of Secretary of State.

                Summary of Conflicts of Interest
In my earliest ethics training at my career employer, I learned that it is insufficient to avoid wrongdoing; it is necessary to avoid conflicts of interest. Further, it is insufficient to avoid conflicts of interest; it is necessary to avoid the appearance of conflicts of interest. 

Hillary Clinton failed to avoid conflicts of interest, and her actions gave ample appearance of conflicts of interest.  As a candidate, Hillary Clinton earned her reputation with voters as an untrustworthy person because of her actions.  Clinton greatly increased the wealth of her family, through actions that gave the impression of conflict of interest. 

In a 2016 interview, David Gergen, a senior advisor to Bill Clinton in his presidency, was discussing the Whitewater scandal (another scandal, which I will not take the time to discuss).  Gergen said of Hillary Clinton: “She does not see the world in the same way that others do, when it comes to transparency and accountability.”

Although the practices of speaking fees and foundations may be typical of Washington, these conflicts of interest are real.  Just because everybody is doing it doesn’t mean that it isn’t a bribe.  Voters understand the appearance of corruption.  And Hillary Clinton must be completely tone-deaf to not understand the implications of those appearances.

Charisma and Oratory
I listened to Hillary Clinton’s stump speeches during the campaign, and compared them to speeches I heard from Barack Obama, Elizabeth Warren and Bernie Sanders.  In my opinion, Clinton sounds wooden by comparison.  Her speeches do not show insightful reasoning and logic.  To me, Clinton’s speeches consisted of a lot of clich├ęs strung together. 

In debate, her logic sometimes completely departed.   For example, the “Stop and Frisk” method of policing was a topic in a debate with Donald Trump.  Trump defended the practice, which had been found to be unconstitutional by the courts.  Clinton commented that the practice had been discontinued because it was “ineffective”.  This shows a complete misunderstanding of the issue – “Stop and Frisk” was discontinued because it was UNCONSTITUTIONAL! 

Clinton simply did not seem to have a fundamental grasp of issues or the necessary intellect to think on her feet and reason persuasively. 

The Fix Was in For Hillary Clinton
In the earliest days of her campaign, Hillary Clinton had received the support of about 90% of the super-delegates to the Democratic National Convention.  These super-delegates are Democratic Party officeholders and officials, guaranteed seats and votes at the convention. 

Secretary Clinton was in a position to direct SuperPAC money to state parties.  The apparent trade of campaign money for super-delegate support gives yet another appearance of corruption to Secretary Clinton and her campaign.

It may be important for the party to coalesce support around a single candidate early in the campaign, but the process in this case short-circuited the primary process and the voters.  By making the process a coronation, instead of a competition, the Democrats lost the opportunity to engage the voters.  Voters care about the process, and were not pleased that Clinton was given the prize before the race.

Popularity
As mentioned at the beginning, Hillary Clinton was an unpopular candidate.  She has been unpopular with almost half of the nation for nearly a quarter of a century.  Hillary Clinton has been one of the most hated politicians among Republicans.  There are few other Democrats who can motivate and energize the Republican base as much as Hillary Clinton.  Well before the campaign, in polls and among my personal acquaintances, Hillary Clinton was deeply unpopular among men, unpopular among older women, and unpopular among Millennials.   She was highly popular only among professional women between the ages of about 35 and 60. 

So what were the Democrats thinking??  Why did Barack Obama choose to groom Hillary Clinton for a presidential run?  Why were there no other serious mainstream Democratic candidates?  Why did Clinton have 9/10ths of the super-delegates wrapped up on the day she announced her candidacy?  Why did the Democratic National Committee act to ensure that Clinton won the nomination?  Did no one think to run a focus group in each state, and seriously consider the results?

Losing Issues
In politics, as in all things, you have to pick your battles.  In the 2016 election cycle, Hillary Clinton and the Obama administration chose badly.  Although I agree with the President and Secretary Clinton on these issues, I recognize the political expediency of not fighting losing battles.  This is especially important with regard to fighting battles that cause you to lose the war.

In the early 1990s, the majority of Americans supported gun control.  There was a bi-partisan consensus that some regulation was necessary, and that these restrictions did not infringe on the Constitutional right to own guns.  But the issue became a major political divide following aggressive campaigning by the National Rifle Association (NRA).   Democrats lost control of Congress to Republicans in 1994, largely on the issue of gun control. 

In the aftermath of mass shootings in the United States, Barack Obama and Hillary Clinton spoke out on the issue of gun control.  This was a political mistake.  The issue of gun control in the United States was decided in the 1990s.  It is a losing issue for Democrats.  In the face of atrocities due to guns, it is necessary to ask Republicans to lead any efforts on gun control.  Efforts to push gun control on the nation in the face of Republican opposition are doomed to failure, and will lose all progress on other critical progressive issues, such as gay marriage, climate change, financial regulation, public assistance, etc.  I know that over 10,000 Americas die each year because they are shot by other Americans.  Another 20,000 Americans die each year in suicide by guns.  But there is no way to win on this issue – pursuing gun control will simply lose elections for Democrats.

Another losing issue was the issue of transgender access to bathrooms.  Unlike gay marriage or abortion rights, this is truly a fringe issue, but it became a defining issue for liberal politics.  By pushing Federal rules on access to bathrooms, Democrats alienated conservative voters.  There are people who feel their privacy or safety might be threatened, if access to public bathrooms was granted to people of the opposite biological gender.  Those feelings cannot be dismissed as not legitimate.  There are few transgender individuals in the country, and one way or another, they have been able to deal with this problem without Federal assistance.  This was a losing issue, and pursuing this reform as a headline issue was a mistake for Democrats.

The Loss of Middle America
Hillary Clinton won the popular vote by a convincing margin, but lost the election due to the structure of our republic.  Small states have disproportionate power by design of the Constitution.  To win the Presidency, it is necessary to win support across a broad cross-section of the country, and that includes conservative Middle America.  Hillary Clinton disparaged Middle America voters, calling half of them “a basket of deplorables”.  Hint – this is not the way to win hearts and minds.  Secretary Clinton needed to listen to these voters, and accept their criticisms of American Government.  Clinton had no response for the manufacturing job losses in Middle America.  Clinton had no answer for declining standards of living among middle-class workers.  Clinton did not accept or listen to the discomfort of white America with the growing diversity in the country.  Clinton did not have answers for the stagnation of black America in terms of opportunity, hopelessness or the prevalence of crime (and the consequent racism and fear among white Americans). 

If Democrats are to win the presidency, it is necessary to raise Middle America in prosperity and opportunity.  As another presidential candidate once said, “It’s the economy, stupid.”

The Swing of the Pendulum
Power in American national politics swings from party to party on roughly an eight-year cycle.  Since 1825, only rarely has a party held the presidency for longer than 12 years.  It is the natural state of our democracy that citizens demand some change and improvement.  That is probably healthy. 

Hillary Clinton was fighting against the current of public sentiment in this presidential campaign.  But still, considering the state of the country and the economy, the Democratic Party should have won this election.

Propaganda
During Bill Clinton’s presidency, Hillary Clinton famously complained about “a vast right-wing conspiracy”.   She was correct. 

Right-wing media blossomed and flourished – or rather, spread like a cancer – over the past 20 years.   Fox News became the nation’s leading television news source; right-wing radio bashed Democrats and President Obama 24/7 on multiple channels; religious television became a megaphone for right-wing politics; internet media such as Brietbart and The Daily Caller, became dominant in internet news feeds, and were amplified on social media.  All of these new sources play fast and loose with the truth; their “reporting” was designed primarily to undermine the legitimacy of the Obama administration through an unrelenting barrage of falsehoods, distortion and negative innuendo.  Completing the spectrum, foreign parties created counterfeit news websites, and populated those websites with fake news, that was regarded as truth by right-wing voters.  It is likely that some of the false stories were deliberate attempts to influence the election by Russia; campaigns of Russian dis-information are a standard feature of elections in the former Soviet Republics. 

Republican Party leaders and candidates, especially Donald Trump, also seem to have lost all respect for the truth.  The Trump campaign misrepresented the condition of the country on substantive issues of unemployment, immigration, crime, and taxes.  The lies and misrepresentations accumulate faster than they can be refuted.  It is unclear whether Trump is misinformed (some of his sources are the aforementioned false news sites) or if he is lying. 

Right-wing propaganda is one of the most troubling developments in the 2016 elections cycle.  Some conservatives would say that the process goes both ways, but there is truly no equivalence.  A quick check of Snopes, Politifact, FactChecker.org, or articles reviewing false news will show that right-wing falsehood exceed left-wing falsehoods by a magnitude of at least ten-to-one.  And it is clear that the propaganda is effective; voters believe the lies circulated on social media whether those lies were told by candidates, by right-wing news organizations, or fake news sites. 

The Democratic Party (and the nation) need to figure out how to respond to the right-wing propaganda campaign.  Propaganda threatens the fabric of society; it threatens our democracy, and it is a slippery slope into fascism.   Democracy cannot function if voters are hoodwinked; we cannot have decency in politics without a common understanding of what is truth.  I don’t know what to recommend to the Democrats, and I don’t know how we will solve this problem as a nation.  But I believe that we must.

Conclusions
In 2016, the Democratic Party lost the presidential election that they should have won.  Many factors played into that loss, but the most important factor is that Hillary Clinton was a flawed candidate.

The Democratic Party needs to address the processes that generated such a deeply flawed candidate. Part of the problem is that the party is doing a very poor job of developing candidates and leaders in local elections.  I have observed many local races in which there is no Democratic candidate.  The unions appear to be the only truly organized part of the Democratic Party in identifying and running strong candidates. 

An example of how to develop a candidate can be seen in the career of Dan Sullivan, the current Senator from Alaska.  Sullivan is originally from Ohio.  He graduated summa cum laude from Harvard, and earned a law degree from Georgetown cum laude.  Sullivan served in the Marine Corps from 1993 to 1997, and continued in the Marine Corps reserve, with later periods of active duty.  Sullivan moved to Alaska in 1997, and was soon named Alaska Attorney General by governor Sarah Palin.   After a year as Attorney General, he was appointed to the important post of Commissioner of Natural Resources, until his campaign for Senate in 2014.  I believe that Sullivan was identified as a potential candidate very early, and groomed for a Senate run through developmental assignments.  I do not believe that the Democratic Party is actively or successfully developing candidates in this fashion, or targeting states in which a talented candidate might succeed. 

The selection of Hillary Clinton as Democratic candidate for president showed a complete disregard for her weaknesses as a candidate.  These weaknesses included a poor performance as Secretary of State, and a reputation for corruption that goes back for over two decades.  To me, it is incomprehensible why she was groomed for a presidential run by Barack Obama, supported by the Democratic National Committee, and backed by the vast majority of party super-delegates before primary voting had even begun.

The Democratic Party must learn from the defeat in the 2016 Presidential Election.  The party must do more to develop young and talented down-ballot and local candidates.  Some of these candidates will develop into leaders of national caliber.  The party must subject potential candidates to competitive processes, to weed out flawed candidates.  The party must improve its ethical standards, and must not tolerate leaders with real or apparent conflicts of interest.  The party must find a way to combat right-wing propaganda.  The party must also develop policies which address the needs and values of conservative middle America. 


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 References

Multiple polls show that 59% to 68% rate Clinton as dishonest and untrustworthy, with dates ranging from May to August 2016.   At the time of the Democratic national convention, two polls approached 70% of people rated Clinton as dishonest and untrustworthy.

Superdelegate support for Hillary Clinton was obtained in a quid-pro-quo deal, through Clinton’s allocation of SuperPAC money to state party organizations. 
Superdelegate support for Hillary Clinton was obtained in a quid-pro-quo deal, through Clinton’s allocation of SuperPAC money to state party organizations. 

Between 40% to 60% of responders rated Clinton as not honest and trustworthy, in polls dating from 2006 to 2016.   (pg. 7).

Clinton’s standard speaking fee is $225,000, and she collected over $21.6 million in two years.

A list of organizations which contracted with Secretary Clinton for speaking engagements.  About 40% of the organizations were trade groups, and nearly all of the organizations engaged in political lobbying. 

Bill and Hillary Clinton received $153 million for speeches over the period 2001 – 2015. 

Chelsea Clinton had a contract with an annual salary of $600,000 in 2014, working for NBC news.  At the end of the term, her contract was converted to month-to-month, with undisclosed terms. 
Daughters of President G.W. Bush and Senator John McCain received similar contracts.
Chelsea Clinton was 34 at the time of the contract.
Chelsea Clinton simultaneously earned a $250,000 grant of restricted stock and a $50,000 retainer from Barry Diller’s IAC/Interactive Corporation.  Chelsea Clinton also completed work on a doctorate in international relations and gave birth to her first child in 2014.  Chelsea Clinton’s estimated net worth is $15,000,000.