When I was younger growing up in California I was what you would call a hippie. I had long hair and round glasses. I wanted to be John Lennon. My parents were Democrats, and my first political awakening was Robert Kennedy, so when I was old enough to vote I registered as a Democrat. Over the years as I engaged politically, I became disillusioned, and have over the last few years reengaged as an Independent. I experimented with Libertarianism, but it really wasn’t me, so I have settled on being a center right Independent. I feel pretty good with this assessment of my political leanings.
Economically I am a Capitalist. I believe in a Free Market system based the private ownership of the means of production. However, I am a realist, and as a Christian, I recognize how the nature of humankind leads to all kinds of horrible decisions, such as exploitation and greed. Government then has a role to play in the market. I see this role as one of being a referee. I don’t see government as being the owner of the means of production, and I don’t see our economic system as state Capitalism, but I do see an important role for government in ensuring that the playing field is level, and people have the same opportunities. I don’t believe in equal outcomes though. There is value to meritocracy, and I do see incentive as critical, but I don’t think that the elites should have the ability to influence social systems for their benefit.
This preamble sets the stage for my comments on John Hickenlooper’s editorial today in the Wall Street Journal. His, “I’m Running to Save Capitalism,” article caught my attention, and after reading it twice, once again demonstrated to me why I am concerned about all of the Democratic candidates for President.
Hickenlooper starts his article with “American capitalism is at risk.” My first thought as I read this was, who in their right mind would want to change our economic system to one like Venezuela? I don’t think politicians from either party want to do that, but I also am cynical enough to realize that politicians from both sides only care only about power. Give the people free things and they will be elected. But, in all fairness “dramatic income inequality” is an issue. Hickenlooper’s article then describes how he intends to save Capitalism, in my opinion, he intends to change it into a state-owned Capitalist system.
I agree with his comment how neither of the two sides, massive government growth and uncontrolled deregulation, “recognize the realities of our situation,” but I am also concerned about several of his so-called solutions. As a loyal Democrat he needs to attempt to dismiss the current economic growth, and then demonstrate how our government savior can come in and adjust the system to be fair, “just like it has done in the past.” Don’t get me wrong, income inequality and health care are critical issues that need to be addressed, I am just not too sure our current political environment will allow a realistic solution.
His first recommendation for saving Capitalism is to make obtaining the necessary skills to thrive in the economy more affordable. Then he comes back with the common Democratic response, “making community college “free for those who can’t afford it.” He also adds, “expand apprenticeships and skills training programs dramatically.” I totally agree with the second half, but I don’t think government should be the driver on this. I think business should take the lead. I do think government has a role to play, but it is not to be the primary banker. I do think that government could give business tax breaks for educational and apprenticeship activities. This is what incentive is all about.
His next part of the solution is earned-income tax credit and raise the minimum wage to $15. According to the Wall Street Journal $15 an hour represents almost 70% of the median U.S. hourly wage. “A value of 50% or 60% of median pay is in line with the international average among rich economies and with the U.S. historical average during the 1960s and 1970s.” I would agree with raising the minimum wage, but we do need to be careful with raising it too much. The WSJ quoted Arindrajit Dube, a labor economist at the University of Massachusetts Amherst, as stating, “setting a minimum wage at 100% of the median wage would have a big impact on jobs because it would compress the entire bottom half of the labor market at one wage.” As we see in France, Portugal, and others higher minimum wages result in higher youth unemployment. I would agree with the need to raise the minimum raise, but I do think it should be connected to cost of living.
Hickenlooper’s next part of his solution sounds like Warren. Government needs to “protect the heart of capitalism – competition.” This sounds really good, and in principle I agree with it, but what level of increased regulation does this mean? He argues that the Clayton Act needs to be restored to its original focus. This seems reasonable, but once again can we trust government to have our best interests in mind, or will big business lobbying lead to greater cronyism? My lack of trust for both Republicans and Democrats will not help me in this matter, nor with the healthcare discussion.
I do think the healthcare system does need to be reformed. This is the one place I agree with Hickenlooper: “I reject the idea we can improve healthcare by turning it entirely over to the government.” However, I do like my Medicare with my supplement. I think some level of compromise that reduces costs and “establishes potability” would be good. I also agree with the author in principle when he discusses taxing the extreme wealthy. Even Warren Buffet agrees. What worries me though is we have finally reduced business taxes to be on par with the rest of the world, will the Democrats increase taxes not just on the wealthy, but businesses as well. This will stifle our current economic expansion. Hickenlooper claims to want to protect small businesses, but once again my cynicism rears its ugly head.
The Democrats always look for revenue increases to fund wonderful programs that never do what they say they will do. But, I agree with Hickenlooper when he says “Capital-gains reform would also allow Americans to pour their money into what is needed: skills and education.” But, I am not too sure I agree with him that the amount raised through this tax will be the $2.4 Trillion windfall he says it is supposed to be.
His last point is something I agree with whole heartedly. I am amazed at how the Republicans have given up on this last point. “Finally, the U.S. should expand free trade rather than adopt a protectionist crouch.” It does seem that in the past we have given away the farm to benefit other countries and not our country. So, his comment intrigues me, “my policy would extend fair trade that benefits Americans.” He gives a couple of examples regarding green-house emissions and intellectual property, which I think are good.
Hickenlooper ends with, “The 2020 election will decide if capitalism flourishes in America. I am a small-business man, and yes, a capitalist. But today American capitalism is broken. We have to fix it before it is too late.” I agree with this in principle, but I disagree that the Democrats are the only one with a solution. I think I suffer from what Jonathan Haidt and Greg Lukianoff call distorted thinking and vindictive protectiveness. I see the Democrats and Republicans as both proposing singular theses and antitheses. Each are incomplete in themselves, ones that do not represent the total needs of our country. Hickenlooper is trying to portray himself as a compromise ideology that is nothing more than a sanctified Democratic platform of very large government and a deep state. In fact, I think he is proposing a state capitalism.
Now the person I am interested in is Howard Shultz. “I wanna see the American people win. I wanna see America win. I don’t care if you’re a Democrat, Independent, Libertarian, or Republican. Bring me your ideas.” Shultz grew up in the projects of Brooklyn and became the first person in his family to graduate from college. He has run a very successful business, Starbucks, and I think he is someone who could find compromise between the extremes. This is a very initiatory viewpoint that I am sure will change as we go along.
As I said earlier, I am a center-right independent. None of the current crop of Democratic candidates float my boat. I am not a Trumpian, I think he is too volatile. He needs to stay off of the Twitter. I don’t want someone telling me that they are a Capitalist and then work to dismantle it. I am all for fighting crony capitalism, but I am not too sure there is a Democrat that can accomplish what needs to be done.
In my opinion this is what needs to be done. Our politicians need to leave business taxes alone. Corporate tax is on par with the rest of the world, don’t hamstring our businesses with high taxation and more regulation. Second, increase taxes on the super wealthy. It appears the wealthy have no problem with that, so let’s do it. Third, create strong apprenticeship programs with tax incentives for business. Millions of jobs are not being filled due to a gap between needed skills and labor force skills. I think this could be a combination of business and government funded programs. Fourth, government should have a competing healthcare option. This option should compete with private market programs. I also think business should receive tax incentives to provide insurance for employees. This could offset the cost to small and midsized companies.
Obviously, I am not an expert, but if our politicians really cared about people and not power, they would find the solutions needed to create a better healthcare and immigration system (I didn’t talk about that because Hickenlooper didn’t). Because I am suffering from vindictive protectionism, I don’t think it will happen.
And that is my thought for the day!