Political Malpractice in America: Republic at Risk

By Randall L. Hull

America is more divided now than at any time since the Civil War; survival of the republic is at real risk. Americans are losing confidence in the future and have almost no trust in our federal government. Our federal government has failed to respond effectively to the Covid-19 pandemic to arrest transmission and restart the economy. At the same time, we are seeing historic, widespread protests against systemic racism in America, which in itself is a manifestation of increasing inequality, as well as deep cultural bias. Our political leaders have failed us for the last forty years.

Randall L. Hull proposes that startling thesis in this economic and political commentary that examines how we’ve arrived at this crisis and what we can do to reverse the political and cultural warfare that pervades our republic. He answers questions such as:

• What steps can we take to reduce divisiveness in America?
• How can we restore shared prosperity to the majority of Americans and rebuild our middle class?
• How can we get politicians to work on a bipartisan basis again?

Hull offers starting points to pursue a model of “balanced capitalism” based on large private-public partnerships to rebuild American infrastructure and new green energy capacity; such investments will both reduce disparities of wealth and begin to reverse damage from climate change. He also proposes ways to safeguard our elections and live up to the ideals of our founding fathers, the most important initiative of all.

Find out how to keep working to “form a more perfect union” and fight political hypocrisy with the insights and ideas in Political Malpractice in America.

• Language: English
• Publisher: Archway Publishing
• Release date: Aug 12, 2020
• ISBN: 9781480891739

Randall L. Hull

Randall L. Hull is a retired global business executive who worked in the energy and chemicals industries for over forty years. He is an honors graduate in mechanical engineering from Lehigh University (1973) and also holds an MBA from Harvard University (1978). He is a member of the American Institute of Chemical Engineers and a member of both Tau Beta Pi and Pi Tau Sigma engineering honorary societies. He is married to Patricia Perrin Hull and is the proud father of two daughters. He has enjoyed a lifelong love affair with U.S. history and lives in Houston, Texas.

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Copyright © 2020 Randall L. Hull.

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ISBN: 978-1-4808-9172-2 (sc)

ISBN: 978-1-4808-9171-5 (hc)

ISBN: 978-1-4808-9173-9 (e)

Library of Congress Control Number: 2020914393

Archway Publishing rev. date: 08/07/2020

CONTENTS

Dedication

Preface

Acknowledgements

Initial Thoughts—Why I Wrote this Book

SECTION I: OUR CURRENT STATE OF AFFAIRS

Chapter 1 America’s Future is Threatened by a Culture of Divisiveness

Chapter 2 The American Birthright is Precious and Unique

SECTION II: HOW DID WE GET HERE?

Chapter 3 The Economics of Globalization

Chapter 4 Income and Wealth Inequality are Creating Two Americas

Chapter 5 Free-market Capitalism is Unstable

SECTION III: SOLUTIONS AND RECOMMENDATIONS

Chapter 6 Shaping Capitalism to Meet New Economic Realities

Chapter 7 We Must Transform Government…Again

Chapter 8 Transforming Our Culture Underpins Everything

Final Thoughts

FIGURES

Figure 1. The decline of Manufacturing in the US (Bureau of Labor Statistics)

Figure 2. Post-recovery Manufacturing Employment (Bureau of Labor Statistics)

Figure 3. Comparison of Children’s versus Parents’ Income Based on Birth Year (Harvard)

Figure 4. The Economic History of the World in a Nutshell (from Sapiens)

Figure 5. Current Account Trade Balance in USA (Federal Reserve)

Figure 6. Gross National Income per Capita of World’s Major Economies (World Bank)

Figure 7. Share of national income earned by top 10 percent (decile) earners (Piketty)

Figure 8. Share of private assets owned by wealthiest Americans (Piketty)

Figure 9. The rich get richer (author)

Figure 10. Real income growth across population pre- and post-globalization (CBPP)

Figure 11. Disparity between real wage and productivity growth (Economic Policy Institute)

Figure 12. Median income of various socioeconomic classes (Pew Research Center)

Figure 13. The middle class is shrinking (Pew Research Center)

Figure 14. Wage growth by socioeconomic class since 1980 (Economic Policy Institute)

Figure 15. Global middle class growing sharply (World Bank)

Figure 16. The middle class squeeze since 1985 (Manhattan Institute)

Figure 17. Income inequality in the US 1910 – 2010 (Piketty)

Figure 18. GDP annual growth rate (Source: FRED® Federal Reserve Economic Data)

Figure 19. Lorenz curve showing income distribution and inequality models (Piketty)

Figure 20. Wealth distribution in the USA 1963 versus 2016 (source: Urban Institute)

Figure 21. Federal deficit as a percent of GDP (source: FRED®)

Figure 22. Total federal budget 2020 = $4.8 trillion (source—CBPP)

Figure 23. Discretionary federal budget 2020 = $700 billion (source—CBPP)

Figure 24. Cultural change is hard but key to execution (author)

Figure 25. Culture enables thriving political and business environment (author)

TABLES

Table 1. Level of systemic inequality in twenty-one richest western democracies (Stanford)

Table 2. Commonly cited causes and remedies for falling US Competitiveness (Harvard)

Table 3. Cost and benefit impact of new laws and regulations

Table 4. Potential new sources of tax revenue

Table 5. Total wealth breakdown in USA (approximate)

Americans are losing confidence in the future due to inequality, cultural

and racial divisiveness, political rancor, and climate change. Identity

politics are destroying our ability to confront these challenges. American

culture is in decline and at risk. It is not too late to reverse course.

DEDICATION

Christine Alberta (Shore) Hull

(09.02.1922 – 07.21.2020)

"The best Mom a Son could ever have—kind-hearted, open-

minded, optimistic, constructive but never critical."

PREFACE

"America is great because she is good. When America

ceases to be good, America will cease to be great."

Alexis de Tocqueville (1835)

This book is not meant to be an academic treatise which would, in almost every case, be written by an economics professor or consultant working at a university or think tank. It represents the thoughts and concerns of an ordinary sixty-nine-year-old US citizen, and first time author, who loves America and loves American history; and also someone who has walked and done business on factory floors, in boardrooms, airports, and offices, all over the world for the last forty years.

I believe that I can offer a valued perspective on what I view as a crisis in America today based on the following: (1) I am a reasonably well-educated person; (2) I have spent the last forty-plus years in corporate America traveling the USA and the world utilizing both my engineering and business skills to solve problems; and, (3) I have a deep love of, and respect for the lessons of American history. With the accelerating disintegration of our civil society in the face of fear, divisiveness, unprecedented economic inequality, exploding federal debt that could put foundational social programs in serious jeopardy, and finally climate change that threatens our grandchildren and the entire planet, I am deeply worried about the future of America. I believe our Republic is facing a greater risk to its survival than at any time since the Civil War—and other prominent public leaders, historians and economists agree with me.

Am I crying wolf? I do not think so. Remember it was Ronald Reagan who said, Freedom is never more than one generation away from extinction. The American middle class, with its values of family and community, has been the foundational strength of our nation over the past two centuries…and it is now being crushed. As a nation, we have always equated government stability with a strong middle class. A vibrant middle class provides a vested interest by its citizens to maintain stability and the economic opportunities that arise as a result.

The assault on the middle class started surreptitiously about forty years ago, and the damage done has been compounding continuously since that time. Our politicians in Washington, drowning in special interest money and jockeying for airtime on their favorite cable TV or network news channel, have largely been asleep at the wheel as this ongoing carnage continued unabated.

I fear the worst with the scarcity of political leaders who are willing to give us straight and honest answers, whose main interest seems to be getting reelected, and whose loyalty seems to lie with their donors and their party, as opposed to their country. We cannot rely on our corporate leaders either—most of these executives are almost entirely focused on their firms’ financial performance in the short term. America is still a great nation, but major cracks are appearing in our values and the swamp in Washington is deeper than ever—far deeper. The survival of history’s longest-surviving democratic republic is at risk and very much in question.

Our economy is broken for a majority of our citizens, our leaders are failing us, and most Americans have almost no trust in government and corporations, and certainly not Wall Street. These are problems with deep-rooted causes that very few of our political and corporate leaders understand. Unfortunately, leaders of both parties too often tout a familiar laundry list of programs and policies that attempt to throw money at symptoms, rather than address the root causes and underlying problems.

Without these transformative changes across American society, we will be much worse-off as a nation, and more ominously, as a planet in the next twenty years. We don’t have to change everything overnight, but our leaders must give us a new vision and national strategy for a nation facing the following challenges, collectively forming the most existential threats we have seen in several generations: (1) deep cultural polarization; (2) rapidly accelerating income and wealth inequality; (3) more frequent and extreme climate disasters; (4) a national reawakening to the widespread presence of systemic racism; (5) the rise of both global and domestic terrorism; and just recently, (6) a global pandemic for which we were woefully unprepared due to the ineptness of the current administration. How we confront and deal with any one of these challenges has the potential to make America anything but exceptional, as it has been for the last 240-plus years.

Our founders tasked us to continuously form a more perfect Union. We are failing in that endeavor by not collaborating to solve these profoundly serious external and internal challenges to our representative democracy. In the case of climate change, as well as the emerging threat of global pandemics, the challenge is truly existential and dire, not only to America but to the world as well.

Externally, technology, globalization, and automation have all undermined the creation of new high-paying jobs and the resulting shared prosperity that we came to expect in our post-WWII economy. Technology, both in information management and production line automation, have boosted productivity significantly, even as demand for products and services gradually slows, thus eliminating millions of jobs. Globalization and outsourcing of jobs to other nations have also eliminated millions of high-paying manufacturing jobs in the last forty years. Those jobs have largely been replaced by low paying service jobs in the retail, fast food, healthcare, and logistics sectors, among others.

Artificial intelligence (AI) will soon eliminate millions of jobs. Lost positions resulting from AI adoption will include cashiers, bank tellers, taxi drivers, truck drivers, book sellers, travel agents, office workers, teachers, stockbrokers, real estate agents, and many others from a workforce which has already experienced a declining participation rate since 2000.

The effect of AI is just beginning. I believe AI represents a third phase of productivity investment. The first phase was investment in equipment and information technology to automate manufacturing and leverage the impact of labor. This initial productivity investment surge arose in the automotive sector in the 1980’s in a response to loss of market share by American firms to imported vehicles. The second phase, which began in earnest after NAFTA was passed in the early nineties, involved global outsourcing of materials and sub-assemblies to regions with lower costs of production. AI, as a third phase will not leverage labor inputs, but will replace them.

As a result of these external economic forces, the middle class will continue to shrink further and faster. On the other hand, corporate executives, owners, and shareholders will all see their income and wealth continue to significantly outpace wage growth as business profits continue to grow with new investment aimed at increasing productivity still further. Profits will rise because of technology and automation. The rich will get richer and the divide between the upper and lower/middle classes will grow even wider. As it turns out, this widening inequality seems to be an inherent characteristic of capitalism as will be discussed in chapter 5 (Free Market Capitalism is Unstable).

Internally, special-interest political action committees (PACs) and non-profit lobbyist groups, completely unleashed to spend vast amounts of money resulting from Wisconsin Right to Life and Citizens United Supreme Court rulings in 2008 and 2010 respectively, against the Federal Election Commission (FEC), have greatly exacerbated the divisiveness and loss of civility in our nation today. Unlimited money flowing into our governing process is at the heart of most of our problems as a nation—economic inequality, climate change, gun violence, and political rancor—and that is a central theme of this book.

As Lawrence Lessig, Harvard Law School professor, writes in his brilliant book, REPUBLIC, LOST: The Corruption of Equality and the Steps to End It, the ideological divide between the political parties started diverging after the election of Reagan, and really widened much farther and faster with the arrival of Newt Gingrich and the Republican majority in the House after the 1994 mid-term elections. This divergence took another step change apart following the Supreme Court’s Citizens United decision.¹ As Lessig points out, money flows more readily to the candidates with more extreme ideologies. Compromise and thoughtful reason are boring it seems! The more sensational and outrageous, the better the ratings…and the money cycle just gets further turbocharged.

Cable TV, and especially internet-based social media, are not bound by the traditional principles of journalism to report facts and to segregate editorial opinions from factual news reporting and, as a result, disinformation now floods the airwaves and internet.

By allowing corporations, dark money foundations and super PACs the same freedom of speech as individual citizens, the Supreme Court has greatly facilitated the flow of money from the wealthy, elite corporate class to many of our lawmakers and judges, thus subtlety biasing their decisions. Estimates of $8-10 billion is projected to flow into campaigns for the 2020 federal election cycle based on projected FEC data through fifteen (15) months of the current election cycle. Some estimates are as high as $16 billion.² Even at $10 billion, this amount will be more than 700 percent greater than the amount spent in 2000. Price inflation since 2000 is only about forty-five (45) percent! For those running for Congress in 2020, the projected campaign spending will average close to $10 million for every elected member of Congress.

Separately, total lobbying money to be spent in 2020 is projected to exceed $3 billion, with Big Pharma and Insurance industries at the top of the list of big spenders. While the floodgates have been opened for money flowing into campaigns in the past decade, lobbyists have seen their rules and regulations tighten considerably according to a seasoned political operative and lobbyist with over forty years of experience in and around Washington, DC. On the other hand, the former lobbyist notes that public affairs professionals are pretty good at playing the hand that they and their clients are dealt, and usually tend to find other channels and mechanisms to increase funding of their programs whenever they choose to do so.

Government of the people, for the people and by the people has been replaced by government of, for and by the lobbyists and super PACs. We no longer have one man/woman, one vote…we now have one dollar, one vote. This tidal wave of money flowing to politicians is disgusting. There needs to be bipartisan action to overturn Wisconsin and Citizens rulings and return government to the people.

In his wonderfully logical and legally nuanced book, Lessig explains how the Supreme Court in Citizens, and other related rulings, has recently ruled with a nearly unbounded bias toward free speech. Previously speech that created a clear and present danger was deemed illegal. Now speech is only limited if it creates actual harm. But, by definition, that harm occurs after the fact that the harming speech has already occurred. To me, that is somewhat akin to allowing reckless behavior and only charging a crime if the reckless behavior leads to actual injury. So, driving 100 mph down a country road is OK if nobody is killed? To me, this is not the definition of a civilized, lawful society.

Lessig, who previously argued that Citizens was an abomination of the free speech provision of the First Amendment (Bill of Rights), now seems to accept that the Court will continue with their unbounded view. He now argues that an expansive view of free speech is not necessarily a bad thing…unless it subverts the equality of citizens, perhaps an even more fundamental right in our Constitution (and Declaration of Independence). By creating the potential for inequality, representative democracy of the People will be greatly undermined. It is a fascinating book and Lessig offers solutions (i.e., public financing of elections through vouchers) that would NOT be deemed unconstitutional as limiting to free speech.

I see another argument that should work to mitigate unbounded free speech but has not yet been recognized by the Court—the Fourteenth Amendment which came after the First Amendment, and therefore a more up-to-date, interpretation of the Constitution. I think this view is consistent with Lessig’s argument for the equality of citizens as a fundamental right in our nation. Does this current tidal wave of money flowing from a tiny minority provide equal protection under the law for all of us ordinary citizens as granted under the Fourteenth Amendment? I think not.

I am no legal scholar, unlike Lessig, but in my opinion, it seems that the five justices who voted in favor of Citizens United over the FEC flat out missed the central element of a representative democracy: of, by and for the people—not for corporations, and particularly not for the elite owners and managers running those corporations who appear to speak for their employees as well, which is nothing short of duplicitous in my mind. The Supreme Court has allowed one man, one vote, to be replaced by one dollar, one vote.

As the historian Joseph Ellis has taught us, the great innovation of our Constitution, conceived by James Madison, is that our nation’s sovereignty is not invested in the States, nor the Federal Government. Unlike any other nation on earth, our sovereignty is vested in We the People. In no way shape or form, is our sovereignty invested in a Corporations or super PAC! Justices in the majority also failed to differentiate corporations with large public equity ownership (e.g., Amazon, Exxon, Ford, GM, AT&T, and Microsoft to name just a few) versus those closely held family corporations and foundations (e.g., Koch Industries, Mercer Foundation) which have no interest in being transparent.

By granting freedom of speech to those private, family-owned corporations and their offspring foundations, massive amounts of dark money have been unleashed to influence both legislative and judicial elections. The wonderfully Bipartisan Campaign Reform Act (BCRA) of 2002, sponsored by John McCain (R-Arizona) and Russ Feingold (D-Wisconsin) was overturned because of the Citizens ruling. The result is money is power, and all power tends to corrupt, as was so eloquently stated by the English historian Lord Acton in the nineteenth century. Does anyone really believe in their heart-of-hearts that our politics and many of our lawmakers are not being corrupted by the tsunami of campaign money? Come on—get real!

Perhaps de Tocqueville said it best almost two hundred years ago, The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money. How prophetic! And all of Congress’s money is our money! We pay far more taxes as individuals than all our corporations by a wide margin! Or even more to the point as Supreme Court Justice Louis Brandeis stated over a century ago, We can concentrate wealth in the hands of a few or we can have democracy. But we cannot have both.

(A quick side note: if you want to see a somewhat cynical opinion of how an avalanche of money has corrupted our democracy, go to YouTube, and pull up George Carlin’s Owners of America. I am not sure I would call it humorous, nor even slightly cynical, but it resonates and is aligned with many premises of this book.)

Any way you slice it, Citizens United was an unbelievably bad decision with horrible consequences that we are now experiencing. Obama got it right when he called out this decision in his January 2010 State of the Union address…the five Supreme Court justices in the majority did not. Hopefully in the future, justices will better understand (1) the full context of our historic legacy; (2) the founders’ recognition of the corruptive power of money (emoluments); (3) true American ideals; and (4) the best of Supreme Court tradition and therefore will rule on future cases that will overturn these poor decisions.

Turning from politics to the economy, our middle class is getting crushed by the forces of globalization and technology. This