Commentary

The World has Lots “More” Now What? III

Dave Davis Commentary, Dave's Healthcare Plan, Policy, The Long Journey to "More", Uncategorized

n our last post, we laid out how old-style top-down governments cannot keep up in a world where change can come from anywhere at any time. Lumbering bureaucracies must become increasingly repressive to maintain the control that has only provided “Less”. Moreover, you can’t be part of a worldwide trading system and supply chain while intimidating and undermining your more liberal neighbors. Threatening supply routes whether it be the South China Sea or the Straits of Hormuz just doesn’t denote a commitment to world trade. Top down just isn’t compatible with the continued growth of “More.” Yet even countries once appearing to follow the liberalizing path (in the classical sense) to”More” somehow found a way to be increasingly top-down and moved in the opposite direction. Venezuela surely has made the trip. Turkey seems headed in that direction. China is at the crossroads. Could others follow? Could we actually get off the highway that has brought us so much “More”? There is always a danger of backsliding and unfortunately, there are worrying signs.

But don’t we need Laws and rules? Of course, all civilized societies have to have them, but there are rules and laws and there are rules and laws. In order for us to flexible and adaptable they have to be needed, fair, level playing field, workable, and reviewable. A good example of this is how we approach energy in light of a warming world. Presently we have a hodgepodge of mandates and subsidies favoring some while penalizing others. A tax subsidy to the producers of luxury electric cars puts competitors with a much different solution at a disadvantage. Many think a better way is to have a carbon tax and let everyone choose what is the least costly way to have energy in light of the tax. Definitely, this would be superior to what we have today, but how do we determine the proper amount of the tax. Once the tax is collected what do you do with the money? Spend it or rebate it? However, the biggest negative is even if it works and we reduce our emissions further unless the rest of the world does the same it will hardly move the needle. However, it would raise our relative costs putting us at a huge disadvantage. Even if the rest of the world buckled under and adopted high cost Zero carbon emission energy sources it would doom a billion plus people to continued poverty. How moral is that?

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The World has Lots “More” Now What? II

Dave Davis Commentary, Policy, The Long Journey to "More", Uncategorized

In years gone by, powerful leaders exerting maximum control could plausibly claim they needed this power to protect the governed from attack or to lead them to “More” by taking it from others. Fighting with and taking from others was justified by presenting your culture as superior to others. From Imperial Rome to Imperial China outsiders were considered barbarians. Much easier to take their goods and enslave if you see them as inferior. In the modern world, these claims just don’t hold up. Recent German history illustrates the point. Prior to World War II Hitler claimed the Germans were being denied their Lebensraum. Invading Poland and other “inferior” nations were imperative to give them the territory needed for its natural development. Today even with unification Germany has less territory yet is much wealthier. With a declining birthrate, the country has had to actually import workers and allow in migrants. After spending 2 Trillion euros on joining east with the west, the country has no interest in taking over Poland or Ukraine anyone else.. Much more profitable to just trade with them. Closer to home, we would love to back what we spent occupying Iraq and Afghanistan. It surely didn’t gain us “More.”

As we pointed out in our last post, innovation was at best a very slow contributor to humanity gaining “More.” Top-down government and culture were essential. The educated elite made and recorded the laws, maintained calendars, and made the proper tallies. For most of mankind being an elite was gained by heredity. 10% or less of humanity used their positions to acquire whatever “More” there was to be had. The rest of mankind was mostly at the bottom. For thousands of years, this was mankind’s basic organization. Then the 15th Century A.D. came and the pace of innovation accelerated to the point it is the main determinate of gaining “More.” As change could now come from anywhere at any time we, in turn, have to be more nimble and flexible. Top-down governance of everything just can’t keep up with what is happening from the bottom up. The more controlling a government is the less efficient. If this wasn’t true the Soviet Union with its 5-year plans would’ve won the cold war.

Today the most controlling top-down governments such as Cuba, Egypt, North Korea, Iran, and Venezuela not only have failed to lead their citizens to”More,” but managed to provide “less”. The question is whether China will join them. Taiwan and South Korea liberalized from one party states to a democratic market dominated countries and gained much “More.” For a while, it appeared China was heading in the same direction. Then Xi Jinping took over. Facial recognition, the social credit policy and concentration camps for Muslims match or exceed anything George Orwell ever penned. It looks like the Chinese Communist Party is bent on joining the “we have to stay in power at any cost club”. President for life Xi seems aligned with those leaders with lifetime job security in we provide “Less” club. The one thing all the members have in common is they have maintained absolute control over their citizens no matter how much pain they have to inflict on their citizens just to maintain control.

China because of its size is of utmost importance to continue the march of humanity to “More.” The nation is at a crossroads. It either to moves to a responsive flexible society like its neighbors Taiwan, South Korea, and Japan and continues on its journey to “More” or it becomes North Korea or Venezuela on a much greater scale. Remember the Chinese Communists went down that road before with Mao’s Great Leap Forward. A failure setting China back for decades. Worse it cost 45 million lives. Is Xi out to break that record?

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Maybe Not So Wrong

Dave Davis Commentary, Uncategorized

Back in April 2015 in our post ALL IN THE PLAN? we theorized President Obama’s justice department would sideline Hillary Clinton and a weaker candidate would go on to lose the 2016 presidential election. This would leave the party in a favorable state for the Obamas. Michelle would go on to become governor of Illinois, putting her on a launching pad for the Democratic 2020 nomination. However, James Comey first wounded Hillary but didn’t prevent her nomination and then mightily contributed to her defeat in the general election but reopening the investigation just before the election. We gave our take on all this at the time in our post Election Recap. . In any case, the Democratic candidate lost.

Meanwhile, even with an unpopular Republican governor in a deep blue state, the state’s problems were so acute it was seen as “the sick man of the Midwest.”  A superhero couldn’t fix this state. Faced with the likelihood of being tarred with failure, the Obamas wisely decided to stay in D.C. far from the Illinois political cesspool.

Looks like we really got this one wrong.  Well, maybe we got some details of the path wrong but maybe not the ultimate result. The point of our post was Obama’s return to the White House.  If anything we think it will be even easier than we thought.  As we pointed out in our earlier post, the Democratic party was starved and neglected during the Obama presidency and has only has started to be recovered with the 2014 midterms.  Not enough time to produce a really top rate group of candidates. The lack of governorships hurt because executive experience is highly valued in a candidate for the nation’s top executive position.  Worse, the perception Trumps election was a fluke and anyone could beat him has brought forth old warhorses and a plethora of uninspiring younger candidates.  For example the 37yr old Mayor of South Bend, Indiana, Pete Buttigieg is doing better in the polls than most of the younger contingent even though his only executive experience is as mayor of a very small moribund city.  Sitting in Phoenix, Az, we’re surrounded by vibrant small cities such as Scottsdale, Tempe, and Chandler, all much larger and growing.  Yet no one would even think of any of the mayors of these much more successful cities as presidential contenders. The Democrats have brought forth a legion of minimal candidates.

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He Cant Be Serious

Dave Davis Commentary, Policy, Uncategorized

President Trump again has put a wide swath of the establishment types in a state of fear for another of our “venerable” institutions.  What could he be thinking?  Steven Moore and  horrors Herman Cain considered for the Federal Reserve Board?  Why they don’t even have a PHD among them. Worse he is playing politics with appointment by selecting people generally agreeing with him on economic policy.  They see the  Fed as a revered independent agency led by highly educated elites delivering stable money and full employment from on high.  Contamination with these two louts will taint this wonderful institution with mediocrity possibly leading to failure. We have trouble in River City.

Before everyone hyperventilates, remember we’re talking about the Federal Reserve.  You know, the people not having a clue the “Great Recession” was on the horizon.  The ones by keeping interest rates so low it forced people in need of returns worldwide to buy riskier instruments such as the Collaterized Mortgage Obligations containing the subprime mortgages. That rocked the world economy.  Even when they woke up, their answer was to buy trillions of dollars worth of debt with newly created money driving interest rates near zero.  The result was the slowest recovery ever recorded after any recession or depression.  This even with  Obama’s near trillion-dollar stimulus.  At best the Fed has a hit or miss record since its inception.  We warned of the continuing destabilization of  the economy if interest rates continue below normal in our post Free Capital to Finance “More” in our series “The long Journey to More.”  The Fed never seems to be aware of the bubbles it creates till they burst.

Tightening or loosening the money supply at the wrong time may actually have happened more often than they got it right. As Milton Friedman put it, “No major institution in the US has so poor a record of performance over so long a period as the Federal Reserve, yet so high a public reputation.”  And this was said before  its “Great Recession” failures.  It would seem this is an organization in clear need of fresh ideas to achieve positive performance.

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One Way Howard Schultz Could Actually Become President

Dave Davis Commentary, The Future Party

Watching a cable news interview with a major university president, we were struck by the fact he was talking not about he might do to reduce the cost of a college education and the attending debt burden, but what he actually had done.  Expounding on his article that recently appeared in the Washington Post where he is a contributor, he outlined what in point of fact how is has reduced costs.  At a time when college costs are rising at a rate far in excess of the general rate of inflation, since he became President in 2013 his university has seen no rise in tuition and other costs such as text books have been successfully attacked.  Innovative ways for students to get a college education without incurring heavy debt have been introduced. Wow, somebody telling you what he’s actually done about a major problem rather than talking pie in sky.

In the fashion of cable news, after University President’s interview was over and he was gone, two commentators, one from the left and one from the right joined the host to discuss what was said. What impressed us was instead of the normal loud disagreement that seems to come with the job of cable news commentator, both were surprisingly positive about what they heard. One might think the commentator on the right might look in  askance of an academic Washington Post Contributor, but on the other hand the one from the left might be unenthusiastic over a known Republican. Yet with some tangible ideas to think and talk about, both admiringly considered how these actions could be expanded upon.  Real solutions seem to bring a certain consensus.

Who is this University President who elicits such a positive response?  That would be Mitch Daniels, the President of Purdue University.  It would not come as a surprise to those acquainted with him to be seen as a problem solver.  A successful two term Indiana Governor, a top  Fortune Five hundred company executive, Director of the Office of Management and Budget under George w. Bush, Think Tank Head and author all point to a man who solves problems.

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