Presidential Debate: The Glaring Omission

Did you watch the U.S. Presidential Debate a couple of nights ago? NBC News moderator Lester Holt promised viewers that the candidates would “explore three topic areas tonight: achieving prosperity, America’s direction, and securing America.”

That’s an incredibly broad set of topics, isn’t it? As promised, Mr. Holt’s subjects focused on everything from the global economy to the natural environment to the sources of social strife.

There was one subject, though, that wasn’t even mentioned during the ninety minute debate. Did you notice what former hot-button topic was completely omitted from the conversation?

It was the Affordable Care Act, commonly known as Obama Care. In fact, there was no reference to any element of health care policy whatsoever. The omission was surprising, given the controversial dominance of the subject in prior elections, and considering the central importance of the industry sector to the American economy and society.

So what are we to make of it? How should we interpret this startling lack of interest in America’s system of health care? Especially given the continuing controversies over the level of access to medical products and services, and the cost of that access, throughout the United States?

One possible explanation is that the very nature of the Affordable Care Act that made it so difficult to implement in the first place is now making it easy to accept in the minds of the American public. As you may recall, although the Act was initially described as a comprehensive reconstruction of the entire health system, its primary beneficiaries were to be the relatively few individuals who desired insurance coverage but who couldn’t obtain it.

Disrupt an entire nation’s system of care to benefit a mere 24 million individuals? In a nation of 300 million citizens? Opponents of the Act portrayed such an venture as a high risk, low benefit leap into the unknown. In retrospect, it was no surprise that so many citizens shrank from it.

But now that the Act has been in effect for six years, it has become the status quo. And guess what? The health care system hasn’t crashed. It’s still plagued with problems, to be sure, but now any future modification to the industry sector can itself be portrayed as a high risk, low benefit leap into the unknown. And that may be why the possibility of repeal or significant revision has vanished from America’s political debate agenda.

Indeed, individuals who wish to engender comprehensive reconstructions of other industry sectors may take heart from the current status of the Affordable Care Act. What lesson does it teach them?

Don’t settle for small, incremental, evolutionary changes. Instead, take a deep breath, swing for the fences, ride out the inevitable backlash, and focus on integrating the changes into the industry sector so deeply that they become inseparable from the status quo.

At that point, the elements of reconstruction may simply become part of the economic and social landscape of the nation. And the public may then simply accept the changes and divert its attention to other concerns.

Accounting For Elections

Whatever happened to the competitive Presidential primary elections? Just a few weeks ago, we were buzzing with anticipation over the possibility of contested Democratic and Republican party conventions. One candidate even predicted that political passions might boil over into street violence!

But with the surrender of Ted Cruz and John Kasich to Donald Trump, and with Hillary Clinton’s smashing victory over Bernie Sanders in New York State, the intra-party aggressiveness of the campaigns appeared to fade away. Indeed, with passion subsiding into pragmatism, cooler heads are now emerging to prepare for the Summer and Fall political campaigns.

So, now that we’re all gravitating back towards rational thinking, it may be an opportune time to reflect on the controversial methods that the Democratic and Republican parties have created to account for the preferences of their primary voters. As we’ve learned during the past few months, neither party simply counts the votes that have been earned by each candidate, and anoints the candidate with the most votes as the winner of its Presidential nomination.

Instead, each party requires a candidate to receive more than 50% of the delegate votes from its state affiliates in order to earn its nomination. And each state affiliate is free to determine the process by which the preferences of its citizens are translated into delegate votes.

And what processes have been adopted by the political affiliates of the states? Well, some employ primaries. Others utilize caucuses. And yet others simply rely on their own officials to select their delegates.

And what if no candidate receives more than 50% of these delegate votes? Then all of the primary, caucus, and party official preferences are tossed aside at the convention, and the delegates simply keep voting until they select a nominee. That process last occurred at the Republican Presidential convention in 1976, and many speculated that it could occur again this year.

In fact, it was this very possibility — i.e. the possibility that no Republican candidate might receive more than 50% of the delegate votes before this summer’s party convention — that appeared to generate the most concern among many Republicans. After all, they feared, wouldn’t this result in the “tossing aside” of citizen votes? And wouldn’t such an action be undemocratic, and thus un-American, in nature?

Yes, perhaps it would be undemocratic … but it wouldn’t be un-American at all. In fact, this very “tossing aside of votes” process is a central feature of the United States Constitution.

You see, America’s Founding Fathers didn’t anticipate the emergence of political parties. Instead, many of them dreaded the emergence of such parties out of concern that citizens might prioritize “what is good for the party” over “what is good for the country.” And they certainly did not want the federal government to simply award the Presidency to the candidate who receives the most votes from the citizenry.

So they created a system that permits numerous candidates, preferably with no particular party affiliation, to vie for state delegate votes. And they granted the states a fair amount of flexibility to determine how citizens register for voting, how votes are cast, and how voting results are tabulated into delegate votes.

Then, according to the Constitution, when the state delegates meet in the Electoral College to cast their votes, the candidate who receives more than 50% of the votes becomes the President of the United States. And what if no candidate receives that many votes? Then the votes of the citizens are tossed aside, and the members of Congress in the House of Representatives simply keep voting until they elect the President.

Can you see the similarity between the contemporary Party nomination process and the Constitutional national election system? In essence, they function in the same manner. And most strikingly, they both presume that the votes of the citizenry should be tossed aside whenever no single candidate receives more than 50% of all votes.

It’s a strikingly undemocratic approach to accounting for the will of the people, isn’t it? But it’s important to keep its Constitutionality in mind when we hear people criticize its current inclusion in the nomination processes of our political parties. After all, even though it seems inappropriate to contemplate tossing aside the votes of the citizenry, this is the very process that the Founders of our Republic chose to write into our national Constitution.

The Fallacy Of Labels

And now it’s Secretary Clinton’s turn to be tagged with a label by Donald Trump! After applying sobriquets to Low Energy Jeb Bush, Little Marco Rubio, and Lying Ted Cruz, The Donald is now alternating between Incompetent Hillary and Crooked Hillary.

By doing so, the leading Republican Presidential candidate is drawing attention to the validity of such labels. Are they ever truly accurate? Or are they simply misrepresentations of the beliefs and positions of our political leaders?

While pondering these questions, it may be helpful to consider the American President who may have accomplished more than any other to usher in the modern era of limited government. He presided over the deregulation of the airline industry, the abolishment of usury and other interest rate regulations, and the phase-out of price controls over domestic oil supplies in the United States.

Indeed, he may well have been the most free market oriented leader of the five American presidents who held office during the 1960s and 1970s. Was he Republican President Gerald Ford? Or Richard Nixon?

Believe it or not, this Presidential promoter of capitalism was Jimmy Carter. He signed the Airline Deregulation Act of 1978 into law. He also signed the Depository Institutions Deregulation and Monetary Control Act of 1980. And he signed the National Energy Act of 1978, followed by the Energy Security Act of 1980.

These laws, considered in tandem, collectively implemented the massive deregulation of the American transportation, financial services, and energy industries. That’s why a conservative libertarian web site and a liberal progressive web site agree that the left wing label that is often affixed to President Carter requires “rethinking.”

Ironically, the two Republicans who served in the Oval Office immediately prior to Carter may have been the most economically liberal Presidents in modern times. How so? Gerald Ford, for instance, ultimately decided to participate in the fiscal bail-out of New York City after he initially rejected the Big Apple’s plea for federal aid. And Richard Nixon temporarily ordered “a freeze on all prices and wages throughout the United States” in order to tame inflation.

Apparently, like the liberal label on President Carter, the conservative labels on Presidents Ford and Nixon are extremely misleading monikers. Ironically, many contemporary pundits have declared that Donald Trump’s self-characterization as a conservative is actually fallacious as well.

So what should we do with these political labels? Perhaps we should simply pay no attention to them. Instead, perhaps we should strive to understand each politician’s policies and positions before we draw conclusions about their philosophical leanings.

What Happened To Star Wars?

Remember Star Wars? Just three months ago, the film enjoyed one of the biggest opening weeks in Hollywood history, grossing $390 million in revenues. Pretty impressive, eh?

But just five weeks later, its weekly gross had declined to a mere $19 million. And five weeks after that, it had declined to a tiny $3 million. How could it have fallen so far, so fast?

George Lucas, the legendary film maker who created the very first Star Wars and then guided the franchise through its first five sequels, might have the answer to that question. He sold the franchise to Disney after its fifth sequel; the current film (i.e. the sixth sequel) is the first one produced by the corporate giant.

And what does Lucas think of Disney’s first attempt at producing a Star Wars film? During an interview with Charlie Rose, he noted that the new film is primarily a “retro movie” instead of a movie that is “completely different with different planets, different spaceships …” Lucas explained that Disney “didn’t want to use (his) stories … (and) decided they were going to do their own thing.”

A New York Times reporter commented that Lucas “was harsh in criticizing the film industry for focusing on profit over storytelling.” And many critics felt that the new movie, in essence, plagiarized the earlier films and simply retold their stories.

So what should we make of this? Well, many people love to hear the retelling of a popular tale. And the earlier Star Wars saga was one of the most popular stories in Hollywood history. Thus, it’s no wonder that Disney’s masterful retelling (or, to use a less complimentary term, plagiarized content) opened to such initial success.

The drawback regarding repetition in film, however, is that such content quickly becomes stale. After all, if a storyteller doesn’t drive a tale forward with new ideas, people quickly lose interest. Indeed, it’s again no wonder that the Disney sequel rapidly lost its audience after its initial spurt of popularity.

Perhaps there is a lesson to be learned here. Organizations and people who simply reiterate a popular and familiar line may tend to grab the attention of an audience in the short term, but they are likely to lose them in the long term. Conversely, organizations and people who advance the conversation are likely to maintain an audience over a longer period.

That’s a great lesson for the Hollywood studios, and for other media organizations too. And, to extend that thought to a different milieu, it might also be a worthy lesson for the politicians who are campaigning for the Presidency of the United States today.

A National VAT: A Socialist Republican Solution?

The United States certainly isn’t the only nation to struggle with sluggish economic growth and a daunting government deficit. Most of its fellow G-8 countries, including Japan, Britain, and the nations of the Euro currency zone, are doing so as well.

Among these countries, though, the federal governments of the United States and France might have the most in common. Both President Obama and President Sarkozy are preparing to fight grueling re-election campaigns, appealing to voters who have grown weary of years of grinding austerity. And Sarkozy is struggling to save his nation’s sterling AAA credit rating, a battle that Obama fought and lost during the American federal budget battles last summer.

Last week, the French President pushed through a sizable increase in his government’s Value Added Tax (VAT) burden, in an effort to finance his country’s social “safety net” programs without increasing the federal deficit. Considering how often Republican presidential candidate Mitt Romney labels Obama a “European socialist,” one might have assumed that the American President would support a similar policy.

Interestingly, though, only one American presidential candidate espoused the establishment of a new tax resembling a VAT. President Obama, ironically, was not that candidate.

Nine, Nine, Nine!

Republican Herman Cain was actually the candidate who called for the imposition of a 9% sales tax, accompanied by drastic reductions in the individual and corporate income tax rates to 9% as well. Although he was originally considered a minor candidate, the astonishing popularity of his tax plan briefly sent him skyrocketing to the very top of the polls before other considerations compelled him to quit the race.

Nevertheless, he was briefly perceived as the champion of conservative Republican politics, even though he espoused the adoption of a taxation policy that was far more similar to contemporary European taxation systems than to the traditional American system. By dropping out of the race well before the first contest in Iowa, though, his policy escaped the harsh scrutiny that it likely would have received eventually.

Because Mr. Cain modified his explanation of the “nine, nine, nine” policy from time to time, it is unclear whether his sales tax would have only been levied on consumer retail purchases, or whether it also would have been levied on business-to-business wholesale transactions. A retail levy would resemble a traditional American local sales tax, while a wholesale one would more closely reflect the style of a European social VAT.

Economic Theory

Placing politics aside, one may wonder how the choice of taxation methodology would impact economic health. To put it simply, would most economists prefer to see the American government rely overwhelmingly on a national income tax (as it does now) to finance its activities? Or would they prefer to see it shift towards a sales, VAT, or other consumption based tax?

Most economists are generally in favor of higher taxes on undesirable activities and lower taxes on desirable activities. Before the global markets crashed in 2008, Americans appeared to be spending far too much, and saving (and earning) far too little. Thus, the concept of a national consumption tax appealed to many economists at the time.

Now that recessionary declines in American consumption patterns have threatened the economic recovery, though, many of these same economists now believe that a national consumption tax would crimp consumer spending and thus deter economic growth. And many conservative politicians are loathe to approve any new taxes at all, fearing that the imposition of even minor new taxes will inevitably evolve into major new levies over time.

Simplicity and Fairness

Perhaps the most baffling aspect of Cain’s popularity, though, involves the reason(s) why conservative Republican voters embraced the “nine, nine, nine” policy at all. Considering that longstanding Republican policy advocates the rejection of any increase in taxation levels, why did those voters embrace the establishment of a new system of VAT taxation along with the maintenance of the existing system of income taxation (albeit at a lower 9% level)?

One reason might have been the attractiveness of simplicity itself. In an era when a majority of Americans are compelled to use terribly complex computer programs to compute and file income taxes, the sheer simplicity of a flat 9% tax rate must have been highly desirable to many voters.

Another reason might have been the ostensible fairness of a single rate that could be applied to all Americans. After all, Warren Buffet himself famously noted that he pays lower rates of income taxation than do his secretaries. Because the contemporary American system of income taxation is actually regressive in certain respects, a flat rate tax must have been highly desirable as well.

Regardless of the reason for its attractiveness, the sight of a conservative Republican candidate embracing a European styled VAT tax with the enthusiastic support of his “base” undoubtedly represented one of the stranger moments of a highly unusual political campaign season. At times of such high levels of voter discontent, we may well experience more such unusual moments in the days ahead.