Between Plague and Cholera Choose Medicine

Following my recent post, I received some feedback from my American friends on how current electoral situation looks like from inside. The response deserves an article, rather than another post.

Disclaimer: the author is not a political analyst, neither lives nor has a right to vote in US, has no party affiliation in US whatsoever and doesn't pretend to know the ultimate truth. Feel free to disagree :)

The issues raised in my friends’ letters are valid and can be presented as following:

1)     Democratic party is splintered and clueless how to unite under any viable joint program;

2)     A lot of voters wouldn’t mind free lunch not bothering themselves with where it will come from, which is the major source of support for Senators Sanders/Warren as well as President Trump;

3)     Economy is doing great, Canada, Mexico and China are reined in, NATO is stronger, North Korea and Iran are weaker etc.

4)     Mayor Bloomberg is an arrogant know-all kind of person who will alienate the voters; we can add to the mix the infamous NDAs, stop-and-frisk policies and whatever else he did wrong during 78 years of his life.

Let’s investigate that a little bit deeper, should we?

We start with the splintered Democratic party which seems so obvious a case. But is it the only party split? Wasn’t it the Tea Party who started the show? And presumed unity under Trump’s banner shouldn’t hide the fact that after he loses now or leaves after the second term the same rivalry between right-wingers and moderates will flare up again.

What does it tell us? Simply that US follows (or leads) global trend (which is ironic, considering Trump’s isolationist policies) of raising populism uprooting political establishment. It leads to three-to-four party systems instead of classic two – left and right populists and one or two centrist parties. In my opinion it is extremely likely that we’ll see the same political landscape in US pretty soon with centrist Democrats and Republicans working together. It is way more logical for Mitt Romney to work with Chuck Schumer and vice versa, than for them to cooperate with Sarah Palin or the Squad. There are simply not enough shared values between centrist and extreme wingers, any cooperation is truly opportunistic and so inherently unstable. Populists detest the Swamp and the Swamp duly reciprocate.

This is exactly why a lot of people voted last time against Hillary Clinton, not for Trump. It will be even stronger factor if Senator Sanders gets nominated. But if Mayor Bloomberg gets his nomination, the same factor will play against President Trump. Michael Bloomberg is “the real thing” – self-made billionaire with undisputed wealth and troves of governing experience. Same as Trump but better. Bernie’s guys will probably not vote for him, but Trump's guys probably will. A game worth playing, considering that no one will vote for Sanders except his core base, same as it happened with Jeremy Corbyn in UK.

And so, we move to the second question of who offers the biggest free check, how to fund it and what does it mean for election result and America.

I never had thought that I will see Ayn Rand’s Atlas Shrugged unfolding in real life in US. I sincerely hoped that USSR’s experience vaccinated people well enough for immune system to hold. But after 30 years since its fall a lot of people have no personal experience of real-life socialism, and so socialist ideas of justice and equality start to get bigger and bigger following. Somehow, no one asks a simple question: how happened that such a beautiful system never produced anything better than lack of food and concentration camps, while vile capitalism allows those aspiring socialists sitting in warm rooms well-fed and bitching about life being unjust and cruel on iPhones? And don't even start speaking about Swedens and Denmarks of the world, its way more complicated story than they try to sell it and anyway it doesn't work for any country bigger than fishing village.

There is never a better explanation that they did it wrong in the past and we will do it right. Really? Who are you, Greek Gods, to teach Lenin, Stalin, Mao and others what real socialism should be? The real answer is that this system is dead-end. State is unable to let you live free and decent life, only markets can. Why? Because markets are freedom-based and state economy is not, as simple as that. Go back to reading Adam Smith, he’s still the best teacher of how it works.

Returning to Ayn Rand, Sanders and Warren tend to speak about income inequality and how they will solve it through taxation and fairer distribution. A million issues here, but let's focus on just three.

First, none of them give a decent answer on how they plan to rein in budget deficit (and surplus is beyond the wildest dreams) which is enormous and starts looking threatening. That’s a huge inflation driver if nothing else, and you cannot keep interest rates so close to zero indefinitely, punishing savers and provoking risky behavior of economic agents who invest into anything that promises positive return. That’s a sure recipe for disaster. And without dealing with budget deficit, taxing reach will solve nothing except triggering capital flight. So, it would really make more sense to continue printing money to pay the bills and hope for the best.

Second, the mentioned above capital flight. One can be reasonably certain that the wealth tax will fail to bring in as much revenue as projected and the biggest beneficiaries will be tax lawyers and advisors. But it will hamper growth and investment long-term. Is it the bet worth making, not even taking? When you finish with Smith, check out Arthur Laffer, the father of Laffer Curve. Kind of self-explaining.

Third, their sincere belief that they know better what to do with other people's money would be entertaining, if not representing a viable threat to economy. Many of those billionaires fight their own battles with injustices of the world, and considering their intellectual firepower and resources, I'd bet that Mr. Gates has a better chance of eradicating polio and malaria than Senator Warren of eradicating poverty. Senators Warren and Sanders largely fight the battle won long ago - there are not so many robber barons around us in 2020.

That said, Senator Sanders’ winning will certainly either bring law making to a halt as Congress will be fighting his initiatives tooth and nail, or in the worst-case scenario trigger economy’s downturn with his voters most to suffer.

Third question we review is President's Trump stellar performance. Here we face the old scientific wisdom “Correlation doesn’t mean causation”. We need to give him justice regarding the tax reform, which is not as deep as plenty experts in taxation suggested, but still a major step in the right direction. Besides he largely rides on top of Obama’s presidency legacy and the favorable economic cycle. One can hardly name any coherent economic policy promoting economic growth (except for the tax reform mentioned above), though not spoiling your good fortune is a major achievement for Trump in itself considering his business track record.

His foreign policies are a mystery to me if one measures bombastic announcements against real achievements. Speaking of NAFTA, the biggest change is the change of name, and everything negotiated there could be achieved in a good old way by experts behind closed doors without publicly insulting and threatening everyone around. That was not the first renegotiation of NAFTA’s terms, and USMCA will certainly be revised in the future too. Attacking China the way he did it was not very productive, and now both countries seem to be locked in cold truce until US elections as Chinese know how to wait and bind their time. They may have lost a battle, but they didn't sustain any critical damage and are far away from losing the war. At the same time, TPP agreement painfully negotiated by Obama administration, which would be the most useful tool in tackling China trade policies in question, was renamed CPTTP and signed by all member counties but US (let’s see what the next president will do about it, my guess is US joins as soon as Trump is out). Situation with TTIP followed similar course as President Trump declined to sign it. In 2019 EU had formally withdrawn negotiating directives as no longer relevant, so free trade with Europe has to wait too. Trump is somehow rooted in XIX century zero-sum game and winner-takes-it-all mentality but, thank God, it no longer works like that. So, he trades two major deals for two major spats, some international trade success indeed.

Stronger NATO under Trump is kind of a joke if you look at it from Europe. The whole point of the organization was US taking the brunt of effort in exchange of largely demilitarized Europe, that’s why Article 5 is so important here. But Trump now behaves as a mercenary saying that if you don’t pay, I do not fight. If such attitude persists, European army will become a reality as US influence will dwindle. Make no mistake, such an economic powerhouse as EU can solve it very quickly if political situation is pressing. And do not even start speaking about perfect relationships with Turkey…

That’s how US is risking to lose its standing as indispensable military power broker right where it belongs since WWII. Is it really US long-term goal?

North Korea and Iran and other nice places like Afghanistan and Palestine. Is there ever any coherent idea behind US foreign policy today at all? What exactly would US like to achieve? It’s not only me being baffled, the whole world looks with interest, but no one seems to get it. Speaking with North Korea was useless because US can’t give them what they want. Speaking with Iran was useful, because US can give them what they want. But Trump does it the other way around. He alienates Palestinians further, but comes to terms with Taliban. What is exactly going there, people? What are your international goals as country and as the “Leader of the Free World”?

So, finally, why Bloomberg? Except for electability among President Trump’s base, which can prove crucial, he is the only one in the race with viable experience. We see there people who teach law in the university having one-year real job experience, longest-serving senator whose biggest achievement before that was being a mayor of a small town, another mayor of a small town, “Obama Vice-President” and a couple of prosecutors. He stands out, really, being able to demonstrate not only multi-billion self-made business, but three terms as the Mayor of NYC. He’s uniquely qualified for the job.

He is a centrist, which is a welcome respite from populist policies. He is incorruptible.

And moral grounds… If it is OK for the President so sign NDA with a porn star he cheated on his wife with, then signing NDA with an employee after delivering a tasteless joke should be acceptable, you know. Mayor Bloomberg is one of the last Mohicans of Madmen era with very different culture norms and ethics back then. He changes with the times, not so fast and not so deep as the Squad would like, but “no one is perfect” as we know from Gentlemen Prefer Blondes (check this movie for cultural norms back then in 30s which would drive modern-day progressives apoplectic). As for debate performance, Senator Warren is not a Great Inquisitor, though she sees herself as such, and US is not a conclave of cardinals electing new Pope of Rome. There’s more leeway here.

Same applies to "stop-and-frisk". I do not believe Mayor Bloomberg sincerely apologized for it. And he shouldn’t. Mayor Giuliani and Mayor Bloomberg transformed a crime-infested degrading city into the modern booming megapolis we all enjoy today. Crime had to be reined in and nether them, nor New Yorkers could wait 20 years until new generation of gentle beings will somehow appear and current one of street criminals will somehow disappear. Targeting risk groups is not racial profiling, it's statistics. Without this data you will not understand neither the scope, nor the location of the problem and will be powerless to do anything about it. And no one sufferes from local crime gangs more than locals of the same ethnicity. This is not about race, this is about unpleasant truth. You need to eradicate crime both short-term by policing and long-term by tackling social roots of the problem. Did Mayor Bloomberg do bad or good job in this regard? Is it too big a price if many people had been stopped and searched just for looking like those guys who are expected to carry and to sell drugs or is it societally acceptable?

For me the answer is quite clear – if I live in a problematic neighborhood and I’d be searched by police from time to time following proper protocol, I’d be fine with that provided that this is temporary measure to be phased out as soon as the problem goes away. This policy serves me well – in exchange of fairly minor inconvenience similar to airport experience any time you fly anywhere, there is significant decrease of illegal activity on the streets as street gangs know they are targeted. It is not theoretical – we lived like that in Mother Russia in 90s and didn’t have much problem with that. Then crime was reined in and police just stopped ad hoc searches on streets, as simple as that.

Having explained why I don’t have issues with Mayor Bloomberg “baggage”, let’s reiterate why he is the best candidate not only to beat Trump, but to perform afterwards.

·      He is like Trump, but better – a lot of people who voted for Trump because he is a rich outsider to the Swamp, will quite possibly mirror this approach in 2020.

·      He is competent – hopefully, there is no need to elaborate.

·      He is well established both in business and in government and there will be no shortage of qualified people willing to serve under him.

·      He is not divisive – his drift from being Republican to Independent to Democrat demonstrates that he naturally gravitates to the center of political spectrum and may be unacceptable only for ultra-right and ultra-left.

·      Business-friendly and philanthropic – a perfect combination to ascertain economic growth and more social justice without being heavily tilted to one side.

·      And he has the more rights than any other challenger to behave as a know-all, those voters who have problems with taking that attitude from a person like him need to do some self-reflection indeed.

Finally, once again, America, do the right thing, vote Michael Bloomberg for President. The world needs some respite.