Thursday, June 7, 2018

THOUGHTS ON IMMIGRATION


1.       Our existing immigration laws are anachronistic and -therefore- enforcing the law has undesirable consequences. The law should be changed to guide immigration policy towards a clearly articulated and desired outcomes in line with American core values and the national interest.
2.       America would not be what it is without the regular waves of immigration it has absorbed over the ages since the time that the land bridge between Siberia and Alaska allowed the settlement of the North American continent. America has proven capacity to assimilate masses of newcomers.
3.       Seventeen percent of the U.S. workforce is foreign-born. But about a third of immigrant workers do not have authorization to work legally in the U.S. and yet America has a labor shortage in several sectors of its economy. That should tell us something. And it will get worse: The government projects that the economy will add 9.8 million jobs between 2014 and 2024 and that the labor force will only grow by 7.9 million workers (only by immigration).
4.       Uncontrolled immigration is a sign of failed national security policy and inadequate border security measures. The blame for this and the task to address it falls in equal measure on all three branches of government, but Congress will have to rectify it.
5.       Responsible government of any nation needs to know at any time who resides within its borders, for what purpose and under what title (citizenship, visa, green card). This may be an unattainable feat without a legally required forge-proof, biometric, identity card for anyone who is not a casual visitor (tourist).
6.       The loop can then be closed, and stragglers can be kept out without building a wall, by mandating presentation of this identity card for obtaining a job, a bank account, credit card, driver’s license, access to education, and other similar life necessities.
7.       The U.S. economy needs immigration for three primary reasons:
a.       As the baby boom generation leaves the workforce, the number of working-age adults born in the U.S. to U.S. born parents will decline by 8.2 million. Between now and 2035, all growth in the U.S. workforce will be entirely due to immigrants and their children.
b.       Jobs that require little formal education will be of less interest to an increasingly educated U.S.-born workforce. There are numerous jobs Americans simply don’t want to do anymore.
c.       Immigrants and their children need to take the place of the retiring baby boomers, replacing them as contributors to our social security systems.
8.       The first order of business is to create an accommodation for undocumented immigrants currently in the U.S. – either in the workforce or a spouse or child of a worker – to allow them to legally reside and work in the U.S. (leaving aside, for now, the issue of citizenship). It is unthinkable to ask accelerated growth from our economy without the active participation of the approximately 9 million undocumented immigrants who are now part of the workforce.
9.       The only legitimate and compelling reason to expel undocumented immigrants from this country is if they have a criminal record unrelated to their entry into the U.S.; if they pose a significant security risk; or if they have no capability or intent to contribute to the U.S. economy and have no family members willing to support them.
10.   The next order of business is to align immigration policy with the core values and the economic interests of America. I posit that such policy would have to:
a.       Enshrine that America continues to be a safe haven for verified refugees.
b.       Keep immigrant families together.
c.       Attract foreign talent irrespective of origin and encourage foreign students to participate in the U.S. economy after graduation.
d.       Attract foreign workers for sectors of our economy that are highly dependent on immigrant labor.
11.   The only public interest in controlling and limiting immigration is in the need for national security, to keep undesirables out and guard against oversupplying the labor market.
12.   Immigration will only stop if America no longer offers the promise of a better future. We should all hope it never gets to that point.

Friday, May 11, 2018

FOUR YEARS LATER


It is coming up on four years since I finished writing my book ‘NEITHER HERE NOR THERE, a First-Generation Immigrant in Search of American Exceptionalism’ and it is time to review the assessments made in the book and update its conclusions.

The book concluded that changes in the American political system would be required to allow the nation to address the major structural flaws that had been creeping up in a house that has stood for almost three and a half centuries.

My presumption is that the effectiveness of a political system can, and should, be measured by its capacity to craft solutions to the most pressing challenges a nation and its population faces. And the contention in my book was that our existing political system, as it functions today, puts our nation at risk of losing its dominance and vibrancy by not offering any steps to deal with the flaws that threaten to undermine its otherwise impressive edifice.

In my book, I identified as cracks in the building of our nation: the national debt and deficit; a crumbling and outdated infrastructure; absence of a comprehensive immigration policy; a losing battle in the war on drugs, the war on terror and the war on poverty; excessive cost of and uneven access to healthcare and education; and neglect and denial when it comes to protecting the environment of our planet.
My further contention was that not addressing the cracks in our building has resulted in creating a level of inequality within our population that is a disgrace to the richest and most resourceful nation on earth and a threat to its stability, national security and economic outlook.

It is telling that all the cracks in the system are of a nature that only governments can correct. This has not changed. In my book, I drew attention to the sharp gap between performance of the private and the public sectors. That gap is wider today than it was four years ago. Our businesses are humming and they are addressing problems of public interest like the treatment of women, climate change, work environment and employment of disabled persons, people with a criminal record and immigrants. Our government on the other hand, under Obama and Trump, has not addressed anything of the kind over the four years that have passed since I finished writing my book. It has only rapidly further increased the national debt that now stands at $21 Trillion (a truly scary and unfathomable number) and is bound to accelerate pace fed by the Trump tax cut, the omnibus budget bill and rising interest rates. By not addressing any of the cracks in our building, our problems have festered, exposing in a painful manner the inadequacies of our political system.

I argued in NEITHER HERE NOR THERE that, if a building is structurally flawed and unsafe, it gets condemned. Nothing of the kind has happened to rectify the US political system, even though it is deeply flawed and manifestly unfit for the purposes it is supposed to serve. The structural flaws that I identified were:
·       The two-party system
·       The money influence
·       The election system
·       The absence of a national strategy
Let’s look if anything has changed in any of these areas.

            1) THE TWO-PARTY SYSTEM
The two-party system has not changed, at least not organizationally. But there are ominous clouds building over the future of the GOP and the Democratic Party. In fact, internal consensus is completely lacking in both parties. There have always been factions, but what we see today looks more like fractions. In the GOP we have long had a more conservative (fiscally and socially) and a more moderate, centrist, representation. And in the Democratic Party we have similarly had a more radical, leftist and a more moderate, centrist faction. But the factions were generally conversant and unified come election time. That may no longer be the case. It is hard to say who is in worse shape. The GOP has been split asunder by the Trump election, which the party did not want, but could not stop. The split has, so far, largely been plastered over by the refusal of most GOP members of Congress to openly revolt against a President who never was a Republican, or even a conservative, until he decided to run for the highest office in the land. But the primaries leading up to the midterm elections in November will expose the warring factions in full daylight display. The by-elections in Virginia, Alabama and Pennsylvania have demonstrated that Trump’s coattails have been trimmed to threads. Some observers go as far as saying that the emperor has no clothes. The fight for the soul (and platform) of the GOP will be fought by at least three distinctly different ideology adherents: 1) Far right conservatives (mostly coming from the Tea Party wing); 2) Centrists; and 3) Populists. The outcome of the primaries and the midterm election will show which faction is winning and then it remains to be seen if the losing factions will stay with the party.

The Democratic Party is not in much better shape. It suffers from a lack of leadership and strategic direction. The far-left is by far the most vocal and has the support of much of the younger population (that always seems to be the case and not only in the USA). But its policy proposals are so far out of the mainstream that the party cannot expect to come back in power on the far-left platform. Anything that smells or looks like socialism or communism is (thankfully) antithetical to American beliefs and values. The best chance for Democrats is to unify behind a pragmatic, forward looking agenda that systematically addresses the cracks in the building that have appeared over time and which are enumerated above. Here too, the upcoming primaries and the midterm election will show which faction will take control of the party.
Regardless of which faction will emerge victoriously from the primaries and midterm election of 2018, on the Republican side and the Democratic side, it is certain that large factions in both parties will feel left behind and will be pondering their options.

The discontent with the current positioning of the two main parties is already clearly exhibited by the number of legislators on both sides of the aisle (but primarily in the GOP) who have declared that they will not be running for re-election. As hard as it may be to establish a viable new political party, circumstances have never in my lifetime been better to see it happen before the next Presidential election in 2020. The nation would be well served with the creation of a centrist third party that would attract moderates from both sides of the aisle. It would give people like Jeff Flake, Bob Corker, Charlie Dent, John Kasich, Doug Jones, Conor Lamb, Mitch Landrieu, Jim Webb and Mark Warner a place to go to and stay active in politics.

2) THE MONEY INFLUENCE        
Money remains king in politics. If there ever was any doubt, you just have to look at the amount of money spent in the most recent by-election for the Pennsylvania 18th District, which was narrowly won by Democrat Conor Lamb. Reportedly more than $10 million was spent on the losing side and more than $2 million on behalf of the winner. This, for one seat in the House of Representatives that will change again in November as a result of re-districting. The ugly reality remains that our elected officials have to keep going back to the well to ‘buy’ their re-election chances and -as a result- end up to be more beholden to their donors than to their constituents. The law has not changed in the last four years. There is a vicious circle here: Change cannot be expected to come from members of Congress who depend on donor money for their campaign and the judicial branch condones the current situation. It has judged that ‘independent expenditures made by individuals….do not give rise to corruption or the appearance of corruption’ (Justice Kennedy writing for majority in Citizens United v. FEC, 2010). The legislature can justify its self-serving inaction with the Supreme Court’s prohibition of rational steps to take the money influence out of politics.
As long as the US Supreme Court holds on to its judgment that limits on election campaign spending are unconstitutional (Buckley v. Valeo, 1976); that political spending is a form of free speech protected under the First Amendment; and that the government may not keep corporations or unions from spending money to support or denounce individual candidates in elections (Citizens United v. FEC, 2010), the money will keep flowing, influencing the outcome of elections and the content of legislative action and inaction.

Noteworthy is that the 45th President, in his election campaign, was willing to finance his campaign largely with his own money and money from the Trump organization, not relying on donor money, although his campaign ended up accepting third party money where offered. His election was a rare case where the outcome at the ballot box was not significantly influenced by either the amount of money donated to the campaign by third parties or the breadth of the field of donors to his campaign. In the meantime, Trump has apparently changed his mind and is actively conducting fundraising events for his re-election campaign.
I have suggested to end the scourge of money in politics by paying members of Congress an honorarium of a million dollars per year but prohibiting them from earning or accepting any money from private sources for the time of their tenure. Always a very long shot, it seems that we are only further away from dealing with this scourge than we ever were before.

3)  THE ELECTION SYSTEM
The frequency of elections, specifically the need for members of the House of Representatives to campaign for re-election every two years, is an impediment to constructive, forward looking work by the legislative branch. The frequency of elections increases the dependency on donor money and takes away from the time that legislators have to do the work they are elected for.  The obvious solution of longer but fewer terms (term limits), in order to lessen the time needed for fund raising and to free up more time for the ‘peoples work’, is nowhere on anyone’s political agenda.
The system, in my view, is also hampered by the absence of any statutory requirement to address, in a national election campaign, the most important challenges for which the political system will have to provide solutions. How, other than by party affiliation and (mostly negative) political advertising, can the voting public determine who they want to vote in office, if it has to wait and see until after the election how, if at all, their candidate will deal with the most pressing needs of the nation?

While, in these two respects, nothing has changed, widespread dissatisfaction with the dysfunction in the Washington Beltway has spurred discussion and some action, bringing about change in other aspects of our election system. First of all, with the districting process. States are taking action against the gerrymandering practices that have drawn ridiculous district lines serving only one purpose: to bring together the highest possible number of politically likeminded people, offering ‘safe and secure’ districts to incumbents. And, just recently, the US Supreme Court has declined to hear a Republican appeal against the redrawn congressional map in Pennsylvania that has done away with gerrymandering in that State.
Another development pertains to the process of primary elections. Here too, the States are the laboratories of innovation and improvement. At least 22 States allow ‘open primaries’ where voters, regardless of their party affiliation, are allowed to participate. And three States, Washington, California and Nebraska, have adopted a ‘top-two’ primary system, where the top two vote-getters, regardless of their party affiliation, advance to the general election. This system makes it possible for two candidates with the same party affiliation (or independents) to advance to the general election. Nebraska utilizes the top-two primary system only for state legislative elections.

If these three developments, redistricting, open primaries and top-two primaries, catch on and become more the norm than the exception, it will enhance our democratic election process and reduce the sharp divide between the aisles in Congress. It will do so by increasing the participation in primary elections, making it harder for far-left or far-right (fringe) candidates to come out on top in their primaries and thus advance to the general election.

4) ABSENCE OF A NATIONAL STRATEGY
 American public governance has no tradition or statute for the creation of a binding strategic plan that is built on broad consensus and transcends the shifting balance of power between the Republican and Democratic parties. As a result, we allow the party in charge to set the agenda without regard to the larger national needs and priorities. And, with the constant shift in control of the White House, the House of Representatives and the Senate, the interpretation of what needs to be done keeps changing. Each administration hurries to get policy changes implemented and resorts mostly to executive orders, since legislative actions are too hard to get through Congress or take too long to get accomplished during the four-year term of control of the White House. The Trump administration may not have completely succeeded in doing away with Obamacare, but it has otherwise been very busy and successful in reversing Obama age rule making, primarily in the regulatory realm. All of this is likely to be turned back again if and when the current occupant gets kicked out of the White House in 2020. So, the tug of war of political expediency continues and keeps the nation from getting the help it needs to solve its most pressing problems. In the meantime, a huge army of competent, dedicated and loyal civil servants, capable of solving problems, stands by as the politicians play their self-serving games of orders and countermands.

Big strategies take a long time to be developed and implemented and don’t fit in with the election-driven decision-making practices of our politicians. These realities cry out for a non-partisan definition of what the government needs to achieve in the interest of the prosperity, security and stature of the nation. Now more than ever is the country in need of the articulation of a national strategic plan, since the days of uncontested global dominance and hegemony are over. However, none of this was in sight four years ago and none of this is in sight today. A political system that does not mandate or even facilitate the creation of a long term strategic plan is duping the people it is supposed to serve and condemning the nation to underperformance, both against its potential and against its global competitors.

The world looks and feels different today from what it was in 2014 and it will look and feel different again in another four years. The difference stems primarily from the unforeseen rise of populism and the election of Donald Trump in 2016. Nothing has been more affected by this than the character and the identity of the GOP. I am still incredulous that the Republican Party not only allowed a person with no political track record and without any bona fides conservative credentials to run on their ticket and that the voters carried him to victory.
Even more astonishing is that, since Trump’s election, GOP legislators have given him a free pass to toss out fundamental Republican beliefs in free trade, environmental stewardship, immigration and fiscal responsibility.

When it comes to public governance, we are always comforted by the strength of our Constitution and the separation of powers. But the separation of powers is only effective if we have a legislative branch and a judicial branch that are willing to push back on the executive branch when the latter gets off the rails. 

I am not sure that I will live long enough to be able to see the Trump episode in the rear-view mirror. Will it be a four-year aberration that will be corrected by the voting public in 2018 and 2020, or will it signal a fundamental shift in the political landscape in the US and in the role, America plays in global affairs?
Short term, the insertion of a populist element in the political scene around Washington D.C. has only deepened the gridlock that had the political system locked up. The only thing of consequence passed by Congress during the first year of the Trump presidency is the GOP tax reform, that will soon enough have to be reversed or amended because it is on course of bankrupting the country. The gridlock is the result of the GOP control of both chambers of Congress and the refusal of the GOP representatives to acknowledge the ideological divide between (most of) them and the President. This show of party discipline has masked, for the most part, the ideological differences within the GOP delegation on Capitol Hill and thus secured the pat stand between two monolithic and near equally sized voting blocks. It will be interesting to see if the dynamics change after the midterm elections of 2018. If the Democrats succeed in taking control of the House and the Senate (which is a big if, given the lack of unity within their party), in theory, the possibility opens for the centrists in both parties to find each other in legislative activities that can begin to address the cracks in the building. Then the question will arise if the President can get Congress to sustain a veto, which he will most certainly issue against any bipartisan initiative that bypasses his office.

This review would not be complete without an analysis of the role of the media in the politics of the day. My first observation is that today’s media is much more occupied with disseminating opinion than facts. It is largely a function of the 24-hour news cycle that has to be filled. In spite of the constant alerts of ‘breaking news’, there is only so much factual news to be brought up, so the rest of the time needs to be filled with opinion and interpretation. That would not be all that detrimental if media channels had not largely organized along ideological lines and technology was not allowing us to select our news feed only from sources that espouse our own political beliefs and opinions.

Social media allow us to ‘befriend’ only those people and organizations that echo and support our points of view. All of this deepens the polarization not only in the ranks of the professional politicians but equally so amongst the voting (and non-voting) public. It makes reaching across the aisle a politically risky move, where it should be a frequently used tool in the political process. It also puts family members, friends, colleagues and neighbors at odds with each other. Freedom of the press, enshrined in the 1st Amendment, is a cornerstone of our democracy. But freedom comes with obligations and the media flaunt their obligations if they do not pursue the facts, the truth, with more vigor than they voice opinion. The best hope one can have for the role of the media is that they keep the politicians and the judiciary honest. That they have the capacity and willingness to separate facts from fiction and factual news from fake news. A free and independent press is a vital component of a functioning democracy. It is the watchdog that will alert the public to transgressions by any of the three branches of government against the Constitution and the rules of the game. Social media have opened the field to anyone with web access. This form of free speech is equally protected by the 1st Amendment. But we have yet to find an effective and constitutionally permitted way to protect ourselves from propaganda, fake news and untruths, cleverly disguised as ‘news’. In short, communications technology has complicated society’s quest for clarity, honesty and truth in media coverage of the political scene.

Based on all of the above, we come to the conclusion that much has changed and yet, much has stayed the same. Gridlock and polarization stand in the way of an improved political system and the leadership capable of breaking the impasse with popular support is absent. The country has made no progress in solving the most pressing problems the nation faces. Four years later, the rise in inequality, the absolute level of inequality and the glaring visibility of inequality together stand in the way of a healthier, more motivated and better performing nation. There is a direct connection – in most instances causality – between the inequality we see within the American population and the most pressing social ailments of our time. Inequality is expressed not only in difference in income or wealth, but also in difference in access to the best healthcare and the best education; the safety of the neighborhoods we live in. The burden of drugs, incarceration and military service falls disproportionately on the underprivileged. And the underprivileged are the ones who have to compete directly with the undocumented immigrants for their jobs.

My contention is that inequality will not be brought back to bearable proportion unless these most pressing ailments of our time are cured. That is a job for the government. And therein lies our Gordian knot: The cracks in our building will not be healed unless our system of public governance is restored to functionality; and inequality will not be brought back to acceptable proportions unless the cracks in our building are healed. It all hangs together and our destiny hinges on the linchpin of a functional system of public governance.
My book and the columns on my blog CASTNET COMMENTARY have been interpreted by some as criticism of my adopted country. That is a misinterpretation. I am a legal immigrant of choice and a permanent resident. My criticism is not directed at the country but at the manner in which it is getting led or misled. Others have tried to convince me that, in my pursuit of the exceptional America, I am a modern-day Don Quixote, chasing windmills with no basis in reality. That may be closer to the truth, if only because windmills are the most recognizable Dutch landmarks. But, if we only chase the realities of today and forego a foray into our imagination of what could be and should be, won’t we do a disservice to the ones coming after us, by not using our unique human capacity for intelligent creativity? As Einstein said: “We can’t solve problems by using the same kind of thinking we used when we created them” and as Nelson Mandela said: “It always seems impossible until it is done.”

Today, America has a government of the people, but not a government by the people, nor a government for (all of) the people. What poor governance has pried apart, good governance will have to put back together. It is not the nation that fails its people, falling short of expectations, it is the political system combined with weak (or worse) leadership that fails the nation. What is our huge government apparatus for, with all of the enormous tax burden it entails, if it is not to serve the people by addressing and solving their problems?
America has made exceptional contributions to world civilization, in war and peace, in exploration, in science and technology, in creating wealth, and in advancing human rights. There is no denying that, in terms of its geography, natural resources, the size of its economy, and its relative youth as a nation, America is blessed unlike most any other nation on earth.

But I am convinced that America today is underperforming against its capabilities and I find the reason for that in the failure of our political system, and the people serving in elected office, to keep the nation from coming apart. The cracks in our building have only widened over the last four years and we are sitting by idle, fatalistically waiting for the building to crumble. We are more polarized than ever since the Civil War and we allow ourselves to be paralyzed in the process, unable to solve our problems, which should be eminently manageable given America’s wealth, resourcefulness and strong civil service component.
We refuse to come together and compromise on the way our problems will be solved. It takes high caliber leadership in the White House and on Capitol Hill to break the impasse. America has done it before and I’m confident it can do it again. But sometimes things have to get worse to the point of becoming untenable, before the nation pulls together. Change comes easier when the pain of staying with the same exceeds the pain and hassle of change.
At that point you pray first that the nation can absorb the shock and then for full political engagement of the younger generation and the presence of the kind of leadership that inspires a nation to right itself.

Friday, January 12, 2018

IN HIS OWN WORDS

I refuse to read the Michael Wolff book ‘Fire and Fury’, because it de-legitimizes the serious concerns about the intellectual and moral fitness of our current President that I share with a good number of people whose judgment I value more than my own. People like David Brooks, the NYT columnist and senior fellow at the Brookings Institute, and Ian Bremmer, President of the Eurasia Group. I wish the book had been written by a serious, professional journalist like Bob Woodward or Carl Bernstein after being given authorized access to the White House. Because I am dying to get a credible read on what kind of Presidency we are really dealing with.

As David Brooks has pointed out in his excellent column ‘The decline of anti-Trumpism’ in the New York Times of January 8, it almost appears as if we have two White Houses, two Presidencies, one rational and effective and the other one irrational, erratic and dysfunctional (Brooks terms the first one the ‘Invisible White House’ and the other, more apparent, one the ‘Potemkin White House’). The rational and effective White House is represented by some of the key personnel in the administration and the staff of the White House. The irrational, erratic and dysfunctional White House is represented by Donald Trump himself and some of his spokespersons. Which White House controls the destiny of our country?

Since we have no credible inside view, what do we have on the record to give us a glimpse into the daily reality of what the White House is really like? I have taken the time to pull up the transcripts of Trump interviews, given between November 23, 2016 and January 11, 2018, to journalists from the New York Times, Associated Press, The Economist and the Wall Street Journal. They make tough reading. They cover essentially the first year of the Trump Presidency and if you are looking for a learning curve, it is not apparent. Whatever the intellectual capacity of #45 may be, the transcripts show that if you ask him to answer questions without a prepared, scripted, response, you get an avalanche of words that are never grouped in fluent, coherent sentences and only sporadically address the question asked. The responses in the January 11, 2018 interview with Rebecca Ballhaus, Michael Bender, Peter Nicolas and Louise Radnofsky of the Wall Street Journal are as inarticulate and scattered as the first one with the executive and editorial team of the New York Times on November 23 of 2016.

Equally revealing from the transcripts is the lack of intellectual curiosity evidenced in the words of the President. Nothing gets questioned, other than the FBI’s hesitation to delve into the Hillary emails and other shenanigans of the Clinton clique. All the answers the interviewers get are self-congratulatory statements about how he can and will straighten out the mess created by his predecessors. A lack of command of the facts, including an intimate understanding of the US Constitution and the separation of powers, is pouring out of these transcripts.

I find it amazing that, to my knowledge, none of the interviewers have cared to publicly ring the alarm bells as they came away from these interviews with a President who is clearly incapable of articulating a sensible thought process off the cuff.  If, in a face to face interview, the President can’t offer a coherent commentary on his own actions, plans and expectations, how will he be capable to articulate his demands and intentions in encounters with other world leaders? This question is particularly compelling, given Trump's penchant for one on one sessions that allow him to report afterwards how an amazingly good relationship he has been able to develop with his counterparts (whether it is Merkel, May, Macron, Abe or Xi Jinping) without witnesses able to refute the story.

Newsweek has latched onto this and reported that the company ‘Factbase’ has analyzed the verbal vocabulary of every US President since Herbert Hoover and found that our current President communicates at the lowest grade level of all his 14 predecessors. Measured on the scientifically constructed Flesch-Kincaid scale, Trump gets a 4.6 grade, which equates to a 4th grade vocabulary. The Factbase analysis is limited to unscripted words uttered at press conferences and other public appearances (not prepared remarks or press releases). It should not surprise us. We hear the President speaking ad lib just about every day and come to the same conclusion. I thought ‘W’ was bad, but at a 7.4 grade he ranks far above the current occupant of the White House.

The problem with most politicians is that they have a tendency to say different, even contradictory, things to different audiences and are masters in hedging their positions, knowing full well that whatever they say can and will be held against them at some point by at least part of their constituency. Our current President, even though more a showman than a politician, is no exception. But most other elected officials have learned to explain their positions in understandable sentences.

Does any of this disqualify Trump for the highest office in the USA? Not by itself, but combined with the fact that, in these interviews, #45 constantly contradicts himself, repeats himself ad nauseam and flaunts the facts, it should at a minimum raise questions in the minds of the people who voted for him in 2016.

Unfortunately, Michael Wolff’s book undermines the foundation for the legitimate opposition to the Trump Presidency, much like the idle talk about impeachment of the President does. The hard truth is that the American voters have put an intellectual and moral minion in the White House. No one can in truth maintain that Trump misled voters in his campaign in who he is, what he stands for, or how he plans on making America great again. The handwriting, rather ugly graffiti, was all over the wall. We need to accept that only two forces can remove this stain from America’s honor by removing him from office: 1) Robert Mueller, if he finds irrefutable evidence of high crimes and misdemeanor committed by #45; or 2) the voters, but not until 2020. We also need to accept that there is this other, invisible, White House that is quietly and methodically going about its business of reversing the Obama agenda.

Ultimately, I am of the opinion that we need to judge the office holder and not the ‘Invisible White House’ and I will find that the current President of the United States is unfit for the office he was elected to for a number of reasons:
·       His refusal to eliminate every trace of self-dealing and conflict of interest between his business interests (his brand), his family interests and the sanctity of the public office he is entrusted with (the American brand).
·       His disrespect for the constitutionally imposed limits on the authority of his office.
·       His zero-sum approach to geo-political issues: if it is good for the other party, it can’t be good for America.
·       His rhetoric on global trade, climate change, the Western alliance, immigration, the refugee challenge, NAFTA and the nuclear deal with Iran.
·       His disregard for the intolerable increase in inequality and the national debt.
·       His narcissism and populism.

But I realize that, other than the first two points of critique, all these arguments are political in nature and need to be contested and resolved at the voting booth. In the meantime, let’s hope that no irreparable harm is done to the country, it’s institutions, it’s standing in the world, not to speak of world peace.

Monday, November 20, 2017

THE NEW NORMAL?

For my regular readers it is no secret that I am not particularly fond of our 45th President, not of his style, his substance (or lack thereof) or his character. But, as I wrote a year ago in my column ‘The Next Four Years’, the voters chose in November of 2016 to give him a chance and we should respect that. The good thing is that Presidents in the United States are term limited to a maximum of eight years and that they have to go back to the voters to ask for an extended mandate after the first four years. In addition, they (their actions and policies) will be assessed in mid-term elections which have the capacity to deny them support in Congress and thus clip their wings before they become a lame duck.

I have to believe, but I have been proven wrong about just about every prediction I have made about # 45, that this President will pay a price in the court of public opinion every time his presidency is subjected to the democratic process of free and fair elections. The sketchy results from the 2017 State and Local elections cannot really be interpreted as a verdict on the current federal administration, but they hint at a repudiation of conservative-republican candidates and policies. The mid-term elections of 2018 will be the first true test of whether we will have entered an era of nationalistic populism or are just going through a period of aberration.

Yes, there are people who don’t care about the federal government or what it does at all and just want to hear the man in the White House use the same rhetoric they like to use when confronted with opinions that differ from their own or when contemplating the lack of respect and dominance America commands abroad. These people cherish the satisfaction of ‘telling them like it is’ and despise political correctness, diplomacy and compromise. But rational people will be results oriented. They will want to judge politicians on how well or poorly they deliver on their campaign promises. Their chance to do that comes at the voting booth. I surely hope that the percentage of voters willing to live by promises, kept or not, and slogans, is not high enough to keep delivering electoral victories. We will have to wait, until November 2018, and see.

In the meantime, we will keep wondering where America will be heading. Will it revert to picking up its century long role of a global pathfinder, a living representation of the values expressed and enshrined in its declaration of independence and constitution, or establish a new normal in which a narrowly defined self interest becomes the norm not only for federal policy but also a model for personal conduct.

The fundamental difference that sets the new normal apart from the old is the axiomatic belief in the zero-point game: ‘There can only be winners and losers, not winners and winners’. In the new normal, the United States would have left Japan and Germany to fend for themselves after World War II had ended. The Allies had won and the Axis lost, as simple as that. Recovery from the Allied inflicted war damage would not have been an American responsibility. The new normal despises losers and idolizes winners. Winning means that you were right all along. The concept that a treaty or a multinational agreement, like NAFTA, the Paris Climate Accord, or the Iranian Nuclear Framework Agreement, can advance the interest of all parties is alien to the subscribers to the new normal. If America does not get it exactly its way, the deal can simply be no good, it must have been poorly negotiated. From this rationale, the new normal had every reason to reject the TPP framework even before it had been fully negotiated.

The new normal is pessimistic and cynical. In the new normal there is no ‘give and take’ and – in political terms – there is no reaching across the aisle. It looks at every challenge as a zero-point game: ‘We can’t all be winners, settlers and immigrants, protectionists and free-traders, Christians and Muslims, conservatives and liberals, rich and poor, healthy and sick, educated and uneducated, white and black and Latino’.

If, God forbid, the 2018 and 2020 elections were to establish the new normal as the lay of the land, it will signal a complete abandonment of traditional American values, beliefs, and aspirations. There is no denying that America has always harbored self-centered, cynical, and confrontational elements, but most of the time and over the long run they have been kept at bay by a moderate, rational, optimistic, and forward looking public opinion.

Will the regular order prevail and bring America, by means of the voting booth, back on the course of leading the world by example and in a collaborative mode with other peace-loving nations, or will it require a life altering shock to the system, like a nuclear conflict, a cyber war, an economic collapse or a popular revolt? That is the existential question.

Monday, October 23, 2017

THE VOID AT THE CENTER

Did George W. Bush read my book?

On October 19, at the ‘Spirit of Liberty: At Home, In the World’ event in NYC he delivered an ill-disguised rebuke of Trumpism in which he said: “At times, it can seem like the forces pulling us apart are stronger than the forces binding us together.” That resonates with me. In my book ‘NEITHER HERE NOR THERE, A First-Generation Immigrant in Search of American Exceptionalism’, I wrote: “The core of my disenchantment with America, as it functions today, is in the fact that the forces that pull America apart seem to have overwhelmed the forces that bind America together.” It was more than three years ago that I wrote these words, well before the surprising rise and coronation of Donald Trump, and it only has gotten worse. At the time of writing my book, I was hopeful that dissatisfaction with gridlock in Washington DC would open up an avenue for moderate Republicans and moderate Democrats to take control of the agenda of the Congress, if not by the creation of a centrist third party, then by an informal coalition for legislative action on the most pressing issues of our time: the increasing inequality, healthcare reform, immigration reform, tax reform, debt reduction and infrastructure renewal. That hope seems to have dissipated, turned into a pipe-dream, for now.

We are witnessing a period of the quickly disappearing middle of the road. Not only in the United States, but also in Europe. The question is if this is a temporary phenomenon or a precursor of things to come. In the United States, we may get some clarity with the mid-term election in November of 2018, which almost certainly will turn into a referendum on Trumpism versus the establishment. Of course, that election will be a traditional battle between Republicans and Democrats and a battle for control of the Senate and the House of Representatives, but more tellingly it will shed light on what brand of Republican and what brand of Democrat will prevail. Establishment candidates for re-election will find themselves confronted with unprecedented primary challenges, mainstream Democrats from the far left, mainstream Republicans from the far right and from populist candidates in the vein of our current President. After this primary tussle for the soul of republicanism and democratism has been decided, and assuming that it will result in a defeat for the establishment, the voters will then have to signal if they think this movement to the extremes is going to have their support or rejection. The mid-term election will be the first clash in this battle. The 2020 Presidential race will, two years later, either confirm a trend that started with the 2016 surprise, or become the turning point back to traditionalism or normalcy. After all, changes in the political arena of our country are still only forged at the ballot box. We have no choice but to go through the contest of finding out if the middle road, the center, is or is not where America is at this juncture.

It is evident that not all Americans see the disappearing center in politics as a threat and a loss. Particularly the populist faction of the Republican Party (and populists outside of the party) led by Steve Bannon are tirelessly working on the demise of whatever remains of the center. They see compromise in politics as treason and strive for unmitigated hegemony. American leadership, for them, equates to imposing its will and its narrow view on the rest of the world rather than sharing our values and ideals with the world by leading by example.

John McCain, a rare remaining representative of the political center willing to speak up against the populist tide, in the speech with which he accepted the Liberty Medal Award, reminded us of what is at stake with the abandonment of the Western liberal order, created by the United States in the aftermath of the second world war: “We live in a land made of ideals, not blood and soil. We are the custodians of those ideals at home, and their champion abroad. We have done great good in the world. That leadership has had its costs, but we have become incomparably powerful and wealthy as we did. We have a moral obligation to continue in our just cause, and we would bring more than shame on ourselves if we don’t. We will not thrive in a world where our leadership and ideals are absent. We wouldn’t deserve to”.

Some divisions require dialogue, reaching across the great divide, and, ultimately, compromise. But outright repudiation of America’s ageless ideals and values deserves only resistance, an uncompromising stand against the corruption of everything this nation has stood for from its inception. We are beginning to see a movement in that direction developing. But only slowly, late and hesitantly. And the voice of alarm appears to come nearly exclusively from the media, the political opposition, and, on the Republican side, the departed or the departing. George Bush speaks out, but is a voice from the past. John McCain speaks out, but he knows that his days are numbered as he has just started serving his last term in the Senate. Bob Corker speaks out, but only after deciding not to run for re-election in 2018. Jeff Flake, Ben Sasse, Lamar Alexander, Susan Collins, Lisa Murkowski, we need to hear this voice of resistance and for the soul of the Republican Party develop into a chorus, a crescendo that invites Americans to join in, like they join in when asked to sing the national anthem, God Bless America or America the beautiful.

America needs an unapologetic return to the center, the middle of the road. It will only get there by an unambiguous repudiation of Trumpism, Bannonism and populism in general at the voting booth. It will require charismatic and principled new leadership on both sides of the aisle willing to put the country ahead of its political ambitions. Only after the void at the center has been recaptured can Congress begin to seriously address the causes of the current discontent that has split America apart. 

Tuesday, July 4, 2017

THE LONG VIEW

We are a great country and we should be governed as a great country (Olympia Snow).

With all the tweeted one-liners and on the spot reactions to the ‘breaking news’ of the day grabbing attention, how refreshing is it to hear a new generation politician speak for over an hour, impromptu, in a coherent, erudite, never faltering, fashion about the real issues of our time. This happened on June 2017 when Tyler Cowen, author and Economics Professor at George Mason University, interviewed Senator Ben Sasse of Nebraska in front of a public audience. Senator Sasse has been attracting attention recently because of his book “the Vanishing American adult” and the publicity that comes with it. Also, because of a range of provocativein a positive sensemind challenging speeches on and off the floor of the US Senate. This interview was not the run of the mill, morning show, three-minute segment, squeezed between two commercials, but a probing, wide ranging, inquest into Ben Sasse’s views on what ails this nation and what to do about it. Senator Sasse’s answers did not come in the form of a carefully scripted speech read from a teleprompter. He gave real-time, unrehearsed, response to tough questions from a highly competent interlocutor. Absent in this interview is any gratuitous commentary on the current political reality. It is all forward looking, representing ‘the long view’. You can find the interview here https://medium.com/conversations-with-tyler/ben-sasse-tyler-cowen-book-twitter-trump-cb5b4a435323 If you missed it, it is worth retrieving. It represents a rareand hope givingevent in our current dispiriting political scene.

If you have the interest of the nation at heart, nothing can be gained by remaining pre-occupied by the daily theatrics of the main players on the political stage, as attention grabbing and addictive that may be. We need to do what Senator Sasse does so well in this interview: focus on the future and start looking for solutions to the serious problems that beset the nation. That is what I set out to do in my book “NEITHER HERE NOR THERE” written three years ago, but today even more relevant than it was when it was published. In it, I pleaded for a constitutional amendment, requiring from the President and the leadership in Congress to establish a national strategy. Without a long-term plan, there is no expected outcome and it is, therefore, not surprising that, for decades now, all that comes out of Washington DC is regulation and short-term policy. Note that recent administrations have declared “war” on a number of national challenges—like the war on poverty, the war on drugs and the war on terror—but they have not bothered to rally the nation behind any particular national objective. And thus, these wars fester on without ever achieving a strategic objective.

Without a doubt, the growing inequality between the ‘haves’ and the ‘have-nots’ in today’s American society is at the root of all the discontent and dysfunction we encounter and are confronted with daily, courtesy of our social media and cable TV. It has also produced the current White House and ‘leadership’ in Congress. Inequality manifests itself everywhere it matters: in income, in wealth, in the workplace, in education, in healthcare, in housing, in criminal justice, in sports and recreation. The best in all of these areas is reserved for an ever-shrinking proportion of our population. And the worst is never experienced by these happy few, but is the daily reality of the ever-growing lower tier Americans. Yet, where is the first serious attempt, in the White House or the Congress, to acknowledge the problem, declare this injustice as un-American, and come up with a strategy to turn it around?

Our political system, as it operates today, is no longer capable of coming up with broad initiatives that can remediate the problems we encounter. It is not even coming up for discussion, in large part because there is no open policy debate between the parties. And, even if there was such debate, there would be no money to fund broad initiatives, as the political reality only permits tax cuts, ruling out tax increases of any kind for any purpose. We may not be a failing state but we certainly experience governance failure.

The best hope we can have is that this too will pass and that we will survive this epoch of mismanagement. That is not a given. Our adversaries sense our weakness and may pounce on us at any time, or, more likely trap us into reckless reaction to their provocations so that we may defeat ourselves.

The long view does not develop overnight. It needs to be debated by the best minds in the public and private domain. It needs to be incubated, challenged, nurtured, articulated and communicated. That is what people like Senator Ben Sasse are good at. This work needs, by necessity, now be done outside of the realm of the federal government at any available public forum and in a bi-partisan fashion. And, if and when a national strategy emerges from this long, arduous work, then it is time for politicians like Senator Sasse to stand up and run for office on that platform.

This country deserves better governance than it has been settling for over the last decades. It will only get the governance it deserves, if it accepts the discipline of taking a serious, long, view of where the nation should be heading and crafts a plan on how to get there.

Tuesday, May 23, 2017

EXIT STRATEGY. A business white paper

I learned from Dave Sullivan, the business consultant who for years taught the Course for Presidents at Aileron, that in business one should never start an enterprise without at the same time designing an exit strategy. Dave Sullivan wants you to ask yourself: ‘How do I extract myself when it does not pan out, when I find that I have more important things to do, when it is time for me to retire, or when calamity strikes? More precisely, how do I extract myself without doing harm to the business, its stakeholders and my estate?’

The typical small business owner has a large part of his/her net worth tied up in the business and is relying on the value of that investment to fund his/her retirement.

The exit planning, we are dealing with in this white paper, has to do with the exit from control over the management and operation of the business, not necessarily from the ownership of the business. These two may, but not always do, coincide.

As Dave Sullivan points out, exit planning should not wait until you begin to feel ready for retirement. In fact, business owners would do well to separate exit planning from retirement planning. Otherwise the presumption is built in that the business owner will not, voluntarily or involuntarily, exit from the business until retirement. The exit planning Dave Sullivan is talking about is having a plan for what to do with the business when the owner falls away or when the business no longer meets the owner’s goals, whether these goals are of a business nature or a personal nature. This can happen at any time in the owner’s life cycle and in the business life cycle.

Such exit plan should look at all alternatives for the business, including liquidation, retaining ownership but leaving the day to day operations to others, becoming a silent owner, selling, transitioning to the next generation, turning it into an employee owned business, merging it with another business, you name it.

Not all of these options may be valid at every stage of the business development or under all circumstances. Therefore, the exit plan should be written as a “what if” scenario:
·       What if I find that, in the foreseeable future, I cannot achieve my return on assets goal?
·       What if the Lord takes me away?
·       What if my health fails me and I no longer have the stamina to lead the show?
·       What if I come across another business opportunity with higher earnings potential?
·       What if I want to go back to school or change careers?
·       What if a family member needs my full time attention and care?
·       What if I discover that others are better equipped to run the show than I am?
·       What if I want to retire?

A carefully considered exit plan is an indispensable business and personal planning tool. It will stimulate the business owner to maximize the value of the business independent of his/her level of participation in the business.

It is also an expression of good governance, as it protects the value and continuity of the business for other stakeholders, particularly heirs, employees, customers, suppliers and –if applicable – minority shareholders.

A good exit plan is a direct reflection of how the owner sees his/her role in the business. If he/she is a veritable entrepreneur, the plan will focus on scenarios that will call for an early exit or distancing from management as other opportunities arise. If he/she is a business owner for the purpose of having job security and making a decent living, the plan will focus on retirement. If he/she wants to be the Chairman of the Board but not the CEO, the plan will focus on separation of powers.

For small business owners wanting to create an exit plan there is plenty of professional counsel available. The first source to go to is The Exit Planning Institute (E.P.I) www.exit-planning-institute.org . The institute is responsible for the certification of “Certified Exit Planning Advisors”. Its web-site is a treasure trove of information on the topic of business exit planning.

E.P.I. points to the damage owners can do to themselves, their heirs and the business when failing to have a well designed and implemented exit plan:
·       Undervalue your company leaving hard-earned wealth on the table
·       Pay too much in capital gains and estate taxes
·       Lose control over the exit process
·       Fail to realize your personal, financial, or business goals during the exit process.

A good exit plan is written with the input of professional counsel. My experience with small business owners is that too many are living dangerously without a good exit plan. They do so at their own peril but they need to be aware that, in the process, they are also exposing all stakeholders in the business, particularly their employees, suppliers and customers, to unnecessary risk and harm.

As stated above, the content of the exit plan will, in large part, be determined by the owner’s vision for the purpose of his business. In the world of small, privately owned business, I have met all sorts of entrepreneurs with all sorts of motives for being in business:
1.       Quite a few owners, when they are honest with themselves, will see their business simply as a tool to earn a decent living for themselves and their families. They would probably have great difficulty working for others and are driven by the desire to be their own boss. When they have had enough and can afford to retire they may simply wind down the business, close the doors and be done with it.
2.       Many owners will see their business not merely as a tool to provide income, but also as a tool to accumulate wealth for themselves and later generations. They will work to maximize value in the business and – when it is time to retire – sell it or transition it to the next generation.
3.       Others see their business in the first place as a societal tool offering useful products or services to the public and employing a large number of people. They will not exit without making sure that the business survives them and that continuity is guaranteed for the employees and the consumers.
4.       Yet others, entrepreneurs included amongst them, have a desire to create something immortal that will last for the ages and will be a monument to their creativity. These are the brand builders who will only let go if their legacy has been secured and their brand has become unassailable.

A good exit plan should be able to withstand the litmus test of leaving no gap between what the owner wants to see happen with and in the business upon his departure and what actually happens if, by an act of God, the owner is unexpectedly removed from the business. Only owners who meet the description of 1) above can live happily without an exit plan. Without them, there is no business and that is exactly how these owners want it. All other owners fail the litmus test, if the reality of the business after their departure is different from the design. All of them should do some hard introspection and ask themselves if they have properly planned for the business to survive them, regardless of timing and circumstances. If the answer is ‘no’, exit planning should be moved to the top of the agenda of strategic steps to take for the business. Dying in the saddle is sad; dying in the saddle without an exit plan for the business is criminal.

Human nature keeps many of us from planning for our exit, whether it is our exit from life or our exit from business. ‘I am not ready for it’ or ‘it is way too early for me to think about retirement’ is what I hear a great deal of in my conversations with business owners. But these arguments ignore the difference between (voluntary) retirement and (involuntary) exit from the business. Exit planning is intrinsically different from retirement planning. Exit planning is a business process with personal consequences, retirement planning is a personal process with business consequences. Exit planning should be done regardless of the owner’s intent or lack of intent to relinquish control of the management and operation of the business. Retirement planning should include a plan for the future: What will I retire to? What am I going to do with my time, my energy and my expertise?

I have seen too many people being lost, miserable, without a place to go to every day, issue the orders, and direct people and operations. Most small business owners realize this and that is exactly why they drag their heels, when it comes to retirement planning. My counsel to them is to first plan for the next phase of their life before exiting the business by way of retirement. Retirement will only be good for you as a business owner if you retire ‘to’ something new, rather than ‘from’ something old. Retirement from your business will be a happy, fulfilling, time only if you have first determined what you want to do with the rest of your life and what you still want to achieve. Then go for it!