Thursday, February 17, 2011

Winner Take All Politics - Hacker & Pierson

I've become very critical of American politics. There are too many news articles pointing out the confusion, dishonesty, lack of ethics, and downright corruption. What is happening to the America I grew up with? It's changed, and not for the better. Our society has also changed.  Is the government changing to keep up with the evolution of society? The answer seems to be yes and no. Over 200 years ago our founding fathers designed a constitutional government they expected to last for centuries. It was unique in many respects, one of which was it's intention to have principles, priorities and plans that would stretch far out into the future.  Today, there is a persistent concern. Is our government  straying from the path set out for us? 

This book is a carefully drawn explanation of how and why our government is changing. It does a fairly good job describing why our country is gradually moving from the responsibility of individuals to the collective responsibility of all.  In other words from Democracy to Social Democracy.

We've settled in to a two party government, Democrat and Republican, and there is room in each for both left and right wings. The old distinctions have changed with changes of each party's constituency, and new elements have been added to our government structures.

1.    The idea of a temporary citizen politician is gone.
2.    The main job of an elected official is to insure his or her re-election.
3.    Lobbyists and Special Interests are now very powerful and influential.
4.    The election of public representatives is largely determined by
      television advertising and emotional appeal, rather than character,
      qualification, and ability. 
5.  Citizen's vote for individuals and expect them to represent their
     interests, but the representatives face several important obstacles:
           * party line pressure,
           * special interests,
           * the size of the impact of a decision,
           * politicians often disregard right and wrong to gain re-election.
           * the misdirection of biased media, excessive advertising, and
                     tilted opinion polls.  

This book is a good primer describing the way government works, how our elected representatives are influenced, and why the government is not working very well. The book appears to have been triggered by: 

The ever increasing gap between rich and poor. 

As explained by the book, runaway inequality is the cause of most citizen discontent.

1.   Plutarch said that the imbalance between rich and poor is the oldest and most fatal ailment of all republics.

2.   New Dealers tried to construct a new economic order built on the conviction that the federal government had a responsibility to stabilize the economy, provide economic security, and ensure a more reasonable redistribution from rich to poor.

3.   From the mid-1970s to the mid-1980s, average real expenditures by incumbents in the White House roughly TRIPLED!

4.   It was Nixon, not Johnson, who presided over the most rapid increase in domestic spending  since the New Deal. Each of these programs were started or significantly expanded: (Social Security, national food stamps, Old Age Assistance, Supplementary Security Income, Environmental Protection Agency, Occupational Safety and Health Administration, National Traffic Safety Commission, Mine Safety and Health Commission, Consumer Product Safety Commission)

5.   The federal tax code is still progressive but the key feature of the code - it's steep progressivity at the very top income levels - has simply disappeared.

6.  Equity and hedge fund managers legally treat their extraordinary incomes as capital gains and therefore subject to only a 15% tax rate.

7.   The most recent financial recession of 2010 to the present caused the federal government to draw massive loans from the future (the deficit) to save the nation's financial sector.

8.   The government purchased privately held companies thought to be too big to fail.


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