"Pittsburgh, Not Paris"

What we have here is a failure to communicate.   Two very different things are happening at once.

Trump spoke announced withdrawal from the Paris Climate Accords.  The Accords, and US withdrawal, are all symbolic, just national body language.  The action steps were expressions of intent and goal, not enforceable, and they were agreed to by President Obama by executive authority, not law, so they could be withdrawn from equally simply.

But as this blog has reiterated body language is how the really important communication happens.   It was a big signal of America's role in the world.  It signaled that the USA was a global leader regarding climate, carbon, and the energy future.  It showed global concerns.  It showed our concern for low lying countries where sea levels were a threat.  It signaled a commitment toward fuel efficiency and renewables.

The shove:  body language

In the past week, with his scolding of NATO members for being cheapskates, his shoving of the Montenegro Prime Minister, his separating himself from others by the being lone person to ride in a golf cart, and now the Paris Accord withdrawal Trump sent unmistakable signals: the USA is going to look out for America's interests, not lead global partnerships.   We are first, we are going to take care of ourselves, we are alone and happy to be alone because the old global partnership arrangement disadvantaged us, and that is over.

The buzz around the world confirmed that the message was heard.  Germany, Russia, China, India, France all got the message.   The details do not matter.  The fine print of the Accords don't matter.  It was a big, body-language signal sent and received.  America is charting a new role in the world.

Big power alliances and tilts have life and death consequences, but they tend to show up over ten or twenty years or longer, not immediately.   France and Russia were traditional enemies after Napoleon, and France and the UK had been enemies for centuries, but in the early 20th Century France planted seeds of alliance with both, which set up the warring blocs in World Wars One and Two.  Dynastically and geopolitically there was at least as much reason for Britain to ally with Germany against France and Russia, but Germany took subtle actions that frightened Britain (built some large warships, to send a message that they, too, could afford a navy.)  Britain therefore tilted toward France. Those tilts were subtle when they were made, but by 1916 and 1942 they were matters of life and death.

The alliance ended, Japan responded.

Britain and Japan had been friendly following World War One, but Britain ended its alliance.   Japan realized it had a grave problem: the British navy could stop Japan from getting oil from Dutch Indonesia anytime they wanted.  Japan read the signal:  they could no longer count on a benign Britain; that changed everything.   Japan started a response that led to eventual war with the US over control of the western Pacific.

Centuries of US intervention in Latin America established a pre-disposition for pushback against American influence--"Yankee Go Home"-- which has set the stage for increased Chinese economic influence as they concentrate on economic integration rather than political meddling.   The relationship between the USA and Latin America fifty years from now is being established right now.

Patrick Von Bargen wrote again today, sending links to mainstream news sources that described this overseas trip as one of the great defining moments in American history, a reversal of seventy years of policy and an extraordinary boon to China.  China, not the US, has claimed world leadership.   He says the solution is for Congress to claim back control of foreign policy.  This Congress will not do it, not yet, but Von Bargen says there is a need for the kind of broad public consensus that would come about only after serious debate and sufficient votes to pass a treaty.

Meanwhile, Thad Guyer looks at the politics of it and shows why such a national debate is impossible and unnecessary for Trump.  Trump has won the message war with the people he needs, his rock solid base of 40%, plus Fox News, plus talk radio.   Voters in older manufacturing states love hearing they have an advocate.  Trump says he is bringing jobs back, the old familiar jobs in coal, steel, and assembly of big heavy things. Trump identified an enemy: foreign sponges who laugh at our weakness.  Trump's bullying behavior is not a bug; it is a feature.  Trump pushed aside the nuisances of European multilateralism and did it with body language.

Here is Von Bargen's thought.  The reform is important, but currently impossible.  Von Bargen wants to put the bully in handcuffs, but Trump is popular where it matters, the GOP base voters:   

Patrick Von Bargen

Another Thought on the Trump Withdrawal from the Paris Agreement--By Patrick Von Bargen.

What I have always worried about most in a Trump presidency was his potential conduct or foreign and military affairs, and the decision to withdraw from the Paris Agreement is a prime example of what I feared. 

The writing and repealing of domestic policies is largely conscribed by sets of rules by which Trump must play.  To repeal an act of Congress or get one passed, he has to play by long-established processes: committee hearings, Congressional Budget Office scoring, getting a majority in the House, referring it to the Senate, probably more committee hearings, and then generally surviving the 60-vote filibuster test on the floor.  To enact or repeal a regulation, his agencies have to follow the Administrative Procedures Act, which requires a published draft rule, a significant public comment period, the presentation of evidence to support the rule, and the publication of final rule – that is then subject to review by the courts.

In contrast, there are precious few procedures or rules that limit a president’s actions in the conduct of foreign policy and military affairs.  He can act on his own, generally speaking, and that gives Trump enormous latitude to do what he wants.  In the case of the Paris Agreement, his stated reasons for withdrawal are largely unsupported by any evidence (I will let others speculate on the true reasons why he did withdraw), but there is no set of procedures to require that the presidential decision-making process be more transparent or more thoughtful or slower.   

Members of Congress might want to think now about enacting – as part of must-pass legislation like the appropriations acts or the annual defense bill – requirements that the Administration must follow before final action is taken on a matter of foreign relations.  With respect to abrogating any existing foreign obligation of the United States, for example, the law could require that the Administration make public a tentative decision and the reasoning for such a decision at least 60 days before the decision could be final.  That would allow the Congress and the public time to examine the decision and bring forth expert arguments on whether the decision is in the best interests of the country or not.

                                                           x      x      x     x


Von Bargen speaks of "expert arguments."   The premise of this blog is that voters rejected expert arguments.  Experts gave us job losses, wars in the Middle East, ascendent China, scary North Korea,  concentrated wealth at the top, illegal immigration, and boring hearings on CSPAN.  Heck with experts.

Trump gives us exciting plain talk, and a simple solution:  America first so that America is great again.  Trump says the experts are fake.

Von Bargen's argument is the Article One prescription for foreign policy, but it is no longer the practice and the politics aren't there for it to happen, not yet.


Thad Guyer gives a warning and an alternative view.  Guyer says not to believe what you may be reading in the NY Times or Washington Post about what a disaster the trip was.  Donald Trump was triumphant.  He showed he was OUR bully, OUR advocate, OUR president.

Media Promotes Trump as a Hero to His Base--by Thad Guyer

Thad Guyer

As the media decries Trump’s Climate Accord destruction, gutting Obamacare, NATO bashing, mass deportations, nationalist trade policies, and on and on, one powerful message is sent: Trump delivers on his promises.  To the left it’s a nightmare, to his base, it’s a hero president.  In demeaning Trump’s battle cry that he represents “Pittsburg not Paris”, Democrats and the media are backhandedly giving him giant credit for small-scale promise keeping.

In reality, the Paris Climate Accord was yet another fragile Obama executive order swept away by an easy Trump signature.  Had Obama submitted the Accord to Congress as an enforceable “treaty” in 2015, it would have been dead on arrival. To meet U.S. greenhouse gas reduction goals without Congressional approval, Obama’s EPA issued sweeping regulations that were quickly blocked by the Supreme Court. See, “U.S. Supreme Court Blocks Obama's Clean Power Plan”, Scientific American, (Feb 9, 2016, https://goo.gl/gm5pKY). Obama couldn’t appropriate money, so the U.S. share of the pledged $100 billion yearly in climate aid to poor (and largely corrupt) countries could not be paid. That’s what Trump killed—an unenforceable, judicially crippled, unfunded feel good “I'd Like to Teach the World to Sing” Coca Cola commercial.  Yet, Trump gets outsized credit with his base as the media and Democrats go into full rhetorical meltdown. Trump scores a promise kept. 

Trump is lambasted for unraveling the Western world because he tells Germany and NATO members they are deadbeats for defaulting on dues, and gives tepid support for the mythical “an attack on one is an attack on all” Article V pledge.  Yet the treaty does not require an armed reaction to such attacks, but only “consultation”. NATO’s effectiveness is based on beefy militaries that rich European countries (and mega-rich Germany) don’t have because they spend the money on single payer health care, early retirements and big social safety nets—i.e. things non-elite Americans don’t have. Trump just said “pay up losers”, but the media melts down as if he pulled out of NATO abandoning helpless allies. The result again is undue credit for Trump with his base: promise kept. See, “Europe Reckons With Its Depleted Armies” (WSJ June 1, 2017, https://goo.gl/GO0ZjJ).

Trump pressured the Republican Congress to “repeal and replace” Obamacare in what amounts mostly to a proposed and likely undeliverable giant Medicaid cut to the near-poor.  Obamacare barely reached 50% of the target sign-up for actual “insurance”, and grossly failed in the promised prices for that insurance. The House bill is a watered down version of the Republican “repeal” nightmare, and the Senate will water it down far more, if it does anything at all.  Yet, Democrats and the media treat these legislative non-accomplishments as though Trump is on the verge of destroying a non-existent “healthcare for all”.  His supporters hear “Trump makes herculean efforts to keep another promise”. See, “The GOP is going nowhere on health care”, Wash Post (May 25, 2017, https://goo.gl/hdHCax).

Trump scuttles an unenforceable unfunded climate pledge, insults delinquent Europeans, and huffs and puffs about failing Obamacare, yet is “credited” to his base with dismantling national and global establishments.  Six weeks ago this scoop-obsessed media reported Bannon was finished, yet now claims Bannon is ascendant without the slightest apology for the misreporting. See, “Trump Undercuts Bannon, Whose Job May Be in Danger”, NYT (Apr 12, 2017, https://goo.gl/F1T3MP). “All I know is just what I read in the papers, and that's an alibi for my ignorance”, said Will Rogers.  The solution, ironically, is taught to us by Donald Trump: Democrats must nominate a candidate who can create and drive a media narrative, not follow it; and churn out lines like “Pittsburg not Paris”. 

Democrats can get elected again.

Democrats Self Inflicted Wound:  Bush and Obama bailed out the banks, but Obama didn't then punish them or break them up.  

Working people noticed.  The system must be rigged.

I had a close up look at a catastrophe.  For thirty years I was a Financial Advisor for a series of Wall Street firms whose names and corporate ownership kept changing.  

I watched the crazy leverage and foolish bank lending 2003-2007, I saw ugly mortgage securitization where bad loans were packaged then marked AAA, and I walked clients through the disaster that resulted.  I was up close when money funds shares quit being worth a dollar, when banks were failing, when GE and GM and AIG and Fannie Mae and all the big banks needed bailing out.   My employer, Citibank, was a major malefactor.  In the aftermath of the crisis Citibank sold my brokerage firm to Morgan Stanley, yet another malefactor.  Morgan Stanley  went into crisis and with 24 hours left to survive saved itself by becoming a something they insisted for years they were not--a bank.  It made it eligible to borrow from the Fed--ultimately the American taxpayer--since no one else dared to do it.

The Bush Administration began bailing out the banks in 2008 and Obama continued the process in his first days in office.   Saving the banks became understood as Administration policy--Obama's--and therefore the Democrats'.   Clients and friends during the aftermath of the crisis asked me why weren't the leaders of my various employers prosecuted for fraud?  How come no one was going to jail?  Surely there was evidence of financial fraud when they sold toxic mortgage pools to pension funds and other institutional investors, they said.

My answer was that I didn't know for certain but I was pretty sure that if the leaders of financial firms were arrested and the institutions investigated closely defining their work as "criminal fraud" rather than just "business that didn't work out" that the participants would all lawyer-up and that their ongoing work would essentially stop and the institutions would fail.  That would be a disaster.  Everyones bank accounts would freeze up.  Employees wouldn't get paid, grocery stores and gas stations would close, people could not pay bills, commerce would slow or stop.  A country cannot have a working economy without a working financial system, and one cannot have a working financial system without financial institutions.  

 Obama saved the system, but it is rigged.

Bank leaders were not prosecuted.  Worse, most of them got their bonuses because otherwise they would have left and their institutions would have failed.  America needs those institutions.  Populist revolts sprang up, the Tea Party on the right, Occupy Wall Street on the left.

President Obama may well have done the right thing for the economy, but it was politically costly for Democrats.  It symbolized that the whole economic system worked for the rich who were carried on the back of the middle class.  The system was unfair.  It was wrong. The rich got away with murder and the regular guy got stuck with the bill.

Donald Trump put the mood into words: "The system was rigged."  

Meanwhile, Obama said the economy was getting better.  

Obama was right by the numbers but wrong by the gut feeling among the great middle of America.  It was in fact getting better but the improvements mostly went to the richest, not the working and middle classes. Wages were stagnating in the middle. Something wasn't right.  Donald Trump caught the mood of voters.  Obama did not.

Click Here to see the article

My blog post yesterday caught the attention of Ashland Oregon resident Patrick Von Bargen.  He wanted me to see an article in The American Prospect that spoke to the issues in yesterday's blog post.   I urge readers to click on the link to read it.

Patrick had a long career in politics and executive development.  He is an executive coach who counsels entrepreneurs and venture capitalists.  He was Chief of Staff to a US Senator and Chief of Staff at the Securities and Exchange Commission.   He is the founder of Harley Street Associates, which readers can look up:  https://www.coachingimpactleaders.com

I asked him to send me a comment, describing the American Prospect article, which I place below:  

Guest Post by Patrick Von Bargen:  Observations on Democrats and its Working-Class problem.

Patrick Von Bargen

In an unusual coincidence, you blog entry “Democratic Class War” was published the same day as a Stan Greenberg article in The American Prospect, entitled “The Democrats’ ‘Working Class Problem.’”  You both focus on the same problem, emphasizing different dimensions.  I find both your blog and Stan’s article compelling and complementary in many ways.  I will let your blog speak for itself to your readers, but I want to offer a few notes on Stan’s piece.

First, Stan Greenberg is, like you, not a newcomer to the topic he addresses in this article.  As a former chief of staff in the U.S. Senate, we hired Stan as our pollster in the first reelection race my former boss ran, shortly after Stan published Middle Class Dreams in 1988 about working class voters in Macomb County, Michigan.  In his focus groups, polling, and analysis, he has been focused on American working class voters for almost 40 years now. 

Second, Stan’s thesis is that the Democrats’ problem is not a white working class problem, but a working class problem, including all non-college-educated voters -- whites, minorities, men and women, rural and urban and suburban.  Reflecting many of the themes in your blog, he argues that what alienated them from Democrats over the past 8 years was (1) a bailout of Wall Street and corporate America combined with an economic recovery that left them with low wages and greater economic insecurity; (2) trade policies that ignored the negative effect on their economic futures; (3) an immigration posture that moved away from emphasizing strong security measures and earning one’s way to citizenship; and (4) a failure to communicate true respect for faith-based, patriotic, traditional, and conservative moral values.

The challenge for Democrats, Stan argues, is “to embrace dramatically bolder economic policies and to attack a political economy that works for the rich, big corporations, and the cultural elites, but not for average Americans.”

What does that mean? It means that Democrats need to relentlessly deliver a compelling economic message demanding “an economy for everyone, not just the rich and well-connected,” attacking trickle-down tax cuts “for the richest and special breaks for corporations,” and promising an agenda to “rebuild the middle class.”

Based on my long career in Washington, I would make two observations.  First, such a message is powerful.  In 1994, my boss had the reelection battle of his life; that year Democrats lost both the House and the Senate in the worst general election drubbing since the 1950s, and he was running against a multi-millionaire in the small state of New Mexico.  Our opponent characterized my boss as out of touch with the average New Mexican and part of the Harvard-Stanford cultural elite.   The TV ad that turned the tide was one that truthfully pointed out that our opponent had voted against the minimum wage 16 times in the legislature, whereas my boss had consistently supported the minimum wage.  My boss won by 6 points, even though other Democrats were defeated left and right.

The second observation is that pursuing “dramatically bolder economic policies” is hard.  Serious change is always hard because of the inertia of the status quo and all the moneyed and powerful forces whose purpose it is to uphold the status quo.   I cite two examples from my experience.

My boss never thought it made sense to be either for totally free trade on the one hand, or protectionism on the other.  Rather, he thought we should develop a range of policies that would structure trade and manufacturing initiatives so that we would leverage American companies’ technological advantages and would secure high-paying jobs for workers in the U.S.   Advanced (now LED) computer and telephone screen displays are a case in point.  It was Americans who researched and developed the technology for these displays.  And we even paid defense contractors exorbitant amounts to manufacture them for fighter aircraft.  But then we did nothing to ensure that billions of such screens were manufactured here in the U.S. for consumer use.  Instead, we let Asian manufacturers do all of that, and we missed a huge opportunity to build our manufacturing base here in the U.S.

My boss was derided because he was championing “industrial policy.”  Think tanks from both sides of the aisle and incumbent business groups pursuing freer and freer trade held up his “industrial policy” as a kind of modern example of a 5-Year Plan.  The analogy was laughable, but it was difficult to overcome.

It can be done, profitably.

The second example was a 1996 economic policy paper my boss developed for the Minority Leader in the Senate called “Scrambling to Pay the Bills: Report of the Democratic High-Wage Tax Force.”  The report included a range of recommendations to benefit working families, but the core concept was that the corporate tax code would be structured so that companies who did right by their workers (paid health care, retirement programs, training, etc.) would get the benefit of lower tax rates.  Of course, each policy recommendation had its detractors, and while praised by those who read it, the forces of status quo made sure that it went nowhere.

So that’s why I say above that Democrats must deliver this new message “relentlessly.”  Democrats must be willing to repeat the message over and over and convince the voters that they will overcome any and every challenge to the message.  They can be open to amendments, they can consider modifications, but they must not waver from their commitment to an agenda to rebuild the middle class.  Without this single-minded and relentless focus, nothing will change.

Democratic Class War

The Class War is Inside the Democratic Party.

Candidates for President, the Senate, and for Congress need to figure out how to bridge the gap, and it won't be easy.

Election Night exit poll

The class war pits the educated upper middle class Democrats against working class working class Democrats.  Hillary Clinton did not just represent women.  She represented the interests and tastes of upper middle class educated professionals.   Hillary saw herself as the champion of the striving working class but they saw her as their oppressor and that is how they voted.

The Democratic constituency split cost Democrats the White House. Those upper middle class professionals have interests in conflict with working class people, but more important they have different tastes and attitudes.  Working people feel snubbed and condescended to by Democrats.  

Hillary Clinton understood there was a problem, but she could not fix it because she is who she is: upper middle class professional.  I watched Hillary in New Hampshire at the state Democratic Convention in 2015 at the beginning of Primary election season.   She wanted a log cabin story, a story that linked her to the striving and struggling working class.   She borrowed her mother's story and how her mother had to make her way in the world at age 16 cleaning houses.  The mother married well and her father's business worked out nicely so Hillary herself grew up in a prosperous Chicago suburb and went to Wellesley College.    Voters are on the lookout for fakes.  John Kerry fooled no one when he held a shotgun and pretended to hut pheasants.  Hillary cannot help communicating who she is: Wellesley, Yale Law, Rose Law firm, Martha's Vineyard, book deals, wealthy friends, a daughter go to Stanford--a splendid example of the educated professionals who enjoyed their successes and then moved up yet again.

Mistake.

The most reliable predictors of a Hillary voter (except for Afro-American women) are educated, professional, urban, secular voters.   The upper middle class.  They read respectable newspapers like the NY Times and Washington Post.  They listen to public radio and watch public TV.  They have 401k accounts.  They want their kids to go to great schools because they believe the surest route to success for their children is education, especially some professional degree.

Click Here: NY Times article

The interests and policies of the upper middle class professional conflict with working people.   People in the upper middle class pay income taxes: likely 33 to 39 percent federal, up to 11 percent state, FICA, Medicare, Obamacare surcharges.   A couple making $200,000 a year is paying some 47% taxes on every new dollar of income, and it would be higher if the cap on FICA (Social Security) were to be lifted, as is being discussed by Democrats hoping to save Social Security by raising taxes "on the wealthy."  People earning $200,000 a year do not feel wealthy.  Upper middle class life is expensive, with housing and education costs and taxes eating up that income.  Progressive, re-distributive taxation takes from the Democratic constituency to give to a constituency that abandoned Democrats to vote for Trump.  It is a conflict.

Immigration is another point of conflict. Upper middle class professionals benefit from immigration by way of a more interesting food environment and ample supply landscape, construction, and hospitality industry labor.  Working people compete with those immigrants.

Another differentiator is how to think of the very wealthy.  Upper middle class professionals are successful strivers.   Hillary distinguished between good billionaires like Michael Bloomberg and Bill Gates (people who oppose racism and homophobia) and bad billionaires like the Koch Brothers and Robert Mercer (people who support conservative causes.)   Working class people see billionaires as people who created systems that are squeezing them into poverty; upper middle class professionals see an economic system that provides real opportunity.   

Working class people want to shake up a system that is no longer working for them.  They wanted systematic change and a bull in a china shop candidate like Trump offers promise that something might happen.  Hillary Clinton and the comfortable upper middle class wants the system to work--just more fairly.

There is a matter of taste and style.  At it simplest it s the difference between wine with corks versus popularly priced beer.  It is Whole Foods versus Safeway.  It is Audi versus Chevrolet.  It is Martha's Vineyard versus Disney World.  It is Yale versus a state college.  Working people feel dissed by the professional class.  It shows up in words like "deplorable."  It shows up when people in nicer neighborhoods oppose affordable housing placed in them. 

Looks fake.

What can a Democratic candidate for federal office do?    Two things.

One, is do not fake it.   Be who you are.  It the Democratic candidate is upper middle class in income and attitude and orientation, do not apologize or ameliorate.  Do what Trump would do: double down.  Embrace who you are.  If you are a lawyer, be a lawyer.  If you are a doctor or businessperson, be one.

Number two is embrace the great bridge issue:  jobs.   Not graduate school, jobs.  Have a real proposal.  Trump had a proposal: build a wall to keep out immigrants, deport immigrants, change our trade agreements.  A Democrat needs a proposal.  My best advice for a candidate in a rural or suburban district is to "run against type", i.e. argue directly for the re-industrialization of rural areas and against the tide of greater urbanization.  It is a commonplace understanding that money flows from rural areas to urban areas.  It shows up when deposits are scooped up from bank branches in rural areas so that loans can be made in urban areas.   Give tax advantages for an openly acknowledged change in national policy, similarly to the Rural Electrification Act.   Stop concentrating population into denser and denser mega-cities.  It is a homeland security issue, it is a congestion issue, it is a lifestyle issue, it is an infrastructure issue, it is a rural and suburban fairness issue, and it is a political issue.  Argue that it is time to reverse the tide of more concentration in the cities and to move jobs back out into more rural areas.

Will it work?   If there were national policies and tax advantages for, say,  a Nike putting a design facility in a pleasant secondary or tertiary city rather than at the urban core, then possibly yes.  The internet has changed the notion of place.  Whether a colleague's office is 20 feet away or 200 miles away, the communication is by electronic message.   It is at least as plausible a jobs solution as building a wall on America's southern border.