The New Reality
Our operatives have uncovered the motivation and reasoning behind various presidential candidates now emphasizing what many of them are calling the “new realty.” This reality relates to their personal histories, climate change, economic prospects, and so on. All of the candidates have “repositioned” their personal stories to gain voter support.
One candidate, born to immense family wealth, tells his story of hardscrabble poverty and Horatio Alger like immersion from this poverty. The media, their fact checking having discredited this story, finds itself dismissed by the candidate. They have to ask questions and report answers in the context of this seemingly ridiculous reality.
Other candidates advocate policies, e.g., nuclear attacks on adversaries, which make no sense in terms of costs or consequences but are great pitches for support and votes. Let’s build a wall between Mexico and the US, or between Canada and the US. Great idea for construction companies that build walls!
There are lots of ideas about taxes. The majority of Americans pay no taxes beyond Social Security assessments. Thus, income tax revenues must come from everybody else. How can we best redistribute income from earners with high incomes to everyone else?
Our tax policies shield many high-income people by designating their earnings as capital gains. Thus, they pay 20% rather than 40% of their income in taxes. The real victims are people whose incomes are designated salaries. Between federal, state, and local income taxes, as well as property and sales taxes, these people can pay as much as 60% of their income in taxes.
The candidates have long argued for lower taxes, but it has all been just rhetoric. The country cannot function without many high earners paying 60% in taxes while the majority of people pay 0% in taxes. This is not going to change. The minority of people with above average incomes is going to pay dearly to support everyone else. Otherwise, the stability of the overall social system is at risk.
The candidates, from either political party, cannot embrace this reality. The idea that we have to redistribute income to avoid social unrest is not acceptable, except for the fact that this is exactly what we do. The reality is that a minority of people is positioned to benefit enormously from various technology and market opportunities; everybody else will find such changes challenging. The political system needs to spread the benefits around.
Nevertheless, several candidates are advocating zero income taxes across the board, as well as zero corporate taxes. They would create a national Value Added Tax. They suggest 2% but replacing the lost revenue from income and corporate taxes would require a VAT of 15-20%. Adding this VAT to state and city sales taxes could yield an overall tax of 30% on all consumption. Commentators have pointed this out but candidates respond with putdowns like, “You need to take a math class.”
The rhetoric really soars when addressing defense spending. Several candidates have advocated doubling the defense budget immediately. They argue that this will pump money into the economy. It has been pointed out to them that the absence of income and corporate taxes will mean that such pump priming will yield little revenue to the government. They typically respond, “Good. Less tax revenue the better.”
Candidates’ poll standings reflect the general public’s enthusiasm for the new reality. The simple fact that the math does not work – the deficits would be immense – is of no interest to the public. They are apparently believing and very much liking the rhetoric.
We decided it was time to explore the genesis of these audacious positions and promises. Our operatives posed as representatives of potential European donors to the candidates’ campaigns. It turns out that a potential donation of $10 million is the price for getting serious attention. $100 million gets you a meeting with the candidate, but we did not need that.
We ended up meeting with three campaign managers. We asked about the reality of their candidate’s positions and promises. All three managers responded similarly, “We are trying to win the nomination and then the presidency. Period. We will take whatever position is needed to win convention delegates and electoral votes.”
But, we asked, “What if you win? How will you deliver on your promises?” They responded, “Promises? If we win the presidency, the slate is clean. Whatever we said during the primaries and the election is irrelevant. Once we are in control, we will do whatever we want. At that point, the public’s preferences do not matter.”
So, we commented, “You are assuming a one term presidency?” Their retort was, “Not at all. Any shortfalls in delivering on promises can easily be attributed to the opposition. We want to do the right things, but we cannot because the other party stymies our every move.” We asked, “How do you know that will happen?” Their response was, “It doesn’t matter. We weren’t going to do those things anyways.”
This readily begged the question, “Why do you want the presidency if there is nothing that you plan to achieve?” With a knowing smile, they each responded, “The key objective is to keep anybody else from accomplishing anything. We want to keep government perpetually dysfunctional.” We asked, “What’s the purpose of that?” With a knowing look, they replied, “While the turmoil plays out, our donors and supporters will be making loads of money, which can help fuel the next round of this charade.”
