Category Archives: Government Issues

the root of the problem

A Return to Prominence

A Return to Prominence

Make America Great Again was a slick slogan and not altogether unwarranted. To make things better it is important to understand the areas where we once led the world, but have lost that position.

Shortly after WW II we were the only viable Super Power politically, economically and militarily. Our standard of living was unsurpassed. The rest of the world looked to us for both leadership and as an example of what is possible.

Today we rank 15th in terms of standard of living behind all of the Scandinavian countries, most of Western Europe, Australia and New Zealand. While our economy, in terms of GDP, has risen by 100% in the last 20 years, the average middle class family incomes have only risen by less than 10%. Over the past 20 years the cost of both healthcare and advanced education has risen at 2 ½ times the rate of overall inflation. Our per capita healthcare cost is by far the highest in the world and averages 2 ½ times the average for the EU countries. Our per capita healthcare costs exceed $11,000 per year. At the same time our quality of healthcare is ranked only 37th by the WHO. The healthcare is the single largest industry in our economy currently standing in excess of $ 3.5 trillion. Our infrastructure, especially as it relates to transportation, has substantially deteriorated. Our debt to GDP ratio stood at 35% in 1970 and it currently stands at 136%. Our spending is out of control. While this is only a sample of areas where we have lost prominence, but they are important issues that deserve attention and affirmative action to repair.

What needs doing, you ask? I can tell you what doesn’t work. Finger pointing and blaming the “other” side. My observation that the extremes on both sides of the political divide are in control of the narrative. Unfortunately, they seem to be attracting more folks that in the past confedered themselves to be open minded and more moderate. Polarization is increasing and it does not serve our country well. Many persons tend to blame both the media and our elected officials for what is wrong and they are definitely co-dependent. However, I ask what are we, as individuals, doing to make a difference. I witness republicans pointing fingers at the democrats saying that their liberal, socialist agenda is ruining the country. I witness democrats saying that our problems are a result of short-term profit-oriented agenda espoused by republicans. I ask, how is this working for us?

What I am suggesting is that the solution can start with each of us. It’s a simple behavioral change that is most difficult to implement. It begins by not playing the “blame game”. If we can achieve that then the next step will be to look for common ground. We will always have issues that are beyond compromise and on those we simply agree to disagree. I am certain that there are items on education, healthcare, middle class incomes, budgeting and infrastructure where common ground is possible. It only takes a few to be examples for others. Become an example and spread the word.

Our career politicians will not make the needed changes as it would threaten their political longevity. The only other way to make the changes that the majority of voters want is through the Constitutional Amendment process. Our founders saw this as a way for the will of the people make changes as times warranted it. After the initial 10 (AKA the bill of rights) we have made 17 additional changes. Now is the time for one that makes comprehensive improvements. The first item would be term limits (you can understand why your elected representative will not favor this change). The most recent polls indicate that over 2/3rds of voters’ favor term limits for members of congress. A recent poll in Idaho came in at 84%. Once this occurs it will be making future elected politicians more accountable to the will of the people.

Including too many provisions in a potential Amendment would make it more difficult to survive the approval process, but I would include the following provisions: Elected representatives to have the same healthcare coverage as the general population and add on amendments to proposed legislation (that have nothing to do with the intent of the bill) are no longer allowed. All of these have tremendous support of the voters and none would ever pass Congress.

China’s Communism

China’s Communism

I have real problems with Communism in China. They have a poor record concerning human rights and do not have an effective system of representing their workers (which was the initial intent of Communism). The more positive side Free Trade and entrepreneurship is alive and well. We visited China in 2018 and have another trip scheduled for the fall of 2020. The tours are very inexpensive, and we surmise that the Chinese Government partially subsidizes them. There were a half dozen venues that were required that were shipping opportunities. What surprised me was that only one of them (The Jade Shop) was government-owned. All of the others were privately owned. All of these businesses provided very professional marketing presentations.

All of our accommodations were in four and five-star hotels that would rival any other hotels we have experienced. Without exception, all of them provided phenomenal breakfasts. As you would expect, most of its infrastructure is very new. I asked our tour guide how all of the improvements were funded. He reminded me that the government owns all of the lands, and they are everyone’s landlord. Beijing typically offers 70-year residential leases and 50-year commercial leases. Our guide further stated that the government had collected over $30 trillion US in lease income over the last 20 years and that currently, they were taking in over 2 trillion annually. The total Chinese National Debt is just under $5.5 trillion US. Their annual GDP is in the $11 trillion US range, and that calculates to a debt to GDP ratio of approximately 50%. By comparison, the current US debt is $24.9 trillion, and the current annual GDP is $21.4 trillion. This equates to a debt to GDP ratio of 117%. Keep in mind that the Chinese Government only owns the land; most of the commercial development and many of the residential improvements are privately owned. The government is communist-controlled, but the economy is more capitalistic and free trade. Their economic system seems to have evolved into a hybrid system. My term for it is “tight rope” capitalism.

Homeownership in China is higher than it is here. In Xiamen, a coastal city with a perpetually hot property market, $300,000 for an apartment is normal — even though the average wage is around $1,000 a month. Even for the city’s middle-class residents, who make between $1,200 and $5,000 per month, the price seems prohibitively high.

However, the people of China can afford to buy these extremely expensive properties. In fact, 90% of families in the country own their homes, giving China one of the highest homeownership rates in the world. What’s more is that 80% of these homes are owned outright, without mortgages or any other leans. On top of this, north of 20% of urban households owns more than one home. So with wages so out of whack with real estate prices, how can so many people afford to buy so many houses? This is all in a country where $5 can get you a bulging armful of food from the local market, and $70 gets you a bunk on a train that’s going all the way across the country. This is a good question that deserves a detailed explanation

The Decline of Communism and the rise of the Middle Class

With the fall of the USSR, its inability to provide aid to many of the other Communist countries, the global movement declined. The intent of their movement, in theory, was to reject nationalism and unite the workers of the world.

It turned out that nationalism was alive and well in Russia, and they were calling the shots for all of the Soviet and Eastern Bloc Countries. Even in Russia, the workers were actually represented by a Politburo. The first politburo was created in Russia by the Bolshevik Party in 1917 to provide strong and continuous leadership during the Russian Revolution occurring during the same year. The first Politburo had seven members: Lenin, Zinoviev, Kamenev, Trotsky, Stalin, Sokolnikov, and Bubnov. The Politburo is nominally elected by the Central Committee.

During Vladimir Lenin‘s leadership of the Communist Party, the Central Committee functioned as the highest party authority between Congresses. However, the 8th Party Congress (held in 1919) established the Political Bureau (Politburo) to respond to questions needing immediate responses. Some delegates objected to the establishment of the Politburo, and in response, the Politburo became responsible to the Central Committee, and Central Committee members could participate in Politburo sessions with a consultative voice, but could not vote unless they were members. Following Lenin’s death in January 1924, Joseph Stalin gradually increased his power in the Communist Party through the office of General Secretary of the Central Committee, the leading Secretary of the Secretariat. With Stalin’s takeover, the role of the Central Committee was eclipsed by the Politburo, which consisted of a small clique of loyal Stalinists. Communism in Russia no longer represented the best interests of the Proletariat, and a new, more concentrated Burgious was created.

At the same time that Russia was corrupting the intentions of Marx and Engels’s reforms in working conditions, and wages in industrial countries created a new economic “Middle Class” that was positioned between the Burgious and the Proletariat. Communism’s decline has been the result of several factors. In the USSR, it was the inefficiency of the economy, the rise of the middle class in other countries, and the uprising of people against lack of leadership representation. The workers were not happy!

As the USSR imploded, they no longer had the financial ability or willingness (they no longer had a communist system) to support other countries. Today only 5 countries maintain a communist regime with China being by far the most relevant. North Korea is not communist. It is a dictatorship that Marx and Engels would see as a return to the Tsars. Vietnam has developed a system that provides for better worker representation and tends to keep hands off of free trade commerce and entrepreneurship. As a result, they have grown into a key vacation destination, especially for Aussies and Kiwis.

Laos has not been as progressive as Vietnam but is not as oppressive as the system in the USSR. It is incredible to me that Cuba has maintained the communist regime without the support of the USSR. When communism in the USSR collapsed, we had an opportunity to develop a relationship that would have resulted in changes there and benefited the USA.  In my opinion, we blew it, big time, for both countries.

China is a fascinating country that deserves a separate narrative.