Fourteen Days To Election Day
October 22, 2020 – Under The Markets Admin
Fourteen days to election day. Which path forward, and how will that decision shape our future?
House Speaker Tip O’Neil’s expression “all politics is local” highlights the importance of the everyday concerns of constituencies to those running for office. In that context there is conflation between local and national concerns of climate change, jobs and health care. There is no longer delineation between what fixates Washington and our local community.
We are offered two starkly different approaches for addressing these challenges.
The first requires finding common ground among ourselves and with others to address profound social, economic and environmental challenges that exist, and which will accelerate in the coming years.
The second, advocates for prioritizing our individual and national well-being, regardless of the implication of that decision to others.
The choice we make will reverberate well beyond our American community. Neither returns us to what we are asked to believe were the halcyon days of yesteryear.
The two proposed approaches for moving forward are not abstract. We have previously lived both realities.
The last four years are illustrative of what going it alone looks like. Four more years will institutionalize how we choose to view the needs of others and engage. Decisions concerning prosperity, safety and well-being will be decided through the prism of what is in our own best interest. We will prioritize helping others only after we first help ourselves.
The alternative is also not abstract. We have lived that reality as well. Interconnectivity requires us to consider our social, political and economic well-being alongside that of others and to act accordingly. Economically, interconnectivity promotes globalization–an increase in the movement of goods, services, capital, technology, people and cultural practices across borders. Globalization has contributed to accelerating the transfer of economic activity away from local communities to large urban centers and to off-shore locations. Because business is best advantaged when sourcing of materials and production occurs in low cost environments, smaller communities in the United States and the country as a whole are disadvantaged because of available labor supply, cost of labor and worker benefits and federal regulations designed to protect the environment. These all increase the cost of manufacturing.
Though lower production cost reduces prices on the articles we purchase, the shift to off-shore production means the loss of good paying jobs for many Americans. The US is increasingly dependent on goods and services consumption to create employment opportunity. Simultaneously, technology reduces the number of jobs required as well as the cost of delivering goods and services with the related impact on employment and wages.
We need only look at the widening gap of income inequality to see who have been the winners in this new economy. Howard Gold, writing in the Chicago Booth Review, estimates that In 2015, the income share of the top 0.1 percent represented 11% of total US income, and Saez and Zucman of the University of California Berkeley estimate that the top 0.1% of US families control 20% of total US families’ wealth.
As large and wealthy a country as we are, we exist in an interdependent world. Recessions, pandemics, social injustice, regional conflict and resulting human displacement, occurring because of conflict or environmental degradation, will not stop because we wish them to. Walls, physical or virtual, will not keep modern threats, often the product of population growth and societal aspiration, at bay.
Information transfers rapidly. Political and economic failures in one country can rapidly accelerate to engulf regions and beyond. Today the frequency of outlier events—the hundred-year occurrence– seems more pronounced, accelerated by population growth and economic demand. The speed with which information disseminates shatters any lingering illusion that the rare phenomena is truly rare.
There are no easy solutions to today’s challenges. The proverbial horse is already out of the barn and seeking to bar the door at this stage does nothing more than leave us alone to deal with these surging realities.
So how do we choose?
We can attempt to turn the years back despite evidence that the world has changed and what previously worked no longer does.
Alternatively, we can accept what is and pull together to make a new normal, something wherein we can all thrive.
Change does not occur without displacement. However. choosing not to move forward out of fear precludes the opportunity to arrive at an alternative place where all are better off.
Policy makers must do their jobs. And, they must do so with thoughtful policies and public spending that cushion the transition for families and individuals displaced by the resulting changes.
The era of Ronald Regan ushered in successive years of reducing governments’ role in American communities. Market forces were to more appropriately triage where investments should be made. The lie of that proposition is apparent and more evidenced in light of the challenges we face. For example, it is evident in the throes of the COVID pandemic exacerbated by the disinvestment that has occurred in public health. COVID also highlights the antithesis. Robust fiscal intervention by governments are spanning the gap over the economic chaos brought about by the shuttering of economies and a return to a new normalcy.
The private sector and civil society cannot substitute for the essential role governments must play in safeguarding the well-being of communities. As Joseph Stiglitz, Nobel Laureate in Economics reminds us, balance must exist between the role of government, civil society and business in complex societies such as ours. Government’s investment in the internet, sequencing the DNA, advances in medicine and biology and operation warp speed are examples of bold initiatives that pay substantial forward dividend despite the cost of the initial investment.
Failure to position ourselves to thrive in a post-pandemic world forever changed by economic, social and climate forces will profoundly impact our national and local community. To prevail requires working with others who share common interests to address the well-being of the 7.8 billion individuals who inhabit our planet.
And, technology now makes possible accomplishments that could only have been imagined thirty years ago.
The COVID pandemic has advanced the third industrial revolution of digital communication, computer and electronics. It now ushers in the fourth where artificial intelligence and the internet of things complement and advance human work and thought. Best practices will be written by those governments, businesses, and individuals who effectively harness technology and artificial intelligence to address these challenges.
The choice we make in the coming fourteen days will have considerable consequences. Politics is local but the definition of local today is very different than was envisioned by the Speaker forty years ago.
