The 2016 Presidential Election has raised a number of good policy ideas for the improvement of the United States society and government. Unfortunately, there is no single candidate that endorses all of the best ideas, and, even more unfortunately, every candidate that has good ideas seems to have more bad ones. Part of the reason for this is the development of a system that encourages candidates to be loyal to political parties and large campaign contributors rather than to middle-class citizens and the nation as a whole.
In my view best candidate would be one who supported all of the following policies:
• Bernie Sanders’ revival of the Glass-Stegall Act,
• Hillary Clinton’s call to overturn the Citizen’s United Supreme Court decision,
• Rand Paul’s Foreign Policy that is against U.S. imposed regime changes,
• Donald Trump’s middle-class tax policy,
• and Carly Fiorina’s reforms of government bureaucracy.
On Crony Capitalism and Banking Speculation–
Reinstate the Glass-Steagall Act has been a repeated point made by Bernie Sanders. Banking that involves paying interest on accounts and charging a higher interest on secured loans is not subject to the high risks of many other financial activities. But bankers are tempted to use cash reserves of other people in speculative ventures for their own profit. Glass-Steagall refers to some provisions of the U.S. Banking Act of 1933 that separated banking from such high risk activities as investing in stocks or owning other businesses. Glass-Steagall was repealed in 1999 by the establishment—democratic President Bill Clinton and a Republican Congress to make way for a Citibank-Traveler’s Insurance merger. It was followed by waves of corporate scandals like WorldCom and Enron from 2000-2003 and the establishment “fix” was Sarbanes-Oxley, a very expensive accounting standard for publicly traded companies that recorded all kinds of conflicts of interest. This caused some companies to delist from Wall Street, or move to the London Exchange, or go private to avoid the accounting standards that could cost companies millions of dollars of year for compliance. One result was that the largest companies only could afford to stay in the game—leading to greater consolidation of capital among fewer corporations. The big got bigger at the expense of the smaller.
This was followed by the housing bubble of 2007, which also would have been prevented by Glass-Steagall, because banks would not have been allowed to speculate as they did. But Dodd-Frank, like Sarbanes-Oxley, was a capitulation to big banks, who already had teams of lawyers and accountants and enough capital to pay fines when caught. The scandal caused by big bank speculation ended up causing small banks to fail while the big banks were bailed out and got larger.
If Glass-Steagall were reinstated, the banking sector would be far more stable and both Sarbanes-Oxley and Dodd-Frank could be repealed as they were establishment crony-capitalist fixes to problems the repeal of Glass-Steagall created.
Unfortunately, Bernie Sanders also is promoting a single-payer health system which would be both too expensive to fund and emulate the problems of the VA health care and British Health care. Health innovation would stop, service would be rationed. The current health care system is broken, largely because prices are set by third parties who prevent the efficiencies of the market. This has been exacerbated by Obamacare, which has created an unsustainable health insurance bubble, but the Sanders’ “fix” would only make healthcare worse by concentrating draconian power in a third party.
On Campaign Finance Reform —
Overturning Citizens United v. FEC is advocated by Hilary Clinton to rein in campaign spending by organizations. Citizens United, a conservative lobbying group, wanted to air a film critical of Hilary Clinton less than 60 days prior to an election, in violation of an existing “electioneering communication” law. This type of media has the same effect as a campaign contribution as it can be substitute for advertising by candidates. Justice Kennedy’s majority opinion in the Citizens United case, argued that the prohibition of all independent expenditures by corporations and unions violated the First Amendment’s protection of free speech. Among other things, Justice Steven’s dissent argued that free speech was not a shield for improper use of money to influence an election, or corruption of the media with quid pro quo exchanges, and that organizations are not the “We the People” that the Constitution’s free speech clause was designed to protect.
The United States was designed to be a government whose representatives represent the citizens in their district, and not organizations or groups. The Sunlight Foundation has stated in the past decade America’s most politically active donors reaped nearly a thousand-fold return (a million dollars for every thousand dollars spent). These organizations influence representatives to pass laws that redirect money from individual citizens to groups on both the left and the right, effectively using government to steal from taxpayers for selfish purposes.
The only way to really correct the problem of campaign finance is to forbid all political donations from organizations and limit donations to an amount most citizens can afford, something on the order of $100 per individual citizen per candidate per campaign. Then such a campaign, financed by “the will of the people” would be the only organization allowed to run political advertising 60 days prior to an election. Unfortunately, a reversal of the Citizens United decision would only be a small step towards this goal, and worse, Hillary Clinton supports another type of reform equally perverse (but in her favor). She is also proposing that the government match the contributions of small donors, allowing another organization (the government) to subsidize the lower class vote, and thereby her Democratic Party. In the end, her positions are strategic maneuvers to pursue her own interest and not to reform the system constructively.
On Foreign Policy—
Do not engage in regime change was initially and most strongly promoted by Rand Paul. Bernie Sanders later adopted this idea because Hilary Clinton, as Secretary of State, had promoted regime change. Inspired by the internal regime change that happened in Tunisia, the idea of an “Arab Spring” for the entire Arab world that President Obama, Secretary Clinton, and George Soros strongly promoted turned out to be based on a naïve idealism that instead undermined the rule of law and led to an anarchy, starvation, and a refugee crisis that hurt citizens more than the dictatorships that preceded it. Neither a reactionary fundamentalism, nor a revolutionary idealism are proper approaches to improvement in governance, rather the rule of law that exists should be built upon by weeding out corruption and oppression and improving human rights records.
The “military-industrial complex” is an internal lobbying group in the United States that wants to produce and sell weapons for profit. It provides lots of campaign finance to both the Democratic and Republican establishment. This is why only anti-establishment candidates like Paul on the right and Sanders on the left are comfortable in criticizing it. The policies of Clinton, Trump, Jeb Bush, Fiorina and Cruz all use rhetoric “military strength” when facing Middle East, without explaining the effects of regime change on ordinary people. President Obama argued in his final State of the Union that ISIS is not as powerful as the fear- and war-mongering promoted by those defense contractor lobbyists who would use such crises to increase the military budget to increase their own wealth. Unfortunately, Obama, like Eisenhower, didn’t say this until he was leaving office.
On Tax Reform—
Donald Trump is the only candidate offering tax reforms aimed at improving the middle class and the American economy. Establishment Republicans support tax reforms that would benefit the very rich, but do little for the US economy. Establishment Democrat policies advocate redistribution of money from producers to non-producers in ways that neither help the US economy nor the middle classes. What we are witnessing in these two established parties creating is a class-ism that is increasingly vitriolic and tearing the country apart. Jeb Bush’s and Marco Rubio’s plans only tinker with the current system. Rand Paul advocates a flat tax that favors the rich. Fiorina hasn’t posted a developed plan other than to reduce the tax code to three pages. Sanders would raise taxes on everyone and grow government, reducing the economy and creating a state that rations more services. Clinton does not offer any specific proposals for change, only rhetoric to appeal to voters for election purposes.
While I have argued that it is better to leave all income taxes except insurance policies like Social Security at the state level, and put sales taxes at the federal level, Donald Trump has promoted the most constructive best ideas for tax reform of the candidates running in 2016:
- Corporation taxes at 15%. This would bring more corporate manufacturing and production jobs back to the U.S., bringing full employment and higher quality jobs to the U.S., rather than the expansion of entry levels jobs like retail store sales clerks and government office workers, both of which should be considered more as apprenticeship jobs than as jobs for parents with children. It would greatly grow the economy and the entire tax base. A 0% tax on corporate income, and a tax on corporate luxury spending would be better yet, but Trump’s plan would make the United States one of the most attractive places for global companies to produce their goods rather than one of the least attractive. Further, if corporations are not taxed but CEO’s and upper management employees are taxed on income they are paid, corporations will be encouraged to use profits for expansion and the creation of more jobs.
- No income taxes, or even tax filings for people who earn less than $25,000 per year or couples that earn less than $50,000. This strategy would relieve most people struggling for their survival from filing taxes, and it would eliminate a huge portion of the IRS bureaucracy by eliminating the tax filings of 75 million household.
Trump also has modifications to the existing system intended to improve it that still have problems:
- Have three tax brackets (10%, 20%, and 25%) for those earning over $50,000 while simplifying the code and ending loopholes for the wealthy. All taxpayers would average a savings of about $1,000 each. Tax brackets have proven problematic. For example, if you pay no tax on $49,000 and a 10% tax on $50,000, you take home less money ($45,000) if you earn $50,000. Computers can easily figure out taxes that are progressive, beginning at a fraction of a percent for people earning $50,000 and going up progressively without having the problem of brackets. I would also not be opposed to taxes of up to 50% on people (like Trump) earning several million per year. This both addresses the “pay your fair share” concern, while keeping people in the country to pay it because if they earned this money from a US corporation, the tax would be paid regardless of whether they chose to live in the United States or not.
- Tax passive income, like stock dividends, at lower rate than earned income. While Trump’s plan reduces the gap, I view it as immoral to pay lower taxes on income earned from other people’s work than one’s own labor. Income on dividends and stock investments should be taxed at an equal or higher rate than payroll income. This would be possible without effecting investment into the economy if corporation tax rates were lowered to zero, as they would be encouraged to reinvest directly rather than relying on third parties on Wall Street.
Trump also has one tax policy, completely eliminating the “death tax,” that I think is harmful to the U.S. society. Eliminating taxes on inherited wealth would eventually lead to the consolidation of wealth in the hands of a few families, creating a dynastic society rather than a democratic one with opportunity for all. Laws can eliminate the death tax for large amounts, say $20 million, enabling successful parents to pass on a comfortable life to their children, while taxes on higher amounts can help keep the economic playing field level.
So, while not perfect, Trump has the best tax plan of the candidates. Unfortunately he also has the most bellicose and undiplomatic speech, with stereotyped comments about Muslims that confuse religion and terrorism.
On reducing government inefficiency—
Phase out most bureaucratic jobs as people retire. This was a good suggestion by Carly Fiorina. Current legislative practices create panels to study a problem, then those panels then turn permanent bureaucracies because legislators are very good at relying on bureaucracies to solve problems and find it very unpopular to fire anyone. Legislators have not learned how to control bureaucracies when they become ineffective, unnecessary, or redundant.
Legislative processes could learn a lot from the business world where bureaucratic reform is forced by competition and can’t be bailed out with taxpayer money. Carly Fiorina also has many other ideas from her business experience that could help reduce Washington’s bureaucratic dysfunction. Government’s bottom line is “security” and the corporate bottom line is “profit” so applying corporate downsizing strategies to government downsizing is not always appropriate. Bureaucrats often drag out this argument to protect their jobs. Nevertheless, both governments and corporations have bureaucracies, and the human nature of workers in both bureaucracies is the same; individuals in government are just as greedy as individuals on Wall Street, and many things corporations are forced to do to eliminate free-riders, governments should also be doing. Unfortunately Fiorina’s tax strategies and military strategies sound a lot like established Republican rhetoric or like she hasn’t really thought about them.
I have highlighted numerous policies of 2016 presidential candidates that would improve the United States society and the lives of most citizens. Since the Constitution was created group interests and moneyed interests have largely wrested control of the government from the citizens, leading to a class-ism in which the extremely rich and extremely poor benefit from policies that have been destroying the self-sufficient middle class that a democracy requires for its existence. Like anti-virus codes in computer software, the policies I have highlighted would help destroy some of the viruses that have infected the US political system and both restore more functionality to that system, while allowing more people the opportunity to freely pursue their own happiness.