Missing the Point

Been watching a lot of post election teeth gnashing.  I think hard core Democrats have totally missed the point of the election.  They think they live in a racist nation and a tribe of Nazi’s voted for Trump.  They are wrong and if you had been paying attention you would not be so shocked.  I think Laura W. at Ace summed it up nicely.  It has nothing to do with Fox News.  By the way, I have never been in many public places that have Fox News on.  Most public places run CNN.

Both political parties have pretty big fault lines in them.  We aren’t seeing the Republican ones because they won.  When you look at state races, they won big.  Give it time.  The fault lines will come out from behind the curtain soon.  The problem for Democrats isn’t they way they are delivering their message.  It’s the core ideas.  Their solutions to the problems stink.  People know it and are turning away.

Silicon Valley is doing a lot of teeth gnashing too.   After reading a bunch of stuff I saw Om Malik’s piece.   I thought it was close to a bullseye, but still missed.  Erin Griffith of TermSheet penned a piece too.  I thought it got closer to what I was seeing.  I really like reading Ms. Griffith.  Churning out meaningful content daily like she does is no easy task.

I might quibble with the findings of the Washington Post on the idea millennials reject capitalism.  That might be hopeful writing on the part of the Post’s writers.  I agree, millennials reject crony capitalism.  When I talk to them, they don’t reject actual capitalism.  When they understand it, they like it.  What they really reject is entrenched institutions that won’t change or use power to repress them.  Look at how they have been educated, and what they have witnessed in their lifetimes.  My daughters are 23, 25.  They saw a contested election at age 9,7.  9/11 the next year.  A financial crisis 7 years later.  They encountered a tough job market when they graduated.  Combine that with major disruptions caused by a technological revolution which upset industries they interfaced with and there is a bit of angst in the millennial world.

Bernie Sanders got a following not because he was a socialist.  Most people I know that liked him aren’t socialists.  They do have empathy for the welfare of people.  They believe in equality.  Core American values.  Sanders got a following because he was plain spoken and didn’t seem like he was establishment.  He talked a lot about breaking up entrenched private institutions. But, as we came to find out, he was fighting a rigged game.  That caused people to feel even more hopeless.  If you want to know what a rigged game looks like and how it’s set up, I suggest you watch the movie on Michael Madigan.

I don’t think millennials or most of America “hate” or detest Silicon Valley.  I don’t think they want it to go away.  If you asked them to give up their cell phones, none of them would.

I do think because of the way big institutions in all industries have acted, and because of the transparency the internet brings, there is a massive lack of trust in the ultimate motives of Silicon Valley.  When Eric Schmidt, Mark Zuckerberg, Tim Cook, and Bill Gates are in the back pocket of Hillary Clinton actively working against the opposition, sides have been chosen.  The same could be said about the CEO’s of Wall Street banks.  Hank Paulsen bailed out his cronies, and the government welfare program has continued to this day in one way or another. When it comes to institutional crony capitalism, political party affiliation is not relevant.

Om Malik is right, Silicon Valley does lack empathy.  But, the empathy they lack isn’t from the technological innovation that’s created which changes jobs.  It’s deeper than that.  It’s a condescending attitude toward anything that doesn’t come out of the Valley.  “We are smarter than you, deal with it.”  In today’s WSJ, read the article on The Empathy Trap.  Empathy is integral to being human when it comes to life.  It might not be a good idea when it comes to public policy.

Entrepreneurs that aren’t in the Valley deal with that attitude all the time.  So do venture capitalists that are trying to raise funds that locate outside of the Valley.  A lot of the fundraising conversation is having to prove that there are good businesses, people, networks and ideas outside of the 7,000 square miles of the Valley.  It’s a significantly bigger hurdle than you think.

Universal Basic Income is being bandied about as an empathetic solution.  It’s not a good idea.  Negative income tax is far better.  UBI assumes that people are helpless.  It assumes we need to warehouse them until the next generation comes along that is better trained for the future.  UBI is a lack of empathy, even though it appears more empathetic.

Ms. Griffith is correct when she says empathy needs to go both ways.  As someone who has been inside both red and blue bubbles, I agree with her 100%.

However, the pundits have misread the tea leaves in the last three elections.

In 2008, Obama won on a slogan of “Change We Can Believe In”.  He was going to bring balanced budgets, get us out of war, and give everyone opportunity.  For people that cared, Bush had campaigned on a promise to cut spending and balance budgets too.  Of course, Bush didn’t get close to accomplishing that.  They gave Obama a chance.  He also had an advantage of being historic.  Electing the first African-American President was important to a lot of people.  He had majorities in both houses of Congress.  What did he do?

Stimulus, ACA, Dodd-Frank, massive increase in regulation and other things outlined in the Laura W. post you might remember. The war didn’t end.

Silicon Valley people were unaffected by that.  But people everywhere else across the country were.  However, with 0% interest rates putting wallpaper over the cracks, corporations were able to shore up balance sheets and the stock market rallied.  People dropped out of the work force at rates we haven’t ever seen.  It’s not that they weren’t willing to work.  The government changed incentives around actually working when it came to unemployment benefits and regs in the ACA.

Additionally, the increased level of regulation combined with high corporate taxes caused companies to hasten their pace out of the United States.  Individual states like Illinois saw many businesses large and small flee to neighboring states like Indiana or the Sun Belt.  Millennials are leaving high tax states in droves.

In 2012, Romney had a golden opportunity, but he ran a terrible campaign.  The mistrust of the establishment and institutions was starting to sink in, but wasn’t fully baked yet.  Romney looked like, and felt like more establishment.  He couldn’t relate to normal people.  Romney offered up no real hope for most people in America.  Is their a gigantic difference in the way Hillary and Mitt looked on the stump?  Why not give Obama another chance?

The last four years have seen the House of Cards fall.  We are 20 Trillion in debt with no end in sight.  People are hopeless.  They are fearful.  They feel like they have no power.  The optimism that is pervasive in Silicon Valley because of great leaps in technology don’t radiate through the rest of the country.  Additionally, there is no compromise between big centralized bureaucratic government crony capitalism and decentralized continuous creative destruction capitalism.  I think people are more comfortable with the latter because it’s more hopeful.  They have a chance.

As I have written previously, I have been all over the country in the last 8 years.  Driving mostly.  Primarily the Rush Belt.  I talk to people in small towns, and medium size towns.  I see first hand what they look like.  My wife has been with me.  She was moved by what she saw.  In the last year and a half, my wife has been involved with a non-profit startup that is catching fire.  The Policy Circle is a place where hundreds of women are joining and meeting to create a network and community around economic issues that are important to them.  What we have seen across America is not pretty and no government program is going to help.  Only private economic growth can help.

Does Trump bring that?  On the surface, maybe.  “Make America Great Again” is a lot more hopeful than “Stronger Together”.  Trump connected with the disenfranchised. Critics of Obama called him an “empty suit”.  Opponents of Trump fail to realize he campaigned a lot like Obama.  Certainly, Hillary failed to make a connection with anyone except hard core Democrats who would support a Democratic robot over anyone else.  Additionally, electing the “first woman President” isn’t that big of a deal when we have women CEO’s and women in power positions all over government and private industry.  Many women detest everything Hillary was held up to represent.

As Michael Moore said, “Trump is a Molotov Cocktail” thrown into the seat of power.  People are desperate enough.  They internalized the principles of The Risky Hire, and went with their gut.  They want less bureaucratic institutional invasiveness in their lives.  They want to repeal and replace Obamacare.  They want a balanced budget.  They want true broad based economic growth.  They want real education reform.  They want a government that listens to them, not talks down to them.  They want access to capital so they can try an idea of their own.  They want to feel proud to be an American again.

Will Trump bring it to them?  No one knows, but they are willing to take the chance.

 

 

 

 

 

  • Fine post — note that many “purity” Republicans are complaining about Trump and his tax credits to keep Carrier. Yet most of these somehow accepted Paulson (& Bush’s w/ Obama & McCain agreement) huge bailout of Big Banks.

    That bailout, which saved the wealth of the top 1% yet failed to generate growth for the 40-80% income folk, was far, far worse than Trump, so far.

    Democrats who believe their own false demonization of Trump supporters as racist are a bit dim, and so unknowing that they’re unaware of what they don’t know — in fact, they think they DO know but what it is they think they know ain’t so. (See Mark Twain)

    tiny typo “were” >> But people everywhere else across the country weren’t.
    However, with 0% interest rates putting wallpaper over the cracks,
    corporations were able to shore up balance sheets and the stock market
    rallied.

    • thanks for the comment and correction. On Twitter, one person said this post was full of prejudice. I fail to see any. Maybe I am wrong. I don’t think America is a racist country. I don’t think it’s misogynist. Trump Derangement Syndrome has already set in. I understand it. Many Republicans felt similar about Obama, but didn’t take to the streets in violent protests. Only the stimulus caused them to stir-and when they did, it was the end of the Democratic Party as a national party. They are strictly urban and coastal now. Out of touch, and out of ideas. No young bench. The old guard has retained power. The money will flow but they will be feeble opposition, only enabled by a complicit media.

      • They’ll be “feeble” until (if?) Trump makes mistakes which hurt his core voters. Carrier was NOT — and tax cut gov’t support is better than, and different, than gov’t subsidy support.

        Maybe every US company needs tax cuts to stay in the US — ok, give them all lower taxes.

        America is mostly not a racist country, but there are truths about group behavior which can’t be talked about honestly because of race.

        If your Twitter person said this column is full of prejudice, it’s likely because of the beginning: “They think they live in a racist nation and a tribe of Nazi’s voted for Trump. They are wrong … ”
        They say it’s a racist nation, you say they are wrong — you are prejudiced.

        Or maybe it’s the negative views about the too-smart folk in Silicon Alley. I remember one of my favorite Stanford Ts:
        “If you’re so smart, why aren’t you rich?”

        Instead I’m happy.