The Unraveling of America

Antifa combatants fighting with Trump supporters at Berkeley, California on August 27. 2017.

Antifa combatants fighting with Trump supporters at Berkeley, California on August 27, 2017.
Youtube screenshot / The Red Elephants

The United States of America  is unraveling as a society, in much the same way that the European Union is beginning to fall apart. Throughout the West, conflict is building between those who believe government is the answer to all social problems and those who believe government creates most of those problems. In the U.S. that conflict is becoming ever more violent. Those who believe in government, generally called “progressives”, are demonstrating increasing hatred toward those who do not, who are most accurately called “neoliberals” but often referred to as “conservatives.” Many neoliberals seem to mirror that hate.

The Two American Resistances

The shock of Donald Trump’s presidential election  drove progressives and Democrats to immediately pledge “total resistance” to every policy Trump and the Republicans attempted to institute. Most Americans, subjected to a progressive news media allied to the Democratic Party, only hear about this particular resistance. Yet while progressives battle tooth and claw against Trump and the Republicans, there is another resistance against the nation’s progressive elites. This is the resistance that got Trump elected.

What makes this ideological conflict increasingly dangerous is how the American people are so evenly balanced between the two sides. The Gallup organization has been keeping a tracking poll for years on Americans’ ideological identifications. Their latest results, published on January 3, 2017, are shown below. Note that Gallup labels neoliberals as “conservatives” and progressives as “liberals.”

Percent of Americans identifying themselves as "conservative", moderate, or "liberal" from 1992 to 2016.

Percent of Americans identifying themselves as “conservative”, moderate, or “liberal” from 1992 to 2016.
Image and Data Source: Gallup

Americans identifying themselves as “conservatives” still outnumber those thinking of themselves as “liberals” by 36% to 25%, but the gap is narrowing. Clearly, the moderates comprising 34% of the population still hold the balance of power.

At the same time the numerical gap has been closing, progressive and neoliberal Americans have increasingly learned to hate, fear and despise each other. As of April 2016, the Pew Research Center found that majorities in both major parties viewed the policies of the other party for the first time not just unfavorably, but very unfavorably. What exactly this means can be seen in the Pew Research bar charts below. In them, the responses in April 2016 are displayed both for all partisans of both parties and for those partisans with high political engagement.

Expressions of frustration, fear, and anger for the opposite party are strong among partisans.

Expressions of frustration, fear, and anger for the opposite party are strong among partisans.
Pew Research Center

Because of these extremely strong feelings, the American people can not ever expect cooperation between the parties until a large number of people on one side of the ideological divide or the other change their opinions. This is the situation that has caused progressives to demonize Republicans (Remember the “basket of deplorables”?), and for neoliberal Republicans to return the favor. This is the condition that could potentially drive the American people to civil war with each other.

What Created This Civil Dissension?

This developing social conflict  has been growing for at least a century, at least since the administration of President Woodrow Wilson if not earlier. Beginning with Wilson, American progressives started to reject the ideas and ideals of the Age of Enlightenment.

Thomas Woodrow Wilson, 28th President of the United States (1913-1921)

Thomas Woodrow Wilson, 28th President of the United States (1913-1921)
Photo Credit: Wikimedia Commons/Harris & Ewing (1919)

In a 1912 speech while campaigning for his first term as President, then governor of New Jersey Woodrow Wilson stated his desires for a revolutionary change in American governance. In his image of America, his view of reality, both the Constitution and the Declaration of Independence had out-lived their usefulness. He declared there needed to be a change in the way we viewed those two documents. Instead of the old view of the Constitution limiting the powers of government with a separation of powers between the branches of government, he wanted Americans to take the Constitution as a “living”, evolving document. Instead of a Constitution guaranteeing ironclad rights for individuals, Wilson wanted a Constitution constantly evolving the relationship between government and its citizens. Evolving human nature renders unnecessary the protection of individual rights. Instead of a separation of powers between government’s branches, Wilson believed society’s needs required a synchronization of effort among the branches.

Ever since Wilson, progressives (once erroneously called “liberals”) have enthusiastically embraced this vision of a “living, evolving constitution”. In this point of view, the Constitution possesses all sorts of implied “penumbras” and “emanations” to be  discovered by judicial interpretation. This perspective on the Constitution has the advantage for the progressives that it is much easier for a Democratic President to appoint progressive justices  to the Supreme Court and judges to the federal judiciary than to go through the mechanics of actually amending the Constitution.

In addition, over the century since Wilson, progressives have greatly weakened the separation of powers mandated by the Constitution in other ways as well. Congresses controlled by progressives over the years have delegated much of their legislative powers to the executive branch and to independent government agencies such as the Federal Reserve Board of Governors, the Environmental Protection Agency (EPA), the Consumer Financial Protection Bureau, and the Federal Communications Commission (FCC). With many of these independent agencies, including the four just cited, the federal judiciary has actually acquiesced to the Congress granting limited judicial power as well, effectively erasing all separation of powers in the domain of the independent agency! This growing phenomenon of autocratic rule by bureaucratic technocrats was discussed in the posts How a Democracy Evolves Into Fascism, The Dodd-Frank Act: A Giant Stride Along the Road to Serfdom, and The Progressives’ War On the Separation of Powers.

By enabling these erasures of power barriers, progressives have destroyed many of the safeguards provided by the checks and balances of the original Constitution. To have created this dangerous situation, they must have totally forgotten why the Constitution was constructed this way in the first place. Over the many decades since Woodrow Wilson, this corruption of American constitutional government has only gradually aroused neoliberals to oppose it. In addition, the many bad economic effects caused by government intrusion into the workings of a once free-market economy, as well as government diktats reaching into peoples’ individual lives, has alienated many in the blue-collar working class. The inevitable result was the second “resistance” of which the progressive news media never speaks: the populist revolt against the prevailing progressive elites.

Should American Citizens Choose One Side or the Other?

Currently, the American people are fairly evenly split  between the major ideological possibilities: 36% are “conservative”, 34% are moderate (i.e. lacking in firm convictions), 25% are “liberal”, with 5% having unknown convictions. With the hell of civil war staring us in the face, it is a duty for each of us — particularly for the conviction-free moderates — to re-examine our convictions. Somehow, we must reach some kind of consensus on the nature of reality that allows us to solve our major problems effectively and to live with each other. How can Americans search for such a consensus?

It is very easy to create a self-consistent picture of the world that offers an explanation for at least some observed events. That is why there are at least two major world ideologies and innumerable variations on them. To distinguish what is true from what is not, a thoughtful human being must insist that any assertion by an ideology be supported by observed data; not only that but the assertions of an ideology must be self-consistent and consistent with all observed facts. Of course, no human picture of the world can totally fulfill these stringent requirements due to the imperfections of our knowledge. However, a world-view that most closely approaches this ideal is the one that is most probably correct.

Luckily, in this age we have a great many credible sources that are easily available through the internet. In what follows I use primarily data from the World Bank, the Federal Reserve Economic Database (FRED), the United Nations, and the Heritage Foundation/Wall Street Journal Index of Economic Freedom. For what sort of truth are we looking among all this data?

The most basic question is: How much should government regulate and manage our society? How much government intervention is desirable and how much is destructive? Because the majority of social problems are connected with the performance of the economy in one way or another, it makes sense to focus first on government regulation of the economy. Fortunately, we have a ready-made index for how much a government controls its country’s economy in the Heritage Foundation/Wall Street Journal Index of Economic Freedom. The Heritage Foundation calculates it for almost all countries in the world every year. Varying from zero to 100, it is zero when the government is totally in control of the economy (no economic freedom for the people), and 100 when government has absolutely no control over the economy. It is calculated as a straight arithmetic average of 12 sub-indices in four categories, measuring government intrusiveness in or protectiveness of a free-market. The four categories are the rule of law, government size and its burden on the economy, government’s regulatory efficiency, and government’s effects on open markets.

The countries of the world provide many different laboratories testing how well economies perform with differing amounts and combinations of government economic control. It makes sense then to see how some figure of merit, e.g. Gross Domestic Product (GDP) per capita, for each country varies with economic freedom. We can easily visualize this by a scatter plot, where we place one dot for each country with the dot’s horizontal coordinate given by the country’s index of economic freedom, and its vertical coordinate provided by the figure of merit. When that figure of merit is per capita GDP, the result is as shown below.

Country Per Capita GDP vs. the WSJ/Heritage Foundation Index of Economic Freedom for 178 countries in 2016.

Country Per Capita GDP vs. the WSJ/Heritage Foundation Index of Economic Freedom for 178 countries in 2016.
Data Sources: World Bank and the Heritage Foundation / WSJ

The most important conclusion from this plot is that once a country’s index of economic freedom exceeds 60, its per capita GDP tends to increase exponentially as its economic freedom increases. Just in terms of a country’s total economic output per person, increasing amounts of government control is very bad news indeed.

However, increasing economic output is not necessarily good if it does not serve people in general. For example, one worry by progressives is that free-markets tend to make the distribution of the national income increasingly unequal. This proposition can be tested by plotting the countries’ GINI index versus their index of economic freedom. A country’s GINI index is zero if the GDP is equally distributed among all citizens, and is 100 if only one person has all the GDP as his/her income and everyone else gets nothing. If you desire your country’s GDP to be as equitably distributed as possible, you want your GINI index to be as small as possible. Plotting countries’ GINI index versus their index of economic freedom produces the scatter plot below.

GINI index for all nations for which data is available in 2016 vs. their economic freedom.

GINI index for all nations for which data is available in 2016 vs. their economic freedom. Red arrow is the linear trend line.
Data Sources: World Bank and Heritage Foundation / WSJ

Note that the red linear trend line has a slight negative slope, indicating income distribution tends to become more equitable as economic freedom increases. This is exactly the opposite result from what progressives claim! Of course, the scatter of countries about the linear trend is not insignificant, indicating improvement of some subindices making up the economic freedom index is more important than others. That however requires research for a later time. Nevertheless, the overall conclusion is that limiting government power over the economy is generally good.

Yet another figure of merit is the Human Development Index (HDI), produced for every country for which there is data and published annually by the United Nations Development Programme’s Human Development Reports. The HDI is constructed to vary from zero to one. Any country with with an HDI of zero would be Hell on Earth; any having an HDI of one would be as close to Heaven as could be humanly created. Constructing a country scatter plot of HDI versus the index of economic freedom produces the result below.

HDI versus economic freedom for all countries on Earth by region in 2016.

HDI versus economic freedom for all countries on Earth by region in 2016.
Data Source: UN Development Programme / Heritage Foundation

The conclusion from this plot is similar to the conclusions of the previous two plots: The less government interference and control mucking up the economy, the better!

There are still more reasons to be skeptical of progressive public policies. One is that they are entirely too expensive to be supported, and will shortly (within about a decade) make the federal government insolvent. Consider the following plot of total federal government revenues and of mandatory entitlement expenditures plus interest on the national debt versus time.

Exponential fits to government revenues and expenditures on entitlements + interest on the national debt

Exponential fits to government revenues and expenditures on entitlements + interest on the national debt
Data Source: Historical Tables 2016, U.S. Government Budget

The purple boxes and red crosses are data points, while the two smooth curves are nonlinear, least square fits of exponential curves to the data. Unless mandatory expenditures (social security, medicare, and medicaid) are greatly reduced or the economy is induced to grow much, much faster, the mandatory expenditures will all by themselves totally absorb every penny of total government revenues by early 2031. If you add other non-mandatory spending — such as for the Defense Department, the Justice Department, the Treasury Department, the Federal Judiciary, and the Congress — then the day for the federal government’s insolvency dawns much, much sooner. We simply can not afford the government we have now, let alone any new programs progressives would like to introduce. Due to an empirical economic law called Hauser’s Law, this is not a situation that can be solved by simply increasing tax rates. If you were to plot federal government tax revenues as a fraction of GDP versus time, you would obtain the very remarkable plot shown below. A graphical representation of what is usually referred to as Hauser’s law, it shows that despite large differences of the marginal tax rate over time, federal tax revenues have fluctuated in a very narrow band centered on a median of about 19.5% of GDP.

Hauser's Curve

Hauser’s Curve
Image Credit: Wikimedia Commons / Sugar-Baby-Love

Should politicians be so foolish as to attempt to increase government revenues by increasing tax rates, they would reduce GDP growth by reducing available capital for investments, and thereby decrease government receipts according to Hauser’s Law.

There are other, non-economic arguments against progressive policies as well, having to do with the kind of lives we would like to lead. Most of us would like to have some control over our own lives, direct our own activities, pursue our livelihood as we want, read what we want, think what we want, and express our thoughts as we want. Yet, what progressives inevitably discover after accumulating some power over society to achieve their aims is that it is not quite enough to do the job. Perhaps their use of their newly accumulated power creates other, even more serious problems (witness the Great Recession of 2008-2009 caused by federal housing policies!). As a result they must always react by seeking even more control over society in order to mitigate the additional social problems they themselves have created. Over time, these imperatives have made progressives and their Democratic Party increasingly authoritarian.

Oh, how I would like to induce a conversation with progressives about all this data, but they seem totally oblivious about the consequences of their own ideas! As a result we slide ever closer to civil war.

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