HIS 107 Readings

Presidential Election 2016

The 2016 Presidential election is likely to have a significant effect on the American democratic system of government.
A process has been underway since the 1970s, which has had profound economic and political effects.


Beginning during the inflationary period of the 1970s and accelerated by tax reform during the Reagan administration, the benefits of the nation's economic growth went exclusively to a wealthy investor section of the economy while wages for the middle and lower classes stagnated. This has been occurring ever since. (as of 2016). The result has been that a small percentage at the top (0.1 of 1%) have become multi-billionaires while the lower 3/4ths of the population are struggling to avoid declines in income.

This leveling or decline of income has occurred in spite of the increased prevalence of two-person family incomes. Employment has become less secure as long-term, well-paid jobs in the manufacturing sector have been transferred overseas, and American workers have increasingly had to rely upon short-term, less secure employment in the service sector of the economy.

Accompanying this transfer, has been a sharp decline in labor union membership, with consequent income decline and less job security.

A further difficulty has arisen because of the rapidly increasing cost of a college education, without which individuals are condemned to the lowest-paid, least desirable employment. In a "catch-22" situation, college students have had to increasingly rely on loans, which are not payable until graduation, but are a substantial financial burden that may require years to pay off. Student loan pay-offs are primary obligations that subtract and delay purchase of other essential consumer items, thus limiting and postponing the achievement of desirable personal goals, and, by reducing consumer demands, also depressing national economic growth.

Meanwhile, those at the bottom, particularly an underclass of blacks and Latinos, are condemned to a life of poverty including even those that may be fortunate to work full time. Among those at the bottom are homeless people, most of whom lack basic services that are supposed to be provided by a public “safety net”. Others, denied basic opportunities, live desperately on the margins of society, taking drugs as an escape, and /or committing crimes. Those who are caught in the dragnet of the criminal justice system are incarcerated, at great cost to the government, often for many years.

At the same time that those factors have reduced incomes and opportunities for the majority, the incomes and opportunities for a very wealthy minority have greatly increased. As the labor union movement has diminished, corporations have had greater leverage in limiting or reducing the costs of labor. Most American corporations have a license to operate issued by a single state government, which thereafter maintains little or no control over their activities. Established for economic purposes, corporations have expanded far beyond the jurisdiction of the individual state to a national and multi-national scope. Multinational corporations can and often do extend their reach beyond their state and national origins, often avoiding national labor and environmental regulation. They can and often do avoid national taxation, and they can and do lower their labor costs by contracting for or hiring workers wherever, in the world, they can pay them less and require more hours of labor with a minimum of safety regulations. The very same factors that limit and reduce worker benefits are serving to further enrich their corporate employers.

The concentration of wealth at the top also provides the wealthy with the resources and the opportunities to invest in a complex variety of financial instruments that further advance their wealth, and minimize their tax obligations.

All of the above factors are contributing to the growing economic inequality that has characterized the last 40 to 45 years. These circumstances sharply contradict the private market ideology that a private market is self correcting through impersonal natural laws of competition and supply and demand. Without intervention from the government, unless some enormous crisis upsets the economy, the wealthy will become wealthier and income inequality will increase.


A top echelon of the very wealthy had run a campaign for the Presidency in 1980 under the name Libertarian. The main theme of their ideology was an opposition to government involvement in the economy and the belief in an unregulated market. This approach was also self-serving because their own economic activities would be allowed free reign without limitation by the government. They were, however, inconsistent, because they were ready to use their economic power to influence government on their own behalf.
They had little success politically in 1980 on their own, however, the election of the Republican Ronald Reagan served their purposes well. Reagan had famously said that the government was the problem, not the solution to the problem. His economic policy involved reducing government funding for regulation and for domestic needs, while reducing taxes for the wealthy and for corporations. Reagan was also inconsistent because his budget provided for substantial increases in military spending, which were not balanced by reductions in other spending. The resulting increase in spending coupled with the tax cut increased the government’s stimulus to the private economy. Coming at at a time when there was a high rate of inflation and economic stimulus needed to be reduced, his policies seemed to be just the opposite of what was needed. It was not without reason that his primary Republican opponent in the 1980 primaries, George H.W. Bush, had called it “voodoo economics”.

Yet, within first two years of the Reagan administration, the inflation was broken and the economy became prosperous. There were two principal factors that caused this outcome. First, high oil prices that had been the consequence of the Yom Kippur War in 1973, had been the principal cause of an international inflation through the remaining years of the decade of the 1970s.

By 1982, a break in the inflation in the international oil market occurred because of substantial increases in the supply of oil as new sources were being tapped. Since oil was the primary source of energy, increased prices of oil had substantially increased costs to industry and to the public. The inflation was broken in 1982 because increased production of oil internationally created a glut in oil supplies. The price of oil, which had been kept at an artificially high level for political reasons, finally responded to market pressures of supply versus demand, and broke sharply downward. Secondly, the Federal Reserve Board led by Paul Volker had embarked on a determined deflationary policy involving high interest rates. Together, the impact was to end the decade-long inflation of the 1970s.
Fortuitously, Reagan’s inflationary fiscal policy, which began to have its effect two years into his presidency, instead of sparking even higher inflation, counteracted the deflationary effect of lower oil prices and a tight money policy of the Federal Reserve Board, and stimulated a return to prosperity.

At the same time, the heavy expenditures for the Defense Department, increased during the 8 years of the Reagan administration coupled with the tax cut, led to a doubling of the national debt. Cutbacks in spending for domestic purposes could not compensate, and contributed to failures in meeting government obligations.

A relapse in government regulations and their enforcement, coupled with a tax policy favoring the wealthy, accelerated the already existent economic inequality. All of the increase in productivity of the economy went to a small wealthy elite, while middle and lower class incomes stagnated or fell. This has continued throughout the decade of the 90s and into the 21st century. While increased productivity did result in small surpluses in the federal budget at the end of the 1990s, deficit spending resumed sharply when the Second Bush administration became involved in the Afghan and Iraq wars.

These two wars, clearly a vast and unconstitutional over-reaction to the tragedy of 9-11, ushered in a new, disastrous set of circumstances both at home and abroad, for which the American people and the entire world are still paying the price.

In spite of these challenges, a wealthy few continued to increase their share of the wealth. So great did the economic inequality become that a small elite was able to lobby on their own behalf with small percentages of their assets. De-regulation, begun during the Reagan years and continuing throughout the 1990s, accelerated during the 8 years of the second Bush administration, and so also did the concentration of wealth at the top.

Uncontrolled crony capitalism, focused on the Housing sector, and exacerbated by reckless investments by the big banks, led to the economic collapse in 2008; the greatest crash since the Great Depression.

In the Fall of 2008, financial links between major commercial banks threatened to escalate the financial collapse to the point where the credit foundation of the entire U.S. economy would be undermined. The administration of President Bush responded with emergency requests to Congress for the appropriation of hundreds of billions of $s to the banking system to avoid a catastrophic failure. The rapid infusion of funds by the Federal government saved the banks, however, the collapse involved trillions of $s that were no longer available for essential economic activities. Consequently, productivity and employment declined sharply, and a major depression occurred.

The collapse was exacerbated by the many long-term factors described above, particularly, the 40 year stagnation in middle class income which contributed to weak demand; and the debt accumulation at all levels, both public and private, that had helped maintain demand in the face of declining incomes.

The escalating cost of two wars in Afghanistan and Iraq was a major cause for the rising federal debt which then rose further in order to bail out the banks.

These were the circumstances that faced the incoming administration of Barack Obama in 2009.

Keynesian economic theory, well established by previous experience, called for a massive infusion of funds by the Federal government to stimulate the economy and/or lower income taxes to encourage spending by the private sector. These measures were bound to increase the federal debt at a time when it was already at a high level. These contrary factors became the basis for a debate that was at the heart of proposed political action, not only in the United States, but throughout the world.

In the United States, the Obama administration was able to pass a stimulus plan that, over a period of three to four years, began a recovery from the depression of 2008. The amount and duration of the stimulus was, however, only capable of ushering in a slow, uncertain recovery. An inadequate stimulus was, no doubt, influenced by the concern about continued federal deficits. Above all, the inadequacy was the result of a compromise with a determined political opposition that fought the Obama proposals at every step of the way. A self-fulfilling prophecy was at work. Inadequate solutions fueled criticism that further weakened the ability of the government to respond. Meanwhile, refusals by the opposite party to negotiate in good faith made compromise impossible. In the United States, extreme partisan positions paralyzed the federal government, particularly after the opposition gained the majority in Congress.

The long-term acceleration of economic inequality was, meanwhile, increasing the political power of special interests, whose goals were incompatible with the public interest. The libertarian impulse of a wealthy few fortified by their drive to achieve ever greater economic power and political influence, motivated them to oppose government action on behalf of the public interest. Fossil fuel interests fought against environmental policies that, in a time of climate change, were urgently needed. Private health insurance interests fought against the public need for universal health care even though government-funded, broad-based medical care had been proven repeatedly in other developed industrial countries to be of high quality at a lower cost. Military, industrial special interests fought to obtain lucrative contracts for costly weapons systems that no longer had any justification in an era of failed states, civil war, and terrorism. Corporations, generally, were motivated to seek profit for themselves through government subsidies on their behalf, through hiring the cheapest labor abroad, and through tax loopholes enabled by the international scope of their business.

The CEOs, the corporate managers, the financiers, and the lobbyists and attorneys these interests employed, constitute a privileged elite that stands in opposition to the public interest.

It is in the short-sighted interest of this elite to maintain their privilege and wealth by opposing any downward re-distribution of wealth through minimum wage laws, investment in infrastructure, acceptance of labor unions, an investment in public education; in other words, any recognition of the necessity that government policy should serve the needs of the public.

This elite has enjoyed phenomenal growth in their share of the national wealth over the last forty years. They have leveraged their economic wealth into an expanding control over the institutions of government. By the time of the election year of 2016, they have established a commanding position in the Congress, and in the Republican Party and, but for an untimely death, a majority of the Supreme Court. The ‘Citizens United” and the "McCutcheon" decisions of the court have opened the floodgates of unlimited flows of money for the wealthy elite to buy influence and power over the Federal government. Through the Republican Party, they have also achieved control over more than twenty state governments, where the main thrust of their activities has been to suppress the vote by a variety of means.

In other words, a privileged wealthy elite, a tiny minority are, in 2016, on the cusp of replacing the democracy that we like to think we have, by a plutocracy.

While the process has gone far toward destroying the democracy that the media propaganda would have us believe still exists, there may still be hope for recovery.

Progressive elements within the Democratic Party have been active in opposing the long-term power seizure by a wealthy elite. Numerous non-governmental organizations (NGOs) have fought back in the public interest through legal action and popular demonstrations on behalf of the environment and opposed to the dominance and corrupting influence of money.
Long-term demographic trends will, if the democratic process survives, increase the political influence of Latinos and other growing constituencies.

The corrupt practices of unlimited money in politics, and concerted efforts to suppress the vote through gerrymandering, and voter I.D. laws, are mechanisms designed to postpone and prevent the expression of the will of the people, used by the Republican Party and their wealthy bosses.

The emergence of a Republican presidential nominee, who is a billionaire with little political experience, has been made possible by the dominance of money in politics. His success in the primary elections reflects that wealth, however, the power brokers have not chosen him. His success is also attributed to his appeal to a disaffected minority, who have been ignored and disenfranchised by the same economic and political that forces that have been described above. His appeal is that of a demagogue who promises solutions in return for their support, while he is, himself, a product of the same factors that threaten the democracy.

The presidential election of 2016 is, therefore, likely to continue the downward plunge into a plutocracy that is an existential threat to the form of government founded in 1787. Among the causes for this unexpected turn of events are a multiplicity of circumstances, some long term and some short term.

Long term causes:

(1) The economy of the United States and, indeed, the entire world has been profoundly influenced by the industrial revolution, which began in England in the 17th century and has now spread across the planet. That revolution has been powered by fossil fuels, beginning with coal, then oil, and then natural gas; sources of energy that had not been tapped before, and sources which had been created in the earth over millions of years. By utilizing those untapped resources, humanity has been able to forge ahead far beyond the expectations and technologies of the previous agricultural era.

This progress has been accompanied by the development of the institutions of the fossil fuel industry, and the dependence by people upon the product in order to meet their many needs in other industrial activities and, indeed, to the many practices of our daily activities.

It has become possible only by great sacrifices made by workers involved in extracting coal, oil and natural gas, at the same time that the workers’ personal income and life circumstances were dependent upon a continuation of their employment. One can question the benefits of replacing long hours of labor on the farm with the circumscribed, unhealthy life style of coal miners or wage-earners tied to factory machinery.

The transition from one to the other has had a long and troubled history fraught with conflict and profound social and political consequences.

Now, at the beginning of the 21st century, the era of the predominance of fossil fuels is coming to an end, and we can expect this transition to also be difficult and prolonged.

Weighed against the wealthy and powerful interests of the fossil fuel industry to continue to profit from the status quo, are the inevitable consequences of industrial pollution, which is destroying the environment and presenting an existential threat to humanity and to countless other species of life on earth. In other words, there is no choice but to make the changes, however difficult they may seem to be.

This dilemma is related to the 2016 presidential election campaign by the loss of secure long-term employment among workers whose jobs are disappearing because they are tied to the old, archaic industries of the fossil fuel era. The “traditional” political institutions that have had the support of these workers in the past, i.e., the Democratic Party, have failed to meet their needs. Too often, the establishment leaders of the Democratic Party have made compromises that have undermined the New Deal legislation of the 1930s. That has provided an opportunity for a demagogue, someone who promises but has no answers, to gain the votes of the working middle class in areas of traditional Democratic strength in the so-called “rust belt” regions of the midwest.

(2) As industrialization has spread throughout the world, some areas are more advanced in adjusting to the process than others. As that progress has occurred, more developed areas have created more accommodations to necessary adjustments in labor relations and environmental concerns than others. This creates a yawning gap between the wage levels, working conditions, and environmental regulations in developed areas as compared with the less developed areas.

In a global circumstance where the costs of communication and transportation are minimized, the industry leaders, the multi-national corporations, can and do take advantage of the lower costs of labor and the environment to transfer their facilities to the lowest cost areas of the world. The temptations, the profit motive, and the competitive situation motivate the owners and management of industry to take the steps that unavoidably lead to the loss of employment by workers, and the abandonment of entire communities that had become dependent upon those industrial activities.

Furthermore, the multi-national corporations use their political influence with home governments to encourage trade agreements that minimize tariffs and other regulations that might inhibit their global operations. The result is that these trade agreements and international regulatory institutions, such as the World Trade Organization, are controlled and operating for the benefit of industrial management, while excluding labor and environmental interests. They can and sometimes are given sufficient power to over-ride labor and environmental practices in the home country.

The result of this monopoly of power at the international level is to further erode the rights of working people. In the United States, this has given the demagogue the benefit in the 2016 election. It is easy for the demagogue to promise an answer when, in fact, the problems are complex and deep-seated. In the United States, in 2016, the demagogue has not only made those promises but he is a part of the wealthy, business interests that have been acting, ever since 1980, to expand their control over the government by subverting the democratic process in ways I have described above.

(3) The Constitution of the United States is, perhaps , the most enduring constitutional framework in the world. This fact testifies to the wisdom of its founders in establishing a system of checks and balances that have prevented abuses of power by an executive, by the legislature, or by chaotic excesses of democracy. It is inevitable, however, that some provisions cannot respond to changing circumstances over about 250 years. An outstanding example of such a provision is the establishment of the electoral college.

In the 2016 Presidential Election, the demagogue would not have been elected without the electoral college. He was elected despite the fact that his opponent had 2.8 million more votes than he did. The states that had the greatest impact from the industrial situation described above were so-called “battleground states” where the popular vote was known to be close. The electoral college amplifies the vote in favor of one candidate over another by translating a close popular vote into a bullet vote giving the winner all of the votes in a particular state. This decisiveness may have been desirable in the rural, agrarian society of 1787, where vote counting was a very slow process, but it is clearly unnecessarily undemocratic in 2016.

Short-term causes:

Perhaps, the most important of the short-term causes for the election of the demagogue in 2016, has been the suppression of the vote in states controlled by Republican governors and legislatures. The state of Wisconsin is the extreme example, where the demagogue is reported to have won by 22,000 votes while the numbers of votes suppressed by voter I.D. requirements and other means is estimated to be about 2 million. Charges of voter fraud, which is an excuse for further voter suppression, are known to be fraudulent because they are extremely rare.
Voter suppression is also likely to have occurred in North Carolina, Florida and Texas, although it is not known that it made a decisive difference in those states.

(2) The evidence that Russia engaged in cybercrime in the Presidential election has been clearly established. It is not known publicly, whether this made a difference in the vote, or whether the selective publication of e-mails at selective times, made a difference. The investigation of Russian interference is ongoing with uncertain outcomes at this time.

(3) In the Presidential election, the media followed the money and gave exceptional coverage to the campaign of the demagogue while the insurgent campaign of Senator Bernie Sanders in the Democratic primary was largely under-reported. The Sanders campaign relied on small donations by millions of people and was consistently downplayed as having little chance against the establishment candidate, Hillary Clinton. Meanwhile, Clinton had a long public record as wife of a former President, as a Senator, and as a Secretary of State. The well-funded Republicans took advantage of the media attraction to alleged scandals to undermine the support for Clinton.

In conclusion, the Presidential election of 2016 has resulted in the election of a demagogue who promises to return the United States to a past of greatness, which is based on the great advantages enjoyed by a nation which has inherited a continent rich in natural resources and settled by generations of immigrants. The promises made cannot be fulfilled because they are coupled with policies of division, based on race and religion, which attack immigrants, soft-pedal the threat of white supremacists, and contradict the diversity that has been a major source of vitality since the birth of the nation.

The President was nominated by the Republican Party, a party which is largely controlled by a small wealthy elite, many of whom would use the government to further enrich themselves. The President is a part of that elite. The directions he has taken, based on his cabinet appointments, clearly indicate that he would represent that elite, even though an essential part of his own political base are workers and middle class voters who have believed his promises.

This election has confirmed a long, 40+ years process, which has given the Republican Party majority control in the Congress and enabled the President to appoint a Supreme Court justice, who is likely to render decisions that favor the continued growth in the power of a wealthy minority and corporations. In other words the election results facilitate the concentration of power of special interests. Furthermore, the Republican Party has the governorship and majority legislative control of a majority of the 50 states.

Opposed to this trend is the system of checks and balances, which, in the lower courts and in the Senate, can still provide some protection for political minorities. Most importantly, the trend towards oligarchy arouses resistance among a people, who are believers and supporters of the founding ideology that the nation is a community of all the people. This belief has been strengthened over the long term by gradual expansion of equal rights to black people, and women, and LGBTQ people.

As these two opposing trends clash, the nation is faced with a fundamental challenge that threatens the foundations of a democratic system