Wednesday, June 26, 2019

Tit for Tat is not a winning foreign policy strategy


The threat this week of a real war with Iran should be a wake up call for all Americans.  A strategy of tit for tat in international affairs is a surefire way to wind up with a shooting war that no one appears to want.

President Donald Trump was right to pull the plug on a proposed military strike in response to Iran’s taking down a US drone.  The Iranians claim the drone strayed into their airspace, while the US contends it was in international waters.  No one denies it was keeping an eye on the possible activities of Iranian military forces.

The incident reflects the dangers of a reactive approach to foreign policy.  Actions are produced in an almost ad hoc manner in response to the latest unfriendly act of our perceived enemy. Usually, such actions exacerbate the conflict. Rarely do they allow for a diplomatic resolution.

Trump’s approach to the conduct of foreign relations is not unique in American history.  It has been pursued all too often by recent US administrations, Democrat as well as Republican. 

A sound foreign policy strategy needs to be based on a clear understanding of the relationship between the US and the country whose actions we are seeking to influence. The history of that relationship impacts heavily options going forward.  Also, the US should be sensitive to the impact our actions can have on third parties as well as on other priorities in our national interest.

Foreign policy decisions do not take place in a vacuum.

In the case of Iran, there has been a long and contentious relationship between Iran and the West. The British began exploiting Iran oil riches in the early 20th century. Despite the glaring inequity of the arrangements, Iran remained firmly in the Allies camp during World War II. The Big Three, Stalin, Churchill and FDR, held a major conference in Tehran in 1943.

Although Iranian nationalism became more assertive in the aftermath of the war, fear of potential Soviet influence led the British and the US to continue support for the Shah as Iran’s leader.  In 1953, the two Western powers engineered removal of the popularly elected Iranian Prime Minister Mohammad Mosadegh.  He had nationalized Iran’s oil industry

The coup restored the Shah’s control but left him dependent on Western support and distrusted broadly among Iranians of all political stripes. The cauldron finally boiled over in 1979 when Iranian revolutionary forces sent the Shah into exile and the clerics took over.  When President Jimmy Carter allowed the Shah to receive cancer treatment in New York, Iranian students took over the US embassy in Tehran and held the American staff there hostage for 444 days.

US-Iranian relations have been virulent ever since. The military skirmishes between the two countries have been few and with minimal casualties, but gestures towards some sort of reconciliation have always run into some obstacle.

The latest breakup, Trump’s withdrawal from the Iran nuclear deal (JCPOA), is exasperating. Negotiated by the Obama administration with the support of five other major countries, Britain, France, Germany, Russia and China, the agreement was endorsed by the UN Security Council as well. Granted, the deal includes nothing to restrain Iran’s meddling in the internal affairs of some of its neighbors, nor to end Iran’s alleged support of terrorist groups. Restraining Iran’s nuclear weapons development, however, is an important step in restoring some level of confidence and trust among the signatories. Hopefully, that might allow for the resolution of other differences.

Trump’s decision to impose “maximum pressure” on Iran through more aggressive sanctions is not likely to succeed.  Iran is a nation of 80 million people whose cultural and political heritage reaches back to the 5th century B.C. Its collective memory of Western exploitation is firmly intact.

Iran’s oil resources are significant. US efforts to block third parties from seeking access to those resources will try our relations with several key countries including China, India, South Korea and Japan. Iran is also strategically located, sharing borders with Afghanistan, Pakistan, Turkey and Iraq, all countries of importance to the US. Iran has already proven it can withstand a serious military challenge, successfully surviving an eight-year war with US-back Iraq in the 1980s.

A number of undesirable outcomes are possible.

Iran will find support in avoiding US sanctions among third parties who see an advantage in resisting US demands. This could give the Iranians cover for continuing to develop the necessary component for nuclear weapons. Iran may also step up its support of militant proxies in the Middle East. 

North Korea will become even more reluctant to give up its nuclear weapons since the US cannot be trusted to honor its commitments. This lack of trustworthiness is also likely to influence China’s willingness to negotiate economic agreements with the US or to support the US in trying to rein in Kim Jong un. Finally, our long term alliances with Europe may also suffer as the result of our perfidy.

 The US cannot afford to risk becoming isolated on the world stage. Both our economic and our military strength require allies. The US needs to rejoin JCPOA and to implement it as expected. Going it alone and ignoring history will not produce a winning foreign policy strategy.





Wednesday, June 12, 2019

Do Top Earners Care?


A couple of weeks ago a New York Times pundit claimed the US economy was so strong Democrats were going to find it tough to defeat Donald Trump in 2020. In the same edition the newspaper printed a list of the top 200 US corporate executives ranked by their 2018 compensation. No apparent connection was acknowledged.

The list, however, makes two things clear: 1) Corporate America’s chief executive officers are profiting robustly from policies already in place before Trump but enhanced handsomely by his administration, and 2) Corporate America cannot be counted on to reduce the income inequality undermining the livelihood of most Americans on its own.

According to the Times list, the 200 highest paid CEOs enjoyed a 6.3 percent pay increase last year, while average workers in the US received only 3.2 percent. Median salary for  CEOs in 2018 was $18,630,000.  Median family income in the US in 2018 was slightly less than $64,000.

Some key corporate CEOs were absent from the list: Warren Buffet (Berkshire Hathaway), Larry Page (Alphabet) and Jeff Bezos (Amazon). Buffet’s modest living style and his commitment to giving away 99 percent of his fortune before his death are well-known. Page receives a salary of $1 per year. Bezos has received the same $81,840 annual salary for ten years.

According to Bloomberg, Page who currently owns 40 million shares of Alphabet has sold shares valued at $9 billion since the company went public in 2004. It’s hard to believe Bezos who controls 16 percent of Amazon has created an aerospace company (Blue Origin) and bought the Washington Post on his humble salary.

Mark Zuckerberg is on the list, but at compensation of only a little over $22,000,000.  The Facebook CEO owns approximately 17 percent of the social media platform, but he holds  over 50 percent of voting rights in the company. According to Investopedia, Zuckerberg sold 240,000 shares of Facebook common stock in 2018 for over $52 million.

Top CEO on the list is Tesla’s Elon Musk, who received nearly $2.3 billion in compensation last year. That is approximately the same amount the company announced in May it needed to raise from capital markets to keep functioning effectively. Tesla has also benefited from a generous federal tax credit, $7,500 for the first 200,000 purchasers.

Concern about the new requirement to publish CEO pay ratios is not evident from data on the list. Calculated by dividing the CEO’s compensation by the pay of the median employee of the company, the CEO pay ratio reveals the income gap between those in charge and those likely doing most of the work.

Ignoring Tesla’s out-of-sight CEO pay ratio, the next two highest belong to Gap’s Arthur Peck, 3,566:1 based on his $20,793,939 compensation, and to Mattel’s Yvon Kreiz, 3,408:1 based on his pay of $16,955,660. Lowest ratio was at Celgene where Mark Alles’ $16,223,923 compensation translated into a CEO pay ratio of 62:1.

Median CEO pay ratio for the entire list was 277:1.

An additional caveat to note: the Times list did not include some of the business world’s most highly compensated individuals, like the CEOs of private equity firms and hedge funds. One of the latter, Kenneth C. Griffin, head of Citadel Investment Firm, paid nearly $240,000,000 for a New York City penthouse in January. Griffin’s firm made $1.4 billion in 2017, but only managed $870,000,000 in 2018.

Nearly two thirds of all hedge funds lost money last year, one of the worst years for hedge fund performance in a decade. Still, the top 25 hedge fund CEOs took home a collective $11.15 billion. One of the managers who fell off the list this year was Appaloosa Management’s David Tepper, who earned $1.5 billion in 2017.  Guess he spent too much time negotiating tax concessions from South Carolina. 

There are occasional glimmers of hope.

Ray Dalio, Bridgewater Associates, had the best performance among hedge funds last year with $2 billion. In a two-part series published on Linkedin in April 2019, the 69-year old investor warned that American capitalism is “producing self-reinforcing spirals up for the haves and down for the have-not. This is creating widening income/wealth/opportunity gaps that pose existential threats to the United States because these gaps are bringing about damaging domestic and international conflicts and weakening America’s condition.”

Another empathetic voice in the corporate world belongs to Nick Hanauer, Seattle venture capitalist. His TED Talk debunking supply side economics caused a stir in 2014.  In the recent issue of The Atlantic, Hanauer continues his plea for our prosperity to be shared:

“…the most direct way to address rising economic inequality is to simply pay ordinary workers more, by increasing the minimum wage and the salary threshold for overtime exemption; by restoring bargaining power for labor; and by installing higher taxes—much higher taxes—on rich people like me and on our estates.”

Dalio may see the reality more clearly:

“My big worry is that the sides will be intransigent in their positions so that capitalism will either a) be abandoned or b) not be reformed because those on the right will fight for keeping it as it is and those on the left will fight against it.”

Monday, June 3, 2019

Experience Counts

Charles Percy had a successful business career as head of Bell and Howell, a camera company, before being elected US Senator from Illinois in 1966 as a Republican. Almost immediately he was broadly touted as a potential GOP presidential nominee. Percy declined to be a candidate in 1968, however, saying he did not have enough experience. 

I am sure that seems a quaint notion to aspiring seekers of the oval office in the 21st century.

To most objective observers, Donald Trump in 2016 did not have the normal qualifications one might expect of a presidential candidate.  His name was reasonably well known to the American public. His “Apprentice” television show had run for a long time, and Trump was often fodder for gossip columns. His celebrity status appeared to be enhanced by the frequent bankruptcies suffered by his real estate and gambling ventures.

But Trump had never served in government at any level; neither elected office, nor appointed position. He had never run for office.  

Trump had no military record, even though he was draft age at the height of the Vietnam War. He was declared 4-F by his local draft board on the basis of a bone spur in his foot.

Trump’s marital life also did not conform to normal expectations. Ronald Reagan had been divorced, but when he was elected, Reagan and his second wife Nancy had been married for 28 years.  Trump’s misogyny was visible and unapologetic.

As a presidential candidate Trump identified several significant issues that American voters felt the country’s political elites had either ignored or had poorly addressed.  Immigration, job security, trade, and the excessive influence of special interests were key elements in his campaign agenda.

In neither the primaries nor the general election did Trump offer much in the way of strategies or programs to deal with any of the issues he cited. He dominated campaign attention by belittling his opponents and predecessors and by aggressively asserting that he, emphasis on he, would solve these matters for the benefit of Americans.

Once in office, Trump’s bombast has not moderated. While he has issued over 100 executive orders, most do not lay out detailed proposals. Generally, they direct some office or agency to address a broad set of concerns or they overturn orders left in place by previous presidents. Ironically, Trump does not appear to view as partners the bureaucracies that are to implement these policies.  

Trump’s picks for senior staff positions in the administration have been undistinguished overall. Frequently, there does not appear to have been any previous interaction between Trump and the appointee. As a candidate he talked of “draining the swamp” in regard to the influence of special interests, but many of Trump’s appointees appear to have significant conflicts of interest. 
  
Commerce Secretary Wilbur Ross and Transportation chief Elaine Chao both have disregarded commitments to divest stock in companies with interests their departments are in a position to further. Scott Pruitt who has already left the Environmental Protection Agency received substantial campaign contributions from the fossil fuel industries when serving as Oklahoma’s attorney general. 

Pruitt has been replaced by a former lobbyist for the coal industry.

Trump’s lack of meaningful experience in foreign affairs has been obvious. At first, he appeared to be enamored with military brass, selecting retired generals for several major slots. They are all gone, and he is on his third national security advisor, his third head of Homeland Security and his third chief of staff in the White House.

Rex Tillerson was his choice for Secretary of State, but Trump and the former head of Exxon were never in harmony. Many senior positions in the State Department remain empty even today, including a number of key ambassadorial slots.

 An ambassador to Mexico was announced in March 2019 and an envoy to El Salvador in January 2019. 

Trump’s only major legislative accomplishment has been the 2017 Tax Cuts and Jobs Act. Estimates of its benefits have been mixed. Corporations have been the big winners, but the anticipated impact on job and wage growth has been muted.  

He has been successful in cementing a conservative majority on the US Supreme Court, thanks in large measure to US Senator Mitch McConnell, the GOP majority leader. The US Senate under McConnell’s leadership has become a much more partisan body.

 The issues that Trump highlighted in the 2016 election campaign are still festering. Some are worse. Any change in his approach to his responsibilities seems remote.

There are lessons here. The US president must be aware of the concerns and needs of the American public in the broadest sense.  He should be the chief advocate for our citizenry.

But the president also needs to be sensitive to our constitutional structure and to the reality of what and who is required to implement policy. He cannot be successful as a one-man band.  The understanding and temperament that come with governmental and political experience is essential to achieving progress.     

As voters we need to improve our personal approach to evaluating presidential candidates and to insist the political parties exercise greater care in the nomination process. Granted in a democratic society you do not wish to impose burdensome restrictions on potential candidates, but realistically, in the modern world a flawed president quickly becomes an albatross that threatens the national interest.   

Friday, May 24, 2019

Student Loan Debt is a Serious Threat



     Apparently, there will not be an early bipartisan solution to the ongoing student loan crisis in America, despite the broad impact of the problem and the potential danger to the overall economy if the problem is not soon resolved. The outstanding student loan debt in America has reached $1.6 trillion and affects over 44 million individuals, primarily students, but also parents.

     Student loan debt exceeds both credit card debt and auto loan debt. Only home mortgage debt is higher. 

     How did we get to the point where protecting broad access to postsecondary education is not recognized as societal obligation, critical to our economic and political well-being.?

     When I graduated from Wofford College in 1959 I owed about $1,000 to the Darlington (SC) Kiwanis Club college loan fund. I had dropped out for the last semester of what was to be my junior year in order to go to work and pay off an earlier loan from the Kiwanis, but I had to borrow more so I could complete my degree.

     Borrowing money for part of the cost of my education was an inconvenience, but not stressful. I paid off my loan within three years, and never questioned the value of my investment.

     The world of higher education in America is a little different today.     

     First of all it is clearly more expensive. Today, the annual costs at a private liberal arts college like Wofford can range from $50,000 to $75,000.

     Even public institutions today carry a hefty price tag.  In South Carolina the yearly cost among public campuses ranges from approximately $20,000 to nearly $30,000 for in-state students. Out-of-state students can pay as much as $20,000 more.  North Carolina’s public institutions are only slightly cheaper.

     With today’s costs it’s obvious few service clubs or fraternal organizations can offer the kind of financial assistance the Darlington Kiwanis Club provided me. A couple thousand dollars in the 1950s was generous and covered about half the cost of my college education. Managing loans that could easily exceed $100,000 would not be feasible for most volunteer organizations today even if they could raise the necessary endowment.

     To help offset at least part of the cost of attendance today, some institutions attempt to use their own resources, private endowments, and access to various federal grant and loan programs. But keep in mind, the median annual family income in America today is $61,000. Half the families in America have no greater income. What is the likely reaction among students from such families to the stories about the current student debt crisis?

     This crisis did not developed in some mysterious manner.  It came about because politicians over the past three or four decades have viewed education as a benefit for the individual rather than as a public good broadly of value to our entire society. This has led states to reduce funding for traditional colleges and universities and forced the institutions to raise tuition and fees imposed on students.

     The change in attitude as to the purpose of education has led to a plethora of for-profit colleges that advertise easy access to lucrative jobs. According to The Economist, between 2000 and 2010 enrollments in for-profit college chains more than quadrupled. Nearly a quarter of their revenue went to marketing, “more than on educating students.”  

     Fewer than a quarter of students at for-profit institutions complete their program, but virtually all wind up with debt. For-profit college borrowers have a default rate of 48% within 12 years, compared to 12% default rate for public college borrowers, and 14% of private college borrowers.

     Billionaire Robert Smith’s recent promise to repay the student loan debt of the 396 men in the 2019 graduating class at Morehouse College was a generous gesture. Unlike nearly two-thirds of their fellow college graduates this year, Morehouse men will not have the burden of approximately $30,000 to shoulder as they embark upon their careers.

     There is, however, little evidence that other wealthy individuals are similarly motivated.  Also, Smith’s commitment does nothing for students who have not graduated or who have transferred to other institutions.

     A proposal to provide tax credits to graduates and their employers for repayment of student loans suffers from the same flaw.

     Since 2004, student loan debt has more than quadrupled which indicates the problem is of recent origin. Continuation of this burden will have a long lasting effect. At least three generations of Americans already face serious restrictions on their participation in our economy. Buying a house, marrying and raising a family, or entering critically important professions, like K-12 education, healthcare or social work, all are impacted.

     Surely, if we can find the means to give a 40% tax break to corporations, we can find a way to eliminate the current student loan debt and to create a more rational system for funding colleges and universities. Until recently, American postsecondary education has been the envy of the rest of the world.  It is not too late to restore that acclaim.

Saturday, February 2, 2019

Another Billionaire for President?


Another billionaire is offering to save the United States from its current political dysfunction.
It appears an occupational obsession that individuals, generally men, who have acquired great wealth in the business world are convinced they can lead us to some sort of nonpartisan nirvana.

The latest self-proclaimed wizard is Howard Schultz, the Brooklyn-born billionaire who built Starbucks into a worldwide dynamo.  He has announced consideration of a run for president in 2020 as an independent.

That should prompt most voters to immediately dismiss his candidacy as fantasy.  No independent candidate, i.e. an aspirant not the nominee of one of the two major parties, has ever won the presidency.  The last one to even receive electoral votes was George Wallace who racked up 46 in 1968, not enough to block Richard Nixon’s victory in the Electoral College. 

However, billionaires get a pass on rational thinking because of their apparent unlimited resources. Americans tend to be in awe of wealth even when they might question how it was accumulated.

It is easy to see how billionaires get the idea they should be in charge of the country.  Although they have acquired their wealth in an economy undergirded by a very friendly, even pandering political system, the conventional wisdom credits them with being rugged individualists.

Billionaires, and some self-styled billionaires, you may have one in mind, claim they bring important skills to the table.  They are problem solvers, consensus builders, pragmatist.  People will listen to them and respond accordingly.

And in the world of business that is normally true.  But in business CEOs operate in a well-defined space with well-defined rules.  The products and services they seek to deliver are targeted for an easily identifiable audience. Personnel needed to perform essential functions whether employees or contractors are under the ultimate control of the CEO.  Their job security and financial well-being depend upon his, or her, whim.

In the political world it is a very different story.  Yes, some personal attributes, like character, discipline and intellectual rigor are important in both settings, but the environment of America’s political arena is far more complex than that of a single company or even a large conglomerate.  It also defies attempts to rule by executive decree.

A US president shares power with the 537 members of the US Congress, much more assertive than the average corporate board member. Passage and funding of the president’s agenda requires congressional approval. Most of his executive staff must be approved by the legislative branch.

Sometimes senators and representatives may owe their election to a president, but generally, that is not the case. Their obligation to the president, even one of their own party, is tenuous.  Each is independently elected by his, or her, own constituency, unlike in a parliamentary system.    

In addition, a US president must operate with far greater transparency than that demanded of an American corporate leader. The media and special interest groups are not only free to assail any proposal or action the nation’s chief executive pursues, they view their constant carping as a sacred responsibility.   

The late presidential scholar Richard Neustadt wrote extensively about the modern American presidency. In his view the US president is not powerless, but there are formidable forces within government and within the political system who have more specific constituencies and consequently an independent set of responsibilities. A president’s task is to persuade those forces that what he “wants of them is what they ought to do for their sake and on their authority.”

Arguing that no billionaire nor successful businessman could perform ably as president is not reasonable, but he or she would have to recognize the different milieu as well as the likely difference in objectives. And therein lies the rub for a potential candidate from the business world in 2020.

In comments related to his candidacy, Schultz labeled himself as “socially liberal but fiscally conservative,” decrying extremes of both parties.  But then he compared Democratic support for universal healthcare with Trump’s demand for a wall on the Southern border. 

Political definition may be in influx today, but universal healthcare is no longer a radical idea. Most Americans, unless they run a drug company or a health insurance monopoly, think it’s a good idea.  After all, other developed countries have had it for decades.

Schultz also expressed concern about the persistent deficit and growth in the national debt, but he refused to state his position on tax increases.  This leaves the suspicion that spending cuts would be his answer to reducing the deficit and the debt, not raising taxes on people like him.

This would not be a very popular or credible position for a presidential candidate in 2020.  For Schultz it could be toxic.  In 2016 his last full year as Starbucks CEO Schultz’s compensation was more than $21.8 million. Using Starbucks 2018 median employee pay as reported, under Schultz the CEO-median employee pay ratio would have been at least 1,700 to 1.

Not a good platform for a presidential run in 2020.

Tuesday, January 22, 2019

Crafting a Better Presidential Nominating Process


Even though it is 22 months before the next general election and 17 months before the major parties hold their political conventions, the 2020 presidential campaign is already underway.  However, the leadership of neither major party seems interested in crafting a nominating process likely to produce a candidate capable of governing.   

This is not a new problem. At its heart is an obsessive emphasis on primaries as the way to evaluate and filter potential candidates.  This allows too much focus on personal charisma and rhetorical skills and only incidental discussion of issues important to the public and how to resolve them.  It also leaves the nomination process open to manipulation by wealthy moguls using their money to pursue narrow motives.    

The problem was front and center in 2016 when both major parties botched their presidential search, producing two flawed nominees.   

The Democratic leadership tilted the process in favor of Hillary Clinton, even though many party faithful viewed her as too cozy with corporate elites and too concern for her own political and financial fortunes.  Superdelegates drafted from the party establishment were handed a major role in the nominating process, and both primaries and debates were scheduled to give Clinton an advantage over others. The ease with which she obtained the nomination disguised her lack of broadly based voting strength. Given the critical role of the Electoral College, this led to defeat in November despite winning the popular vote. 

On the other hand, the GOP leadership abdicated responsibility for shaping the nominating process. With a plethora of candidates the Republican National Committee chose to essentially surrender management of the process to the candidates and their wealthy backers. Too many aspirants participated in the numerous debates for any meaningful focus on issues. Relying on celebrity interrogators contributed to the melee, and the aggressive and outrageous persona of Donald Trump prevailed. In all likelihood, Trump will be the GOP nominee again in 2020 and will dictate his party’s nominating process, if there is one.

Current Democratic leaders are ecstatic about the multitude indicating interest in the party’s 2020 presidential nomination.  Obviously encouraged in part by Donald Trump’s low approval ratings, nearly three dozen candidates have made some move towards seeking to be the party’s flagbearer in the next general election. So many in the hunt, however, may distract the party from addressing mistakes which produced the 2016 debacle.  

In mid-December, Tom Perez, Democratic National Committee chairman, revealed a vague plan for 2020 which calls for twelve candidate debates beginning in June 2019.  That is more than a year before the Democratic Convention in July 2020, and eighteen months before the 2020 General Election. And it sounds eerie like the GOP disaster in 2016.

Although Perez said accommodating the large field “is a first-class problem to have,” he did not offer a first-class response as to how the DNC plan to deal with the challenge. No indication of how the debates might be structured nor how questioners would be selected.  No definitive word as to how participants would be determined except to say that one relevant metric would be “grass-roots fund-raising.”

The United States is a representative democracy in which American citizens elect agents to act in our behalf and interest. It cannot function well if the two-way communication between citizens and representatives breaks down.  Historically, political parties with genuine grass roots organizations at all levels of government have been vehicles for facilitating that communication, but in recent years neither major party has performed this function effectively. 

Although primaries were originally viewed as instruments of reform, allowing greater say in the nomination process for the general public, today’s primaries are controlled by a very small slice of the electorate usually energized around narrow interests. Little time is spent by candidates during the primaries actually listening to the public. Voter surveys are disseminated by candidates and parties, but the vacuous questions confirm their purpose is fundraising not enlightenment.    

Instead of placing so much emphasis on primaries, the DNC would do well to explore initially ways in which to engage prospective voters in discussions about the problems that concern them.  State or regional forums focused on specific concerns could be held during 2019.  Expert authorities could be invited to participate in the forums as well as potential candidates, but there would be dialogue, not sermons.

Maybe it is pie in the sky to believe either major party would be willing to invest so much time and energy in listening to the American public. It’s much easier to organize campaign rallies and to fill the airways and social media with 30 second commercials that oversimplify and overpromise. Given the dysfunction of our government today, however, the survival of the major parties likely depends on crafting a presidential nominating process that produces not just electoral victory but also the capacity to govern.

Saturday, January 12, 2019

A Silver Lining?


The ongoing shutdown of most federal agencies may have a silver lining after all.  Since before Christmas nine of 15 Cabinet-level departments have been essentially closed or forced to operate with reduced staff, leaving 800,000 federal employees unpaid.  The consequences for the public are proving to be enlightening.

For forty years we have been bombarded with political rhetoric about an overbearing government intruding into every aspect of our lives and undermining our innovative spirit. Ronald Reagan gets credit for initiating the onslaught, famously saying, “Government is not the answer.  Government is the problem.”  And Bill Clinton piled on in his 1996 State of the Union address declaring the “the era of big government is over.”

Deregulating and making government smaller has been the almost universal message of both Republicans and Democrats. The shutdown, however, is offering a broad array of opportunities for ordinary Americans to gain new insights as to the role of government in our everyday lives.  It may lead to a reassessment of such political pontificating.

As result of the shutdown’s impact on the Food and Drug Administration inspections of our food supply and evaluations of proposed drugs for combating disease or chronic illness are restricted.  The Agriculture Department is hampered in monitoring the safety of our meat, poultry and egg production. Also, subsidy payments to farmers suffering losses as result of the trade conflict with China are on hold and agricultural statistical data needed by farmers for future planning is not available.

A variety of services supporting US business and trade activities are on hold or have been significantly reduced.  For example, the Commerce Department has suspended collection and publication of data related to our domestic economy and international trade.

Access to the National Parks and the Smithsonian museums in Washington, DC, have been restricted and in some cases eliminated.  A few states concerned with the impact on tourism have actually taken over park maintenance.  Since a significant source of park funding is visitor fees, the shutdown is a double whammy. 

The quality of our air and of our water supply are at risk because funding for the Environmental Protection Agency has been suspended, and protection for consumers from monopolistic and other fraudulent business practices cannot be provide without appropriations for the Justice Department.  Failure to fund the Securities and Exchange Commission limits oversight of the stock market and prevents approval of new corporations.

Landlords who rent to tenants receiving rental assistance from Housing and Urban Development will not be paid while the shutdown continues and the processing of home mortgages for many middle income Americans will be delayed.  The impact of the shutdown on the Internal Revenue Service means fewer audits and more revenue losses to tax cheats.

Ironically, even though the stated objective of the standoff is “border security,” some of the most severe reductions in governmental services are being imposed on the Department of Homeland Security.  Employees in the Coast Guard, Border Patrol, Immigration and Customs Enforcement, Transportation Security Administration, US Citizenship and Immigration Services and Federal Emergency Management Agency are all impacted by the shutdown.  Most are still working but without pay and unable to provide a full range of protections. 

Significantly, DHS has furloughed, meaning they are not allowed to work even without pay, nearly half of the staff of the Cybersecurity and Infrastructure Security Agency.  So much for keeping an eye on terrorists sneaking across the Southern border.

When the US was founded it consisted of thirteen states with a total population of less than 4 million occupying 865,000 square miles. New York City was the country’s largest city with approximately 33,000 residents.  Charleston, SC, was the fourth largest municipality with roughly 16,000.  In the primarily rural society of 1790, self-sufficiency was an important and achievable value.

Over 320 million people live in the nearly 4 million square miles that make up the US today.  That includes the 50 states, District of Columbia and several territorial “possessions” (which as advocates of self-determination we try to ignore).  New York City is still the largest city with more than twice as many people as lived in 1790’s America.

There are still rural areas, but most Americans today live in cities or suburbs in close vicinity of urban centers. Rubbing elbows with our neighbors sometimes causes friction, but it is unavoidable.  Under the circumstances the concept of “small government” is a dangerous and mindless illusion, and economically, self-sufficiency is no longer an option, much less a value.

Just how interwoven government’s responsibilities and services are in our everyday lives is being revealed in the shutdown.  Effective and representative government is clearly essential to our right to life, liberty and the pursuit of happiness in the modern world. Maybe we’ll remember that when the next election rolls around.