Lenz: Trump Is Right, America Doesn’t Win Anymore

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The 2016 Republican Presidential race, for all of its faults, has exposed an uncomfortable truth about the track record of our republic: America does not win anymore.

Whether you blindly love, or like so many, have a visceral hatred for him, Republican frontrunner Donald Trump has exposed a shared American delusion.

There is perhaps no lie more often repeated in American politics than the belief of “American Exceptionalism”. Exceptionalism does not imply superiority, but it does imply the object being referred to is the exception to a rule.

In the course of human history, the rise and decline of superpowers is hardly an exception to the rule. The truth is America has not “won” in some time and in comparison to superpowers of yesteryear, we certainly are no exception to the rule of decline.

We are over a decade into the wars of Iraq and Afghanistan, and in case you are unaware, both “countries” are dramatically worse off than when we self-righteously decided to liberate them. The War in Iraq resulted in the birth of the Islāmic State, which in turn, spawned the Syrian Civil War.

As if democracy building in Iraq were not destabilizing enough, it has become the official policy of the United States to support the removal of Syrian President Bashar al-Assad, with hopes of replacing his government with an organic, and mythical, Syrian democracy.

Keep in mind, millions of Syrians have fled the civil war for Europe, so you can imagine the “democratic leanings” of those who chose to stay and engage in the ongoing civil war…

Apparently, offering Syria to the Islāmic State on a silver platter was not a large enough “win”. Hence our support of the overthrow of the late Libyan President Qadhafi. Unfortunately as of today, Libya has become the latest target in the Islāmic State’s acquisition spree and potential home to its future capital. The citizens of Libya have Hillary Clinton, and by association, the American voter to thank for their new status as “Country most likely to join the Caliphate.”

You may be saying, “Sure, it is easy to single out a few examples of US intervention and create a narrative of failure”,  yet almost every US intervention in the Middle East has resulted in a devastating loss to each American citizen’s financial health (via inflation and necessary future taxes) and personal safety (via the accompanying backlash from intervention and occupation by a foreign power). One is hard pressed to find a single instance where US intervention resulted in a middle eastern “win”.

How about US economic “wins”?

Again one would be hard pressed to find a single example of lasting US economic victory. Even former Chairman of the Federal Reserve under President Reagan, Paul Volcker, has lived to see his success in defeating the stagnation of the 1970’s wiped away. President Reagan’s tax code simplification and reduction stands COMPLETELY undone.

It took the Federal Reserve fewer than fifteen years to create a series of consecutive tech, mortgage, and corporate bond & equity bubbles.

Nothing feels more like a “win” than the anxious feeling one gets when sitting on the precipice of another global recession. Even the most nationalistic among us is forced to acknowledge that our “wins” certainly do not feel like wins.

Now, former President Bill Clinton used to say, “Any idiot can tear down a barn, but it takes someone with intelligence to build one”, so rather than continue to point out America’s recent lack of “wins”, the question becomes what would an America that “wins” look like?

Foreign Policy: It is time to end our foreign entanglements. Frankly, the United States cannot continue to play social engineer in the Middle East and other historically chaotic regions of the world.

Militaries are not built for perpetual warfare and occupation. It is time to admit that our intent to spread democracy to the rest of the world was naïve and idealistic.

We must extract our military from the financially calamitous role of world police and doing so will strengthen our national security.

It is time to protect the home front, engage foreign nations economically, and hope that the adage “nations who trade together, don’t go to war” holds true.

Economy: The fact of the matter is that the economic growth of the United States has been the single largest enabler of our current fiscal nightmare. When taking into consideration the entitlement expenditures we face as the Baby Boomer generation ages, we simply cannot afford anymore foreign policy expeditions. Our economy is changing and the number of taxpayers required to support the existing social welfare apparatus will only continue to grow.

Our leaders have failed to appreciate the entrepreneurial dynamism which allowed their social insurance and military extravagances. We are at our lowest levels of entrepreneurial activity, technological innovation, and corporate formation.

One need not be a professional economist to understand that the subsidization of student loans has resulted in an ever rising cost of attending college. The mounting cost of attending college has created a lasting debt burden on people aged 25-40. As these individuals leave college and advance in their careers, becoming an entrepreneur is all but impossible given their financial obligations.

We know economic growth comes from new companies that invent the industries of tomorrow. We also know all US job growth comes not from small businesses, but from young businesses, specifically those under five years old. As American entrepreneurial activity declines, so does the economic outlook and sustainability of existing social insurance programs.

An American economic win would be to stop subsidizing college and transition toward a model of skill acquisition to gain employment and pursue career advancement opportunities. Our economy can no longer be restricted by the four-year college degree serving as litmus test for qualified applicants. Our failure to make these changes will serve as a self-fulfilling prophecy of economic decline.

Second only to entrepreneurial activity in importance, is the complete overhaul of the US tax code. Last year the Fortune 500 spent over $200 billion in accounting and tax planning costs. That is $200 billion diverted into the non-productive financial and legal professions, and not $200 billion into productive research and development jobs or new jobs via expansion. The tax code is literally stealing jobs and economic growth from our future.

The flattening and simplification of the tax code is not a matter of letting the “rich” keep more of what they make.

Ask yourself, “Who benefits from more tax laws?”

Obviously accountants and attorneys benefit the most from our modern-day white-collar WPA.

Lastly, the United States has to end their endless forays into monetary experimentation. The Federal Reserve has proven competent at little else other than economic chaos in trying to tame the business cycle.

A gold standard is not politically possible, but a policy of price targeting is, just like the one carried out by former chairmen Paul Volcker in the 1980s. The manipulation of the US dollar and corresponding inflation is most harmful to the poor.

Inflation is a hidden tax robbing from those with the least earning power. In addition, printing money results in horrible distortions in the economy. When the Federal Reserve offers cheap interest rates to banks, the borrowing banks necessarily begin offering increasingly risky loans because the potential downside of losing cheap borrowed dollars can be offset by gains.

However, as that money filters through the economy, all prices begin rising due to the flood of new dollars. Banks are then forced to make even riskier loans to beat the vanity gains from inflation. Once again, inflation is another example of a self-fulfilling prophecy of economic devastation.

Perhaps the largest unseen effect of inflation is the effect it has on CEO and investor behavior. When a CEO knows that the price of their investment will necessarily increase, due to the flood of dollars into an economy, it shifts their behavior from investing in things like new plants and equipment, to investing in inflation hedges that ride the cresting wave created by a flood of new dollars.

In the 1970’s, many CEOs opted to invest non-productive assets like land and metals because they were assured of a gain from inflation, and since their compensation was tied to stock performance, why risk putting money into productive assets like new plants and equipment? It was far easier to invest in inflation hedges and wait for the rise in prices.

New plants and equipment generate returns in the form of efficiency and productivity gains. Ideally those gains yield lower costs and higher profits. In an environment where the value of the United States dollar is stable, CEOs and investors have no choice but to pursue strategies of growth and investing in new machinery/training for workers because they do not have the option to ride an inflation driven rise in the price of shares.

The Drug War: Simply put, it is impossible to be a fiscal conservative and continue to support the ever-increasing cost of imprisoning a larger percentage of our population than any other country in modern history. The War on Drugs, while possibly well-intentioned, has been at best an economic black hole, and at worst a racist societal cancer on communities.

Ending the War on Drugs is a win for every American.

The Police State: Ferguson, Chris Garner, and various other instances of police brutality have finally awoken the American public to the militarization of American police. Once again, our economic power allowed the weaponry extravagances of police, but we no longer can continue to spend in such a frivolous manner.

A healing process at the individual level has never been more needed in American history. Trust is built one human interaction at a time. Police need to be constantly reminded they are public safety servants.

Community members too often view police as an abstract collective entity, and our police officers view citizens much the same. Until police and community members begin viewing each other as individuals, distrust and violence will remain the norm.

Surveillance State: Each American owes a debt of gratitude to Edward Snowden. He exposed how far we have fallen from our Constitutional commitments. 9/11 was an act of terror, but one that was the result of years of US intervention in the Middle East. The Patriot Act  and its allowance for the creation of an Orwellian surveillance state, made us no safer than prior to the attack on the World Trade Center.

Information is power, and since power corrupts, and absolute power corrupting absolutely, it is a matter of if, not when, the temptation to use the tools of the surveillance state for political purposes becomes too great for even the most dutiful of public servants.

In addition, it is outrageously expensive and only further contributes to an epidemic of cancerous distrust.

More important than any of the previous arguments, the surveillance state is unconstitutional, and antithetical our founding ideals.

Donald Trump, to the chagrin of many, is owed a thank you for bringing to light America’s lack of wins. However, no such gratitude is owed to his prescription for igniting a new American winning streak.

An America that wins, is one that protects the smallest minority on earth: the individual.

An America that wins is one where we quit waging an ineffective and expensive drug war.

An America that wins is one where we stop believing in Keynesian economic fairy tales and instead start applying sound monetary and fiscal policies.

An America that wins is one that heeds the advice of President Washington when he warned to stay out of foreign entanglements.

An America that wins is one where we no longer speak of each other as abstract groups like police, illegal aliens, or Muslims, but as my neighbor Jim whose a police officer, and my neighbors Jose and Muhammad who both moved here in search of a better life.

The last 100 years of American history have been an experiment in naïvely trying to impose our ideals on the rest of the world. Somewhere during our well-intentioned, yet woefully misguided pursuit, we abandoned the very ideals we sought to spread. Hence, it is no coincidence our abandonment of ideals coincided with a “losing streak”.

In order to start “winning” again, we must spend a little less time preaching the gospel of liberty, and a lot more time practicing it. As those wins begin to mount at an individual level, the result will not simply be an America than wins, but a world that wins.

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Greg Lenz is a reformed Conservative. I've slowly evolved my position from Conservative Republican to it's current status of Libertarian Republican. I'm aware people hate the Libertarian Republican label, but ultimately I'm a pragmatist. Economic issues are my primary concern therefore I do support Republican candidates from time to time (Rand Paul 2016). As of late, I find myself flirting with Minarchism. The writings of William F. Buckley, Ayn Rand, and Thomas Jefferson have played the biggest role in shaping my beliefs.

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