It is sometimes too easy to be jaded and cynical, and to write people off as merely a product of their affiliations and past lives. This especially applies to public figures and how we think about them. When I say easy, I mean cognitively easy: we think of a person and what they stand for in a way that challenges our world view the least and fits neatly into a narrative we had already started writing. Rewriting, or adding digressions and nuance to the story, is too time-consuming. I am as guilty of this as anyone. In many cases, the judgement is actually correct, and more often than not it is borne out by an abundance of evidence.
But every so often, I need to be reminded that people are people, and that they can be complex and difficult to label. Their motives are not so simple, and not so impure as we might have first thought. This realization doesn’t automatically render individuals great, nor does it wipe the slate clean. But it is an antidote to thinking of the world as a static and stark chess board, where everyone plays a single role for a single side, never changing.
The first example is Neel Kashkari, the Goldman Sachs banker picked by Treasury secretary Hank Paulson (and former Goldman Sachs banker himself) to “administer” the Troubled Asset Relief Program (more commonly known as TARP). It was never clear to me what his job was precisely, or whether he was particularly good or bad at it: but members of Congress were not happy with it or the turn TARP had taken after being passed under the spectre of a harsh financial collapse. Recall the famous hearings, where Kashkari was asked by Rep. Cummings: “Is Kashkari a chump?”
After going back to the world of finance and working for Pimco, he then ran for governor against Jerry Brown in California (we know the outcome there). His ads made him sound like any other ostensibly fiscally conservative Republican. Low taxes, less government, etc. Nothing remarkable, interesting, or particularly thoughtful.
Then, surprisingly, he was picked as the next head of the Federal Reserve Bank of Minneapolis. I don’t think he was qualified or should have been picked for that position, in which he will occasionally be asked to vote on monetary policy that impacts the entire economy, but I’ll leave that for others: Brad DeLong and others summarize the issues and his views well.
But then, in February, he gave his first major speech. It was all about ending Too Big To Fail (TBTF). Here are his policy prescriptions:
- Breaking up large banks into smaller, less connected, less important entities.
- Turning large banks into public utilities by forcing them to hold so much capital that they virtually can’t fail (with regulation akin to that of a nuclear power plant).
- Taxing leverage throughout the financial system to reduce systemic risks wherever they lie.
Sounds like the Bernie Sanders plan. It’s not clear that breaking up large banks into smaller banks is a good solution (nor do I understand how one enforces them to be less connected than if they were part of a big entity with a large capital base). Nor do I think TBTF is something you can regulate away. The tax on leverage is probably a good idea (a financial transaction tax), and large banks have been forced, thanks to Basel III and Dodd-Frank, to hold significantly more capital. Stress tests carried out by the Treasury have also pushed towards this.
But all of this is a long way of saying I was surprised by the speech. Probably it went into territory that’s not really standard (and maybe not appropriate) of a newly-appointed Federal Reserve Bank president, at a time when there’s unprecedented scrutiny by outsiders to politicize the Fed. And the usual caveats apply, especially when dealing with an aspiring politician: this could simply be an attempt to change his public perception rather than a sincere belief in the kind of financial regulation he talks about. Only time will tell. But it certainly did not sound like a Wall Street banker.
The second example is Tom Wheeler, FCC chairman since 2013. Ars Technica had an in-depth interview entitled “How a former lobbyist became the broadband industry’s worst nightmare.” Tom Wheeler had served as a chief lobbyist for the cable and telecommunications industries prior to his appointment. Few had expected him to be anything but a friend to those industries, and progressive were unhappy with his nomination.
Fast forward to 2016, and he has largely acted as an opponent to the telecommunications and cable industries in their ambitions to consolidate and monopolize. Famously, he led the charge to destroy the proposed merger between Time Warner and Comcast. Most recently, he has pushed for rules requiring cable companies to conform to a single standard in cable boxes, thus allowing customers to purchase rather than lease the boxes at extraordinary rates (to the tune of $20 billion annually, or $231 for the average customer). The entire interview is worth reading. There is even a reference to The Master Switch by Tim Wu, a definitive text on monopolies in the information industries of past and present from the man who coined the term net neutrality.
Wheeler’s tenure has been consequential. But looking at his resume, you might have thought he would reach different decisions on a number of important issues. Sometimes people can surprise you. It’s worth remembering that.
I wrote just a few days ago that Trump was a lot like the rest of the Republican party, and more moderate if anything on certain policy issues, and that we should be cognizant of this rather than solely emphasize his choice of rhetoric. I said this because I worried this focus on rhetoric would make his party competitors seem less crazy when they held equally destructive policy beliefs.
However, over the last few days, my thinking has changed based on recent events. The other presidential candidates in his party, like other leaders in the party from the past, are largely responsible for the terrible turn of events. By claiming repeatedly that their country was being taken in apocalyptic terms; by portraying every election as a matter of spiritual life or death; by claiming Obama was purposefully trying to ruin the country; and by using racism subtly and not so subtly, they have created this current monster and his followers. But at this point, the only candidate who has advocated for violence is Trump, and that has me rethinking my classification of him as the least bad option from the party.
Policy choices are meaningful, and they can ultimately impact real lives in small and large ways. But someone who incites and advocates violence and who aspires to hold the highest office in the country, leading the executive branch and all its limbs, would be decidedly destructive and dangerous in ways I have trouble thinking about. So I was wrong about Trump: rhetoric does matter.
I guess this started at a Trump rally when John McGraw, a 78 year-old man, punched a protester as he was being escorted out. The protester was held back and wrestled to the ground by police officers. Afterwards, when video came to light, McGraw was arrested. In an interview, McGraw stated:
Number one, we don’t know if he’s ISIS. We don’t know who he is, but we know he’s not acting like an American, cussing me… If he wants it laid out, I laid it out. [. . .] Yes, he deserved it. The next time we see him, we might have to kill him. We don’t know who he is. He might be with a terrorist organization.
I hesitate to associate a single man with Trump. But throughout the campaign, Trump has expressed support for exactly this kind of thing:
“If you see somebody getting ready to throw a tomato, knock the crap out of them, would you?” Trump said, drawing cheers and laughter. “Seriously, OK? Just knock the hell — I promise you, I will pay for the legal fees. I promise. I promise. They won’t be so much, because the courts agree with us too — what’s going on in this country.”
I thought it was a dumb thing, more talk to whip up support among his followers, but nothing to be taken very seriously. Just Trump being Trump. I was wrong.
On NBC’s “Meet the Press” on Sunday, Trump was asked whether he would pay McGraw’s legal fees, as he once offered to do for supporters who rough up protesters.
“I’ve actually instructed my people to look into it, yes,” Trump responded.
There’s really nothing more to say. What I worry about is the other Republicans. They have stated that they don’t like what’s being done, but that they would support the nominee, whoever he is. They have to change their minds fast if they care even the slightest about, I don’t know, democracy and civic discourse. But maybe that’s not likely. Josh Barro writes about Rubio powerfully:
[Republicans] have spent seven years running around the country, accusing the president of being a fifth columnist hell bent on destroying our country. If Obama’s America were as bad as people like Rubio say it is, the civil unrest fomented by Trump would be justified.
Now the Republicans who fed this narrative are watching in apparent horror as they see voters have taken them all too seriously.
Rubio says the idea of supporting Trump as the nominee is “getting harder every day.” [. . .] “I think we all need to take a step back and ask whether we’re contributing to this,” Rubio said Saturday about the unrest. He should start with himself.
Last summer, when Donald Trump announced his candidacy to a bunch of paid extras in a mall food court and subsequently rose to the top of the polls, I think I made a mistake many others made. I thought that this was just another one of those candidacies, not unlike that of Newt Gingrich, Herman Cain, or Michele Bachmann in 2012. In other words, 2016 would just be a repeat of 2012. At the time, my chief worry was not that Trump would win his party’s nomination, but that Trump would make the other candidates (and their ideas) on the debate stage seem less crazy than they actually were.
Why was I wrong? I wasn’t paying attention to what he was saying, or who he was appealing to. And he was appealing to the struggling working and poor whites who blame globalization and immigration for much of the nation’s woes and who feel that neither party has represented their interests. Late last year, a report came out that said poorly educated middle-aged whites were the only demographic in America that had experienced life expectancy declines. And a recent interview of Theda Skocpol, political scientist at Harvard, demonstrated to me that what most Republican voters care about (immigration) is not what the large Republican donors and elder statesmen care about (deregulation and tax cuts for the rich). The latter has pandered to the former in primary after primary, but it seems these voters are finally realizing that the establishment doesn’t actually care. Hence, Donald Trump.
Fast forward to today, with roughly half the primaries completed. Trump remains at the top of the national polls, and he leads in delegates. Meanwhile, the media in recent weeks has remained focused on his celebrity, televising every victory speech or rally and subsequently condemning him. And so, I was completely wrong about Trump’s chances for success in the primaries, but I wasn’t wrong about the media focusing on words (and how they are delivered) rather than on more substantive issues, and in the process making others on the stage (and their ideas) look more palatable. On tax policy, Trump, Cruz (the “crazy” pick), Rubio (the “establishment” pick) and Kasich (the “moderate” pick) all propose large tax cuts that will primarily help the wealthy and create huge deficits that could only be paid by cutting the safety net drastically. On immigration, despite all the focus on Trump, all have adopted similarly harsh stances. On trade policy, Trump is the same as Romney in 2012, where he lambasted Obama for not going hard at China for currency manipulation. Trump also favors more protectionist policies, which is at odds with big business and the Republican establishment (and agrees with some of Bernie Sanders’s own rhetoric). By fighting a battle on language instead of a battle on ideas, the media essentially gives up on the latter.
I consider all of the major Republican candidates to be basically terrible and unacceptable: Ohio Governor John Kasich is considered the moderate in the race because he will not say mean things in debates. Rubio is considered the most electable because he’s young, speaks positively and can be manipulated by the big donors and establishment forces in the party. And then there’s Cruz: I have been of the view that Cruz would be the worst possibility of all because he’s an extremely skilled and smart politician, and worse, a real believer in his causes. He has demonstrated an ideological purity that would be more damaging than any kind of political incorrectness. He single-handedly shut down the government over an attempt to repeal Obamacare. . .while Obama was still in office and had veto power. The pointlessness of that crusade was not lost on his own colleagues.
Since the early 1980s, the Republican party, driven by rich donors with a specific agenda, has gone further and further right. The “sensible” Republicans, who used racism and immigration issues subtly (and not so subtly) for years to drive their victories, now wonder how the party could be so broken in this election.