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3/2/16

US Presidential Elections: More countries are destroyed by their own politicians than by foreign armies - editorial

Montesquieu, (Charles Louis de Secondat)
“The deterioration of every government begins with the decay of the principles on which it was founded.”, said  Montesquieu, (Charles Louis de Secondat)  (1689-1755), a  famous French political philosopher who lived during the European "Age of Enlightenment".

In fact, putting this in the context of the US Constitution and the intended way America is supposed to function , it follows,“Congress makes the laws, the president carries them out, judges decide controversies, and the citizens may be penalized only by a jury of their peers”,

Unfortunately, in reality, this is not how the US functions as a political entity anymore.

America is now ruled by a uniformly educated class of persons controlling the commanding heights of bureaucracy, of the judiciary, education, the media, large corporations, and that force wields political power through the political establishment.

Its control of access to prestige, power, privilege, and wealth exerts a gravitational pull that has made the political elites its major accomplices.

As to the economy : “Think of the American economy as a large apartment block. A century ago—even 30 years ago—it was the object of envy. But in the last generation its character has changed."

"The penthouses at the top keep getting larger and larger. The apartments in the middle are feeling more and more squeezed and the basement has flooded. To round it off, the elevator is no longer working. That broken elevator is what gets people down the most.” said Lawrence Katz, Harvard University economist, already back in 2010.

British Prime Minister Winston Churchill (1874-1965) once noted that “democracy is the worst form of government, except for all the others.”  Indeed, democracy is a very fragile political system that can sometimes fail the very people it is designed to serve.

American president Abraham Lincoln (1809-1865) defined it as “a government of the people, by the people, and for the people.” He would turnover in his grave if he saw how his Republican party defines the functions of Government today.

But democracy is at its worst when an oligarchy takes control of a country’s institutions and imposes its own agenda. Such is the case, unfortunately, in today’s United States. Money interests, not the sovereign people, control the political system; they control the corporate media system, they control the U.S. Supreme Court and much of the judicial system and, one can even argue that they control a large chunk of the academic system.

The U. S. economy, like most industrial economies, is an open economy. This means that goods and services can be exported and imported while facing a minimum of border taxes and other barriers to international trade. For a quarter of a century now, it has also meant that the U. S. economy is part of the economic globalization model.

The later goes much further than free trade: it means that corporations and banks can move their capital, technology and production plants around the world in search of the greatest profit and the best investment environment. Many economists believe that this globalization model has been pushed too far and has become a major cause of economic stagnation in the industrial economies.

In an open economy, keynesian-type stimulus policies of deficit government spending or of tax reduction do not work properly, essentially because stimulus policies of this type are the equivalent of heating a house in winter with the windows and doors wide open. The new deficit spending may help the world economy, since much of the new spending ends up abroad, but the domestic multiplier effect of such spending can be very low. This means that such an economic stimulus in an open economy may not be as effective in stimulating economic activity as hoped and, in some circumstances, it can do more harm than good.

Nevertheless, many politicians (and some economists cling to the old idea that lowering taxes for the rich when the government is in deficit or new non-infrastructure government deficit spending can stimulate the economy.

 This obviously does not work, at least not if the new deficit spending is not focused domestically. Spending deficit money in Afghanistan or in Iraq doesn’t much stimulate the U.S. economy!

What works in an open economy are policies geared toward changing relative prices in order to encourage domestic production and employment. First of all, a lowering of the real exchange rate can encourage net exports and stimulate domestic production and employment, provided the government does not sustain excessive domestic absorption through unproductive large deficits.

Another approach to move relative prices in favor of domestic production and employment is to use the tax system accordingly. Presently, many American corporations are hardly taxed at all on their profits when they operate abroad. Some appropriate taxation of these profits can encourage repatriation of capital and support additional domestic investments. It may be argued that the American political system is not flexible enough to allow for the use of tax policies to encourage domestic production and employment. If so, this would be another indication that the current state of the political system in the U. S. is inimical to economic progress.

The results of the present day US economic policies are everywhere to be seen. The United States has reached levels of inequality in wealth and income that used to be seen only in some backyard third-world countries.

Specifically, therefore, when it comes to politics, it is also in the best interest of any country to avoid giving power to idiots, ignoramuses, incompetents, devious and delusional characters or to demagogues. If not, watch out.

The records show — More countries are destroyed by their own politicians rather than by foreign armies.

Donald Trump’s claim to be an enemy of 'rule-by-inside-deal' is counter intuitive. His career and fortune have been as participant and beneficiary in the process by which government grants privileges to some and inflicts burdens on others. Crony capitalism is the air he breathes, the only sea in which he swims, his second nature. His recipe for “fixing” America, he tells us, is to appoint “the best people”—he names some of his fellow crony capitalists—to exercise even more unaccountable power and to do so with “unbelievable speed.” He assures the voter that, this time, it will be to “make America great again.” Sure, tell us another one Mr.Trump.

Hillary Clinton's approach is to "improve on the system" as she says. She's also embracing the label of "insider," declaring that she knows "what it takes to get things done". With Hillary it is probably the word "insider" which worries most Americans,specially those who believe that the US political system is rotten to the core.

Bernie Sanders's call for a political revolution is at the center of his political appeal. Progressives don't just love him because his policy proposals are more left wing than Hillary's. They love the fact that he calls America's political and economic system by what it is: corrupt.

America's choice for President in November 2016 will either be as significant as the declaration of independence on July 4, 1776, or the final chapter in the systematic destruction of the American Democracy..
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