Why Hillary Clinton and Democrats Lost the White House, Senate, Congress, Governorships and State Legislatures

“Change will not come if we wait for some other person or some other time. We are the ones we've been waiting for. We are the change that we seek.” 

Barack Obama

Anyone who believes Mrs. Clinton lost because she is a woman needs to wake up. There is no question that misogyny played a role, but she needed to win in spite of this because she was attempting to break a glass ceiling in what is, for now, still a man’s world. The facts clearly show that women did not unite against Mr. Trump because of his lewd and misogynistic comments, just to vote for a woman. “Instead, they voted more or less as they always have: along party lines.” (NYTimes).

Also, consider that Trump won white working class voters in “many of the areas where Mr. Obama fared best in 2008 and 2012. In the end, the linchpin of Mr. Obama’s winning coalition broke hard to the Republicans." (Source: NYTimes).

He also won almost 30% of Hispanics (more than Romney or McCain did); and overall did “…better than Romney among blacks, Latinos and Asian Americans, making it more difficult to claim that racial resentment was the dominant factor explaining Trump’s support nationally.” (Source: Washington Post).

Let’s be clear that people don’t suddenly wake up one morning, turn on a racist switch and vote for hate. If that is true then we may as well pack our bags and abandon this great experiment called democracy. If we can get past the media’s hysteria and selective narrative, we will see that simply dismissing Mr. Trump’s victory as racism and misogyny (there was absolutely an element of it) is not just an over-simplification but dangerously naïve.

The next step is trying to understand, and fix, why Democrats and Mrs. Clinton lost, despite the fact that Mr. Obama had a higher approval rating than Mr. Reagan did at end of in his second term; another fact that makes it hard to blame racism. So, why did Mrs. Clinton lose?

She lost because the Democratic Party showed it had been taken over by a mafia and they were willing to use brute force to propel her candidacy, even though the base was clearly screaming for a different voice to represent them.

She lost because she came across like a Queen seeking a political coronation and someone who had become a member of the special interests and wealthy elites she promised to fight.

She lost because the majority of the world has lost faith in politicians of all stripes, and they are looking for outsiders who will use brute force to break the system, not politely try to navigate it.

She lost because she was complacent and took for granted that changing demographics would work in her favour. She simply assumed that minorities, women upset with Trump’s irresponsible and bombastic statements, and left-leaning millennials would carry the day for Democrats.

She lost because she changed her position numerous times on the minimum wage, on TPP and on trade; issues that most mattered to her voters.

She lost because she was completely tone deaf to the screams of the wider electorate, an electorate screaming for economic dignity. The kind of dignity that only a well-paying job can provide, and a sense of self-worth that comes from being able to provide for your family and promise your children a good education and a bright future.

The reason she lost is because she did not offer a vision for how she would help create decent jobs for all Americans; she forgot that it’s still “the economy, stupid”.

Her campaign was entirely rooted in trying to convince voters that Trump was an evil demagogue who is unfit to govern. But people needed to know how she would help them put food on the table, afford healthcare, find a job, get an education and lift themselves and their children from economic indignity; Mrs. Clinton failed to provide this narrative.

Instead, Mrs. Clinton and Democrats chose to stay in their bubble and ignore the growing working class cries for help. As a result the Democrats not only lost the White House, Senate and the House, but were also decimated across the board in Governor and state legislative races. Voters clearly and soundly rejected current party policies at every level of government; Democrats would be wise to take heed.

Democrats now have a clear choice to make. They can waste time and energy filing futile petitions, funding protests and calling for vote recounts. They can continue to scream and cry about Trump being racist and misogynist and refuse to accept that he is the President-elect and they can also refuse to work with him once he takes office. By doing this, they will once more bury their heads in the sand and, like the GOP has done, become a party with no vision, no rallying cause and end up with an internal civil war of their own, led by various extreme factions within the party.

Or they can come out of their bubble and spend time trying to understand why so many blue collar voters and minorities, who have historically been a guaranteed part of their base, felt so excluded and isolated that they needed to find such an extreme alternative.

They can work with President Trump to further the economic cause of all Americans while ensuring that hate never permeates the mainstream arteries of our democracy, and they can champion an alternative vision to his, one that must be more economically inclusive of all voters in 2020.

NOTE: Title changed on 12/5 from "2016 US Election: Why Democrats Lost and the Choice They Need to Make".

Hindutva or Development; That is the Question

“Disobedience is the true foundation of liberty.” 

Henry David Thoreau

Capitalism and democratic freedom go hand in hand. In order for India’s economy to succeed, people need to stop fearing backlash for religious or political beliefs, and have no fear in publicly criticising the government, the PM, elected officials and even the army.

Silence is no longer an option; it will be deemed as acquiescence at worst, cowardice at best, at a time when moral policing, anti-Muslim bigotry, religious intolerance, frivolous accusations of anti-nationalism and vigilantism continue to grow.

In order for Mr. Modi’s vision of India to succeed, he needs to go well beyond cutting a few layers of our bureaucracy and corruption, and also start championing free society where diversity of thinking is encouraged, where there is respect for rule or law (and consequences for breaking it) and where there is a very clear separation between religion and state.

These are the fundamental underpinnings of every successful free market economy. India cannot progress economically with one-hand tied behind its back. If Mr. Modi continues to allow apolitical institutions like the army to be used by his political cronies as instruments of faux nationalism, he will pay a very heavy price and so will India.

The bottom-line is that every month between 2011 and 2030, nearly 1 million Indians will turn 18 and if India is unable to create well-paying jobs, no matter what else Mr. Modi achieves, his tenure will be viewed as a failure.

In my estimation, there are couple of things Mr. Modi must do to change the tenor of the current discourse in our nation and lay the foundations for a more cohesive and inclusive India.

One. As one of the few politicians who understand the power of social media, Mr. Modi must make an appeal to all digital lynch mobs to make clear that this behaviour will not be tolerated and most certainly should not be done in his name. He needs to be unequivocal in his condemnation of social media misogyny, bullying and hooliganism, but stop short of passing new laws. 

His needs to be a plea for civility without limiting free speech. It is about appealing to people’s good sense and getting them to take the higher ground, just like Mr. Modi did when he met with Nawaz Sharif and invited Pakistan’s SIT team (against the wishes of his own advisors).

Two For a man who took office promising to attract foreign companies and investment by changing the backward, corrupt, bumbling and bureaucratic image of India, his government’s own PR has been nothing short of an unmitigated disaster.

In a world where perception is reality, the BJP is increasingly being seen as a government of overreach. One that regularly tramples on civil liberties and constitutional rights. Granted, some of this is overreaction, media bias and orchestration by opposition parties, but truth is that beef bans have been enforced in BJP-led states, independent documentary films have been banned, funding has been blocked for NGO’s, college students have been charged with sedition and there was an attempt to blacklist an independent TV channel without judicial oversight. All of this has transpired under Mr. Modi’s watch.

The point is that the world is watching and taking note. Ultimately, nobody wants to invest in a country where rule of law is regularly trampled and sound economic policy decisions are overtaken by religious fanaticism and medieval ideology.

Three. It is easy to forget that at sixty-nine years we are still a young and nascent democracy. Witnessing the machinations of the last two Congress governments, the Aam Aadmi party’s complete ineptitude and the BJP’s Hindutva antics, it tells me that to begin our evolution into a mature democracy we need to start creating non-partisan institutions, independent think tanks, civilian ombudsman bodies and numerous other apolitical and non-partisan groups that have the ability to monitor our government’s activities and prevent overreaches. 

Such institutions are the bedrock of every mature democracy. We have seen how these independent organisations ultimately held the US government to task over recent overreaches like the illegal Iraq invasion and the torture of enemy combatants, and put a stop to intelligence agencies' infringing on citizens’ rights through opaque domestic spying programs.

India needs this type of independent oversight to hold government and elected officials accountable when they stray, as they all inevitably do. Modi can become the PM who championed the creation of these public institutions.

If he does not start to address these underlying civil and social issues, all the good he continues to do – his recent bold move to combat black money, removing foreign equity caps (from defense to railroads), launching Jan Dhan Yojana (bank accounts for the poor), smart city initiatives, fast track projects, divestment of PSU’S, women's empowerment programs – will all seem inconsequential as they are overshadowed by beef bans and the use of antiquated British laws.

I believe it comes down to a very simple question that Modi needs to ask himself: What does he want his legacy to be?

Does he want to be remembered as the Prime Minister who put India on the path to achieving its full potential - by promoting free thought, gender equality and rule of law, or the PM who allowed India to be reshaped by wildly misguided notions of Hinduism and pseudo-nationalism? 

History will certainly judge how Mr. Modi chooses to answer, but long before that we will decide at the ballot box.

Bet Big on India with One Big Caveat

“A person who brings out the greatness of his friend himself gains importance.”

-Rig Veda 

Anyone who has spoken with me recently will likely be tired of hearing me say how there is absolutely no doubt in my mind that this next decade belongs to India, BUT depending on how India chooses to traverse it, will decide if the next century is also ours. It is true that I have always been among India’s most vocal cheerleaders, the eternal optimist and jingoistic patriot. I believed in her potential even when I was in the extreme minority during the lowest ebbs of our license Raj. I never stopped believing in her despite the tremendous odds and the contrary viewpoints of many an expert. Today, the landscape is far different, and I imagine few people will challenge my views based on the last decade of economic data.

First, let’s discuss why I am optimistic before I spell out the major caveat. The reason for my optimism lies in two parts: one has to do with forces within India, and the other a set of external factors which squarely benefit us. It is true that in the 21^st century, no country can thrive on its own because of our global economic interconnectedness and interdependence. These connections will only grow deeper in the next century and serve to further isolate economies like Russia, Iran, North Korea and others that pursue isolation over smart dependency.

Indians want innovation over idol worship and 

paycheques over pogroms

We can all agree that we owe a debt of gratitude to the Congress Party for ushering in an era of liberalisation, without which we would not be among an elite group of economies, the third largest in the world. However, I also believe the greater debt we owe them has to do with the unmitigatedly corrupt, greedy and dystopian second term they presided over. Their unchecked gluttony is directly responsible for shaking the lethargy of the Indian public; we would not have seen the rise of Narendra Modi onto the national stage without it. As a direct result of our frustration with the Congress, the majority of Indians were willing to give Mr. Modi a chance, and not based on his Hindutva philosophy. This combined with his promise to beat China and provide economic development for all Indians. It is why the youth voted for him in large numbers, the same youth that carries no baggage from 1984 or 2002 - a generation born on WhatsApp. Mr. Modi would do well to recognise and remember this because if he is seen to pander to the vocal minority within his base, the same winds that ushered him in will push him back into regional oblivion. Indians want innovation over idol worship and pay cheques over pogroms; they do not want a Hindu nation. 

The second factor that helped put the wind in India’s sails (around the time of Congress’s demise and Mr. Modi’s rise) had to do with the course that the other much vaunted BRICS economies took. In a word, they are all in the shit hole with the exception of China, which is a little different. I don’t need to spend time explaining how Russia has faltered, but will point to one thing worth nothing with regards to Brazil's and South Africa’s demise. Without question both suffered from poor leadership, institutionalized corruption and flimsy economic policies that were based on riding the global financial bubble, not on investments in domestic growth. We can argue that India had many of the same problems with corruption and lack of strong leadership under Manmohan Singh, but there is one major difference; we have a much stronger democracy. One that can withstand medium-term failures, and has the ability to course correct when things go deeply wrong. Look no further than the decimation of Congress, the rise of AAP and the BJP wave.

The fundamentals of our democracy are strong, not just in terms of people and ideas but also civil institutions, our judiciary and bureaucracy. We are better equipped to withstand bad government for a term or two and bounce back than any of the other BRICS. China is the only other BRIC standing, and here I will argue that it is our democratic values that will help us win the day against them. While China’s economic growth has been sputtering of late, I believe the final drain on their storied growth will come from a social implosion. Simply put, you cannot give people a little taste of capitalism and then expect to continue to control their thinking and freedoms, certainly not in a world where there is a world wide web and the ability to travel. Once people taste freedom of thought and expression, they tend to want more, not less.

There is no question that the demise of the BRICS has been another major gift for Mr. Modi. Now he must make sure he does not waste it. Their demise has made us the cynosure of all global investment for the foreseeable future. This, before Mr. Modi did anything to prove himself, or have time for his policies to have a substantial impact on India’s economy. It has provided him with a one-term carte blanche of sorts but he now very quickly needs to start putting this foreign investment where his development (mouth) is.

Capitalism is driven purely by great ideas, not by ideology

Now the big caveat I mentioned. What made America the greatest economy and strongest nation over the last century is the fact that the majority of Americans found a way to rise beyond petty politics, religious rabble-rousing and superficial differences, to unite under common cause. As a society they understood that capitalism is driven purely by great ideas, not by ideology. For this reason their leaders have always embraced inclusiveness (slavery aside) and not for some other higher altruistic purpose. It is why they have encouraged freedom of thought, expression and strived to build a homogenous melting pot of diverging cultures and viewpoints.

Diversity makes a nation richer and more powerful, as long it can find a common capitalist cause to rally behind (not a political or religious one). The American motto “E Pluribus Unum” can be found on everything from their coins and currency to their Presidential seal; it means “out of many, one”. Americans have rallied behind this motto and worked hard to attract the brightest and best minds from every corner of the globe; this diversity has paid great dividends with world-beating innovation, and years of economic growth and military dominance.

We need a society that convalescences around education and economic opportunity, not Hindutva

India’s veins are bursting with rich and diverse talent. Mr. Modi must now strive to create an even more open-minded and inclusive society, one that convalescences around education, skill development, economic opportunity and growth, not around Hindutva. Now is the time to stand united, not to divide further. This alone will allow Mr. Modi to deliver on his promise of the Indian dream. However, if he continues to allow the forces of Hindutva to hijack his agenda, then he will very quickly squander the Indian century that is now finally, and firmly, within our grasp.

 

September 11 - Ten Years Later (Part 2)

Read: September 11 - Ten Years Later (Part 1)

If Oscar Wilde were around he might say “To start one war, Mr. Bush, was a necessity but to start two seems like recklessness”. 

As we continue to examine the impact of the decisions made by our government in the months and years after 9/11, it is important to look back at some of missed warning signs and lost opportunity costs for America that were a result of the course the Bush administration chose to set America on.

On 2^nd December 2001 one of the world’s largest energy companies, named “America’s Most Innovative Company” for six consecutive years by Fortune magazine, with 22,000 employees and global revenues over $100 billion, filed for bankruptcy. Enron’s entire financial reporting had been based on institutionalized fraud. Their demise also led to the dissolution of an old and reputable accounting firm, Arthur Anderson, the firm responsible for auditing Enron’s books. Close on the heels of Enron a number of other companies fell to similar accounting scandals. These included ImClone and Global Crossing, followed in the summer of 2002 by WorldCom and Adelphia. This brought into question the accounting practices of virtually every corporation in America. It became clear that there were serious discrepancies between the financial pictures companies were presenting to Wall Street, publicly, and the actual state of their internal balance sheets – the vast majority of Corporations were obfuscating their financials using contemporary accounting rules. All this was unfolding against a backdrop of a darkening economic picture based on the stock market bubble which burst in the first quarter of 2001. The economic excesses that had accompanied the heady growth and profitability of the 1990’s were gone. Too many firms, especially those in the technology and telecommunications, had made poor decisions and investments in in the wrong type of assets. However, even as growth slowed there was one startling difference from all post war recessions. Most recessions have been driven by sharp decreases in consumption spending, particularly related to durables and housing. However, during the early 2000’s consumption spending had actually been increasing year on year. This recession was being driven by plunging business investment (source: Joint Economic Committee Reports 2003). There is no doubt that seeds of this economic slowdown were sowed in the Clinton years, and are not directly related to the Bush administration’s policies but it is abundantly clear is that the signs of America’s impending financial meltdown, including the underlying factors that caused it, had started to become apparent early on during Bush’s first term in office.

It was in 2001 that Bush administration became aware of the problems in the overheating US housing market. At the center of the problem were two Government sponsored enterprises (GSE) called Fannie Mae and Freddie Mac, whose government mandated mission was to keep mortgage interest rates low, so more Americans could afford to buy homes. By now it was well-known in Washington political circles that both institutions were so highly leveraged that a minor decline in housing values, as little as 1.3% to 2%, could wipe out both companies. And that their failure would have major repercussions on financial markets and US economic activity across the board. Bush was shot down by Democrats in Congress when he tried to bring additional oversight over these GSE’s in 2002. By early 2003 the signs had grown alarming; by this time these two mortgage lenders had more than $1.5 trillion in outstanding debt issued on their balance sheets.  In July, of the same year, a report by independent investigators concluded that “Freddie Mac manipulated its accounting to mislead investors, and critics said Fannie Mae does not adequately hedge against rising interest rates” (source: New York Times). However, with stiff resistance from Democrats, and the administration distracted by two wars, Bush chose to relinquish this battle and focus on what he clearly believed was far more important for securing America’s future: getting rid of Saddam Hussein. By the time Freddie and Fannie finally collapsed at the end of 2008, housing values had dropped 12.8%, since 2006. By now things were pretty dire and it became necessary for government to intervene in every part of the economy as Bush put it, “to prevent the crisis on Wall Street from becoming a crisis in communities across our country." Finding themselves in the midst of yet another crisis this administration decided once more to use fear to push through a $700 billion bailout plan for banks. Giving sweeping powers to the government to dispense gigantic sums of taxpayer dollars in a program that was sheltered from court review. TARP was a three page bill that did not specify which institutions would qualify or what criteria would be used, if any, or what taxpayers would get in return for the unprecedented infusion. It was designed to save companies that had brought this Armageddon upon themselves, and by an administration that had neglected to pay attention to many years of warnings. By all accounts, what would likely have been a minor economic downturn had it been handled when the warning signs first emerged resulted instead in a US and global financial catastrophe.

Another aspect of economic growth is immigration, which early on Bush showed he realized the importance and benefits to the US economy. He saw a need to reform the stagnant US immigration policy. He called for a new and large-scale guest worker program, paths to legalization for existing illegals, and had five meetings with Vincente Fox, the Mexican President, all in his first nine months in office. However, when it became known that all of the 9/11 hijackers had entered the US with legal visas, and that some has stayed after expiration, it changed the complexion of the debate on immigration along with his administration’s healthy stance on it. The administration decided to view the issue of immigration through the lens of ‘homeland security’. One accompanied with rhetoric that heightened fear and focused on detection of terrorists along with greater powers for law enforcement. America went from taking pride in being a nation of immigrants to being afraid of them. In the two years after 9/11 legal immigration fell by 34%, naturalization decreased 19% and employment based immigration also declined, as percentage of overall legal immigration, while absolute numbers dropped by 53% (source: Migration Policy Institute, 2004). To give you one example of the effect of the Bush policies on immigration, pre-9/11 it would have taken an Indian student who came to attend college in America about 18 months to become a permanent resident, and five years to become eligible for citizenship. Today, the same Indian student would have to wait 70 years for a permanent resident visa (source: National Foundation for American Policy). There is no dispute among economists about the importance of immigration, and that it is fundamental to the success of the American economy. Immigrants have founded 52% of Silicon Valley’s companies, creating millions of American jobs (source: Foreign Born Entrepreneurs: An Underestimated American Resource). This is not just true of higher income, better educated immigrants but also uneducated, low skilled workers. Without immigrants “the pace of recent U.S. economic growth would have been impossible. Since 1990, immigrants have contributed to job growth in three main ways: they fill an increasing share of jobs overall, they take jobs in labor-scarce regions, and they fill the types of jobs native workers often shun.” (source: Federal Reserve Bank of Dallas). Instead of using the opportunity to rally Congress to fix loopholes, and sensibly and securely reform what was without a doubt an antiquated and outdated visa system, the Bush administration followed through on a knee-jerk path, deciding to clamp down with archaic rules that made it much more difficult to get any type of US visa and effectively encouraged, if not forced, the smartest minds from around the world to return home after receiving an American college degree.

Across the board this administration seemed to believe it could have its cake and eat it. In late 2002, Cheney summoned Bush’s economic team to his office to push for another round of tax cuts to stimulate the slowing economy. Paul O’Neill, then the Treasury Secretary, and the entire White House economic team had become convinced that the country was careening toward a fiscal crisis, and they pleaded with Cheney to start reining in government spending. Instead, Cheney used Reagan’s words that “deficits don’t matter,” to completely shut down Paul H. O’Neill and the economic team. This was just a few months before the Iraq invasion began. Apart from the two rounds of tax cuts, which added roughly $1 trillion to the deficit over ten years, Bush also created a Medicare drug entitle­ment that will cost an estimated $800 billion in its first decade, he increased federal education spending 58 percent faster than inflation. He became the first President in US history to spend 3 percent of GDP on federal antipoverty programs. He also spent billions bailing out the Detroit auto industry and ended his final term with the $700 billion toxic asset recovery program. It is worth noting that during his two terms the income disparity grew, the poverty rate increased, unemployment rose to reach 7.8% in January, 2009 (the highest level in more than 15 years). When President Bush took office, the national debt stood at $5.727 trillion and when he left office it was more than $9.849 trillion (source: CBS News). That is an increase of a staggering 71.9 percent on Bush's watch. There were a total of seven debt ceiling increases, almost one for every year Bush spent in office. Interestingly, most of Bush’s spending was financed by issuing US treasury bonds (about 40 – 45 percent bought by foreign powers). When Bush took office in February 2001, the mainland Chinese owned a paltry $63.7 billion in U.S. debt. When Bush left office at the end of January 2009 the mainland Chinese owned $739.6 billion in US debt (source: Treasury.gov).

There is no doubt that these were extenuating circumstances, and 9/11 changed America forever; no argument there. The issue has more to do with the priorities and focus of this administration for the many years after 9/11, and their fixation with a hurriedly planned and poorly executed War on Terror. As a result the vast majority of domestic and foreign policy decisions seem to be devoid of short-term priorities and long-term thinking. It was as if this administration decided that the 9/11 attacks gave them cart blanche and zero accountability for all their actions. That it also did not matter how America would pay for its out-of-control spending, as long as it was done in the name of ‘national security’. It seems this administration was perfectly content kicking the can down the road. This at a time when America was clearly in alarming decline with corporate innovation dying, the education system in shambles, entitlement programs going bust and the country heading towards insurmountable debt. Without the distractions of a spiraling situation in Iraq, a war that deeply divided the country and created an acrimonious stalemate in Washington, Congress would also have been much more focused domestically and compelled to act. And had Bush not been completely consumed by his war on terror it is certain he would have also paid greater attention to the many warning signs of US economic decline. All this coupled with a complete lack of diplomacy in his first-term resulted in alienating long-term US allies, weakening its moral authority and having the mighty US military power humbled by a bunch of rag-tag rebels, in both Iraq and Afghanistan. Consider that Bush’s global war on terror will continue to cost US taxpayers for at least another generation, and has almost single-handedly been responsible for tilting the balance of global economic power squarely into the hands of China. In the end, we must ourselves this one question - was all this worth it just to get rid of Saddam Hussein?