End of Week Circulars for September 10, 2016

Trump

As I predicted on Lion’s site in mid-August when I heard the Trump campaign was about to begin its ad war offensive, Trump is now statistically tied in five swing states:  Ohio, Virginia, Florida, Pennsylvania, and North Carolina.

The ads of the Trump campaign combined with sharper messaging have turned the race into a jump ball.  The work of Kellyanne Conway to change his image into that of a more conventional, non-threatening, Republican candidate, but without diluting his nationalist policies, has worked beautifully.  If Trump wins, she, in our enlightened, Hamiltonian opinion, deserves the Congressional Medal of Honor.

To sustain their current momentum, the Trump campaign needs to continue going on the attack against the many flaws of Clinton.  The tone of the attack ads should all be negative, and remind voters of every scandal the media either does not report on or tries to sweep under the rug.  This will keep distractions and side issues, such as the Khan uproar, from taking the message off of Hillary.

A theme I recommend they deploy against her is that she gets away with law breaking because she is a privileged elite.  This theme will echo in the minds of voters by linking together her elitism, which keeps her separate from the ordinary people, with her criminality which is of such a degree that it would earn any other non-elite multiple life sentences in federal prison.

I see two potential problems lurking for the campaign:

Lack of Debate Preparation

Supposedly Trump is refusing to practice for the debates despite the recommendations of staff to do otherwise.  This is a recipe for an unneeded failure.

To coax him into preparing somewhat for the debates, I recommend the staff offer him “zinger” lines to use against her.

His instincts are to go on offense, and if he has some rehearsed lines to go after her with, he might agree to more preparation if he is handed some good shots to get in against her.

It will also help him stay on the attack during the debate.  If he goes on offense and stays focused on her weak points, he should win because her failures are inexcusable.  He can only fail in the debate if he lets her many weaknesses go unchallenged due to incoherence.

Something along the lines of “it’s too bad our Benghazi personnel didn’t have Swiss francs for you to airlift to Iran” should peak his interest in practicing.  It will also go over brilliantly on live television because there is no defense she can make to salvage the role she had in the attack on the embassy.

Richard Spencer’s Altright Speech and Stephen Bannon

Spencer continues to be stupid.  This week he held a conference making antisemitic statements.

This would not be a problem for the Trump campaign, except for the fact Bannon went on record a few months ago stating he made Breitbart.com open to altrighters.

Although Bannon is probably not antisemitic and at the time the altright was not uniformly antisemitic, the labeling of Spencer is making any associations with the altright increasingly toxic for Trump.

Bannon will probably have to be let go by the Trump campaign so that Conway’s softening of Trump’s image continues without any racism scandals knocking their message off course.

The problem is how to let Bannon go while keeping the media reaction to a minimum.

I recommend they push him aside over the weekend when a football game is on, or some other distraction grabs the attention of the media momentarily.  When the media eventually asks where he went, the campaign should make up some frivolous excuse about how he “wanted to enhance coming initiatives with Breitbart”.  Or some such nonsense.  And the next day introduce a new distraction to take their eyes off of Bannon’s exit.

If they ask anything more about the altright, say there is no association between them and the campaign, and that Hillary is just raising a small distraction to keep voters from noticing her terrible record.  The should also put her on the defense by repeating their theme today that Hillary is calling millions of ordinary Americans harmed by the policies she supports racists.  Then pivot back to another issue.

However this is handled, Bannon will likely have to go due to Spencer’s egomania.

State of the Race

I see the following swing states as lean Trump, tied, or lean Clinton:

Lean Trump

Missouri

North Carolina

Ohio

Arizona

Iowa

Tied

Florida

Virginia

Lean Clinton

Pennsylvania

New Hampshire

Wisconsin

Michigan

Colorado

Despite the growth of Northern Virginia as government workers continue to live large off of the loot they’ve stolen from the American taxpayer, the state of Virginia is winnable if black turnout is lower compared to their 2008 and 2012 turnout.

Virginia remain a top target state of the Trump campaign in case Pennsylvania doesn’t work out.  The lean Clinton states could pulled be closer into the Trump column with more advertising and messages on issues that are particular to those states.

Response to Commentators about Hamiltonian Economic Policy

In the blog entry, A Gentle Introduction to Alexander Hamilton, Jason Liu and Garr questioned what was meant by “state guided” capitalism in a Hamiltonian regime.

Liu in particular wanted to know how this differed from the state supported capitalism of East Asia.

In the article, we defined the difference between capitalistic, libertarian, and liberal economic systems in the Hamiltonian Model of Economic Systems:

1) Capitalism – The political actor fashions the political competitive boundary conditions and remedies any violations of the conditions; the private sector actor using price signals decides on which actions are most valuable within the boundary conditions established by the governmental actor (they do not violate laws) and naturally occurring conditions.

2) Libertarianism – The private sector actor fashions the political competitive conditions; the private sector actor decides on which actions are most valuable based on price signals within the system boundary conditions.

3) Liberalism – The public sector actor fashions the political competitive conditions; the public sector actor decides on economic actions within the system.

The question Liu asked presents us with a good opportunity to demonstrate how the above definitions work in practice.

Consider how Japan would likely deal with a nearing bankruptcy of one of their iconic car manufacturers.

If Toyota were on the bring, it is highly likely the Japanese government (the public actor in our system) would intervene on behalf of Toyota (the private actor) to keep them afloat.

In a Hamiltonian system, there would be no bailout for, say, GM (private actor) if it were failing.

The federal government (public actor) under a Hamiltonian system would instead focus on fashioning a business environment that would support all manufacturers through common policies shared by all manufacturerssuch as good trade agreements (more on trade in a future post), taxes specially directed to manufacturers, cheap carbon energy to supply factories with fuel, efficient ports and airports to import raw materials, flexible labor arrangements, etc.

By these common policies, a welcoming environment would yield itself to manufacturing of all kinds.

However, there would be no bailout of a particular GM if it fails despite operating in a good environment.

Hamiltonians consider the role of government finished when a good business environment has been created for private actors by government policy.  The government role is then no longer concerned with what private sector actors do so long as they do not violate laws.

A private actor at risk of going out of business, would be allowed to fail so that whatever economic niche was filled by that company could be filled by a more skillful private actor.

Distinguishing what role a public actor should take and what role should be that of a private actor will require many examples to make clear in the minds of readers, because what is arguably the realm of the private and public actor can overlap and cause confusion.

But with practice and more examples, we feel that this model of the relationship between governmental and private actions will become clearer to readers, especially those of you with common sense and sound judgment.

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4 thoughts on “End of Week Circulars for September 10, 2016”

  1. Didn’t Manafort try to soften Trump’s image and only ended up with sinking polls? Or was that because of his fight with the Khans?

    I still believe that politics mostly works on a basic, gut level, and all the higher-minded issues are just rationalizations for those instincts. Like I said on Unz, a lot of minorities find shrill, uppity, know-it-all white women unsavory. Trump should work that to his advantage.

    ***

    I agree with your assessment of East Asian state capitalism, but there is more reason behind it. Asian states tend to view its corporations as geopolitical assets. Free market or even economic growth does not always supersede the imperative of having a “piece” on the game board, even if that piece is floundering. And, since western nations have had an economic and technological edge in recent times, Asian nations must be more protectionist, sometimes even mercantilist to avoid being pushed out of global markets, or worse, losing the domestic market to foreign firms. The lack of such nationalistic protectionism is probably what screws much of Latin America and Africa.

    So in your example, if Toyota falls, the Japanese government is rightly afraid that the void will be filled by a foreign competitor before a Japanese equivalent arises. This may not seem as serious a problem to westerners, whose dominance in the world assures them that eventually, a new western corporate power will take the reins. This is not so for most countries around the world.

    I’m not going to deny the long history of nepotistic, extralegal zaibatsus in Japan, chaebols in Korea and top-down state monopolies in China, but these systems are generally defensive and nationalistic in nature, not purely the product of cronyism. The Hamiltonian system you describe sounds well and good either in a world where your nation is the top dog, or in a world where all nations are treated as one, giant global market with no real sovereign interests, which we both know has led to many problems in our modern age.

  2. Didn’t Manafort try to soften Trump’s image and only ended up with sinking polls?

    He did, but Trump did not listen. For some reason he is listening to Conway.

    I still believe that politics mostly works on a basic, gut level, and all the higher-minded issues are just rationalizations for those instincts. Like I said on Unz, a lot of minorities find shrill, uppity, know-it-all white women unsavory. Trump should work that to his advantage.

    Some Hispanic voters might be inclined towards Trump because he reminds them of the criollo strongman dictators from back home in Latin America.

    The Asian vote can sometimes break evenly between Republican and Democrat if the Democrat candidate is unappealing enough.

    But the most important segment of the minority vote remains the black vote. It was exceptional black turnout coupled with reduced white turnout that won 2008 and 2012 for the Democrats. If the turnout of blacks matched historic norms, Obama would either have won reelection very narrowly against Romney or possibly lost. Every other minority group is negligible in importance compared to blacks.

    I’m not going to deny the long history of nepotistic, extralegal zaibatsus in Japan, chaebols in Korea and top-down state monopolies in China, but these systems are generally defensive and nationalistic in nature, not purely the product of cronyism. The Hamiltonian system you describe sounds well and good either in a world where your nation is the top dog, or in a world where all nations are treated as one, giant global market with no real sovereign interests, which we both know has led to many problems in our modern age.

    The corporate crony system followed, to varying degrees, by East Asian nations is not bad.

    As I argued in A Gentle Introduction to Alexander Hamilton, the standard free market critique of why liberal economic systems fail is true because public sector actors do not have sufficient information or incentive to replace the role of private actors when it comes to hunting for optimal business value.

    In modern East Asia, long as major political and business stakeholders are satisfied, their crony capitalism gives enough breathing space for their private sector actors to go find value on their own, without burdening them with centralized bureaucratic interference. On balance, they have a decent enough divide between the roles of state and private sector actors to avoid socialist stagnation.

    The downside to Oriental crony capitalism is that legacy firms are overly protected and become complacent over time because they know they have enough political connections and strings to pull in case something goes very wrong.

    You may be correct that the tradeoff for a lack of dynamism is worth it in exchange for geopolitical protection and influence. However I tend to think this type of protectionism is more of a necessity for China, which has not fully developed itself, than for Japan and Korea. The latter two have diverse enough industries where they can afford to experiment a bit with some creative destruction.

    Still, if they choose not to do so, their system is good enough to guarantee them a high standard of living.

  3. Many people think New Hampshire and Wisconsin are more likely to go red than Virginia.

    New Hampshire arguably may be easier to win than Virginia but not Wisconsin with its Scandinavian/German socialist tradition.

    Hillary can’t count on the exceptional black turnout in Virginia that Obama did.

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