The American Political System: The Mistrust Problem



It’s been a little while since I’ve written anything here.  In part, my absence was due to just being busy with work, but that’s not the only reason.  Sometimes, I just need to stop and just soak in what others are writing, so I’ve been doing quite a bit of reading during my hiatus and that was what I was doing today when I ran across a piece by economist Joseph Stiglitz entitled “The 1 Percent’s Problem”.  I don’t know much about Stiglitz other than what he’s written.  I suppose the reason I say that is that he’s formerly the chief economist of the World Bank; an institution that clearly serves the same 1% he derides in his op-ed,  so it’s hard to understand his motivations in light of that.  The fact that I have that question in my mind speaks directly to the mistrust problem that he cogently outlines in the excerpt below:


The Mistrust Problem

One of the puzzles in modern political economy is why anyone bothers to vote. Very few elections actually turn on the ballot of a single individual. There is a cost to voting—no state has an explicit penalty for staying home, but it takes time and effort to get to the polls—and there is seemingly almost never a benefit. Modern political and economic theory assumes the existence of rational, self-interested actors. On that basis, why anyone would vote is a mystery.

The answer is that we’ve been inculcated with notions of “civic virtue.” It is our responsibility to vote. But civic virtue is fragile. If the belief takes hold that the political and economic systems are stacked, individuals will feel released from their civic obligations. When that social contract is abrogated—when trust between a government and its citizens fails—disillusionment, disengagement, or worse is sure to follow. In the United States today, and in many other democracies around the world, mistrust is on the ascendant.

It’s even built in. The head of Goldman Sachs, Lloyd Blankfein, made it perfectly clear: sophisticated investors don’t, or at least shouldn’t, rely on trust. Those who bought the products his bank sold were consenting adults who should have known better. They should have known that Goldman Sachs had the means, and the incentive, to design products that would fail; that they had the means and the incentive to create asymmetries of information—where they knew more about the products than the buyers did—and the means and the incentive to take advantage of those asymmetries. The people who fell victim to the investment banks were, for the most part, well-off investors. But deceptive credit-card practices and predatory lending have left Americans more broadly with a sense that banks are not to be trusted.

Economists often underestimate the role of trust in making our economy work. If every contract had to be enforced by one party taking the other to court, our economy would be in gridlock. Throughout history, the economies that have flourished are those where a handshake is a deal. Without trust, business arrangements based on an understanding that complex details will be worked out later are no longer feasible. Without trust, each participant looks around to see how and when those with whom he is dealing will betray him.

Widening inequality is corrosive of trust: in its economic impact, think of it as the universal solvent. It creates an economic world in which even the winners are wary. But the losers! In every transaction—in every encounter with a boss or business or bureaucrat—they see the hand of someone out to take advantage of them.

Nowhere is trust more important than in politics and the public sphere. There, we have to act together. It’s easier to act together when most individuals are in similar situations—when most of us are, if not in the same boat, at least in boats within a range of like sizes. But growing inequality makes it clear that our fleet looks different—it’s a few mega-yachts surrounded by masses of people in dugout canoes, or clinging to flotsam—which helps explain our vastly differing views of what the government should do.

This excerpt describes how I feel about a great many things and particularly about national politics.  I don’t advocate people not voting as it’s really not my place to do so, but disinterest in the process arises naturally when mistrust and irrelevance sets in.

The political parties and their candidates sell us their brand and we only have a choice between two brands; a democrat or a republican. But behind each brand, there’s a sameness or a oneness that really doesn’t distinguish the two in any significant way.  In other words, the branding sells the electorate on a difference that really doesn’t exist where it really matters and the staged fights that we see are actually designed to reinforce the branding more than anything else.  The nation has lurched towards a vast concentration of wealth and power with the assistance of both parties.  We’re in imperialist entanglements due to a very consistent foreign policy pursued by both parties.  That foreign policy has saddled us with trillions of dollars of debt and that is leading to a fiscal train wreck that’s been overseen by both parties.  There is really no difference between the two where it matters and the differences that are plied to us by the corporate controlled press are on issues that mostly don’t matter while the issues that do matter can’t even be discussed.   I liken it to a house that has a leaky faucet in the kitchen while it sits in the path of a raging forest fire.  The press and the politicians only talk about the leaky faucet, which is an issue, but it happens to not be as big of an issue as the fire.  So, we wind up voting for whoever convinces us that they’re the best person to fix the faucet while no one acknowledges the fire.  That’s not rational.

No, there’s no need to advocate that someone not vote, but awareness can lead one to the very rational conclusion that engagement with a broken political process that amounts to a fiction is a waste of time—particularly when there’s a fire lapping at the door.  It’s far better to make preparations to escape the flames.

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  • Black_Diaspora2

    Welcome back, Greg.

    We can recite chapter and verse what’s wrong with our democracy, and how
    that wrong has impacted our economy–including our individual economic well-being.

    Standing back, I see two major defects in the body politic–a political system that thrives on special interest money, and a concomitant, pervasive sense of helplessness gripping the electorate, an electorate that has struggled in vain to take back the reins of government.

    Nowhere has this been made more evident than in the 99%, Occupy Wall Street movements, which sought to bring attention to the wildfire raging across this nation, only to be beat back, derided, and pepper-sprayed for their trouble.

    I’m what you’d call–paradoxically–a Realistic-Idealist. I see things as they are, but hold fast to the vision of how they might be.

    For all that the two parties hold in common, there’s still sufficient differences in their approach to governance–their political philosophies–to vote for one or the other. We know all too well where the two political parties’ lines merge, but we fail to acknowledge where those lines diverge.

    For example: Republicans are autocratic in their approach to winning and governing. Around 20 states are contemplating, or have passed, some voter-suppression legislation, or have purged their voters’ rolls, in an obvious attempt to reduce the number of voters–and potential votes–for the Democratic party, preying on blacks, students, and the elderly.

    I like the fire and water analogies. Yet, a “leaky faucet” for some is a deluge for others, and the acrid smell of smoke is already flaring the nostrils of those closest to the fire.

    We both agree that, without a major shift of emphasis in this country’s political and economic philosophies, this country’s future as a superpower is in grave danger.

    For now, my plan is to stay politically active. This activity will continue until such time the unthinkable happens–Republicans regain control of Congress and/or the White House.

    With the fire growing ever so close, threatening both the house and its contents, it becomes paramount that we salvage what we can while doing what you suggest–
    indemnifying ourselves against inevitable losses, while “mak[ing] preparations to escape
    the flames.”

    Despite the proximity of the fire, we can still make a difference. We can still salvage some things before the roaring flames are allowed to fully consume the house, but not with a Republican administration.

    For example: With a Democratic administration, and a supportive congress, we can
    salvage the Affordable Health Care Act, the current, hard-won law that Millard Mitt Romney has prioritized to repeal as his first official act as president. The Act, not perfect by most metrics, is still better than what preceded it, although a growing number of Americans are opposed to it, which brings me back to the article you’ve introduced here, “The 1 Percent’s Problem,” which suggests that people are hardwired to seek their own self-interest.

    I say: People are more interested in “being right” (pun intended), even if it kills them!

    As a people, we’re becoming more and more preoccupied with our own well-being, and
    less with the well-being of our neighbors, be it their physical or economic well-being.

    The prevailing attitude, encapsulated this way–“I’ve got mine, get yours”–has entered the mainstream of American thought, perhaps driven by conservative talk radio, and a
    depressed economy placing strain on social services, as the cost for life essentials
    outpaces family incomes.

    With a Democratic administration, and a supportive congress, we can continue our troop draw down in Afghanistan, and foil a potential re-engagement by a hawkish Republican administration, believing that the Obama administration has prematurely abandoned what could be–were we to remain indefinitely in Afghanistan–an indisputable victory.

    We can continue to use measures short of war to force Iran to discard its nuclear ambitions, rethink its relationship with Hezbollah, and abandon its supposed plans for the destruction of Israel.

    With a Democratic administration, and a supportive congress, we can approach our national debt, not with austerity programs only, but with programs that stress economic growth and expansion. We have seen–by taking account of the lack of success of some countries in the Eurozone with austerity–just how ineffective austerity can be in a down economy–plunging these countries once again into the throes of a recession.

    With a Democratic administration, and a supportive congress, we can end the War on the Poor, as outlined in the Paul Ryan Budget, salvaging Medicare without privatizing it, and strengthening Social Security for future generations without gutting key provisions–allowing a portion of it to be invested in a volatile stock market. 

    With a Democratic administration, and a supportive congress, we can not only wind down the Afghanistan war (which is now this nation’s longest), but bring our bloated defense budget more in line with our current threat assessment, and resist the cry (occasionally by Willard Romney and other saber-rattling Republicans) to keep America strong with an even stronger military, accusing President Obama and his administration of “weakening”
    America’s  military resolve and readiness.

    With a Democratic administration, and a supportive congress, we can bring more balance to this nation’s Supreme Court, and the entire federal-court system–countering efforts by Republicans to stack the courts with members of their own party and political persuasion.

    Realizing that the federal courts are the last recourse for their draconian laws, and their desire to legislate clear political advantages for their party, Republicans have systematically held up court appointments, while packing the courts with members that often support their radical, conservative agenda.

    With a Democratic administration, and a supportive congress, we move one step closer to clinching a deal for a massive infrastructure project, one that will build new roads, and replace dilapidated and unsafe bridges, while putting back to work construction workers, and contractors, while boosting related businesses.

    Economist, Paul Klugman, in his new book, “End This Depression Now,” is urging the hiring and rehiring of our nation’s first responders–police officers, and firefighters–as well as teachers and nurses–groups that have seen their numbers slashed over recent
    years, because of a loss of state and local government tax revenues during the housing crisis, and the job-reductions that ensued.

    In my city alone, firefighters are receiving pink slips, and fire stations have closed, one that would have responded to a fire at my resident had the need presented itself, requiring now a longer response time.

    It’s axiomatic, that the Republican-held House–currently spending more days in recess,  than in actual work–won’t pass the president’s jobs bill, and neither will they introduce any of their own, for fear that a recovering economy–and a sanguine employment outlook–will help the president’s reelection bid.

    Just as it’s the first responsibility of a bureaucracy to survive, Republicans will pass no laws that will put Americans back to work in substantial numbers, as the survival of their party hangs in the balance, as they pin their hopes on a continued sluggish and
    struggling economy.

    If asked, I’m sure Republicans wouldn’t call their actions un-American, just good business sense, coupling their interests with that of the American people–saying essentially, “What’s good for the party is good for America.”

    Strangely, many Americans aren’t upset with this tactic, as Republicans have managed to spin our economic situation to their advantage—even as they promise further tax cuts for the 1%, the uber-rich “job creators”–pledging to reduce our national debt by downsizing government,  and reducing food stamps, and other safety-net programs for the poor.

    We’re learning–to our chagrin–that people don’t always vote their self interest, but their perception of that self-interest (an interest usually molded by others), and are more incline to adhere to established principles, to be right regardless of cost, than to acknowledge the failure of those ideologies to which they’ve given their heart and

    With a Democratic administration, and a supportive congress, we might see higher taxes on the rich, the passage of the Buffett Rule, and full funding for the Dodd-Frank Wall Street Reform and Consumer Protection Act.

    To be sure, the Act does little to address “too big to fail,” and other measures that brought this nation’s economy to its proverbial knees. But it’s a start and, with a little luck, the law may be strengthen under a Democratic congress.

    Frankly, it’s time that the 1 % pay their fair share, since many of them, and their children, aren’t volunteering to fight the wars waged on their behalf, and on behalf of the military industrial complex, from which some of their wealth is derived, with the military subsidizing the true cost of providing oil to an oil-gluttonous nation, by keeping
    shipping lanes open, piracy to a minimum, and masking the true cost of a gallon of gas.

    With a Democratic administration, and a supportive congress, the federal government could take the lead in ending the War on Women, and their need for low-cost contraception to keep abortions to a minimum by providing a shield against the assault of sex-crazed men, who feel that condoms reduce the pleasure of sex, and that abortions are the answers in cases where child support may be imposed.

    We would see an end to the attacks on Planned Parenthood at the federal level, threats from Willard Romney to bring it down–and hopefully a federal push to squash new Personhood legislation, to honor a woman’s right to choose, and to keep Republican control statehouses from prescribing unnecessary medical procedures–transadominal
    and transvaginal ultrasounds–and, in the process, coming between doctors and their patients, all in an effort to discourage women considering abortions.

    In recent months, the demand for ultrasound technicians has quadruple!

    With a Democratic administration and a supportive congress, we would see an end to the incessant wrangling over extending the nation’s debt ceiling; we could then put in place sound fiscal policies, and reasonable cuts over time to reduce the debt, restoring the nation’s AAA credit rating in the process, while preserving critical programs that would negatively impact the poor and the overall economy were they to be cut.

    The Republicans’ resistance to raising taxes on the top earners to achieve that end–presumably honoring their pledge to Grover Norquist–places an undue burden on society’s most vulnerable members–the poor.  As the economy resists rebounding, the plight of the poor garners less and less empathy from lawmakers, with congressional Republicans squarely blaming the unemployed for their out-of-work status.

    With a Democratic administration and a supportive congress, the assault on gays and lesbians will diminish–as will calls for a Constitutional provision outlawing same-sex marriage, threats to reinstate “Don’t Ask, Don’t Tell,” and promises to enforce DOMA, the Defense of Marriage Act.

    As Jesse Jackson has famously said, “We have to keep hope alive.”

    Although not much of a Jackson fan, the sentiment expressed in that aforementioned statement, captures precisely where this nation now stands–our crossroad, so to speak–that may become our cross if we don’t choose wisely.

    As the ravenous fire approaches, having consumed everything in its path, we–the American people–will have to decide what possessions are worth saving (since we can’t salvage everything)–and what can be allowed to perish along with the house, if it comes to that.

    The author says this of “rent seeking” and the “rent seekers”:

    “In a broad sense, “rent seeking” defines many of the ways by which our current political process helps the rich at the expense of everyone else, including transfers and subsidies from the government, laws that make the marketplace less competitive, laws that allow
    C.E.O.’s to take a disproportionate share of corporate revenue (though Dodd-Frank has made matters better by requiring a non-binding shareholder vote on compensation at least once every three years), and laws that permit corporations to make profits as they degrade the environment.”

    Although both parties have had a hand in creating the economic conditions that contribute to the income disparities that face this nation, Republicans–almost single-handedly–have become the party almost exclusively devoted  to “rent seekers,”
    convincing a growing number of the electorate that their personal interests lie with those exploiting the system–the “rent seekers.”

    • Hi BD

      Thanks for taking the time to respond to my post and please
      accept my apologies about the delay in responding to your comments.  
      There’s so much I could talk about in response to the above, but I’m going to
      highlight the main issues where I depart from Obama and the democratic  party.  I’ve concluded that there’s
      really no place for me to go until and unless there emerges a third party that
      is prepared to truly align itself with the interest of the people.  I
      don’t see that on the horizon right now, so I perceive my only choices are to
      vote for the lesser of two evils or not participate in what amounts to a
      charade.  I don’t seek to impose my choice on others, suggest that
      everyone need to do the same nor make a value judgment on those who choose to
      do differently.    I have to listen to my own conscious and, at
      present, it objects to the current setup as legitimate and representative of
      the interest of most people.  A recent Gallup poll shows that the congress
      enjoys a favorability rating of less than 20% which in and of itself is
      astounding.  People generally have lost faith in not only the congress but
      major political and social institutions.   Basically, the consent to
      govern has been lost and many realize implicitly that many of our political,
      economic and social institutions are no longer responsive to the needs to the

      The failure of Obama and the democrats in general lies in not being progressive
      enough on the issues that really matter.   In that, I don’t refer to
      those things that are generally considered progressive such as gay rights,
      environment issues and etc.  Whereas these things are important to certain
      constituencies, they really aren’t germane to the concerns of the broad
      cross section of the American public in my opinion.  The same can be said
      of certain traditionally “conservative”  issues  like tax cuts, spending cuts and etc.  Both sides of the political spectrum keep
      issues before us that appeal to certain subsets of the electorate and they both
      control the political narrative to the point that the issues of real importance
      will never be discussed.  In many ways
      the battle is scripted and the issues that are being fought over basically
      amount to nothing.   The upcoming presidential campaign will
      revolve around verbal gaffes and accusations and not one substantive issue will
      be discussed or debated.  This is no
      different than what occurs daily.  You
      are being given nothing to base a vote on other than how you feel.  It’s very much like how things like cars are
      marketed.  Those who sell them want you
      to make a emotional decision based on how you feel rather than one based on
      substantive information.  If one bases
      his decision on the latter, he might not purchase at all or he might purchase something
      far different.  In other words, having to
      think about substance encourages rational behavior and that’s frequently not in
      the interest of those with “stuff to sell”. 
      I believe that there’s a growing awareness of this and I think that this
      is the driving force behind the growing portion of the electorate that
      considers itself independent.   


      The problem in America is all of the “narratives” that are
      used  essentially stifle debate and
      obscure real issues. There are a number of very real substantive issues that we
      face and Obama and the democrats have been active participants in this process    They’ve
      also have carried out problematic policies that are consistent with what
      previous administrations have done.   I’m practical in the sense that I can accept
      that not every battle can be won, but to have not engaged in the battle or to
      have just simply continued doing the same thing the previous administration did
      is unforgiveable.   


      What are my problems? 
      No prosecutions of the Wall Street criminals and no talk of it from
      anyone.  It’s like it never happened even
      though these very people are the one’s responsible for the financial collapse
      that occurred in 2008 and currently unfolding once again.  The toxic financial instruments at the heart
      of all of this were a fraud put upon the public on a global scale and yet we
      can’t talk about it—it’s like it never happened.  Obama has expanded the use of drones for
      targeted assassinations killing so called suspected terrorists strictly on his
      judgment.  There’s no doubt that there
      are innocents among those killed hence expanding the number of people in the Arab
      world that hate this nation and thereby stirring the pot so as to create
      justification for continuing what amounts to murder.  Obama has continued an imperial meddlesome
      foreign policy first in Libya and now in Syria and then to Iran in a manner
      that certain to force responses from Russia and China, hence resulting in a dangerous
      escalation.  I don’t accept the narrative
      around Iran’s supposed nuclear ambitions. 
      I see it as propaganda similar to that which the previous administration
      used to justify the Iraq invasion.  Obama
      has simply opted to participate in repeating a lie frequently enough so that it
      is eventually accepted as truth.  There’s
      a recent report out that we’re going to expand covert activities in
      Pakistan-and this is after relations have turned south after repeated drone
      strikes.  In addition, there’s a change
      in stance towards China where our naval force projection will focus on regions
      around China in the next decade because they’re a “threat”.    Obama gets no challenge on any of this from
      the left or the right because this is where they agree and these policies are
      significant in their impact on domestic policies in addition to keeping the pot
      stirred internationally.  All of this is
      hugely important, but the pre-dominant narrative obscures all of this so people
      aren’t able to put things in context.


      The National Defense Authorization Act, which is an
      outgrowth of all of the above, is perhaps the best example of how foreign
      policies drive domestic policies.  Since
      we can detain and kill so called enemy combatants without any sort of due
      process,  this ultimately leads to an
      environment where that can occur domestically.   Since we conduct or support policies that
      interfere in the affairs of sovereign states, it leaves us in a constant state
      of war.   Frequently, the abuse that we heap on others
      abroad, both economically and militarily, find themselves in domestic policy
      simply as a function of having honed the “skills” elsewhere before applying
      them here.  This is why I take no solace
      whatsoever in any of Obama’s supreme court appointments that may occur during a
      second term.   At this point the system
      is such that every subsystem (legal, regulatory, legislative and etc) will be
      aligned with the overall move towards a sort of corporate fascism here in the
      US.   The financial crisis, the foreign
      policies, de-regulation and non enforcement of laws on the books, the extreme
      concentration of wealth,  the narratives
      and propaganda coming from the press and more, all point to the fact that we
      arrived at fascism here in the US.   For
      me that means that it really doesn’t matter who gets elected as everything has
      been bought and paid for and what semblance of a democracy we did have has been
      lost.  The system is about its perpetuation
      rather than change.


      As I say, this is just my position and I suspect that there
      are many others who feel this way, but we don’t know about each other because
      the predominant narrative puts all debate into the “left-right box”.  The manner in which I perceive things just don’t
      fit in that box.   I don’t begrudge anyone opting to continue to
      work within that system to effect change and that’s not the point of my writing
      all of this so much as to explain my own thinking and why I’ve come to the
      conclusion that a vote between the lesser of two evils is still a vote for evil
      and that I can’t do.   


      However, that doesn’t mean that there’s nothing to do
      outside of that system.  There’s plenty
      to do.  In America nowadays, voting is
      the most passive thing that one can do.      

      • Black_Diaspora2

        “The financial crisis, the foreign policies, deregulation and non enforcement of laws on the books, the extreme concentration of wealth,  the narratives and propaganda coming from the press and more, all point to the fact that we arrived at fascism here in the US.   For me that means that it really doesn’t matter who gets elected as everything has been bought and paid for and what semblance of a democracy we did have has been lost.  The system is about its perpetuation rather than change.”
        You make a compelling case. 

        If it’s as you say, and I don’t doubt it, why would billionaires spend hundreds of millions of dollars to unseat the current president for another?

        Compare this:  

        with this: 

        • >>>If it’s as you say, and I don’t doubt it, why would billionaires spend hundreds of millions of dollars to unseat the current president for another?<<<
          You raise a very good question BD.  I think for the billionaires it's all the same and the money they give to Romney will ultimately shape Obama's behavior by forcing him to compete for their dollars.  That means promises to win back whatever favor he lost and in that he'll wind up as compromised as Romney is.    Your links prompted me to do a bit more reading on this and apparently,  the percentage of Obama's small donations have grown by about 50% over 2008 to make up for steep dropoff in big donations.  According to one democratic donor, Obama's supposed "class warfare rhetoric" has made the wealthy wary:


          It doesn't make sense to me that his supposed rhetoric is problematic as from a policy standpoint, Obama has been fairly accommodating of the wealthy by extending tax cuts, lack of prosecution of Wall Street criminals and etc.  I have no idea what they could possibly be upset about as they've continued to pretty much get everything they've wanted.   From what I understand, this dropoff has set off alarms in the Obama camp and closing the gap will mean the wealthy wrangle out of him whatever Romney is promising and that means a sort of synthesis between the two campaigns at the end of the day.  That means the wealthy win no matter who ascends to office IMO.

          In the off chance that doesn't occur and Obama is truly funded by the people, that would be favorable, but he did receive significant percentage of small donations back in 2008 and it appeared that he promptly forgot that once ensconced in office.  As a result, he  faces a undertow on the left and it's not due to what he failed to accomplish.  I think everyone understands all the obstructionism and ridiculousness from the republicans he had to deal with.  It's really what he failed to fight for and the policies of the prior administration that he continued and expanded upon. Many who supported him in 2008  feel somewhat betrayed and there's a hill to climb as a result.

          • Steven Lemon

             If you think “everyone” is smart enough to understand  ” all the obstructionism and ridiculousness from the republicans ” (Obama) had to deal with, how come they  are not smart enough to understand that the GOP was utterly powerless for the first two years of his administration?

            Do you think “everyone” is smart enough to know that unemployment in the BLACK community has gotten WORSE since he took office?

            Do you think “everyone” is smart enough to know that all the talk about Wall Street and Goldman Sachs means NOTHING to the Black community except that WE will be repaying the trillion dollars that OBAMA, not Wall Stree,t spent before his first year was done?

            Could it be they are not as smart as you think they are?.

            •  Thanks for dropping by Steve.  Sounds like you have some issues with Obama, but they appear to be different than the issues I have with him.  I have no issue with his stimulus spending in concept at the outset of his administration, in practice however, it fell short.  Most believe it wasn’t big enough and got eaten up in state bureaucracy.  It should have been more targeted in my view and the result is a waste of money with little stimulative benefit.  I thought the program to assist GM was successful and impactful in saving jobs; some of which were African-American.  I think Dodd Frank was largely defanged by the banking lobby, but am willing to wait to see what happens before rendering final judgement.  As to the African-American community’s unemployment rate, I don’t blame him fully for that nor for the overall unemployment rate as these were a function of policies put in place long before Obama, however, he certainly hasn’t helped matters with his support of certain trade policies.  The main areas I take issue with Obama on are his continued use of hegemonic practices on the foreign policy front and  his lack of aggressive in going after the Wall Street criminals.  I do think that some of this is a function of the system itself, but he’s opted to play the game rather than challenge it and I’m come to realize that the expectation that he’d do something other than that was unrealistic.

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