The Reality of a Rigged System

In the political debate today called Presidential politics, dialogue is often referenced to a broken, privileged, or rigged system. Is it? Yes…but not by the forces or for the reasons that activists may think. It is the product of societal, cultural and economic evolution.

The discourse and acrimony in political divisions today is not the result of acerbic rhetoric rendered by the candidates. It is the anger and disillusionment of citizens that prosperity is beyond their reach because of a rigged system. And further that an elected elite is either indifferent or participatory in the fix, or both.

It is important to realize that Donald Trump and Bernie Sanders are not the problem; they are the consequence of the problem. To quote Henry McLeish, a former member of the British Parliament and a current member of the Queen of England’s Privy Council, on his observation of U.S. politics, “They [Trump and Sanders] are drilling into this deep vein of anger.”

Upon what then can we agree are the true tenets of this rigged system? Corporate America enjoys a tax structure that allows for their control of discretionary capital including tax credits, economic development incentives, and offshore accounts. They claim that these perks help them create jobs, when in fact it also helps them to create “widgets,” sometimes offshore, to the benefit of investors and not always to job creation in the United States.

Wall Street benefits from a regulatory system that allows for the wholesale management of large funds of capital wherein risk is underwritten by the concept of “too big to fail.” The government will, and has stepped in, to bail out illiquid and poorly managed equity investments and preferential portfolios.

Big unions also have complicity in the problem. They demand legacy costs of generous health care and pension fund packages that are not flexible and relative to the world competitive markets for the cost of labor. Their rationale is that there have not been real pay raises for years and that their benefit packages have been diluted by cost-of-living increases. Their conclusion is that wages must be regulated by the government. They feel they are at a disadvantage in the world today. There is fact in their assumptions and analysis. But wages and prices must be part of the negotiation of the total picture of free enterprise if American industry is to remain competitive. This is of little consolation, however, to the wage earner who has trouble supporting a family and a mortgage, even with two earners in the household. To the rank and file worker, the backbone of America, business as usual is not acceptable. They believe the system is rigged against them.

Add to all of the above the globalization of the world’s economy. Since 1974, most manufacturing jobs have become competitive beyond the borders of a sovereign nation. Thomas Friedman documented this trend in his book The World is Flat. This dynamic cannot be avoided. It must be dealt with realistically.

Millennials just entering or emerging into the job market are experiencing difficulties beginning their careers. Good jobs are scarce and declining across industry sectors. Inequality in income distribution appears real to them when the economy does not provide a starting position in their selected field that allows them to establish a minimum quality of life. This challenge is seen as a pejorative when the control and profits of Wall Street fuel the philosophy that incomes are radically disparate.

So what is the cause of this rigged system? Partial blame can be laid at the feet of Congress, the Federal Reserve, and the citizens themselves. Congress continues to run deficits that add to an unacceptable and burdensome federal debt. This debt drags on the economy. Dodd-Frank becomes the law of the land to regulate Wall Street without any respect for community banks and the restriction of capital for small businesses. The March 26th Economist cover story entitled “Winners Take All” is a discussion on how America’s small businesses are being impacted negatively by this lack of true banking competition. Our government leaders ignore the role of China and their flawed system of currency management in the global trade order. The Federal Reserve implements monetary policy for the purpose of controlling inflation to facilitate the creation of jobs. It was never intended for the Federal Reserve to distort interest rates for an extended period of time through quantitative easing to the detriment of the bond markets and the financial services industry sector. Congress and the Federal Reserve work independently of each other to perpetuate a system of government services that we cannot afford. The Federal Reserve manipulates interest rates in the hopes of promoting economic growth for the creation of jobs. Congress subsequently continues to deficit spend at a cost that is perceived to be affordable. This is not a conspiracy. It is the result of the right hand not checking with the left hand in order to course correct the management of the economic system of the United States.

There has been a cultural decline in the United States of America. This decline may be debatable in substance. But one statistic that is not debatable is the increasing number of children being raised by no parents or by a single parent. A child growing up in a home with two parents, by some studies, has a 50% better chance of graduating from high school and achieving gainful employment than a child raised without both parents in the home. Grandparents and step-parents are alleviating the problem. But the situation continues to worsen. More and more youth in America are left at a disadvantage. Some are falling behind in school because of inadequate early childhood development. Many are realizing the same consequence as the Millennials. They cannot get to the first step of entry into the economic system. Government programs continue to attempt to wire around the problem rather than demand citizens take some responsibility for their own situation.

A vicious downward spiral of the standard of living is the result of the denial of the interconnection between these three elements impacting society today – the government, the Federal Reserve, and the citizens.

What is the answer? Leadership that understands and is not afraid to tell the American people the truth.

The sagacity of the American public allows them to embrace the truth when properly presented without agenda. Sanders and Trump may not be the cause of the problem, but they are currently exacerbating the problem by inflaming the anger without providing the solution to unrig the system. Now, even the party primary system seems rigged. Donald Trump and Hilary Clinton will be the winners of primaries tonight. Hopefully soon they will direct their attention to constructive policy.

What should be done? The system must be restructured.  Priorities must be determined and when committed to, they must be governing.  A great American re-set must be pursued.

All government policy dealing with corporations and Wall Street must be reexamined. In the new world economic system, free enterprise should be the overriding principle. Businesses should rise or fall based upon profits, not government subsidies, tax credits or social engineering. The poor must be supported. Single women with children must be given flexibility to adjust. Family owned businesses must be a protected. Health care, education, and early childhood development should be considered priorities. Religious liberty must be respected as foundational to our culture. Our military is critical, not just to the security of the United States, but to the continuity and peace of all nations.

The United States is unique in the world today in that it is the only country that provides government services for its own people while providing banking, currency, and military support for world commerce, free trade, and world security. The world relies upon our systems. Like it or not, it is in our best interest to continue to carry this obligation into the future.

What we need today in the United States is a candidate for President who is committed to restructuring the system from the ground up based upon principles and priorities, not tinkering around the edges to maintain the status quo. It will require that this person be outside the system to accomplish such a vision. He or she must portray the truth about our current predicament in common everyday language that the average citizen can not only understand, but to which they can personally relate. Communication of a new policy must be parlayed through the new medium of social media. The message will have to be advanced consistent with new technology. If he or she can accomplish defense of truth through such modern means, then the generations can be united in the debate and determinations of a new re-set.

What is required is a movement of the people to seize their citizen responsibility at the grassroots to form a new alliance. An alliance that redefines personal liberty advanced through a new opportunity party.

If we do not face this truth, then we are relegating to future generations a society wherein some people are pushing a square cube while others are pushing a round ball. Such a society can only result in further division, envy, despair, conflict and anger.

By facing this truth, and through leadership committed to defending the truth, we can re-set America, and thus realize the chance for opportunity and prosperity in the future.

Our children deserve this chance and our commitment to provide it.

My name is Marc Nuttle and this is what I believe.

What do you believe?