Election Reflections

August 28, 2016

Let’s pay a visit to an earnest voter…

The Labor Day weekend was a week away and the election campaigns would swing into full gear following the holiday. He had a hard time deciding what to do with his vote in November.  His mom used to make it easy, voting the party ticket no matter what. He heard someone say that they would write in Reagan’s name this election. He told himself that he was more conscientious than that so he reviewed some of the issues.

Climate Change

He thought that climate change was at least partially caused by human activity, so he decided he should probably vote Democratic this election. Republicans were climate deniers, weren’t they?  Hell, some Republicans denied evolution.  Michele Bachmann had announced that she wasn’t running for re-election for her House seat. He thought that she should be put out to pasture where she could do the least harm.  He had read a climate scientist writing that it didn’t matter much anymore, that human activity had already flipped the switch.  Sure, we might be able to make a few small improvements, some amelioration of the damage, but it wasn’t worth arguing with others who preferred to think that climate change was as real as Santa Claus.  What was that song by Chris Rea?  The Road To Hell

White House Short-timers

Obama had a few months left in his second term.  Was he hoping that Iran didn’t do something crazy in the meantime?  Former White House Press Secretary Robert Gibbs said (Interview with David Axelrod) that the worst day in an election campaign is the best day working in the White House. Everyday some part of everything that happens in the world came into the White House so the stream of problems was constant.

September was coming up.  Did Obama say a little prayer that there would be no financial crisis like the one that beset former Prez Bush in September 2008?  Bush’s body language in those last few months of his second term screamed out that he wanted to be gone from the flood of problems coming across his desk.  Bush had turned out to be a big government Republican with dramatic big government solutions to the financial crisis.  He had flooded Iraq with lots of cash in 2003.  Then he had wanted $700 billion from Congress.  His Treasury Secretary, Hank Paulson, had famously handed the Congress a scrap of paper, the most concise emergency bailout plan ever devised.  Hank could have written it on a piece of toilet paper in the men’s room.  $700B!

Rock-em-sock-em big government robot fights for justice

Democrats had been proposing big government solutions to society’s problems for as long as he could remember.  Solutions that cost a lot of money and produced meager or mixed results.  Was it bad execution of a good solution or was it the wrong solution?   The Dems were good at blaming someone or something else when their programs didn’t work very well.  Human greed, Republicans, selfishness, and poverty were the usual suspects.

Republicans blamed most problems on government regulators, Democrats, high taxes, and a loss of Christian values.  Republicans believed that a progressive income tax, the taking of money from one person and giving it to another, was a violation of a person’s property rights.  He agreed with that so maybe he should vote Republican.  But then most Republicans wanted to take away a woman’s right to choose what happened inside of her own body.  That was also a violation of a woman’s property rights, a God given right to privacy. So which property rights should he hope to protect with his vote?  Neither party cared much for the Constitution, that was for sure.

Social mores

At heart he was a classic liberal, or what is now called a moderate Libertarian. Gay marriage, fine.  If transgender people wanted to use the sex of bathroom that they identified with, fine.  His granddaughter had said she didn’t care if some transgender boy wanted to use the bathroom. The stalls had doors.  Dems seemed more libertarian on social issues, but very autocratic on economic issues.  Why couldn’t the Dems or Republicans be libertarian on both social and economic issues?  Because then one of them would be the Libertarian Party, he thought ruefully.  The anti-government anarchists had taken over the Libertarian Party several decades earlier.  Maybe it was time for the moderates to take it back?


He didn’t think that politicians in Washington should be using the tax code to correct what they perceived as inequities in society.  It was the Republicans in 2003 who had stopped the practice of penalizing married couples through the tax code.  A Democratic House and Senate had put that one into place in 1971 (1998 article) but it was Nixon, a Republican, who signed the legislation.  Democrats could justify any tax.

The Hammer of God

He didn’t think Bible thumping politicians should be telling us how to live our lives. He was with the Dems on this one.  No, God wasn’t dead.  He was kept alive by politicians who used Him as a rhetorical weapon against the other party. Running for his first term in Congress, Abraham Lincoln, a Whig, had endured accusations that he was not a religious man (Sandburg’s Lincoln bio).  The Whigs had morphed into the Republican Party during the 1850s and now it was the Republicans who used religion as a cudgel against Democrats.  (Obama warning in 2012 race)  Apparently, only Republicans knew God’s will and how to implement it here on earth.  How could he vote for a party that was so conceited and arrogant?


But he also thought that the Federal government had no constitutional right to be telling people that they had to buy health insurance.  Each party wanted to take away people’s rights and freedoms.  As a small employer for several decades, he had often wished that health insurance wasn’t tied to employment. Bigger companies could offer more favorable benefits to good employee prospects, and it was tough to compete with that. Despite his preference for private solutions to societal problems, he wished that there was a program like Medicare for all or no tax write offs for health care benefits.  One or the other.  A public option had been a part of Obama’s 2008 platform (Politifact) but he had not been a particularly strong leader on this one and had encountered resistance from the members of his own party.  The result was Obamacare, a rough draft legislative hodge-podge that was more typical of a preliminary committee product, not a final piece of law.  Democrats just sucked at crafting economic legislation yet, in an ironic twist, they tended to see most of society’s problems as economic ones.  Obama had got his health care legislation passed only to see it used against the Democratic Party in the important census election of 2010, when the Dems lost a large lead and control of the House. Bill Clinton had tried to pass a health care bill in 1993 and lost Democratic control of the Congress to the Republicans in the 1994 election.  The Dems had apparently not learned their lesson.


He couldn’t decide who was going to best keep the country safe.  Republicans seemed to think that Mexicans threatened each American family somehow.  Not all Mexicans, he understood, just illegal Mexicans.  For years, hundreds of thousands of students and visitors had come to the U.S., then overstayed their visas and remained in the U.S. illegally.  According to Republicans, all those other illegals weren’t a problem. Just Mexicans.   The Donald would build a wall.  In 2006, a Republican Congress had approved funds for Homeland Security to build more fences along the southern border.  Neither Democrat or Republican Congresses had been able to move the fence building further along toward actual construction.  Having once solved the problem of building a skating rink in Central Park, the Donald thought that he – and only he – could get this fence thing going.  He wished the Donald good luck in herding 535 fat cats in Congress toward any one project.  As the top Fat Cat, maybe the Donald could make it work.

Crazy vs Experience

Nah, he thought, the Donald was too crazy and inexperienced. Most Presidents were either one or the other, but not both, except for Bill Clinton.  Clinton had been crazy enough to have sex with an intern in the Oval Office and inexperienced enough to propose a universal health care plan.  He had won the Presidency with the lowest popular vote in the country’s history yet Clinton had thought he had some clear mandate. Even strong Democratic control of both the House and Senate could not help him and within two years, Clinton certainly contributed to the loss of  both the House and Senate to the Republicans.

Split the vote

Several decades ago a co-worker had shared his personal voting system.  “Split your ticket in the hope that the government stays split,” the guy had said.  That way the politicians could do the least harm.  Maybe that’s what he would do this election.  His congressional vote didn’t matter.  Few Congressional districts were contested in the general election and his district had voted Democratic for more than forty years.  Republicans would likely keep the House anyway.  Democrats might just take the Senate so he should vote Democratic to make it more likely.  That would help split the Congress.  That still left his vote for President.

Supreme Court

Over and over again he had heard that this Presidential election was a vote for the direction of the Supreme Court for the next decade or more.  His secret hope was that the Court would remain at eight members. If there was no clear majority on the Court then there should be no precedence set in Constitutional law.


Maybe he should vote for the Libertarian Candidate, Gary Johnson?  Johnson seemed neither inexperienced or crazy other than the fact that anyone who runs as a third party candidate in this country must be crazy.  If the Dems took the Senate, they could simply block any nominee to the court and keep the Court at 8 members.  He could tell himself that a Libertarian vote was a combined nod to both the Democrat and Republican parties.  It would not be first time that he had split his vote but it had been quite some time since it did it in the hopes of a split government.


Having resolved all those election issues, he turned his attention to the World Series schedule.  If the series went to seven games, the last game would be played on November 4th, at the height of pre-election coverage and just a few days before the election. (Schedule) If the Cubs were in the World Series for the first time since 1945, the attention of many voters might easily be diverted to the historic match up.  Let’s say the Cubs won the series for the first time since 1908 and let’s imagine that the series went to seven games, with the final game played on Friday, the 4th. KC Royals’ fans had celebrated their 2015 series extra inning win over the Mets just two days after the final game.  He could imagine that millions of Chicago residents and former residents would be there to celebrate the event on Sunday perhaps and the festivities rolling into Monday.  Although Illinois was usually a solid vote for the Democratic Presidential contender, he imagined the possibility that thousands of Illinois voters, distracted by the post-Series events, didn’t vote in Tuesday’s election.  Like Florida in 2000, the results turned on the votes of a few in Illinois and Donald Trump won the Presidency because the Cubs won the series.  Nah, he thought, sounds too much like a bad movie script.

Next week: a troubling long term trend that will hurt many investors

Manufacturing Miracle Coming Soon

August 21, 2016

In the olden days, like the late ’90s and early ’00s, it was a good thing that America was ridding itself of heavy manufacturing industries. They were, like, so 20th Century, man.  We were entering a new century of computers, the internet and high tech manufacturing.  Compaq Computer, Sun Microsystems (Java), Microsoft, Oracle (databases), and Apple expanded in Massachusetts, Colorado, California and N. Carolina.  Bye, bye old smoke belching industries and hello new clean room high tech industries.  America was becoming a knowledge and service economy.  Let those third world countries like Mexico, China and Thailand make stuff and pollute their cities, and ship the finished products to our shores.

Wind the clock of history to the present day and we are having a markedly different discussion.  Donald Trump, the Republican candidate for President, vows to bring old time manufacturing back to the U.S.  Under pressure from the leftist wing of the Democratic Party, Hillary Clinton pledges to kill the Trans-Pacific-Partnership (TPP) trade agreeement in its present form. The theme of this election: jobs and security.

Remember the billionaire Ross Perot who ran for President in the 1992 and 1996 elections?  Ross and The Charts.  Sounds like a Motown group.   While Perot didn’t get any votes in the electoral college, 20% of voters pulled the lever for him and probably pulled most of those votes away from George H.W. Bush, the incumbent Republican President in the 1992 election.  Bill Clinton won that one with the lowest popular vote in history and may send Mr. Perot a Christmas card each year as a thank you.  Perot said that if NAFTA passed – and it did pass in 1993 – there would be a big sucking sound as jobs were vacuumed from the U.S. into Mexico. In the late 90s, not too many companies had moved to Mexico yet.  The high tech and internet booms were in full swing and the unemployment rate was less than 5%.

 No big suck until…

In 2001 China was admitted to the World Trade Organization (WTO).  Put into a big pot a lot of cheap labor, eager urban planners in China, and lax environmental regulations.  Stir vigorously.  A black hole forms that sucks jobs from America and other developed countries.

From 2000 to mid-2008, before the financial crisis, manufacturing industries lost four million jobs.  Almost 25% of the work force gone in just eight years.  The transition from manufacturing had been going on for several decades but at a much slower pace.  In the previous twenty-two years, from 1978 to 2000, the manufacturing work force fell by two million.  As more product manufactures moved to China and southeast Asia in the 2000s, the job loss rate was five times what it had been in those two decades.

Manufacturing is a stew of many ingredients called the supply chain.  The chain includes the companies that make parts and tools for big industry as well as the transport needed to get raw materials to these suppliers.  It includes the housing, schools, shops and hospitals for a large regional work force.  Donald is going to bring that huge infrastructure back.  All by himself.  Yay for Donald.


Franklin D. Roosevelt and the Banking Panic of 1933

Two days after FDR took office in March 1933, he declared a national bank holiday, shutting the nation’s banks for a week.  For a month before FDR took office, depositors had been withdrawing their money from banks in a concerted panic.  The conventional narrative is that FDR’s quick action saved the banking system from a certain collapse.  But wait, there’s more.  Why were people in a panic?

In order to win the election in November 1932 against the incumbent Herbert Hoover, FDR used a familiar tactic – scare the voter.  In the midst of the Depression, this wasn’t difficult.  Britain had gone off the gold standard in 1931 and American confidence in their financial institutions and their very currency was sorely tested. FDR’s oratorical and theatrical skills helped convince many voters that only an FDR presidency could rescue the American family.

In those days, a new President did not take office until March of the year following a November election. Soon after FDR was elected, people began to fear that he would devalue the dollar once he took office. En masse, people wanted to trade in their dollars for gold or something that could be converted to gold. In the first months of 1933, states began to declare bank holidays to halt the wave of withdrawals but the panic caused many more banks to fail. (A detailed account of the bank panic)

When FDR took office, 35 states had declared bank holidays of various extent.  FDR made the bank holiday a national one that included the reserve banks.  In the ensuing week people grew more confident as they realized that FDR would not devalue the dollar and that the Federal Reserve would guarantee all deposits until a national insurance program could be enacted.  When the holiday was over, people began to return the hoarded money to the banks. To sum it up, FDR’s quick action helped alleviate the panic which was started in part by FDR’s election.  Here’s a more complete account from the FDIC    I wish history was more like the simple version found in our grade school history books.

The Erosion of Inflation

August 13, 2016

What is inflation?  Commonly regarded as the change in prices from one year to the next, we can also define it as the rate at which the value of money declines.  In classical monetary theory, inflation reflects government demand for private savings.  When savings can not meet the demand, immoderate governments create the money they need.  This influx of invented money leads to higher prices and inflation.

Higher inflation encourages borrowers, including governments, since they can pay back loans borrowed in Year 1 with money that is worth less in Year 2.  A person who borrows $100 for a year at 10% interest but with 10% inflation, pays back a total of $110.  But the $110 is only worth 90%, or $99, in purchasing power.  In effect, the lender has paid the borrower for loaning the borrower money.  In a case like this, no one wants to lend money at that interest rate. The lender must charge a higher interest rate, driving up the price of borrowed money in a self-reinforcing tailspin of inflation chasing interest rates chasing inflation.

Deflation, or negative inflation, discourages borrowing for the opposite reason; money borrowed in Year 1 is paid back with money that is worth more in Year 2.  That same $100 borrowed for a year at 10% interest and 10% de-flation is paid back with $110 that now has the purchasing power of $121.  In this example, the borrower effectively pays the lender 21% interest.

I marked up a graph of post-1850 inflation I found here to show several key points in the “hockey stick” of inflation.

The Federal Government borrowed and spent a great deal of money during the Civil War period 1860-65, driving up the rate of inflation.   With a  currency backed by gold and sometimes silver, it took several decades of intermittent deflationary periods to correct for the imbalance of the Civil War.

When the Federal Reserve was created in 1913, the value of a dollar was little changed since 1850.  The Bureau of Labor Statistics doesn’t compile data on inflation before 1913.  After a World War and a severe short recession, a dollar in 1920 was worth half of what it was in  1913 {BLS }

Several years of deflation after the stock market crash restored some of the value to the dollar until the Federal Government began borrowing large sums of money to fund Roosevelt’s New Deal.  Inflation accelerated under the heavy government borrowing for World War 2.

Even though Roosevelt had ended the ready convertibility of dollars to gold during the Depression, several countries wanted cooperation in setting an international monetary standard.  At the Bretton Woods Conference in 1944, a year before the end of World War 2, the price of gold was fixed at $35 per ounce, a dollar benchmark that effectively made the U.S. dollar the world’s reserve currency.
In 1971, the Nixon administration removed that fixed price and allowed the dollar to float in price against gold and other currencies.  Within two years, the rest of the developed world followed suit.  A glance at the chart shows that this is the bend in the hockey stick, the point where cumulative inflation marches relentlessly upwards.

As I noted at the start, some inflation encourages borrowing. The keyword is “some.”  High inflation introduces so much uncertainty into the economy that it becomes debilitating.  Workers can not negotiate wage increases fast enough to keep up with the speed of inflation,, so they reduce their real spending.  Lenders demand high interest rates when they lend money in order to compensate for the declining value of money.  The high rates discourage borrowing and crimp economic activity.

A reasonable and fairly predictable inflation rate allows debt burdened governments to pay back borrowed money with money that has less value. In half a lifetime, from the point in 1973 when most governments freed their currency from a gold standard, the U.S. dollar has lost 80% of its value.  For the first two decades of these past forty years, family income kept pace with that loss of value.  During the last two decades the value of a family’s labor has been transferred to governments whose elected officials devise programs to return some of that transferred value to the most disadvantaged families.

In real terms, personal incomes have more than tripled since 1973 {Graph} but most of those gains were in the twenty-five years ending in 2000 when real personal incomes grew by 135%, a 5% annual pace.  In the sixteen years since 2000, real incomes have risen only 35%, averaging slightly above 2% per year.  When the value of money declines, the only way to save value is to invest money in assets, and only those on the upper half of the income scale have been able to preserve the value of their money in assets.  The lower half on that income scale has struggled.

As the value of money has declined in the past forty years, money invested in assets have gained in value. The press goes goo-goo as the SP500 makes new highs but that is a nominal value.  The inflation adjusted value is barely above its value in 2000 (Table) but has tripled in real value since 1973.  Home prices have not done as well but have gained 50% since 1975 (Graph).  For many families, their house is the majority of their assets and the inflation adjusted Case Shiller home price index is still below the level of ten years ago.

Elections are a competition of ideas for solutions and this election is no different.  The chief theme has been the ever declining value of money and labor, the relentless struggle of those on the lower half of the income scale. Folks on the political left favor ever more government intervention and clamor for more social programs to reduce household expenses, including free college tuition,  childcare and medical care. On the income side, the left calls for a doubling of the minimum wage.  Higher taxes and more debt will pay for these solutions.

Folks on the right side of the political aisle are ruled by an ideology that opposes government solutions, believing that there always exist remedies from the private sector even if there are no proposals for a private solution.  However, even those on the right want more government spending, but of the military kind, where it can most benefit families and economies in rural communities.  Donald Trump is now calling for greater infrastructure spending but this is sure to anger the conservatives in his party.  Folks on the right claim that more spending will be paid for by lower taxes on upper income families and the magic of wishful thinking called optimistic economic assumptions and dynamic budget scoring

For more than four decades, the world has been engaged in an international game of currency manipulation to prevent the fair market pricing of each country’s currency. Nations newly industrializing disregarded or gave a knowing wink to international agreements on labor practices and environmental protections.  Now the populations of the developed countries are aging and their birth rates are falling, particularly those countries in western Europe.  Already high government debt levels are strained by a swell of retiring workers who want the pension benefits they have been promised.  Economic growth that is sluggish or non-existent can not meet the demands for services and benefits, prompting more government borrowing.

Promises in a Presidential campaign are like unicorns.  After the election, the candidate removes the horn and voters realize that what they got was a rather good looking but ordinary horse, not a magical unicorn.  Promises are nevertheless calling cards to a political vision, and the vision of both campaigns is a rally ’round the flag of the domestic economy and American families. Trump’s supporters are endorsing his call for tariffs on imported goods to punish those countries which subsidize their industries and make American products less competitive in price.  Hillary Clinton is now calling for penalties for company inversions, the practice of relocating the legal presence of a business overseas to lower a company’s tax liability.  To rally their troops each candidate promises to fight the international system that threatens the well being of many American families.  However, it is our own government that is part of that system, the war on the value of money, on the value of work.

Hillary’s America

August 7, 2016

Those of us who did not fall asleep in sixth grade civics class remember that the Democratic Party was the party of slavery in this country for almost two hundred years.  (To save some typing, I’ll use DP and RP for the Democratic and Republican parties.) Dinesh D’Souza, the maker of the political documentary “Hillary’s America: The Secret History of the Democratic Party” beats us over the head with that party association for about half the length of the film.

The film’s release was deliberately timed for July, coinciding with the conventions of both political parties.  The timing and the strong audience interest surely have the industry’s attention. In almost two weeks, the film had grossed over $5  million, admittedly weak compared to the usual movie offerings from Hollywood.  For a documentary, however, those are strong numbers.  I went to an early afternoon showing on a weekday, expecting a theater of mostly vacant seats.  Instead, I had difficulty finding a seat among a sea of gray haired retirees, the age demographic that votes in consistently high percentages each election.  The person manning the ticket booth later confirmed that the movie was the most popular daytime choice among the twelve movies it was showing.

The movie begins with the conviction and two year imprisonment of D’Souza, who contributed too much money to the campaign of a friend who was running for local office.  An innocent man persecuted by our legal system, we are told.  A sentence that was hardly commensurate with a technical violation of election law.  D’Souza had my sympathies until he attributed his plight to a vendetta by President Obama who evidently orchestrated this judicial persection of D’Souza in retribution for earlier documentaries that D’Souza had created.  What was next, I wondered?  The Illuminati?

Taking notes during the film, I did some fact checking afterwards.  Did D’Souza go to prison for two years?  Not according to this NY Times article.   By law, the judge could have given D’Souza two years but declined to do so.  The details of the trial are here. The reader will see that this was not an innocent mistake of  mistakenly writing one too many checks to a political campaign. The audience is led to believe that several scenes and conversations that occurred inside the jail were during D’Souza’s two year sentence.  They might have happened while he was in detention, not a pleasant experience, for sure, but not two years in prison.

D’Souza makes the claim that Obama rules over an urban plantation of blacks, other minorities and immigrants, following a template laid down by rural southern plantation owners and urban DP politicians.  Obama’s political background is rooted in the state of Illinois where Democratic mayors and a gang of political cronies have ruled Chicago through a system of voter impressment, physically forcing immigrants and blacks to the ballot box. D’Souza neglects to mention that the most corrupt mayor of Chicago was “Big Bill” Thompson, a Republican whose two terms during the Prohibition era set the template of power and corruption that marked successive administrations in the city. But this is not a Republican Party hatchet job, is it? More inconvenient facts, darn it.

D’Souza makes the case that FDR’s reign during the Depression era 1930s marks the beginning of the Democratic theft of America.  Whether it was a theft is a matter of opinion.  As Lincoln did, FDR used the crisis to help rewrite the relationship of the Federal government to the states and its citizens.

During some forty minutes, the movie documents the many horrors of slavery by Democratic landholders. The moral rot at the heart of the DP is evidenced by the election of a savage, ruthless man to the highest position in the land.  Andrew Jackson was a Democratic President who treated his slaves worse than farm animals and forced Indian tribes on a long death march from their ancestral lands.  The party of slavery and Jim Crow laws now tries to market itself as the champion of blacks and minorities.

As with other documentaries of political propoganda – yes, Michael Moore, I’m talking about you – there are careful omissions of fact and context as well as just plain old sloppy research.  Facts are sacrificed to the cause the film promotes.  D’Souza tells us that Abraham Lincoln started the Republican Party, a falsehood that is easily checked by anyone with a cell phone.  Why tell such balderdash? D’Souza wants to stress that the RP, which began as a friend to the blacks, is still a friend of the blacks and other minorities.

D’Souza notes that it was Republicans who took land from the defeated Democrats after the Civil War and gave it to the blacks who had worked those lands.  On the face of it, this is true.  Now for the rest of the story, as broadcaster Paul Harvey would say. In the Reconstruction period following the Civil War, Republican politicians took over state legislatures and did award white owned farms to the newly freed blacks.  Many blacks, illiterate and unschooled in the management of a farm, lost the newly awarded lands to tax forfeiture.  Republican legislators and their friends were at the courthouse when the lands were auctioned and became the new owners of the land for a paltry sum.  That unlovely coincidence of human greed surpasses all political affiliation.

Emphasizing the point that it is the Democrats who are the party of racism, D’Souza recounts Democratic President Woodrow Wilson’s sordid sentiments toward blacks, his endorsement of the KKK and the hosting of a White House screening of the D.W. Griffith film “Birth of a Nation.”  D’Souza includes several clips from the movie to cement the association between the Democratic Wilson and slavery.

D’Souza dramatizes a scene where Wilson repulses the efforts of Ida Wells, a black journalist and activist, who attempted to get the President’s help to stop lynchings in the Democratic South.  Left out is the fact that Wells had been unable to get cooperation in this cause from a Republican President, William McKinley (Source).  In 1918 and subsequent Congresses, there were repeated Republican efforts to pass anti-lynching legislation but they were blocked by Democratic Senators (See notes at end).

The RP is a friend of women as well as blacks, D’Souza tells us.  After all, a Republican Congress passed the women’s suffrage amendment.  What we are not told is that Republicans specifically excluded women from the draft language of the 14th Amendment.  As this historian notes, “History is messy.”  Inconvenient facts are tossed aside to present a consistent narrative with a simple, clear message.  Donkeys bad.  Elephants good.

Although Democratic President Lyndon Johnson signed the Civil Rights Act of 1964 into law, D’Souza reminds us that it was the Republicans who overcame a Senate filibuster of the Act by southern Democrats.  One more reminder in an election season that the RP has been a friend to blacks.  Republican efforts to make voting by blacks a bit more difficult is conveniently left out of the narrative.

D’Souza dismantles the notion of a party switch, the idea that southern racist Democrats switched parties and are now Republican.  To refute this theory popular in Democratic circles , D’Souza shows a graphic of the 1500 KKK leaders and Democratic politicians in the southern states in the 1960s.  After the passage of the Civil Rights Act, less than 1% switched parties.  The graphic is a visually powerful argument but there is little explanatory information with this graphic. What years are compared? Why include the KKK members?  How were the party affiliations of these members checked?  A comparison of election maps before and after the passage of the Civil Rights Act makes it clear that there was a party switch.

In the 1960 Presidential election, most of the southern states, including Johnson’s home state of Texas, voted Democratic. This election map shows the southern blue voting block.  The Civil Rights Act passed in July 1964, a few months before that year’s Presidential election.  Texas stayed with Johnson but five Southern states went Republican, as this election map shows. (You can also toggle the election year above the map.)

In the 1968 election, four of those five southern states voted for George Wallace, the former Democratic governor of Alabama who had refused to integrate public schools in the state. Running as an Independent and a champion of segregation and states’ rights, Wallace won about 10% of the electoral votes, a feat achieved by no third party candidate since. (Map)

Clearly now the southern states were in the hands of Republicans and segregationists. Or were they?  In the 1976 election, many southern states voted for Jimmy Carter, a fellow southerner and the Democratic governor of Georgia. (Map)

The appeal of political propoganda documentaries is that they simplify history by carefully filtering out the confusion of contradictory events and data.  We would all like to disregard the complexity of human behavior, the conflicting loyalties that confirm the chaotic in human affairs.  We want tidy circles, not ragged inkblot shapes.  What keeps historians busy in a lifetime of academic research and study can be easily brushed aside by the makers of message films.  Darn it, we’re still arguing over the causes of WWI  and that was a century ago!

Champions of slavery, tolerant of racist Jim Crow laws and lynchings in the southern states,  the DP has also supported eugenics laws.  D’Souza implies that this is part of a continuing effort to eradicate the black race.  No longer able to use black people as free slave labor, the DP seeks to rid the country of them through sterilization and abortion.

Margaret Sanger, the founder of what is now called Planned Parenthood, was also a champion of eugenics (see here),  as were many progressives.  In today’s political alignment, progressives are part of the DP, but they used to be part of the Republican Party when the eugenics movement first gained popular strength.  Led by President Theodore Roosevelt, the progressive movement was responsible for workplace and social reforms, and the creation of the first national parks.  Eugenics was an “enlightened” and scientific idea at the time, but horrifies us now. Hitler’s devotion to the concept impelled his commitment to the methodical destruction of the Jewish race, and the wholesale slaughter of Slavs and Communists who surrounded and threatened the noble German race.

Linking Sanger with another group devoted to the suppression and eventual eradicaton of the black race, D’Souza shows a picture of Sanger at a KKK rally as proof of her association with the racist group. The researchers at the debunking site Snopes showed that this was a doctored photo .  Sanger did speak before a NJ women’s chapter of the KKK as part of her effort to speak about birth control to as many groups as possible.  In her autobiography, Sanger wrote about the meeting and the strangeness of the experience so D’Souza uncovers no dark and hidden secrets.

Sanger wrote that she wanted Negro parents to have the ability to make the same family planning decisions that white parents did.  She envisioned a day when Negro parents had the same access to hospital services for their births that white parents did.  She wrote ” Some day … there will not be a single section of the country without adequate hospital facilities for all. But until that day is here, Negro mothers should be given all possible protection against needless sacrifice through childbearing.”  Doesn’t sound like someone who wants to eradicate the Negro race, does it?

D’Souza’s message is that abortion and sterilization are the twin weapons of the eugenics movement.  Although sterilization was discontinued after the 1970s, abortion remains a tool of the eugenics movement primarily aimed at black women and the gradual reduction of the black race in America.

As evidence of this, D’Souza notes that the majority of Planned Parenthood (PP) clinics are in black-majority neighborhoods.  Protecting Black Life, a pro-life advocacy group, has an interactive tool using 2010 census figures that verifies the correlation of clinics in black and Hispanic neighborhoods.  With a tendency to have lower incomes, these minority population may simply use PP’s services more frequently, prompting PP to position their clinics in these areas.  Secondly, lease rates are lower in these neighborhoods and are attractive to an organization with constant funding needs.  However, those are boring pedestrian explanations for the correlation of locations.  D’Souza’s more dramatic explanation is that the location of PP clinics is part of a DP master plan of genocide.  Republican presidential candidates Herman Cain (2012) and Ben Carson (2016) have made accusations similar to D’Souza’s (WP article)  Maybe D’Souza will write the next Jason Bourne film?

A conservative propoganda piece must include Saul Alinsky, the anti-Christ of liberal politics who wrote “Rules For Radicals.”  The 1971 book consisted of tactics that a community organizer might use to knit low income communities into a more powerful voice at the political bargaining table. Confrontation and conflict are themes common to many of the tactics.

Political propoganda consists of a series of “dog whistles” familiar to the target congregation.  Conservatives are quick to tar any Democratic politician with the epithet “Alinskyite” as in “Alinskyite ideas.”  The congregation barks with approval.

Obama was only ten years old when Alinsky died in 1972 but Obama was a community organizer who has quoted Alinsky.  The quotes are not direct but close enough that any true conservative can see that Obama is a commie radical like Alinsky.  In Chapter 2 of Rules for Radicals, Alinsky wrote about the world as it is and the world as it should be. When Obama uses the words “world”, “is” and “should” in the same sentence, he is quoting Alinsky and professing to be a Communist.  I totally get that.  Here is one example of this kind of dogmatic analysis.

In a 1963 speech, President Kennedy – yes, a Democrat – differentiated those who saw the world as it was and asked why, and those who dreamed of what the world could be and asked why not.  His brother, Robert Kennedy, used the phrase as well in several speeches.  In that same speech, JFK  attributed the original quote to Irish playwright George Bernard Shaw.  Using the logic of this conservative accusation, we can assume that anyone who has dreams about a better world is a disciple of Alinsky and yes, a radical Commie Utopian.

The movie’s title begins with Hillary’s America, so when is D’Souza going to show us Hillary’s secrets?  Why, just about now. Hillary Clinton actually wrote a student thesis on Alinsky.  As president of the student club, Hillary invited Alinsky to speak at Wellesley College. The audience does not have to be good at math to realize that Hillary Clinton = Communist.

As the student commencement speaker at her graduation from Wellesley in 1969, Hillary went off script to chide the guest speaker, Republican Senator Edward Brooks, an African American, about his remarks (Transcript of Hillary’s speech). D’Souza dramatizes it for his audience. White girl at Wellesley rebukes black senator, showing no respect for either his position or his race.  Senator sits quietly in chair on dais as Hillary says these disrespectful words.  Bad Hillary.

Here is a piece of Hillary’s remarks: “we feel that for too long our leaders have viewed politics as the art of the possible. And the challenge now is to practice politics as the art of making what appears to be impossible possible.”  Any conservative can see what she is saying.  We feed her words into the conservative de-confabulator and out pops the translation. She is talking about the world as it is and as it should or could be.  Alinskyite Communist thinking of a better world, for sure.

D’Souza left out the Senator’s remarks that prompted Hillary’s response. Senator Brooke adopted what was a mild authoritarian posture typical of the time.  Student protests against the Vietnam war, discrimination and entrenched power structures occurred almost weekly, it seemed.  He said: “Dissent and protest are essential ingredients in the democratic concoction. Without them an open society becomes a contradiction in terms, and representative government becomes as stagnant as despotism. Yet there is a narrow but distinct line between productive dissent and counter-productive disruption.” (Transcript of Brooke’s speech)

Brooke cautioned against protest for the sake of protest, sentiments that sound reasonable to most American ears today.  Other elements of the speech would be typical of today’s moderate Democrat or Republican, animals who may have been driven to extinction in the current era of polarized opinions.  Only a Republican very secure in his seat would dare to give such a speech today.  Brooke endorsed the growth of the many Federal government cabinets recently created to combat housing and job discrimination, poor education and poverty.  Yes, a Republican endorsing bigger government. He was practically a Socialist in the eyes of some conservatives today! What did bad Hillary find wrong with those sentiments?

Hillary’s response is rather tame for the period when there was open antagonism between the rulers and the ruled. D’Souza uses a snippet of a sentence taken out of context to portray Hillary as an uncivil person with little respect for authority.  That’s the message of this segment of the film.  Hillary bad.

These days ain’t those days.  There, I said that and you can quote me.

Rulers had rigid rules that gave most of society’s power to men, not women.  Hillary spoke for many who wanted a change.

The rulers said war was necessary and that the ruled were supposed to go fight the war to stop Communism.  The ruled were ordered to fight but were not allowed to vote. The ruled broke things in protest.

At the universities, rulers had clearly defined and time honored curricula choices that reflected the prejudices and preferences of past generations.  The ruled wanted a greater voice in curricula selection.

The rulers had a grading system that seemed arbitrary to the ruled.  What is the difference between a B+ and a B paper?  With few consistent rules to guide the grading process, wouldn’t a pass-fail grading system make more sense?  No, the rulers said.  Rulers make the rules and students follow them.  Is that clear?

Those were the good old days.  College students today are surprised when they hear of these old rules, most of which have been either abandoned or dramatically altered.  The ruled stormed the forts of power and the rulers compromised so that they could continue ruling in whatever capacity they could manage.  Some of the ruled became the rulers.

I do encourage the reader to read the speeches of both Hillary and Brooke.  Hillary’s speech is the shorter, for sure, but both speakers are rather moderate and deliberate, remarkable in an age of sometimes murderous (Kent State) and often bloody (Columbia U. and others in NYC, for example) protests.

Having established that Hillary is a socialist, anarchist Communist, D’Souza then shows the tragedy of her personal life.  For several decades she has been covering up for the sex addiction of her husband and former President Bill Clinton.  Democratic Party = slavery = sexual deviants = Communism = Godlessness = bad.

I was busy writing out D’Souza’s equations when I realized that I was going to miss an appointment.  I had to miss the final 15 minutes of the film but I suspect that D’Souza was going to finish with the tragedy at Benghazi and Hillary’s personal email server while she was Secretary of State. If you want to know how the film turned out, you can rent it on Vudu or spend a couple of hours at your local theater.  I have now seen a Michael Moore film and a Dinesh D’Souza film.  As Johnny Cash sang, I walk the line between either extreme.  I hope I can keep my balance.



“We urge Congress to consider the most effective means to end Iynching in this country which continues to be a terrible blot on our American civilization.”  Republican presidential platform, 1920. In the House, Republicans held a 50 seat majority, 240 seats to 192 Democratic seats.  In the Senate, Republicans had won a 49 to 47 majority in the 1918 elections.  Repeated Republican efforts were blocked by Democratic Senators (more here)

The claim that Lincoln founded the Republican party is incorrect.  Here and here.

In Buck v. Bell (1927), the Supreme Court ruled that state sterilization laws were legal.  As further evidence of the DP’s efforts to eradicate the black race, D’Souza notes that it was Oliver Wendell Holmes, a Progressive, who wrote the court’s majority opinion.  D’Souza omits the fact that a Republican President, Theodore Roosevelt, appointed Holmes to the court and a Republican majority Senate approved the appointment.