Politics and Markets
Oct 31, 2022
Let’s face facts. When it comes to capitalism and creating wealth, we do a decent job in this country. Sure, there is ample room for improvement and wealth disparity is a glaring challenge. But compared with the rest of the world, we do it best. However, when it comes to politics, we’re more akin to a banana republic. Why is that?
We’re in the business of markets because we believe in them. If you want to determine what products have value in the most efficient way possible, pool together an enormous amount of money where participants haggle over products and price. In short order, you will determine which products are of value. Those that aren’t of value will lack an ability to attract liquidity and eventually, go away. It is an incredibly efficient process.
Now, juxtapose that against our political system. Two parties that raise massive amounts of money to support candidates that aren’t the best of the best. Candidates that likely won’t offer us the best return on our investment. Candidates whose values are often times more in line with the outliers of society. Instead of the best opportunities rising to the top and then attracting capital, the system works backwards and the best of the best are unable to emerge because ideas matter less than maintaining the existing two party system.
As we close in on the midterms with all their spectacle and media attention, let’s take a step back and recognize what these midterms mean and should mean.
Growing up, we remember political elections. But the ones we remember were presidential elections. That is until around the late 1990s when the machinations of big media realized if they Super Bowled-up the midterms, they could garner larger audiences every two years instead of every four, which meant more frequent and more expensive ad sales.
There’s no begrudging a company trying to make more money. However, when the catalyst of that motivation results in the bifurcation of the public, where middle ground becomes the barren wasteland of yesteryear and extremist polarization dominates, then maybe calling into question profit motives becomes more reasonable.
Our political system once allowed for anyone with good ideas an opportunity to run for office. Men like Harry Truman did not have well established political machines behind them spending ungodly sums of money. Sure, the system had flaws and backroom deals are where most things got done. Still, the system allowed good ideas to float to the top, bad ideas were (eventually) squelched and progress was made.
Today, we live in a gerrymandered system where only a handful of areas throughout the country are really up for grabs. Fear mongering has replaced policy proposals. Massive amounts of money are spent within echo chambers that silence outside voices from being heard.
The question we need to ask ourselves is not how we got here. Rather, is this the course on which we want to continue? Each election brings about lesser qualified candidates which ultimately has the effect of degrading the entire system. Those who might have something to offer are turned off by the nastiness of the system. Others, willing to tolerate that, lack the funds to be heard.
It’s not an unfixable problem. It can be made better. Rank choice voting can help guarantee an elected official is the one person the majority agree should be in office. Term limits would wrest control from embedded and out of touch politicians more interested in self preservation than serving the needs of the many. Less sensationalism by media companies and greater focus on policy proposals than Page Six innuendo would keep issues in focus over personalities. Then, allow the money to flow into supporting those with the best potential return on investment.
Our election process can be better. Capital markets provide us with the blueprint for how to do it. We just need to collectively decide the path we’re on is unsustainable, we want and more importantly, we deserve better.
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