A thrown match ۔۔۔۔ Farrukh Khan Pitafi

The media management team of the democratic ticket in the US elections cannot seem to catch a break. When President Biden was running for re-election, it moved the first presidential debate forward and accepted CNN’s terms, which backfired royally. Now, on the day Kamala Harris outlined her vision for an opportunity economy in a speech at Pittsburgh, the team decided to arrange an interview with Stephanie Ruhle of MSNBC. A superficial Google search would tell you that Ruhle has served as the managing editor and news anchor for Bloomberg Television and editor-at-large for Bloomberg News. Don’t get me wrong. There was nothing fundamentally wrong with the interview except a dogged focus on trying to wrongfoot the Democratic nominee on policy matters. Given the opportunity, every TV interviewer does that, which is expected of you. However, this interview was given to MSNBC, friendlier towards the Democrats. I am not privy to the terms of reference agreed in advance and will only assume that this was a part of the remit. Even though it was her first solo interview after becoming the democratic nominee, VP Harris held her own. That is not where the problem lies.

The problem lies with the distinct difference of opinion on display. Remember, the fight between the Democrats and the Republicans is not superficial. The Republicans, especially the fiscal conservative ones, believe in smaller government, less spending and tax breaks for the rich. In theory, if the rich find a business environment conducive, they will invest more, creating more jobs and, through taxes, more revenue streams for the government if taxation is absolutely necessary. In theory, this is supposed to result in a healthier economy: ergo the trickle-down effect. The Dems are more likely to lean towards a welfare state model where the state taxes the rich and actively looks after the poor and the vulnerable. This, of course, is not a rule of thumb. Remember Trump’s populist promises in 2016 and cavalier federal spending at the cost of the rising fiscal deficit?

You will notice that both these views have merit, and the jury is still out to determine which works better. Two factors complicate America’s situation. First, the federal government is supposed to be weak, and the real power of policy, at least in theory, resides with the government of each of the fifty states. Second, those who argue for a smaller federal government also want to cut regulations. This is a recipe for disaster. A government, indeed, has no job running businesses. However, it is the government’s job to introduce a regulatory framework and ensure no violations occur. If you subscribe to Adam Smith’s invisible hand theory, then you are sorely mistaken about the nature of America’s capitalism. Large American corporations use every predatory practice in the book to control the market. Price gouging and cartelisation come naturally to these businesses. As a result, compared to other liberal democracies, America’s healthcare system is in a shambles. Not convinced? Consider this: A CBS News 60 Minutes on the performance of the Federal Trade Commission (FTC) under the leadership of Lina Khan recently revealed that an Asthma inhaler that sells for $7 in France was available to American customers for $500. Why this dramatic price variance? While American companies could not manipulate prices on the generic design of the device, they added an innovation to extend their patents. A narrow strap that connects the inhaler cap to its body. Once she decided to bring disciplinary action against them, they dropped the cost to $35. If you are still not convinced, keep in mind the 2008 market crash and the fact that what eventually resulted in this was the 1999 repeal of the Glass-Steagall Act, a banking regulation introduced by Franklin Roosevelt in response to the 1929 stock market crash. So, rules are essential for such a combative market.

But Ruhle seemed already convinced that regulations and taxes drive the rich out of America, and she failed to mention this at the show’s start. Interviewers generally are supposed to keep an open mind. Otherwise, it makes the whole exercise pointless. Occasionally, a senior interviewer with rigid ideas may get away with it, provided you acknowledge your biases at the outset. However, the show soon looked like an attempted ambush because this was not done. Now, why would that be? MSNBC is undoubtedly a friendlier channel. But its parent company has no shortage of pro-Trump, pro-Bannon Manchurian candidates. I am not calling Ruhle one, even though the year she switched from Bloomberg to MSNBC is highly suspect. She joined the network in early 2016 when it played a crucial role in Trump’s victory. Also, since she hosts a show at 11 PM, a graveyard shift for hard news-related shows, perhaps she had more to prove, which is why this happened.

But despite all of this, it is difficult to blame her or MSNBC for how things unfolded. The campaign’s job is to know who is being chosen for the interview and what to expect in advance. When your team drops the ball, it is difficult to blame anyone else. I bring it up because, so far, it is a bug, not a feature. If it becomes one, it may create more problems for the campaign. Also, it is a missed opportunity because this happened when everyone was lauding the vice president’s Pittsburgh speech.

Let us also address another crucial issue causing this divide in America – the national champions versus competition debate. The argument goes like this. Since China is rising, and so are its major companies benefiting from state patronage, countries like the US, which prefer competition over large business corporation monopolies, may be unable to withstand the Chinese onslaught. With me so far? This is, of course, if you forget what China did to Alibaba and Jack Ma.

There are many problems with this argument. The first is that it is part of the same blackmailing tactics of the rich. Tax us, and we leave. Regulate us on price gouging, and we leave. Break our monopolies, and we leave. The businesses that went offshore did so because American policymakers were convinced in the past that their economy had moved past its dependence on manufacturing, and it was acceptable to let them go. This was before the 2008 crash, of course. The point of competition and wealth creation is that if a big player leaves, another replaces it.

The second problem with this premise is that most of these regulations and taxes on the rich exist only in theory. The third: In the age of tech displacement, automation and AI abolishing regulations is a risk no economy should take.

But here is the final question. China has a different political system, which may, at least in some respects, give it some advantage over America. Should America change its political system to resemble China’s? Why are you shaking your head?

Courtesy Express Tribune