Political instability also exists in US

By DAVID MOON, Moon Capital Management, LLC
April 24, 2011

According to security experts at IHS Jane’s Information Group, Somalia and Zimbabwe now regularly join Gaza and the West Bank as the least stable areas in the world. So too do Sudan, Ivory Coast, Chad and Haiti. Afghanistan is obviously on the list.

Political instability extends far beyond Egypt and Libya.

It must be pretty difficult to live in a politically unstable country, but I suppose everything is relative. In the US, military leaders don’t declare war on their own elected officials – at least not in the past 150 years - so it’s a lot better here than in Sri Lanka. But I wonder how Barack Obama would respond if a few hundred thousand people demonstrated outside the White House demanding his resignation. I don’t think George Bush would have climbed in his pickup truck and driven back to Texas. Most Americans assume that conceding to the will of the masses is the right thing to do – at least if it’s Hosni Mubarak doing the conceding.

Would we have reached the same conclusion in our own country?

Mubarak was President of Egypt for 30 years, after serving as Vice-president for six. For comparison, Barrack Obama has been in office a little over two years.

There are obviously different ways to measure a government’s stability. Just because we try to operate our country according to the by-laws in a fairly stable Constitution, actual governance practice has suffered its own form of instability.

Since 2001 there have been more than 4,000 changes to the US tax code. Last year, which was considered a “status quo” year, the code had a total of 579 changes.

That’s certainly one type of instability.

Think about the non-profit board on which you serve or the finances at your church. Consider the budget for your school’s PTA. Imagine that you are more than half way through the year and still haven’t decided on a budget.

That is instability. It is also our federal government.

I was eleven years old when Gerald Ford backed into the presidency in 1974. Following the Nixon Watergate scandal my mother told me that Ford would likely be the last Republican president ever elected in the US.

Ten years later a Republican carried 49 states in the 1984 Presidential election. His vision of tax reform included a 44 percent reduction in the top rate. His version of free market capitalism was dubbed “Reaganomics.”

Twenty-five years later Barack Obama’s version of financial reform is predicated on the fact that “at a certain point you’ve made enough money.”

That is a 180 degree change in a period half as long as Fidel Castro’s reign in Cuba. If our leaders reflect the values of those being led we have unstable values in this country.

I don’t know about you, but during the threat of a federal government shut down a couple of weeks ago, I was about ready to send everyone in Washington into exile with Mubarak.

David Moon is president of Moon Capital Management, a Knoxville-based investment management firm. This article originally appeared in the News Sentinel (Knoxville, TN).

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