Bernienomics

The danger of Bernienomics is that Bernie Sanders opened the door of respectability for socialism. In the past calling yourself a “socialist” was political suicide. His “democratic socialism” is not harmless. There is no place in the world where socialism, democratic or otherwise, has not created poverty and, ultimately, repression.

Bernienomics, or Bernie Sanders’ “democratic socialism”, is economics born of ignorance. That’s because socialism is a failed system based on ignorance of the laws of economics. It is almost criminal neglect to sit by and not say this in light of Bernie’s growing popularity.

There is no place in the world where socialism has not created poverty, repression, and, ultimately, dictatorship. This is a statement of fact, not an ad hominem attack on socialists.

Yet millions of Americans are drawn to socialism, especially many Millennials who see capitalism as a failed system. A 2016 Gallup poll showed that 55% of Millennials (those born between 1981 and 1996) think socialism is a good idea. Another poll said that only 16% of Millennials could define what socialism is.

Senator Bernie Sanders calls himself a “democratic socialist” to try to distinguish his version of socialism from “bad socialism”. He had quite a ride during the last presidential election with millions of followers sharing his passion for free stuff for all.

Bernie’s version of democratic socialism is not “true” socialism, but socialism-lite welfare statism. You may recall that Bernie called for universal health care, free college, free child care, massive government infrastructure spending (jobs, jobs, jobs), greater regulation of business (capitalists), a $15 minimum “living wage”, and higher taxes on “billionaires” and corporations to pay for it. If you are part of some leftist special interest, Bernie is there for you.

Yay, free stuff!

Free stuff is what can get you elected and Bernie came close to being the Democratic presidential standard bearer in the 2016 election thanks to enthusiastic Millennials. That is a disturbing trend.

I would normally shrug this off as an affect of age. As British prime minister Benjamin Disraeli (1804-1881) is reputed to have said: “A man who is not a Liberal at sixteen has no heart; a man who is not a Conservative at sixty has no head.” Which is another way of saying we are passionate but ignorant when we are young; life’s experiences grant us wisdom with age.

The danger of the Bernie thing is that he opened the door of respectability for socialism. In the past calling yourself a “socialist” was political suicide. Better to use the newspeak term “progressive”.

“Gosh, if socialism means free stuff, it can’t be all that bad.”

This is significant because ideologies in America have hardened. The Pew Research Center in a June, 2017 survey found that two-thirds of Americans are ideologically more Right wing or Left wing than before when half of us held more mixed political values. “The median Republican is now more conservative than 97% of Democrats, and the median Democrat is more liberal than 95% of Republicans.” Democrats’ disapproval of Trump is the highest (92%) of any president in the past 60 years. It’s a fascinating study well worth looking at.

This means that Democrats are more “liberal” than they have been in the past 20+ years; likewise Republicans are more “conservative”.

What does this mean? Bernie, or, more likely, Progressive Senator Elizabeth Warren, has a better shot at getting the Democratic presidential nomination in 2020. Ditto Progressives in local races.

For those of you who think Bernie’s view of how things ought to work are harmless, it is revealing to know that he thought Venezuela’s socialist dictator Hugo Chavez was on the right track:

These days, the American dream is more apt to be realized in South America, in places such as Ecuador, Venezuela and Argentina, where incomes are actually more equal today than they are in the land of Horatio Alger.

Well, Bernie wasn’t entirely wrong about Venezuela—everyone is equally poor now.

Those curious about “democratic socialism” should read up on The Bolivarian Republic of Venezuela. Instead of Chavez’s socialist workers paradise, the economy has collapsed, people are starving, there is almost no medical care or medicine, goods have disappeared from store shelves, the corrupt Maduro government holds power through force and intimidation, and people are leaving the country.

Before you say that this is not “true socialism”, Venezuela is socialism done right. Chavez and Maduro followed the socialist playbook, and, like all socialist countries in the world, it devolved into poverty and authoritarian rule. If it had worked then Soviet Russia, China, Cuba, India, and North Korea would have been workers paradises.

Bernie’s new favorite country is Sweden. In Sweden they have a lot of free stuff. Bernie says that Sweden’s policies resulted in a prosperous, healthy, and happy country. We should emulate their policies, he says. It’s a nice thought but it’s a myth.

What most people don’t realize is that prior to becoming a welfare state in the 1960s, Sweden was a prosperous capitalist country. From 1890 to 1960 they had a system of free market capitalism which did what capitalism does best: create prosperity for all. And then a new socialist government implemented “reforms”: the highest tax rate in the world (government consumed 50% of GDP), extravagant welfare programs, free health care, generous old age pensions, free child care, long vacations.

Then, no surprise, the economy declined. Even the health of Swedes (longevity) declined. In the 1990s things got so bad that market-oriented reformers were voted in and they started the process to transform and deregulate their economy: reduce taxes, reduce welfare benefits, introduce privatization of some government services, reduce spending and debt, and reduce the level of government regulation of labor benefits.

As expected, the economy began to grow again.

Contrary to what Bernie believes, the welfare state did not create prosperity. The data proves that most of Sweden’s economic growth and wealth creation occurred before the welfare state was implemented. The welfare state made them poorer but market-based reforms got them back on the road to prosperity.

Capitalism and socialist welfarism do not sit well together. Almost every welfare state has faced the same dilemma and only deregulation and market-based solutions saved them. Thatcher did it for Britain; Macron is trying to do it for France. The Greeks ignored the lesson and look at them.

In some ways you can’t blame these hapless Millennials for their ardor for free stuff. Most learned nothing in school and college. Had they taken an economics course maybe they would have avoided the liberal/Progressive groupthink that is endemic among college professors.

A recent study shows that of the top 51 liberal arts colleges (5,197 PhD track professors), Democrats on average outnumber Republicans 12:1. In 39% of the colleges there were no Republicans. The data show a much higher ratio in the social sciences than STEM departments, and the highest in interdisciplinary studies (gender, race, ethnic studies), communications, and anthropology departments. The top three Democrat colleges: Wellesley (136:1), Williams (132:1), and Swarthmore (120:1). This and other studies show a clear liberal bias.

Perhaps it is not news that colleges are liberal and that young people are radical. But the rise of Bernienomics is a growing trend. With the Republican party ideologically lost and leaderless, there is no intellectual opposition from the party of Trump. 2020 will be a watershed election for America and I fear free stuff may win the day.