I’m a little disappointed that Bernie Sanders hasn’t taken my suggestion to change names to “Bernice Sanders,” identify as a woman, and capture votes from those Americans who wish to see a female president. Despite this, it is time for me to declare my (lukewarm) love for Bernie Sanders for President.
Personally I would prefer for the U.S. to have a market economy along the lines of a Singapore or Hong Kong. Government would consume less than 20 percent of GDP and provide high-quality basic services. This, however, is not what a majority of Americans want. Nor is it what Republicans are actually promising (and in any case, I don’t think that Republicans have any chance to win a national election). Thus I have not educated myself regarding the Republican candidates and don’t have an informed opinion regarding which of them, if any, might make a good President. [The popularity of Donald Trump does not signify the popularity of “Republicans”; Trump was a registered Democrat until recently and many of the ideas that he espouses, e.g., restrictions on trade to increase revenues for domestic companies and increase salaries for domestic workers, are not policies that are typically considered “Republican.” If anything, the popularity of a protectionist Democrat running as a “Republican” shows that support for a market economy is shrinking even among nominally Republican voters.]
If the U.S. cannot have a market economy, what choices do we have? Broadly I think the remaining options are Socialism and Crony Capitalism.
Americans with jobs have a visceral reaction against Socialism because they associate it with other Americans kicking back and living off their labor. Maybe it is a welfare family playing Xbox with friends in a government-provided house while serving chips purchased with food stamps. Maybe it is someone who once had sex with a working American and is now living off child support and/or alimony. These, however, are not essential elements of Socialism. In the former Soviet Union, for example, able-bodied citizens had to work. You couldn’t get paid by the government and/or a court-ordered fellow citizen for having sex, having children, or having been briefly married. You couldn’t be a stay-at-home parent. You couldn’t sit at home collecting Welfare because your skills failed to command a government-set minimum wage. In a Socialist U.S. there could well be a dramatic reduction in the share of GDP allocated to the non-working.
[Example of a conversation that wouldn’t have happened under Socialism: “My sister is thinking about becoming a midwife, but she doesn’t want to study science.”; “We could show her how to make a lot more money [under Massachusetts family law] delivering her own baby.”]
Government bureaucrats allocating resources in a Socialist economy are at least explicitly tasked with doing whatever is in the best interest of a society in the long run. This is distinct from picking winners/cronies in a Crony Capitalist economy where a company might be favored with taxpayer funds because of its connections to a politician.
Let’s consider health care. If we could cut spending on health care from 17.5 percent of the GDP down to a more typical developed country level of 10 percent (or we could dream of cutting down to a smart/rich country’s level of 4.5 percent! (see Singapore in this table)), that would enable us to increase private domestic investment by at least 50 percent (current level is 16.7 percent of GDP). This would provide a bigger boost to GDP growth than almost anything else other than perhaps providing young people with a world class education (see Smartest Kids in the World for why that probably won’t ever happen in the U.S.).
Obamacare, which Hillary Clinton supports, is classic crony capitalism. It costs a fortune. The benefits flow primarily to the health care industry. Nobody cares about the 33 million Americans who end up without insurance. If the goal is to provide health care to residents of the U.S., this is perhaps the least effective and most expensive system that one could possibly design. If you add in the costs of Americans spending time figuring out which policy to buy, figuring out why a claim wasn’t paid, talking to insurers, etc. and the medical billing sub-industry’s costs, it becomes an even more ludicrous self-inflicted wound to our economy.
Bernie, on the other hand, presents the only credible alternative to the crony capitalist world of Obamacare, Medicare, Medicaid, etc.: socialized medicine to at least a basic standard. (I proposed a slight twist on this in 2009.) At Beaver Creek about half the adults with enough money, leisure time, and vitality to spend a week skiing were in the health care industry, e.g., as doctors, nurses, technicians, or somewhere in admin/ownership/investment (I didn’t meet anyone from a health insurer, though! If they are getting crazy rich from the mountains of paperwork they aren’t spending their dough at Beaver Creek). They all spoke out against Bernie, fearing a dramatic reduction in their incomes should his single-payer system be enacted by Congress.
This alone is, to my mind, sufficient reason to vote for Bernie. Health care is the biggest problem with the U.S. economy and Bernie is the only one who is willing to stand up and say “Stop the madness.”
What about Bernie’s plan for higher tax rates? We’re voting for a president, not a dictator. He would have to make his case for European-circa-1970s tax rates to Congress and they could decide whether to attempt to muddle through with the current system or jump on the “full Socialism” wagon.
Note that I don’t think Bernie’s higher tax rates would product higher tax revenue. My theory is that the combination of local, state, and federal governments is already squeezing as much juice out of the U.S. economy as can be squeezed. Bernie assumes that people won’t respond to economic incentives by changing their behavior. Virtually every paper at the 2015 American Economic Association meeting found the opposite, as did the research cited in The Redistribution Recession. As in the old days of high nominal tax rates, sometimes the behavior change is an elaborate tax shelter (it will be turbocharged in our era due to globalization). Most Americans will respond by working less, though, just as Europeans did in response to their higher tax rates.
What if America became a society like 1970s Sweden or England where it didn’t make sense to work especially hard? That would be a materially poorer society than what we’d have given a market economy, but we’ve already chosen to cut GDP growth in favor of more bureaucracy, regulation, and government (see this CIA list of countries ranked by GDP per capita). But money isn’t everything. If you go to the Vail Valley, of which Beaver Creek is part, you’ll find a large number of Americans who are healthy enough to work, and often highly skilled, but who choose not to work. Some of them saved enough during their working years to have a fancy house but most live in modest two-bedroom condos. All of them enjoy the outdoors, spending time with friends and family, etc. It is a lot easier to build and maintain friendships there than in a place where people work hard. Good luck asking someone in downtown Boston or New York to take the day off to go hiking or skiing! If Bernie’s proposed tax rates get approved then the U.S. as a whole becomes more like the Vail Valley. People will earn enough to get by and spend the rest of their time on activities that research shows are better contributors to happiness than additional income. (Citizens of the Former Soviety Union spent a lot of time with friends, family, literature, etc., since it wasn’t practical to get ahead by working 60-hour weeks.)
Bernie as President means an open debate about what kind of economy and society we want. Hillary as President means back-room deals that quietly siphon off more of America’s GDP into the pockets of cronies.
What if Bernie + Congress = deadlock? That would mean we’d be living under more or less the same federal laws and regulations that we have now. Deadlock means millions of government workers collecting taxes, distributing handouts, and running programs more or less as they have been doing for the past few decades. Is that an emergency? Only for people who don’t think we have enough churn in laws and regulations! Deadlock might produce extra economic growth because American business owners, for the first time in memory, would have some assurance regarding the future legal and regulatory environment.
In summary, given that Republicans are so far out of step with the American majority that they can’t win a national election, and that the only other Democrat candidate is a torch-bearer for Crony Capitalism, I have concluded that President Sanders is our best realistic hope in November.
[Note that I recognize that the thinking of the American voter is typically 180 degrees opposite to mine. Thus the fact that I would choose Bernie over Hillary is to me a confirmation of my 2015 prediction that Hillary was assured of victory. I have certainly seen this among my liberal Facebook friends. Folks who were two years ago demanding a single-payer health care system and for the U.S. to emulate the highest-tax European welfare states are now saying that single-payer can’t work and that the European welfare states are horrifying examples of slow GDP growth. Everything that Bernie advocates is stuff that they were themselves advocating a couple of years ago, but now they’ve changed their mind and are advocating whatever policies Hillary proposes.]
- “Charles Koch: This is the one issue where Bernie Sanders is right” (the hated rich bastard says “[Bernie] thinks many corporations seek and benefit from corporate welfare while ordinary citizens are denied opportunities and a level playing field. I agree with him. Democrats and Republicans have too often favored policies and regulations that pick winners and losers. This helps perpetuate a cycle of control, dependency, cronyism and poverty in the United States. … The tax code alone contains $1.5 trillion in exemptions and special-interest carve-outs. Anti-competitive regulations cost businesses an additional $1.9 trillion every year. Perversely, this regulatory burden falls hardest on small companies, innovators and the poor, while benefitting many large companies like ours. This unfairly benefits established firms and penalizes new entrants, contributing to a two-tiered society. … That’s why Koch Industries opposes all forms of corporate welfare — even those that benefit us. (The government’s ethanol mandate is a good example. We oppose that mandate, even though we are the fifth-largest ethanol producer in the United States.)”)