I have criticized Democrats for failing to understand their 2016 loss to Donald Trump. Rather than face their own shortcomings in the eyes of their voters, they demonized them as deplorables and refused to acknowledge the legitimacy of the election, blaming Russian collusion and FOX News manipulation. The real answer lies in two dynamics. The first is an anti-elite populism which both Donald Trump and Bernie Sanders access. The second is an uncontrolled primary where the center of the party is dispersed among too many candidates and the extreme element is left unchallenged able to secure a plurality and the nomination. Extremism is bold and attractive; marginal changes are boring. Politicians are now marketed like media products.
In a political system managing many competing interests, big changes are rare and difficult. Reform is seductive; it compares the best intentions of an ideal with the reality of the faults and imperfections of the status quo. Somehow Bernie’s supporters think his socialism is something new because they modify it with pleasant adjectives like ‘democratic’ and can thus magically ignore its history of dismal failure.
History is not always a movement of big ideas or a battle between clearly defined good and evil. Problems more often require tradeoffs; rejecting a good idea for a better idea or pursuing a bad idea to avert a worse outcome. Every crisis is not an existential threat, every consideration of subsidiarity is not a return to Jim Crow, and every exercise of executive authority is not the second coming of Hitler.
So why do we have this interest in socialism and the cavalier dismissal of its sordid past; the delusion that this time is different?
The 2008/9 economic collapse may be the top reason. Not only was it displayed as a failure of capitalism but the bailout of big banks while small banks and homeowners suffered played to the cronyism and class warfare that has become standard rhetoric of the left. Neither party wanted to bailout the large companies, but a bad solution was preferable to a worse outcome. What was too often unheard was the role played by misguided regulations such as Basel risk standards, mark to market rules, poor lending standards mandated by regulators and the outsized role of Fannie Mae which was supervised by Congress who ignored the warning signals presented to them by its auditors. Hubris and greed has been with us since the Garden of Eden, but the toxic soil of this collapse was enriched with government fertilizer fed by government gardeners who now accept none of the responsibility. Is the answer to increase the government’s control over the economy?
Student debt motivates many young Bernie supporters. This system is a travesty; hoisting onerous student loans on our youngest, pushing expensive degrees often with exaggerated benefits. The cost of higher education skyrocketed, propelled by these loans which have been nationalized. Demands for loan forgiveness and free college sounds seductive, but where does this money come from? Should the loans for a practicing attorney be forgiven? Should a trade school electrician or welder be forced to subsidize an art history major? What is the real or social cost of relieving a select group from their responsibilities?
Much of our transfer payments do not go from rich to poor, but from one middle class group to another better politically connected middle class group. The areas of our economy with the highest inflation- health care, higher education, and housing – are the areas most controlled by government regulations. Do you think this is a coincidence?
When you stimulate demand though various subsidies and restrict supply through regulations and protections the cost will rise; any first-year economics student understands this. Is the answer to the dislocations caused by government regulation to increase the regulatory power of the government?
There is a role for regulation of a complex economy, but the rules should be clear, direct and transparent. Markets are imperfect but they deliver information that consumers use to adjust their decisions. Socialism blocks this flow of information and thus causes a much greater distortion and misallocation of resources. This is why socialist economies stagnate and fail.
Capitalism becomes the basket where you place all your gripes about our economy. Capitalism is just a form of political freedom and like all rights and freedoms they’re not unrestricted and unregulated. There are good regulations and bad regulations. Good regulations support the proper functions of liberty and free markets; bad regulations undermine the institutions that support liberty and markets. If many of our problems come from bad regulations and bad government policy, then how is handing more power that source going to help? Progressivism grew to protect us from special interests, but what happens when the special interest we need to fear the most is the one that seeks to protect us?
Before you fall for the siren song of the reformer, who professes to have all the solutions to your fears and anxieties, you may want to consider if he is more likely a part of the problem.