Bernie Sanders has developed some momentum the past few weeks in his bid for the Democratic nomination. He is running to the left of heavy favorite, Hillary Clinton, and it looks like his message is resonating with the grass-roots base of the Democratic Party.
He is bringing in big crowds in New Hampshire, Iowa, and Maine.
He considers himself a Democratic-socialist, so his ideology has been what could be described as “workers’ populism.” He has a 12-step agenda where the top two items are fixing infrastructure and reversing climate change.
The rest of the agenda is about providing cradle-to-grave entitlements, nativist trade, and demonizing those who are successful and hitting them with an onerous tax policy.
Sanders believes the government solves all problems, but as we are observing with Greece, that is not a realistic path. Sanders sounds great to the left wing of the left wing, but an economics 101 course will beg to differ.
Everyone agrees that we need greater infrastructure investment in the U.S., but making it a No. 1 priority when we have a debt and jobs crisis spiraling out of control makes no sense. Infrastructure spending is done much more effectively on a local level, and large federal projects need to be paid for completely up front, after a competitive bidding process.
Claiming that the U.S. can reverse climate change through our domestic policy as the No. 2 agenda item is not only fool hearty, it’s impossible.
Even if you believe your hybrid car will have some sort of calculable positive affect on the climate, we live in a developing world. Developing countries are spewing out much more carbon then the United States through coal and outdated combustible machinery.
We spent hundreds of years developing our economy for the creature comforts we all enjoy today through the burning of fossil fuels. Wagging our fingers at poor countries to guilt them into being green is hypocritical and ineffective. The free market will pave the way for the necessary innovation to get off fossil fuels worldwide. Our current green technology doesn’t even power 10 percent of our economy.
His other agenda items play out like a Greek tragedy. He is looking for much greater union participation, increasing the minimum wage, healthcare for all, expanded safety net programs, equal pay for women, higher taxes, and punishing Wall Street.
Unions were a 20th century solution for horrible working conditions, child labor and the abuse of the working class. We now operate in a global economy. We don’t have a monopoly on goods produced, so we cannot continue paying unskilled workers extremely high wages and pension packages.
More unions mean more outsourcing. It’s unfortunate, but true.
A minimum wage increase has been a rallying cry by Sanders and the left for a while. Paying workers $15 per hour eliminates jobs through a massive wave of innovation.
Small businesses are the jobs drivers in the U.S., and increasing their labor costs dramatically will lead to less employment. Rolling back the trade agreements we have with the rest of the world will drive up the price of all goods here at home and that will hit the poor the hardest.
The big three entitlements (Social Security, Medicare, and Medicaid) are already pushing the U.S. deficit to $20 trillion at a breakneck pace, and it could be reached by the end of the Obama second term. With two-thirds of the budget already going to entitlement spending, Sanders wants to expand those programs.
He also wants to provide full healthcare for all which leads to waiting lists and rationing. It also calls to mind the cost of such an endeavor (note the failure in cost containment in Obamacare). Increasing taxes on the small businesses and successful individuals leads to less tax dollars as the wealthy pursue more tax shelters or just move overseas altogether. Greece has pursued high taxes pared with unrealistic entitlements for years which led to the perilous debt situation in which they find themselves.
The parallels between what Bernie Sanders wants for America and what has happened in Greece cannot be ignored. It’s amazing that someone would build an election platform on European socialism while those ideas in action are being proven to be foolish and arrogant.
Has he not seen the ATM lines? Cobbling together the worst, most outdated ideas for America’s future is not a campaign. It’s living in the past while the rest of the world counts down how long America has left as a superpower.
Kevin Broderick serves as a consultant for a Fortune 500 Insurer in the Employee Benefits marketplace for large employers. He received a finance degree from Providence College. For more of his reports, Go Here Now.