As Democratic primary voters prepare to choose between the socialist wing (Bernie Sanders/Elizabeth Warren) and the socialist-lite wing (Pete Buttigieg etc.), it is a good time to consider how far left the center of gravity has moved in the Democratic Party.
In fact, it is worth appreciating how successful the Warren/Sanders wing of the Democratic Party has been in pulling the entire field to the left. This post-2016 shift is radical, is not transitory, and is incredibly relevant to the state of national politics. And regardless of who wins the 2020 presidential general election, it is here to stay.
In my book, “Elizabeth Warren: How Her Presidency Would Destroy the Middle Class and the American Dream,” I document the unfathomable reliance on federal government her policy portfolio advocates.
From a virtual takeover of the banking system, disintermediating and marginalizing community and local banks at every opportunity, to a radicalization of federal energy policy, stripping America of its achievements in oil and gas independence, Warren (and Sanders) do not merely use rhetoric to pick at “Wall Street” and “the fossil fuel industry” (no strangers to leftist antagonization).
They propose a policy regime that puts Washington D.C. (specifically, the executive branch of the federal government) and unprecedented levels of power and control over finance, energy, healthcare, education, and even technology.
A fully-implemented Warren/Sanders America would be unrecognizable not just to conservatives and moderates, but even to the Obama era progressives who now seem positively moderate by comparison.
At the height of President Barack Obama’s popularity and political leverage, the idea of blanket student loan forgiveness was unfathomable. In fact, Obama passed legislation that allowed for easier loan forbearance in the event of documented financial hardship. Never was the idea of gainfully employed people who voluntarily took student debt (and lived off of it) having their debt wholesale wiped away (i.e. paid off by working taxpayers who themselves paid their student debt obligations) even considered.
At the height of Obama era popularity and political leverage, he had vast options to widen the investment tax burdens on Americans. Both dividend and capital gain taxation were set to revert to pre-Bush tax levels with no vote from Congress even required!
Instead, the Obama administration sought and achieved permanent relief from higher investment taxation, and allowed capital formation to be a major priority in their agenda. The new Democratic Party is not merely suggesting pre-Bush level investment taxation, but Draconian escalations that in some cases exceed 50% tax on capital investment.
This growth-stunting policy agenda is tame in comparison to the various “wealth tax” initiatives that seeks to provide annual burdens on the ownership of a family farm or private business, above and beyond the income taxes already paid, above and beyond the investment taxes paid from the fruits thereof, and yes, even in advance of the eventual estate taxes levied at one’s passing. These quadruple taxes would make socialist European countries cringe, and in fact, have made them cringe – resulting in a complete purge of these abusive tax ideas from European society!
Class warfare and envy are not new in the Democratic Party either, but again, traditional rhetoric and sloganeering is now being met with dangerous policy implementation. The suffocation being threatened upon America’s financial markets and private investment industry is a sight to behold. While the term “private equity” may invite demonization for the less informed, the millions of jobs saved and created by such a vital innovation will not be amused if this new perspective is allowed to prevail.
Clinton and Obama regimes recognized the net good done in American finance by strategic and capital partners. The new regime is seeking the wholesale elimination of capital markets support of American business, the result being a strangling of job creation, productivity improvements, and economic growth. The few companies that have not survived interventions by private equity companies would quickly become a graveyard of American businesses, piled deep and wide as the unintended and intended consequences of these Marxian regulations did their damage.
We are accustomed to criticizing policy mistakes and areas of disagreement by attacking their cost, and indeed the new Democratic Party is piling up social program mandates by the trillions (with a “T) … Medicare-for-All, the Green New Deal, universal pre-school, free public college and university, student loan forgiveness, enhanced social security benefits, and the list goes on and on – these are not marginal or mere “billion dollar” mistakes. They amount to tens of trillions of dollars of unpaid social programs, by their own measurements.
And yet, the unfunded fiscal insanity of it all is not the worst part. Indeed, part of the reason such extremism can be proposed without even raising a ruckus is because both parties are so numb to appalling spending irresponsibility.
Rather than merely focusing on the unfathomable price tag of new progressive leftism, we ought to focus on what the entire package actually means. It means the death of the American dream, and the final act in suffocating the middle class out of the peace and prosperity that so many have found. It re-defines the American experiment to something unrecognizable by our founders, that replaces human ingenuity and tenacity with a reliance on a disinterested nanny-state. It codifies a culture of grievance and victimhood. And it bakes into the spirituality of the culture a belief that we are either oppressed, or oppressors. Marx would be proud.
Conservatives need a Democratic Party that shifts back towards the left. Liberals will always be left-of-center, and that will always differentiate them from the American Right. But these days, we should be less worried about what separates progressives from conservatives, and more worried about what separates them from the liberalism of Obama and Clinton.
David L. Bahnsen is the founder, Managing Partner, and Chief Investment Officer of The Bahnsen Group, a bi-coastal private wealth management group with offices in Newport Beach, CA and New York City, managing over $1.5 billion in client assets.
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