What Sanders and Warren Don’t Understand. How Democrats Can Dominate the 2020 Elections.
What Democrats, Warren and Sanders in particular, don’t understand is what the very wealthy do with their money. Whatever they do with their money is good for the economy, so long as they don’t invest in wasteful tax shelters (which should be eliminated)! If they spend on consumption, they provide jobs. If they spend on investments, they provide jobs and economic growth, they finance research and development, they finance venture capital start-ups, corporate growth, and bank lending. And by buying Treasury bonds and state and local bonds, they finance public spending. Increase taxes on the rich and you end up with less investment, crucial to economic growth. Bashing the wealthy is the obsession of the economically illiterate. It’s not that the wealthy are taking away from the poor. The poor are poor because of a deficient public school education and a deficient economic policy which has not prevented repeated long recessions and high unemployment. “Taxing the hell out of the rich” is not the solution. First, taking all their money will not eliminate poverty. Second, once they’ve been wiped out by high taxes, there are no more wealthy to tax! Third, the rich are responsible for most of the nation’s economic growth. Eliminate them, and you have nation-side poverty. Nor is the solution communism: it makes everyone poor, as history has shown.
No society has ever prospered without the wealthy (who earn their wealth honestly in a free market/private enterprise economy). Just to name a few, consider the enormous contributions to our economy by billionaires such as Jeff Bezos of Amazon, a service of great utility and provider of hundreds of thousands of jobs and opportunities for the self-employed. Many object that Amazon didn’t pay taxes last year, but that was due to depreciation tax deductions related to huge investments to grow the company. What about the enormous contributions of Bill Gates, the founder of Microsoft, in terms of speeding technological applications and providing new employment, directly and indirectly, apart from all the extremely valuable charitable activities he has been involved with? How about Elon Musk, the founder of Tesla, who has created many jobs and spearheaded the development of electric vehicles and is leading in space technology? How about the late Steve Jobs, the founder of Apple, a leading, innovative technology company delighting hundreds of millions of consumers worldwide and employing hundreds of thousands? What about Sergei Brin and Larry Page, the founders of Google, developing a critically important technological advance benefiting society, and employing hundreds of thousands? What about Jensen Huang of Nvidia, a world leader in graphics and AI chips? What about Marc Benioff of Salesforce.com, a pioneer and leader in cloud computing services?
How many great technological innovations and great companies have come from socialist or communist nations? None. How many jobs have Elizabeth Warren and Bernie Sanders created? None. How much have they contributed to the American economy? To technological advances? Nothing! And they want to reduce the money earned by the wealthy, those who create and provide desirable products and services, those who provide millions of jobs, those who provide the capital for indispensable investment, those who lead the world in technological innovation? Did government create Amazon, Microsoft, Tesla, Google, or Apple? Where would we be without them, and all the other companies created by people who are now billionaires? Sanders has an appalling communist mindset and is an economic ignoramus to say billionaires should not exist. Meanwhile, Harvard Law Professor Warren’s wealth tax is unconstitutional, a violation of the 5th Amendment’s no taking clause (the very reason there are no federal real estate taxes!).
To win the 2020 elections, Democrats must absolutely not be the party of class warfare and of raising taxes, especially not long-term capital gains taxes. Those should be eliminated since unfair (v. sellers of their primary homes, and inflation) and economically counter-productive by reducing investment and consumption. Nor should Democrats be the party obsessed with budget deficits due to fallacious economic orthodoxy. Rather, Democrats should understand how to use QE financing of budget deficits for necessary infrastructure, education, and health care spending, in order to avoid counterproductive tax increases on anybody, including the very wealthy. And they should advocate QE-financed tax rebates as the standard economic stimulus tool to always nip recessions in the bud and prevent high unemployment. If the Democrats renounce tax increases and advocate the elimination of long-term capital gains taxes, they will win over many Republicans and easily dominate the coming elections, and have an economic boom.
The Democrats must stop promoting class warfare. They must stop saying they are the party of unions, the party of the working class. They must stop saying, falsely, that unions built the middle class and built America, to the exclusion of entrepreneurs who created and successfully managed businesses, creating the great majority of America’s jobs. Unions have created no jobs and no companies. Unions have actually destroyed many jobs, putting many companies in difficulty. That’s why union membership has shriveled. Democrats must be the party of all Americans. Democrats must stop talking about income inequality as a problem of capitalism which should be addressed by implementing socialism. It’s not income inequality that matters, it’s low incomes that matter. Since low incomes are due to a low level of education, the sustainable solution is to ensure that every American gets a truly excellent education. The Democrats must focus on improving public school education, while financially assisting low income Americans when necessary, and stop disparaging capitalism. Democrats must realize once and for all that poverty and low incomes are due to a low level of education and poorly devised social programs, not to capitalism.
The Democrats should focus on greatly reducing poverty, mental illness, violence of all sorts including gun violence, abuse, addiction, and discrimination of all sorts including racism, through vastly improved public school education. That requires adopting an enlightened public school curriculum (including 1) ethics; 2) logic/critical thinking; 3) 20thCentury history in great detail; 4) the Universal Declaration of Human Rights along with the history of human rights violations; 5) economics and investing; 6) history of art, architecture, and design; 7) history of music; 8) introductory law; 9) comparative religion; 10) the major mistakes in economic, social, and foreign policy over the past 100 years; and 11) psychology, accompanied by “group therapy” and “good parenting” classes, with individual attention for students in need. An enlightened public school curriculum is an absolute necessity though few people seem to realize it. We must admit that all our social problems are due to a low level of education, hence the solution is greatly improved public school education, along with individual tutoring and extra study hall/homework for students having academic difficulty in order to prevent them from falling behind and dropping out.
If the Democrats’ priority is truly to win the 2020 presidential election and get rid of Donald Trump, a serious danger to national security and a national disgrace, they must have a practical, enlightened platform which appeals to bothDemocrats (centrists and leftists) and Republicans. That can be achieved with logic and just a little open-mindedness focusing on mutually desired outcomes, even on divisive issues such as gun control, abortion, climate change, student loans, and the asylum crisis. The right solutions to our problems are win-win solutions, not solutions favoring one category over another. Such a platform is the way to real unity, the only way to win the elections. Divided Democrats (i.e., socialists and non-socialists) and infuriated Republicans would lead to Trump’s reelection.
© Edward Sonnino 2020
March 5, 2020
