‘New socialism’ won’t move America forward

In his State of the Union message, President Trump felt compelled to assert that we are not — and never will be — a socialist country. Democrats in the room smirked. Many Democrats tout platforms of “social justice,” and some proudly proclaim themselves as socialists. They call for massive income redistribution, citing America’s “immoral” economic system, and even suggest outright property seizures (“wealth taxes”) to fix social wrongs.

{mosads}Having worked as an economist in the former U.S. Department of Health, Education and Welfare in the 1970s and in the Ford White House, I’ve begun to wonder two things:

• Do contemporary Democrats think they’ve suddenly invented “social justice” and that serious politicians from both parties have not worked tirelessly to address the huge disparities involving women, minorities and the poor during the past 60 years? Can they not appreciate the tremendous progress America has made?
• Do they not understand that many of the “issues” they have “discovered” have been addressed by programs that have led to more progress than they could have imagined, and that the other “new ideas” they call for have been tried and failed, or so fully debated and tested that the clear evidence was that they would fail?

Since 1960, America has created and expanded, in Republican and Democratic administrations, the civil rights acts, programs to address a guaranteed income floor for the poor and their children (Aid to Families With Dependent Children), food for poor families (food stamps), housing for the poor (Section 8), opportunity for children in poor families (Head Start, Women Infants and Children, and busing), legal aid for the poor, urban development programs to revitalize inner cities, Title 1 and Title 9 to increase opportunity for the disadvantaged and women in education, affirmative action and EEO, and other efforts to assure fairness for women and minorities in the workforce and education, health care for the poor and the elderly (Medicare and Medicaid), and many other programs to create equal opportunity for everyone.

Over the course of the past 60 years, America has spent trillions of dollars and the human efforts of tens of millions to move the country forward on all fronts. The results are clear. Many minorities and women are millionaires, CEOs, heads of universities and other institutions, judges, members of Congress, cabinet members and leaders in every walk of life. Unemployment among women and minorities is the lowest in history — progress undreamed of 60 years ago in America or anywhere else in the world.

The “new socialists” have discovered no new problems, nor put forward any useful new ideas to move America forward. The huge progress of the past 60 years was not built on the back of a socialist, massive-redistribution economy. It was built on the back of a competitive, capitalist economy that created great wealth and quite a few billionaires while at the same time lifting a massive number of people in the United States and throughout the world out of grinding poverty.

To many, this seems like a Faustian bargain. Simply stated, when a country applies very high taxes on its wealthy citizens, or seizes their property for “redistribution,” investment dries up, business fails, tax revenues decline and everyone is, equally, poorer and miserable. In contrast, when a country respects achievement and property rights, trusts its citizens and markets to invest more wisely than the government, and keeps taxes, even for the very rich, at moderate levels, the market does better, investment increases, tax revenues increase, and there is more “fairness” to spread around than even the most angry socialist could hope for.

Do socialists not understand that the idea of “Medicare-for-all” was thoroughly studied (the National Health Insurance Experiment), debated and rejected because, in brief, it would collapse the American health care system and really be “Medicare for none.” Do socialists not understand that 70 percent tax rates were tried recently in France and led to collapsing investment, capital flight, economic collapse, and a new president? Do socialists not understand that a mini-Green New Deal of sorts was just tried in France and led to riots in the streets?

Throughout history, promoting “grievance” and promising “more free stuff” has been a tried-and-true, although highly cynical, recipe for attaining political power. “It’s free” or “It’s unfair” is a much easier political speech to give than to say “It’s complicated.” President Trump is right in the sense that America has been built on the ideal of “equal opportunity,” which would advance the entire country, rather than a pure economic “equality” that would level everyone down to equal poverty and misery.

Bottom line: After a century, the results are clear in the United States and worldwide. The American version of freedom and capitalism makes everyone better off, rich and poor. Socialism makes everyone worse off, rich and poor. Trump was right. New socialism is nonsense.

Grady Means is a writer and retired corporate strategy consultant. He was special assistant to Vice President Nelson Rockefeller for domestic policy in the Ford White House, and was an economist and policy analyst for Secretary Elliot Richardson in the former Department of Health, Education and Welfare from 1971-73.