Bernie Tells a Whopper About China

Oh, I try to stay clear of politics these days. You know, yeah.

But sometimes, someone makes such an outrageous claim that I can’t help myself from chiming in. This post is courtesy of Bernie Sanders, who said the following in an interview recently on CNN:

“China is an authoritarian country … but can anyone deny, I mean the facts are clear, that they have taken more people out of poverty than any country in history. Why you criticize when I say that — that’s the truth. So that is the fact. End of discussion.”

First, the fact. Yes, China has taken more people out of poverty than any country in history.

Second, the non-fact. End of discussion. Nope. Not in a million years. Not until Bernie answers this one question: How did China relieve its destitution and poverty?

Answer: capitalism

So you see, Bernie has just disproved the over-arching thesis of everything he says about economics. He is crediting authoritarianism (and socialism??) for China’s growth. Major whooper alert.

Here are the other facts that Bernie has eschewed.

During the years that socialist command economics were under full-force in China, how many people were brought out of poverty? That’s the wrong question. How many people died because of their oppressive policies. Uncountable.

From Mao’s take-over in 1949 until the wakening years after his death thirty years later, China was severely impoverished. GDP per capita was among the lowest in the world. They were isolated from the world economy. The great famine of 1958-1961 killed millions. Their army was in tatters. When they attacked northern Vietnam in January of 1979 (hey, weren’t the Vietnamese their socialist comrades!), they were embarrassingly rebuffed by their southern neighbors who were actually poorer than they were!

So what happened? What changed? How is it that the impoverished China of the early 1980s has grown into an economic powerhouse?

I have to say it again: capitalism.

Economic reforms loosened the strings on individual achievements which were muzzled under the socialist command economy. And while the authoritative communist regime continued their hold onto power with a death grip (think Tienanmen Square 1989), the new economic freedoms allowed unprecedented growth and unprecedented foreign investment.  In other words, capitalism started doing its thing.

Let me leave you with an example from Vietnam, who following China’s lead, also implemented market reforms in the 1980s that began to raise the Vietnamese out of poverty as well.

In 1984, there was famine in parts of Vietnam. Their lush farm lands couldn’t even feed their own people. They had to import low-quality grains from places like Bulgaria. I’ve had many Vietnamese families tell me about those years living under a socialist command economy. The common Vietnamese word they use is “kho” – meaning miserable. And then the market reforms hit. The government began allowing farmers to exceed their government quotas of rice in order to sell the excess or plant other cash crops. What happened when farmers began to have incentive to grow more knowing that they would actually benefit from it? Production soared. Within a few short years of allowing people to pursue their own personal interests, Vietnam went from not being able to feed their own people to being one of the largest rice exporters in the world.

The transformation was remarkable. And yes, it all happened under an authoritarian communist regime.

But it’s not the regime that gets the credit, it’s the individuals (and also government entities) who took a risk to invest money, to solicit investment, to plant extra, to think big, to dream for a better life for their families. There was profit to be had by the people. And they did it. They used the mighty tool called capitalism, even within a tightly controlled economy, to better their lives.

So let’s make this very clear: socialism didn’t build China’s wealth. Not by a long shot.  Socialism doesn’t pull anyone out of poverty. It just holds back growth potential. Imagine where China would be today if Mao allowed entrepreneurship back as early as 1949?

So, Bernie, your China example is just disproving your point about capitalism.

Life, liberty, and the pursuit of happiness. China has been experiencing their own brand of this for the past thirty years, no thanks to socialism.

Are older people smarter?

Don’t you find it fascinating that Bernie Sanders’ core support is from the under 30 demographic?

Why is that?

I’ve thought a lot about this lately. Is it because they like his rhetoric? “We’ve been screwed by the large corporations!” “They’ve made the playing field unfair for this generation.”

Is it because they have had fewer life experiences? Will these same people buy into the Sanders’ philosophy after 20 more years?

Is it because they can’t get a job, so the prospect of paying exorbitant taxes seems remote or even alien to them?

What makes the older people in America cast aside Sanders’ message more readily?

I don’t really have any answers to this, but I do find it quite interesting. It could be that the label “socialist” has a completely different meaning to the older generation than the younger. Socialism for anyone over 40 brings back images of the Soviet Union, Tienanmen Square, Vietnam, and a host of other visuals which aren’t easily removed from one’s psyche.

For an unemployed college age kid, Sanders’ message certainly does resonate. Free college. Why should you have to pay such exorbitant fees while many get rich off the scheme? I’ve put one kid through college and have another one in college. I’m all too familiar with the ridiculous cost of higher education.

What about healthcare? Who doesn’t think the US healthcare system is broken? The fees are ridiculous, especially after comparing the coverage and care and price I receive in Malaysia. Great, fast service, high quality care, at a fraction of the cost. So when Sanders’ talks about giving everyone healthcare run by the government, it sound appealing. But really, when’s the last time the government ran a program that large efficiently and responsibly? And really, for 320 million people? Really? You actually think the government could pull this off? They can’t even give our vets proper care.

And what about the fat-cat Wall Street executives who seem to be Sanders’ scapegoat for everything? They are surely an easy target. They are living large and have enjoyed a cozy relationship with government and political entities for as long as … well … as long as there has been governments, I suppose. It’s easy to wave your finger and yell “$15 minimum wage” when you’ve never run a business. It’s easy to accuse the rich of rigging the system when you can’t find a job. I get it.

But here’s where I get off the circus ride. No one owes you anything. America was founded on the ideal of freedom and the pursuit of happiness. I don’t begrudge anyone of any millions of dollars that they have earned legally. (If, by chance, they’ve earned it illegally, by all means go after them.) But if they’ve stayed within the law, tip your cap to their ingenuity and move on. We have to create our own happiness. We have to live our lives for ourselves, and we can’t rely on any big brother to swoop in and prop us up. We have to embrace our freedom, cherish it, live for it, protect it, and never let any politician try to diminish it.

So young people, you absolutely have the right to believe what you want and support any political candidate of your choosing. That’s the American way. At least until it isn’t.

Bernie Sanders has a big problem with something. And so do I.

I’ve never met Bernie Sanders. He seems like a nice guy. He seems sincere and consistent in what he has believed in all of these years. I have a friend in Vermont who says nice things about him. I believe her.

But over the course of this presidential campaign season, as I listened closely to what he was saying, I realized that I could never vote for Bernie Sanders for president. The reason? I just flat-out disagree with him.

I’ll start with this video clip of one of his interviews. This, in a nutshell, illustrates one of the more poignant reasons why I could never be a Sanders supporter.

Sanders Video

Now, if you didn’t watch the video, that’s okay. Let me briefly explain. Hillary Clinton has been receiving some flack lately because of the millions of dollars she’s pulled in over the past couple of years in speaking fees — hundreds of thousands of dollars for a one hour speech. Her defense for accepting such an outrageous amount was, “They offered that much.” Sanders, in the video, says how he has a real problem with someone accepting $200,000 (or more) from an hours worth of work.

That is why I couldn’t ever vote for Sanders.

Still not clear?

Let me explain by using a situation that came up in my American Government class quite a few years ago. I had one student give a speech based on an article that she had read, and her basic premise is that sports stars should not receive such high salaries because “It’s only a game”, “It’s not ultimately important”, and “There are other people in the world who could use that money more than them.”

At the end of the speech, I opened it up for questions, and I was eager to ask one of my own. I asked:

“So who should get it?”

“What?”

“Who should get the money? You said that sports stars shouldn’t be paid that much. So if they don’t get the money, who should?”

She wasn’t sure how to respond or, perhaps, what I was getting at.

I told her to take a sport, any sport. I chose baseball because that’s what I do. I asked her to think about the revenue streams in baseball. You have ticket sales, concessions, media contracts, multi-media rights, memorabilia, and a host of other ways for any particular club to earn money. When all of that money is added together, it becomes a staggering amount of cash – billions of dollars created by fans who want to see the entertainment of baseball. It’s the same in every other professional sport. So there are some 800 players who generate billions of dollars worth of entertainment. All of it is taxed by the government, so they get their share, but what to do with the rest. If, as my student contended, the athletes themselves shouldn’t get the money, then who should? The owners? I’m sure the owners would be very happy to follow through on this student’s premise that the players are overpaid. They’d be happy to take the excess and pocket it because that’s the only other option: there’s the players and the owners. They create all of that revenue. They offer a product that the public wants. Then they use the revenue to live very well – yes – extremely well – well above the average Joe who works nine to five. They earned the money. The public paid for it. The government got their tax revenue. The people were entertained. Everyone is happy.

Is it fair? That’s not the right question to ask. It has nothing to do with fairness. Or maybe it does. Wouldn’t it be unfair for the owners and players not to get the money that they’ve created? In fact, there is only one other option in this scenario: Government intervention.

What does all of this have to do with Sanders? Plenty. What Sanders is saying is that there should be a limit on success. It’s possible to have too much success (though what is too much success in Sander’s mind is unclear. Is 100,000 per speech too much? 50,000? 10,000?). And even those who earned their success should be forced by the government to give up some of their success. He’s saying it’s a shame that private corporations use their privately earned money to lure top speakers to their events.

The only way you could stop a sports star from earning millions is for the government to stick their neck into a privately funded organization and tax them to death.

Likewise, the only way you could stop a corporation from paying six figures for a one-hour speech is for the government to step in and regulate how much a private corporation can spend at a private function.

These are dangerous economic thoughts.

So much has been said lately about the gentleness of Democratic Socialism compared to the Socialism we’ve seen in China or Vietnam. But when presidential candidates are spouting the exact same line of criticisms toward capitalistic endeavors that you would have heard during the Great Proletariat Cultural Revolution, the real desires of Democratic Socialism are finally unmasked. The philosophical underpinnings of his positions are very clear.

I don’t want a president who wants to put a limit on success. I want a president who wants success for everyone, from the poor to the billionaire. And I certainly don’t want a president who tells private corporations how much success they can achieve because if they don’t find fertile business grounds under their own two feet, they’ll look for the greener grass overseas. And that’s not going to help anyone.

Let me get back to Hillary for one final thought. When Hillary was asked why she accepted so much for giving a speech, she responded: “That’s what they offered.” Good for her.

The company sees value in having her speak.

The company earned that money legally, so they can do what they want with it.

She could have accepted less, but why? If she didn’t receive it, the company would have spent it elsewhere to try to build value into their corporate vision, just like that of an owner of a sports team.

So Bernie and I see things differently. I do not have a problem with someone receiving $200,000 for a speech. I’d even probably give one myself if asked.

What is Democratic Socialism?

What is Democratic Socialism?

This is a question which has never been more pertinent in a US presidential election cycle with the prominence of democratic socialist candidate Bernie Sanders, enjoying an unprecedented look as the Democratic Party nomination. It is also worth noting that the front runner Democratic candidate, Hillary Clinton, has done little to distance herself from this “Democratic Socialism” label. So in order for the American public to make an informed choice, this term needs to be defined in a specific way.

Now, if Facebook memes are your main source of political information, you might start to get the impression that democratic socialism is a calmer and wiser version of the socialism which decimated the former Soviet Union, China, Vietnam, and any other society which tried a centrally planned economy. In a way, that’s true, but you might also get the impression (if you use Occupy Democrats as your guide) that democratic socialism is not a strange concept at all to America and that America has used democratic socialistic ideas many times during our existence. At best this sentence is misleading if not an outright falsehood.

Let’s start with a definition. Democratic Socialism (or Multi-Party Socialism) is a governmental system which uses taxes as a means of controlling the economy, especially by redistributing tax dollars in ways that benefit society’s less well-off. The hallmark of democratic socialism is a mixed economy–that is, an economy which allows free enterprise to exist but uses an aggressive and big government mindset to own and manage certain industries and create a massive safety net for the entire nation. The safety net might include single-payer healthcare, (Canada, UK) tax payer funded education (Denmark), housing, job training, and many other benefits. (You’ll already notice that I didn’t use the word “free” as Bernie Sanders uses it. That is, “free higher education” – “free healthcare” because there’s no such thing as free higher education. It should be correctly labeled as tax-payer funded higher education.)

Supposedly, if you google “75 ways that America is a socialist country” you’ll have your “proof” that America is already socialist and that this movement towards Democratic Socialism is nothing to be alarmed about. But this thought is disingenuous on many levels. The first and the easiest one to understand being that even if America is socialistic in 75 ways, it doesn’t mean that America would be better if it was socialistic in 76 ways or that America would be worse if it was socialistic in 74 ways, or in five ways. This is no way to gauge whether a country qualifies as a democratic socialist country or not.

The United States is only “socialist” in the sense that any nation with a democratic or republican style government naturally will have certain “social” aspects to the way they govern. Every country is socialist to a degree. If it wasn’t, it would be called anarchy. The theory of American democracy comes from what is called the Social Contract Theory. In this theory of how governments formed, people willingly and voluntarily banded together to form a government for the good of their community. It wasn’t through compulsion. This means that people willingly give up certain rights for the good of everyone so the rule of law and order could reign supreme. This way, the government is derived by the people, and the rights given are also agreed upon by the people, not the government. By extension, the social contract theory may create many areas within society which uses a more socialistic approach to maintain order or to accomplish large tasks which they couldn’t accomplish on their own–building roads, building school systems, and using government to provide for the needy. All of these are legitimate and useful ways for governments espousing democracy to act. But these in themselves do not make a country a democratic socialistic country. And just because a country has socialist elements doesn’t mean that democratic socialism would make it even better.

America has long espoused a robust market economy, with the role of government as that of a regulator, but not a major portion of the country’s economic output. This is in stark contrast with a mixed economy where the government plays a much larger role in the economy. America’s market-economy-past has had both its triumphs and failures. America became an unprecedented economic engine from the late 19th century through the 20th century. Innovation and limited government oversight drove economic progress. Unfortunately, in the midst of this tremendous growth, many workers, imigrants, and poor members of society were left behind, forcing the government to step in and rightfully regulate the playing field so free competition could survive and workers could make a fair wage in a safe working environment. These changes started in the early 20th century and ebbed and flowed in various degrees over the next few decades, until the Franklin Roosevelt administration drastically expanded the reach of government as a means of combating the Great Depression.

Since the 1930s, the general trend of American economics has been larger government oversight and regulation, and an ever-expanding federal government which controls more and more of the economic system. And while America still has a market economy today, it has gradually moved closer to a more mixed economy in various areas. It has also expanded America’s safety net to unprecedented heights.

Yes, it’s not just Canada that has a safety net. America has a huge one. Massive, really, and this reality often gets lost in the midst of political soundbites on TV. But think about these examples:

  • Fifty million Americans are receiving some kind of federal government assistance. That’s 1 in 6 people.
  • A typical family earning less than approximately $40,000 a year pays no federal income tax. None. But, if they have children or are in other types of circumstances, they will even GET money back from the government. (child tax credit) Repeat, they will get a tax credit even though they didn’t owe any taxes. These can add up to thousands of dollars.
  • Millions of American students receive Pell Grants and federally backed school loans.
  • Most poorer families can qualify for free health insurance, and this did not start with Obamacare. Many states have for years offered tax-payer funded healthcare to the neediest of citizens.

This is by no means an exhaustive list of the services that the government supplies in 2016. What about tax rates? Democratic socialism demands high taxes from their citizens. Where does America currently stand in that regard? Do the rich “pay their fair share” as the democratic candidates like to say?

  • The highest tax bracket for 2015 is 39.6% (this of course does not include state income tax, social security, medicare, capital gains, or the local tax you pay at stores) Meaning that the highest earners in America easily pay more than 50% of their income in taxes, while, if I can remind you all again, the lowest age earners pay no federal or state income tax (though everyone pays the SS, medicare, etc…)

Is a 50% tax for the rich fair? That’s up for you to decide.

If all of this happens under a MARKET economy, then what exactly are the Democratic Socialists wanting?

  • Democratic Socialists want a mixed economy. That means more government control over industry – especially the banking industry.
  • They want to drastically increase tax rates, especially on the rich – 70% is not an uncommon goal. Others have espoused a top tax rate of 90% for the richest of Americans after their income hits a certain threshold. While these sounds extreme, it’s not unprecedented, as this was, believe it or not, the highest tax rate under the Eisenhower administration.
  • They want to institute carbon credits to squeeze the producers of fossil fuels.

This is just a small list of what Democratic Socialists want. The problem is, this vision is far removed from the vision of the founding fathers because of one crucial ideal: liberty. Democratic socialism, by its nature, limits liberty. As has been said, “The bigger the government, the smaller the individual.”

One of the basic principles of the U.S. Constitution is limited government. The founders were expressly concerned with a government which would have too much say in their lives, so the powers of the federal government are expressed powers – meaning those specifically written in the constitution. If they aren’t listed, the government doesn’t have that power. Likewise, the rights of citizens were specifically put in the constitution to limit the government’s ability to curtail individual freedom.

One more thing about freedom. We have in America the Statue of Liberty, not the Statue of Equality. American ideals were never centered around equality but has held liberty to be more important than equality. Equality is a European value. (See French Revolution.) In this way, Democratic Socialism is historically not an American value. We have always espoused the individual. We have upheld personal responsibility. We have never wanted the government to tell us what to do, what we can make, what field of study we should focus on, or how successful we can become. We have always been innovators, dreamers, individuals searching for happiness the way we see fit. Our equality comes from the equality of opportunity – the idea that if you work hard enough in America and show some grit, then you can do what you love, live where you want, and espouse to dreams with no limits. These are all goals which conflict with democratic socialism in one way or another.

So that’s where we’ve come from. It’s up to the American people to decide whether we want to change our priorities as a nation, or to uphold what the Founding Fathers held dear: freedom from an overreaching government.

That’s my take. What’s yours?