Commentary: Bernie Sanders, a democratic socialist.
Socialism has a mixed reputation in America, leading many to the conclusion Bernie would ruin us. That's not true. He's not proposing something new: we already have housing subsidies, food stamps, Medicaid, Medicare, and Social Security, to name a few. Bernie talks about a “democratic social revolution” through the ballot box, exactly the kind of change our Constitution provides for.
> Specifically, he advocates “Nordic model democratic socialism” (Economist, 2/13, others), but seldom says so.
It's the economic and social system of government successfully practiced in Denmark, Finland, Norway and Sweden. We'll call them the Nordic 4. It's a unique type of socialism, in which most businesses are privately owned - just like here.
Other fundamentals include:
> Democratic representative government, also like the United States (World Factbook, CIA, 2015).
> Free education through college at public schools; universal healthcare; and a “social safety net” with broad benefits, unlike the safety net that's disappearing here.
> Free market economies and mostly self-regulating business, with minimal government controls. “Workplace regulation” is done through employers, trade unions and government acting together as “social partners.”
How well does it work? Some examples follow:
Job secutity is excellent; well-paying jobs stay at home and aren't outsourced. Labor organizations are strong. Unions represented approximately 62% of the Nordic 4's combined workforce in 2012. The US stood at 11%. (Organization for Economic Cooperation and Development) In 2014, the International Trade Union Confederation gave Nordics the “highest ranking” for workers' rights protection. Denmark had the world's only 100% score.
With secure jobs and strong social safety nets, poverty rates are low (Forbes). The Nordic 4 has an average poverty rate of some 7.6%, the USA has a rate of 17.4% (OECD 2011).
And despite light government regulation, business/government corruption is rare. The Nordics have four of the world's most “corruption free” societies. New Zealand is the number five (Entrepreneur 2013).
Finally, the Nordic countries are four of the five “most democratic” countries in the world; Switzerland is the fifth. The US is 16th (Global Democracy Rating 2014).
Now let's apply Bernie's ideas to the US. Obvious downside: somebody has to pay for it. Bernie's expressed some ideas to pay for his Nordic-style programs before tapping you and me.
> First, reform the IRS tax code. Bernie says the top 20% of American income earners bring home 58% of the income (Meet the Press 10/11/15). The US has a progressive income tax: the higher your income, the higher your tax rate. The highest rate step is 39.6% of income. But this one tax rate applies to incomes from about $450 thousand shooting skyward to an average of $217.5 milion. Also, don't forget – much unearned income qualifies for special lower rates. The US median household income – half earn more, and half earn less – is $51,939 taxed at a 25% rate (US Census 2013).
Taxing top earnings some 4700 times higher than the median at a rate 1.6 time times higher is not progressive.
The rich chisel away at that 39.6% with a mountain of exclusions, exceptions, and deductions which can bring taxable incomes to zero. After using his deductions, Warren Buffet said, “My secretary pays more in taxes than I do” (Forbes 2011, others). Mark Cuban says “He's right” (Dallas Morning News 8/29/2011, others).
Solution: truly progressive income tax rates and adjustments in deductions for the rich. Taxing 58% of the national income at an appropriate rate could pay for a lot of change.
> Bernie wants to levy a special tax on financial market speculation to pay for higher education. He accurately pointed out that today's college education is the equivalent to a high school degree a generation ago. (Democratic Debate 10/13/15). The well-paying industrial jobs once available to high school graduates have mostly gone overseas. We owe our children an adequate education to compete in a tougher world.
Is America ready for this type of government? You'll have to be the judge of that. "The Nordic Model has succeeded in combining the best of capitalism and of socialism. European and North American countries should look the Nordic model if only for ways to tackle poverty and inequality” (Borden magazine). Inevitably, taxes would go up, but look at what you'll get back: no astronomical health insurance premiums or out-of-pocket payments. No second or third mortgages to put the kids through school. Stronger labor protection to save our remaining industrial base, improve working conditions and grow new high-tech industries to support our college-educated kids.
That's it. In parting, we want to make three points:
First: Bernie's socialism works and will continue to work here.
Second: Bernie in the White House won't automatically morph us into Nordic socialists. We have checks and balances.
Last: It's fair.
Bottom line: A vote for Bernie Sanders is a vote for a better America.