Bernie Sanders's Long History of Pushing Government Takeovers of Private MarketsTags Price ControlsProgressivismSocialism
Socialist ideas have taken a hold on some of the more progressive members of the Democratic Party, namely Senator Bernie Sanders. The latest NBC/Wall Street Journal poll, however, may provide Senator Sanders with a reason for concern. Although 40 percent of Democratic primary voters express positive views of socialism, only 19 percent of all voters express the same positivity. The Vermont senator may be able to stand out in the crowded Democratic primary, but the general election voter will likely be cautious of some of Senator Sanders’s proposals.
As many readers are aware, socialism provides for the “governmental ownership and administration of the means of production and distribution of goods,” according to Merriam-Webster. That is, it's not just a vague notion that the government should do more. Socialism is a system of government ownership.
Through Senator Sanders’s lengthy career in politics and even in recent years, he has advocated the nationalization, or government ownership, of numerous industries. Throughout the 1970s, Senator Sanders was an avid proponent of the nationalization of utilities, the federal takeover of the energy industry, and the public ownership of banks and major industries.
According to the Wall Street Journal, as late as 1987 Sanders conflated democracy with the “public ownership of the major means of production.” His proposals are often blanketed by calls for a host of positive rights, or rights entitling one person to have another person act in their interest. Such positive rights include the right to healthcare, education, a living wage, affordable housing, and “a secure retirement.”
Senator Sanders has been remarkably consistent. During his long political career, he has called for the nationalization, or "democratization," of the following industries:
Senator Sanders’s plan to tackle climate change includes a $16 trillion initiative to transition the United States toward renewable energy sources. This plan consists of dramatically increasing funding to administrations overseen by the Department of Energy and utilizing the regulatory force of the Environmental Protection Agency to strictly regulate carbon dioxide emissions. Sanders’s EPA would enact much more stringent emissions limits than those enacted during the Obama administration, resulting in the retirement of coal and gas plants. Only private renewable energy producers and federal utilities would remain. Back in 1973, Sanders wrote to Vermont’s then senator Robert Stafford, “the oil industry, and the entire energy industry, should be owned by the public and used for the public good—not for additional profits for billionaires.”
Although Senator Sanders has focused on nationalizing utilities, he has placed special emphasis on high-speed internet access as “a basic human right.” His contention is that tax revenues assist in building the internet, so it must be a public good for all, “not another price gouging profit machine,” writes the Seattle Times. His plan 1) requires internet service providers to provide a “Basic Internet Plan,” 2) redefines “minimum broadband speeds” in order to set an internet speed floor of 100 Mbps for downloads and 10 Mbps for uploads, 3) allocates $150 billion to create modern infrastructure for “widely accessible” and “affordable” high-speed broadband, and 4) imposes net neutrality on internet service providers, which ends throttling, a business tactic that hinders the usage of data consumption by users.
The most contentious of all of Sanders’s plans, Medicare for All, would completely overhaul the entire healthcare system. Medicare for All would create a single-payer, national health insurance program to provide comprehensive coverage to all. Sanders’s plan goes further than most other progressives’ plans by effectively eliminating private insurance. Vox notes a feud between progressives as to whether or not a federally funded public option should compete with private insurance. According to the Wall Street Journal, Sanders “plays down the radicalism of Medicare for All…by arguing that we are only ‘talking about expanding the most popular health-insurance program in America.’” Aside from the dubious economics behind a universal healthcare program in a country of 320 million people, Sanders and his colleagues have been at war over the real cost of these plans. Sanders has conceded that middle-class Americans will pay more in taxes, but the tax increases, he contends, will be far less than the cost of buying private insurance. In addition to universal healthcare, Sanders has called for “public ownership of the drug companies and placing doctors on salaries [a form of price control].”
Along with Sanders’s proposal to overhaul the healthcare industry is a plan to replace for-profit credit reporting agencies with a public credit registry. Public credit registries are common throughout the world, albeit sometimes used in collaboration with private credit bureaus. The argument is that credit reporting agencies have become utilities in that consumers have no direct involvement with the agencies, writes Vox, but that the agencies’ product has a significant impact on an individual’s day-to-day life. Credit reporting agencies receive information from various data furnishers, or data providers, and in turn use scoring models, or algorithms, to determine a credit risk score. Sanders and other prominent progressives view the discrepancies in credit scores and access to credit as systematic racial discrimination, and thus they believe the only alternative is for the federal government to create its own public credit registry. Sanders’s plan to overhaul the credit reporting system stems in part from his efforts to decrease the relevance of medical debt to consumers’ credit scores.
During the 2016 presidential campaign, Sanders endorsed the concept of postal office banking, which requires the United States Postal Service to “engage in basic banking services.” Postal banking is thought to be a potential solution to the issues of payday lending. As the argument goes, Senator Sanders and a large portion of the Democrat Party seek to cap the interest rate that payday lenders can charge to consumers to end the cycle of poverty perpetuation. The Intercept argues that the nation’s thirty-one thousand post offices issuing “simple bank accounts and even short-term loans” would solve the issue for those one-in-four American households with little or no access to banking. Voila! A government “solution” to a government-created problem; a problem that can be solved by financial technology (fintech) or credit unions.
As I have written extensively, Sanders and his colleague Senator Elizabeth Warren have proposed to “cancel” student loan debt and to guarantee tuition and debt-free public colleges. On Sanders’s campaign’s website, he outlines the details of his plan. Although most public colleges are funded by state governments or state-led scholarship programs, these institutions also accept federal funding, as well as tuition revenues from federally guaranteed student loans. Sanders’s plan intends to use federal taxes to cover the cost of tuition. This plan will result in further federal requirements, possibly similar to the requirements under Title IX, and enlarged administrative costs. It is not clear how Senator Sanders’s plan would coexist with state funding for universities. Would state governments continue to fund higher education at all?
As if Senator Sanders had taken a cue from Senator Warren’s campaign, he has proposed a high-cost government plan for nearly every major issue. His housing plan consists of 1) investing $2.5 trillion to build “10 million permanently affordable housing units,” 2) expanding Section 8 vouchers under the Fair Housing Act to make rent affordable to all eligible families, and 3) combating gentrification, exclusionary zoning, and restrictive zoning. This plan does not call for the nationalization of housing per se; however, rent control and zoning laws are typically regulated by states and localities. Federal intervention in housing would send federal resources to predominantly urban areas and undermine the benefits of decentralization. The lone bright spot for libertarians is Sanders’s call to reform zoning laws to “allow for more construction in the priciest neighborhoods and markets.” Even Vox finds issues with rent control: “the issue with rent control regulations is that while they generate large benefits for tenants who stay put in hot markets, they tend to make it a lot harder for people to find a new place to rent.” Rent control restricts the supply of rental housing by discouraging investment in real estate with the reduction of the rental price below the market rate, and it encourages “the conversion of potential rental properties into Airbnbs or office space.”
Sanders’s laundry list of socialist proposals culminates in an idea he pitched in 1974. During his 1974 campaign for the Senate, he sought to make it illegal to “gain more wealth than [a] person could spend in a lifetime and have a 100% tax on incomes above this level.” He determined $1 million per year to be that level. On his campaign website, Sanders now proposes 1) establishing a progressive estate tax on multimillionaire and billionaire inheritances, 2) removing the income cap on Social Security payroll taxes, 3) to “substantially increase the top marginal tax rate on income above $10 million,” 4) to close tax loopholes, or deductions, 4) to establish an annual wealth tax for the top 0.1 percent of households, a plan which I discussed at the Foundation for Economic Education website, and 5) to introduce a more progressive tax rate system for companies with “large gaps between their CEO and median worker pay.”
Sanders's benevolent perspective towards government-run institutions goes back decades. In fact, in his book Our Revolution, he explains his long-standing adherence to the ideas of democratization of resources. Although one cannot doubt his conviction towards these ideas, these proposals are at best dubious. The downstream effects of nationalizing industry and placing the burden of operating these institutions on taxpayers will inevitably lead to unintended consequences.