Living in the Collective Basement

The rise in popularity of avowed socialist Bernie Sanders is a phenomenon that would have horrified the citizenry a decade ago. Proposing systematic wealth confiscation and redistribution was considered political suicide until recently. What happened?

There are a few social changes that are responsible for the rise in acceptably of the socialist philosophy.

The first is the coming of age of the Woodstock generation. The 1960’s radicals invaded public education. It was one of the few fields where they were accepted and provided with a regular paycheck.  As true zealots, they preached their brand of utopia to their students relentlessly and condemned dissent from their orthodoxy.

The second precipitating event was the rise of crony capitalism. The appearance of the bad mortgages and derivatives were only a few of the obvious signs that the free market was being gamed by the financial services and the political class. With the advent of stock options as compensation, the long-term health of a company was no longer the focus of the management. Annual reports determined their compensation and that compensation was enormous. Two or three years of gutting the company while looking profitable on paper made it possible for the executives to bail from their positions with millions of dollars lining their pockets. When the financial collapse hit eight years ago, the same executives retained their compensations while the taxpayers were left to pick up the tab. Those compensations should have been returned to the companies from which they were engineered.

Finally, the economy overseen by the current administration has been anemic. The current jobless rate is purported to be fewer than 5% (U-3) while the number of people who have dropped out of the workforce is enormous. If one adds those individuals into the equation (U-6) the unemployment is closer to 12%. The jobs that are available are lower in wage which allows politicians to make a case for increasing the minimum wage. At the same time, the Federal Reserve has been giving the banks interest free money which has pushed large investors into the stock market, inflating the price and increasing the wealth of the rich.

It is small wonder that so many Americans are disgusted with the current economic state of affairs. Many who have been either living in their parent’s basement or on public assistance can see no improvement in their future. They feel that their only option is relieving someone else of what has been deemed as obtained unfairly.

To negotiate ourselves through this quagmire, this country must return to the principle of the free market where the success or failure a company is based on their market acceptance. The unholy alliance between the public and private sector has got to end.