Being America, we can choose whoever we want to be President of the United States. So how did we end up with this group?
We have a self-proclaimed socialist and a former first lady no one trusts (with good reason) fighting for the Democratic nomination. And we have a billionaire who seems to think anyone whose family didn’t come over on the Mayflower should be deported as the leading candidate for the Republican nomination. 
Someone reasonable may yet emerge from the pack of presidential wannabes, but let’s take a closer look at what a Sanders, Clinton or Trump presidency would mean to your finances—and to America. We’ll start with the two Democrats this week and take on The Donald and other Republicans next week.
As for the Democrats, this is not JFK’s Democratic Party or even Bill Clinton’s. Both Hill and Bernie are campaigning as the saviors of the middle class by campaigning to the left of President Obama.
That’s pretty far left. President Obama also pledged to help the middle class and the middle class is worse off as a result. President Obama ceded control over the economy to the Federal Reserve Board, which provided a tremendous benefit to the top 1% of earners by goosing the stock market to record highs. Meanwhile, zero interest rate policy (ZIRP) hurt seniors and others living on fixed incomes, as their savings accounts and certificates of deposit didn’t earn enough to keep up with inflation.
If only grandma had been willing to invest in junk bonds, she might still be able to get by without SNAP.
Then there’s the mountain of new regulations, trillion dollar annual deficits and record number of executive orders we’ve had to deal with. These have a cost to businesses and that cost is, of course, passed on to consumers. Big businesses can deal with regulations more easily than small businesses; in fact, many big businesses lobby for more regulation, because it means less competition.
As a result, for the first time in history the number of business failures in the U.S. has exceeded the number of startups for the past six years. Small businesses create the majority of new jobs in the U.S. So what impact do you think the bigger government promised by Comrade Bernie and Comrade Hillary will have on the economy?
Income Inequality
The big theme for the Democrats is income inequality. While it’s true that the income of an entry level employee flipping burgers is many multiples short of the income of a Fortune 500 CEO, which issue should the next president focus on—income inequality or increasing economic growth to the point where we can all increase our income?
The concept of “income equality” is warped. In the sports world, no one would expect Patriots backup quarterback Jimmy Garoppolo to be paid as much as Tom Brady, the four-time Super Bowl winner. Pay is based on performance. It’s based on a person’s talent and hard work.
True, luck, a good agent, team need and other factors play a role, too. So what. Would you want the government to dictate how much the Patriots pay their quarterbacks? Probably not. So why should government dictate how much a business pays its employees? This is supposed to be a free country. It’s not the government’s money to pay out.
The economic issues the two Democrats take on don’t get much deeper and amount to a choice between socialism and near socialism. Take a closer look at the two candidates.
Hillary Clinton. While it’s incredible that the United States has never before had a woman as a major candidate for president, voting for Hillary Clinton just because she’s a woman would be worse than not voting at all. Disregard former Secretary of State Madeleine Albright’s comment that there is a “special place in hell” for women who don’t vote for Hillary. She’s since admitted that there is no such place.
There’s not much difference between the Clinton economic plan and the Sanders economic plan, although the Clinton plan is harder to pin down, as it shifts based on the audience, the day of the week, her standing in the polls and other variables.
Ms. Clinton has promised to create “the economy of tomorrow,” which is a pretty scary place. She believes, as Mr. Sanders does, that Dodd-Frank did not go far enough. Both candidates also advocate a $15 minimum wage. Even the Congressional Budget Office concedes that increasing the minimum wage would result in fewer jobs.
You may also recall that Ms. Clinton created Hillarycare, a predecessor of Obamacare, during her husband’s first term. Like Obamacare, it would have required all U.S. residents to enroll in a qualified health plan and it would have created a costly new government bureaucracy.
Bernie Sanders. Bernie Sanders at least seems honest about his beliefs. Being a socialist is cool if you’re a college student or professor. It’s not cool if you’re in charge of the world’s largest economy.
Mention “socialism” and supporters inevitably think of Scandinavian countries, where people ride bicycles to their high-paying jobs as organic grocers. When translating socialism to America, which bears no resemblance to Sweden, the most charitable comparison we can think of is France, which elected François Hollande president in 2012 and quickly came to regret the decision.
As Zerohedge noted last month: “Since 2012, when Mr. Hollande came to power, more than 600,000 people have joined the ranks of the unemployed at a time when joblessness has decreased in most of the other large European economies.” Hollande, who has at least recognized that his policies aren’t working, said that France is an economic “state of emergency.”
Hollande has sought, and failed, to implement a 75% income tax rate on revenue earned above 1,000,000 euros per year. Sanders, likewise, would take a tax-the-rich-to-feed-the-poor approach, with a 52% federal income tax rate for Americans who earn $10 million or more. The current top rate is 39.6%.
Sanders plan would create a huge disincentive for creating wealth. What it wouldn’t do is create anywhere near enough revenue to pay for his social programs. His 13-step plan for achieving income equality includes lame ideas such as, “Demanding that the wealthy and large corporations pay their fair share in taxes.”
America currently has the highest corporate tax rate in the world and it’s the only developed country that taxes revenue when it’s returned to the U.S. If you really want corporations to pay their “fair share,” how about eliminating special tax treatment for companies like Solyndra and lowering the overall corporate tax rate so American companies can be more competitive and create more jobs?
Bernie also supports “free” healthcare and “free” college for all (Note: Hillary supports free community college). The only problem is that if it’s free for you, the rest of us have to pay for it. If you’ve worked hard to put your children through college, make sure you keep on working, so you can put someone else’s kids through college. After all, every American should go to college, because it’s the only place in America where you can learn that socialism is superior to capitalism.
If you want to have some idea what impact free healthcare will have, take a visit to your local emergency room. You’ll likely see a long line of people who, to put it delicately, don’t have emergencies to deal with, but who go to the emergency room, because they don’t want to wait a week or two to see their primary care physician. It’s inefficient and ineffective.
One economist who doesn’t receive enough attention in America’s colleges is F.A. Hayek, the Nobel prize-winning economist who wrote The Road to Serfdom as a warning to the United States and the United Kingdom, which were becoming increasingly socialistic. Having witnessed the uprising of Hitler, who was a socialist, he recognized that socialism inevitably leads to fascism.
Hayek noted that Western democracies had “progressively abandoned that freedom in economic affairs without which personal and political freedom has never existed in the past.” Socialism, while presented as a means of assuring equality, does so through “restraint and servitude,” while “democracy seeks equality in liberty.”
He wrote that “when economic power is centralized as an instrument of political power it creates a degree of dependence scarcely distinguishable from slavery. It has been well said that, in a country where the sole employer is the state, opposition means death by slow starvation.”
Socialism is about taking away individuality, so that we are all treated the same, regardless of our personal talents or work ethic. The result is that those who live in socialist countries have no incentive to work hard and excel. Capitalism is about equality of opportunity, which enables individuals who make the effort to achieve more. Neither system is perfect, but we’ll take capitalism any day.
Bernie Sanders’ website says his platform would “reduce income and wealth inequality.” What it really would do is reduce income and wealth.
What’s truly scary is that some media have concluded that Bernie Sanders isn’t really all that radical (such as Prospect and Alternet), while others (such as Salon and Reason) have concluded that he is not radical enough. Maybe they should start a write-in campaign for Vladimir Putin.