For most of America’s history, we have been governed by two political parties of one mind. Both Republicans and Democrats were mostly practical, centrist and pro-capitalist. Even liberals eager to tax business were careful not to kill the goose that laid the golden eggs of jobs and prosperity.
This was “the end of history” described in 1992 by political philosopher Francis Fukuyama. Capitalism, combined with an income floor for the poor maintained by a sizeable welfare state, would from then on be the advanced world’s permanent system of economics.
But with the 2018 election, this secure political environment for investors has changed. In our newly schizoid politics and economics, one of America’s two parties is now largely controlled by self-described socialists who hate the free market and want to destroy it.
History is again up for grabs in class warfare, and every future election will be Russian roulette, with the fate of American free enterprise hanging on whether capitalist or anti-capitalist politicians win. How long can our nation, divided against itself, continue to stand?
In recent days, for example, a socialist neophyte in Congress, Rep. Alexandria Ocasio-Cortez (D.-N.Y.), absurdly accused Wells Fargo CEO Timothy Sloan of being “involved” in caging illegal immigrant children and of funding a polluting oil pipeline. Days earlier, she had successfully intimidated JPMorgan Chase Bank into halting all funding of private for-profit prisons.
New York’s leftist Governor Andrew Cuomo recently threatened banks with both losing state business and being punished with government regulation if they did not make it impossible for their credit cards to purchase firearms or ammunition. New York City’s socialist Mayor Bill deBlasio threatened to expropriate landlord multi-million dollar buildings if they refused to go along with his demand that they redistribute their wealth to tenants.
President Barack Obama implemented “Operation Choke Point,” which threatened banks that refused to spy on or to cut off the bank credit of dozens of legal businesses, including firearms and ammunition sellers.
President Bill Clinton expanded the Democrats’ Community Reinvestment Act, using regulatory threats to intimidate banks into giving mortgages to millions who did not meet traditional creditworthiness standards. This monstrous Democrat-commanded wealth redistribution led to the 2008-2009 crash and loss of 39 percent of the average family’s total net worth. This frightened and infantilized Millennial children away from capitalism and investment risk.
The expanding spectacle reminds us of Karl Marx’s and Friedrich Engels’ “Communist Manifesto” and its 10 ways to destroy capitalism and the bourgeoisie, five of which are:
- Abolition of property in land
- A heavy progressive or graduated income tax
- Abolition of all right of inheritance
- Confiscation of the property of all emigrants and rebels
- Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly
And now we see Democrats threatening banks because they lent money for things that socialists dislike. This new socialist Democratic Party, which already has ways of carrying out these other four agendas to destroy American capitalism, has now politically targeted banks, as Craig R. Smith and I explained in our book “Don’t Bank On It! The Unsafe World of 21st Century Banking.”
What happens to investing in America now that one political party is determined to control or destroy every company, except those crony entities such as Solyndra that funnel huge campaign contributions to the Democratic Party in a partisan taxpayer-money-laundering scheme?
What is an investor to do when politics – not product quality or business competence – determine a company’s success or failure?
Can you trust anything denominated in dollars when a socialist government will again soon turn to printing tens of trillions of excess paper dollars to fund one exorbitant vote-buying giveaway program after another? Ocasio-Cortez, hailed as “the future of the Democratic Party,” has already proposed a $93 trillion “Green New Deal” program, the first of many socialist schemes that will bankrupt the United States.
“If we were directed from Washington when to sow and when to reap, we should soon want bread,” warned Thomas Jefferson. But politicians now seek the power to tax and regulate everything in our lives in the once-free marketplace. Socialists buy voters to retain power. But socialism is only wealth redistribution, not efficient capitalist wealth production. Such megalomaniacal politicians could soon cause starvation, as socialism has done in Venezuela.
Investors can rethink and escape America’s new socialist schizophrenia, as Craig R. Smith and I explain in our latest free White Paper (see below).
Lowell Ponte is a former Reader’s Digest Roving Editor. His articles have appeared in the Wall Street Journal, the New York Times and other major publications. His latest paper co-authored with Craig R. Smith, “Protecting Your Wealth in Today’s America: How You Invest Your Savings Requires New Thinking,” shows how to rethink several areas of investment to protect and grow your savings in our new schizophrenic politics. For a free, postpaid copy, call toll-free 800-630-1492.