Warren and Sanders the Philosophical Divide and Why the Situation Renders it Meaningless

Despite the bad HuffPost headline “The Real Dem Divide: It’s About Power” (its not about a power struggle between Sanders and Warren, please), this is a good piece by Zach Carter that looks at the philosophical divide between the Sanders approach to fixing inequality (more socialism) and the Warren approach (fixing capitalism)  Which is in all practical respects moot right now because the system’s lights have been blinking red for so long, with only inaction and regressive action, that underlying philosophy notwithstanding, the vast majority of Americans from all over the spectrum see a need for structural reforms in our economic system.  For Warren and Sanders the bottom line is pretty much the same answers to the same problems.

But they’re not alone at all anymore.  In fact, those opposed look out of touch now as the Howard Schultz roll out with Bloomberg side show illustrated (we need fundamental tax code reform but not raising taxes on billionaires ’cause that would make us Venezuela – JEEEEZ!).  The newly elected 2018 Alexandria Ocasio-Cortez led faction in the House are all on the same page with Sanders/Warren.  Even the Democrats of moderate stripe are ready to talk about the really modest proposals that the media and the GOP’s billionaire relief caucus will call radical.  Polling shows that people get that we need real action and put their hopes in the Democrats to push initiatives that can level a playing field that has been actively tilted for the “economic royalists” for decades.

The government shutdown showed real time examples of what studies have been saying for years in that a huge faction of Americans really do live pay check to pay check and missing even one check can start a Jenga tower of catastrophe.  40% of the country cannot deal with a sudden $400 emergency.  And what is $400 in this day and age?  That’s a few hours of emergency plumbing or an emergency room visit.  It’s a minor car repair, not a middling one.   There are millions of economic potholes Americans can fall into  that $400 wouldn’t even cover.  The situation is pretty goddamn dire.

“The two senators disagree over the best method to give the working classes a leg up,” according to David Dayen. “You can restructure markets so everyone benefits, or you can break down the market system, either eliminating the profit motive or giving everybody a public option.” For Jacobin founder Bhaskar Sunkara, Warren aims at “seeking to construct better policy but not an alternative politics,” rejecting “the class-struggle, worker-centric approach of Sanders.”…

The trouble for leftish intellectuals is a confusion over the terms “socialism” and “capitalism.” Both words are extremely flexible, and their meanings shift with political currents. In an American context, it has never been easy to distinguish between socialism and reformed capitalism ― and committed capitalists have denounced both with vigor. Franklin Delano Roosevelt was condemned as a socialist by congressional Republicans. In the 1940s, American conservatives viewed the social safety net in Britain and the Stalinist Soviet Union with almost equal alarm. By the 1950s, Herbert Hoover had concluded that the words “liberalism” and “socialism” really just meant the same thing.

So Howard Schultz can say FDR was his favorite Democrat in the last 50 years (who died 75 years ago), but not square the circle that his top marginal tax rate was 90% as he rejects AOC’s 70% proposal.  History has shown that FDR saved American capitalism – as the hard core right wing at the time considered him a socialist – those marginalized right wingers are now the mainstream of Republican conservatism.  Before the 2020 election is over, every Democrat will be called a socialist.  And the public for the most part will yawn as they did in the 30s because of the situation.  Solutions like Medicare for All, that was hardly spoken before 2016, will become commonly accepted planks in the Democratic platform in 2020.

It depends on the problem they’re trying to solve. In practice, they end up supporting an awful lot of the same solutions. In addition to Medicare for all, breaking up the banks and taxing the rich, both Warren and Sanders are advocates of a federal job guarantee, postal banking and a bill making it easier for workers to unionize.

Nobody talks about postal banking.  I have.  But until AOC mentioned it in the last month the last time I saw it in print was likely when I blogged about it.  But it’s a really no-brainer, simple solution to  a big problem for millions of people at the bottom of the economic ladder.  And like raising the top marginal rate, it’s NOT A NEW IDEA, WE HAD IT TILL 1967.  It’s bringing back things that worked that were removed through the lobbying of big banking interests.

All of these proposals transfer money and power from the super-rich to the not-rich. Take postal banking. About 32.6 million households rely on a check-cashing service, payday lender or other expensive, small-dollar financial bottom-feeder at least once a year, according to the FDIC. On average, these households earn about $25,500 a year and spend nearly 10 percent of their income ― $2,412 ― on these sketchy financial products. That’s over $82 billion going from hard-up homes to predators every year. You can deal with payday lenders a lot of different ways: ban them, regulate them or, the preferred tack of Warren and Sanders, have the government make them obsolete. If every household can get a low-fee bank account with the Post Office, they won’t have to turn to legalized loan sharking to get by. That’s bad news for payday loan executives, like ACE Cash Express CEO Jay Shipowitz, who made almost $4.5 million in 2004 alone. Is postal banking socialism or reformed capitalism? Yes.

Democrats have to make the argument that taking some of the power from the banks and corporations and restoring a modicum of protections for the working class will actually inure to the benefit of the people at the top as well.  They’re taking an ever larger slice of a static pie and starving the source of their wealth.  Give a bigger slice to the consumers and the pie grows.  Make productivity matter instead of squeezing pennies out people and everyone benefits.

Those that fear monger and call it a plan to create Venezuela will just look silly.

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