Bernie Sanders: Nice Guy, Bad Policy

Watching Senator Bernie Sanders on CNBC last week, I was reminded of why I like him as a person and worry that such an earnest, nice politician (a true rarity) could have such misguided ideas about economics. If only I felt the same about the men and women who tend support more classically liberal policies. I do not trust the politicians with whom I agree on economics, and I adamantly oppose the policies of the few politicians I might trust.

Yes, another lousy election season begins, not that they ever end.

Here is what Sen. Sanders said that troubles me. It proves he doesn't get market economics or how the areas in which government is most involved are least responsive to customers.
10 questions with Bernie Sanders
John Harwood
Tuesday, 26 May 2015 | 6:10 AM ET

The whole size of the economy and the GDP doesn't matter if people continue to work longer hours for low wages and you have 45 million people living in poverty. You can't just continue growth for the sake of growth in a world in which we are struggling with climate change and all kinds of environmental problems. All right? You don't necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers when children are hungry in this country.
Forget 23 spray deodorants. I'm sure there are three or four times that number at my local Target and Walmart stores. And 18 different sneakers? Has Sanders not visited a Footlocker or Payless Shoes? I'm willing to wager Nike alone offers more than 18 styles for any demographic.

Limiting choices in clothing or personal hygiene products won't feed more children. What's sad is we have free lunch programs, SNAP, and other programs that aren't as efficient or as effective as planned. I've worked within impoverished urban and rural areas. Education is the only way to help families provide better and budget more wisely.

Children are not going hungry because we have choices within consumer products. Sorry, but developed nations have both the most choices for everything and the lowest rates of genuine starvation on the planet. If anything, because of those choices we have lower prices and allow money to be spent on more essential items.

In the United States, we spend less on housing, food, clothing, electronics, and many other items than in most industrial nations. We spend more on healthcare and education. What do healthcare and education have in common? Oh, yes… government involvement.

We spend (2014):
26.9% on housing
14.8% on transit
6.6% on food (lowest in the OECD nations)
5.1% on healthcare

If you aren't paying for college (which Sanders wants to make free — yet "free" is relative as Germany and other nations have discovered), and you have average healthcare insurance, the United States keeps getting cheaper for most citizens. I know it doesn't feel that way, but look at all the stuff we own today, from smartphones to HD televisions, that our grandparents couldn't imagine. Those things exist because of our free market and choices.

Even food, which I felt was increasing in price faster than inflation, is actually getting cheaper over time. Mother Jones, call it progressive or liberal or whatever, agrees that overall food costs are lower in the United States than elsewhere and getting even cheaper as a percentage of income.
On some level, this is pretty intuitive—food is a basic need, and there's only so much you can eat, no matter how much money you have. But even among developed countries, our food spending is ultra-low: People in most European countries spend over 10 percent of their incomes on food. In fact, Americans spend less on food than people in any other country in the world.
We do spend more of our gross domestic product on healthcare and education than other nations, for mediocre results — and both sectors of the economy are highly integrated with government. Nearly half of the expenditures in healthcare are from government programs (in the least efficient multi-layered payment model imaginable). If you want to drive down prices, make the billing easy and clear, especially for major medical procedures. Right now, people must let their insurance company or the government pay large bills without any understanding of the charges.

Real, transparent markets face pressures to compete.

Higher education assumes the middle-class will keep taking out subsidized loans forever, failing to respond to market pressures. Tuition isn't itemized, beyond the "per unit" cost. Unless you study the budget of a college, there's no way to know what you're really paying to receive. (Again, the "free" education markets in Europe turn out to be expensive, too, because only tuition is free, and the cities with universities are expensive places in which to live. More on that in another blog post.)

Sanders is a nice guy. He genuinely cares about the middle-class and everyone else. But, he doesn't seem to understand markets. That worries me, because people I respect are nodding in agreement with some of the economic statements made by Sanders. Do these people really imagine the federal government will somehow get magically more effective at allocating resources?

The market works, when you have a transparent and fair market. That's what we don't have in healthcare, education, or finance. Sanders' ideas might actually make the markets less transparent and less responsive.

Too bad other politicians support crony corporatism (not genuine capitalism) and don't seem to understand what our small and new businesses need for success. Sanders' policies would not be great for the United States, but I'm not sure they'd be significantly worse than the corporate welfare policies others continue to support.

Can we please have a free market candidate who is honest and able to educate voters in plain English? Not another crony corporatist and not a well-intentioned socialist, but someone with faith in the public and businesses to compete in a transparent market.

One of the mistakes Sanders and others make is claiming that libertarians resist all regulation. Not true. We support disclosure requirements, enforcement of contract law, fair (loophole free) tax policies, and considered public infrastructure. Most of us are not anarchists. We don't want to take away programs for the poor, disabled, and those hit by natural disasters. We want wiser spending, more fairly collected and disbursed.

Classical liberals should be wary right now. Sanders is a nice guy and he's going to sway a lot of voters — shifting policy debates further away from free markets. I blame crony capitalism that supported dishonest and uncompetitive "capitalists" for making Sanders' presidential run more influential.

We don't need government running the markets. We need government standing by to make sure the markets are open and fair. There is a difference.


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