In the 2016 political season, we are confronted with one Bernie and are reminded of another (as Richard Dreyfuss does the title character in Madoff, ABC, 2016). One is a politican; the other is a crook. But perhaps, as Mark Twain said, I repeat myself. Indeed, which is which, or what they may truly have in common, is a matter of interest and examination. The inescapable conclusion is that, were Bernie Sanders to become President of the United States, it might as well be Bernie Madoff running the country.
|Bernard "Bernie" Madoff, b.1938|
Federal Prisoner #61727-054
|Bernard "Bernie" Sanders, b.1941|
United States Senator, Vermont
|Bernie Madoff ran a large scale swindle for many years. Heading an investment firm (Bernard L. Madoff Investment Securities, LLC) from 1960 until 2008, Madoff took money from people, which was intended for investment, and used it to perpetuate what is called a "Ponzi" scheme, which means that the money was not invested but was used to create the illusion of inevestment income, as part of it was paid back to investors. This kind of thing, of course, cannot go on for very long unless new victims constantly add money to the operation. The better the illusion of legitimate success, the easier it is to attract new victims, who get the good word from previous investors who are happy with the return they are apparently receiving. Madoff seems to have been extraordinary good at this, considering how long he kept the thing going and how easy it evidently was to escape the eagle-eye of securities regulators, who were warned more than once about him. Indeed, the whole thing was so successful that one wonders why Madoff wasn't smart enough to invest the money in the proper way and run a legitimate business. However, he may have been brilliant in one (criminal) way but not in (legitimate) others and, after all, real investing entails risk, and Madoff could easily have run his swindle in such a way that made it look like it was outperforming legitimate investment firms. He need not even have always paid good returns, since no sensible investor expects to see that all the time anyway. All he needed to do was apparently perform as well, or a little better, than what investors might otherwise expect. It is hard to imagine that the swindle survived all the way from 1960 to 2008, 48 years, so Madoff must have begun as a conventional investor. Perhaps he discovered that he wasn't good enough at it and that he could eliminate the risk by just paying out capital as though it were income. The Left, who have no understanding of capital, may actually think that this is what all finance is like, which makes Bernie Madoff no more a crook than any other Wall Street investor. The existence of bankruptcy contradicts this fantasy; but then we know, as we are told, that the rich are a permanent class who never lose their wealth and status. The rich, as Marx said, only get richer. Yet Marx himself, after a fashion, was aware of bankruptcy, since he believed that, after impoverishing the workers, capitalists would have no one to sell their goods to, which would result, not in bankruptcy per se, but in the Revolution. This is odd, since with the failure of their businesses, capitalists would no longer need to be overthrown by violent revolution. They would be on the street themselves, perhaps demanding their "benefits." Bernie himself will spend the rest of his life at taxpayer expense in Club Fed.||Bernie Sanders is a professional, career poltician who calls himself a "Democratic Socialist" and wants everyone to give the wealth and power of the nation to professional, career politicians, like himself, who then will correct the evils, unfairness, and "inequities" of capitalism. He thus condemns the "rich" as useless parasites, the "1%," in order to promote the political ruling class, the real 1%, like himself. Sanders actually seems to live modestly, but we see the Clintons rolling in money from crony donations to their crime family foundation. In terms of genuine political wisdom, Sanders is an old fool, but he does an excellent job of deceiving a lot of young fools, and older fools (like actors), to blame the "rich" and fall for the seizure of power by Bernie's own political class. However, since Sanders intends to destroy the banking system and the Wall Street financial system, the wealth that Sanders seeks to loot would before long simply dry up. Margaret Thatcher said that the problem with socialism is that eventually you run out of other people's money; but the real dynamic there is that the other people stop producing money in the first place. Indeed, Sanders, like Elizabeth Warren, sounds like he wants all the bankers and Wall Street brokers in jail, where they will obviously produce nothing at all. In other words, the "socialism" of people like Sanders and Warren consists of little more than cargo cult economics coupled with a blast of hatred for business. One thing essential to this is the fairy tale that the mortgage credit collapse of 2008 was the result of misconduct and crimes by banks and Wall Street, and a lack of federal regulation, when the truth is that the whole business was engineered by the real and heavy hand of federal regulation, with threats made against banks that if they did not lend to unqualified minority borrowers, they would be prosecuted for civil rights offenses. With all the non-existent courage of corporations, the banks buckled with little protest. The mortgages were then passed on to Wall Street, which relied on the trustworthiness of federally mandated bond rating agencies, who were all wrong. Now all that is easily forgotten by Democrats, whose preposterous narrative is that the banks were "predatory lenders" who wanted to end up with a glut of abandoned and unproductive "zombie" properties on their hands. After the idiocy of his economics, we might also wonder what "Democratic" means to Bernie Sanders, who honeymooned in the Soviet Union, which also called itself "Democratic." Since Sanders wants to prosecute Global Warming "deniers," his commitment to features of democracy like free speech, let alone the integrity of science, is questionable. But then attacking free speech is all the rage in American "education."|
|The politics of people like Bernie Sanders (and Elizabeth Warren) itself amounts to a kind of Ponzi scheme, just like with Bernie Madoff. This is the most obvious in Social Security, where current revenues are used to pay the benefits to people on Social Security. It would be illegal for a private pension fund to be run like this. When it was realized in the 1980's that the Baby Boomers would overwhelm the system, Social Security taxes were raised to run a surplus that later could be used to pay future benefits. However, at the time, Senator (D-NY) Daniel Patrick Moynihan (1927-2003) pointed out that the accumulating "Social Security Trust Fund" would, in effect, consist of nothing more than a box (perhaps Al Gore's famous "lockbox") with a piece of paper in it saying, "IOU 5 trillion dollars." Thus, all that has been done with the surplus from Social Security taxation is to hand it to the Treasury in exchange for Treasury bonds. Pieces of paper, which get stacked up in a room. The money meanwhile is spent as part of the Federal Budget, like the money from the sale of any other federal bonds. When Social Security needs to cash in its bonds, the Treasury not only will no longer have the revenue from Social Security taxation, but it will need to come up with more money, both to cover its own spending, and to pay money to Social Security. It will need to get that money either from taxation or borrowing, which is what would have needed to be done if Social Security had never raised its taxes and run a surplus in the first place. Thus, the original plan of raising Social Security taxes turns out to have been no more than a way of raising taxes in general, with all the money going into the general waste of the federal pig trough. Once the Social Security Administration needs to cash in its bonds, the circumstances will be the same as though no Trust Fund had ever been accumulated. Meanwhile, even the fraudulent "Trust Fund" doesn't cover much in the way of future benefits, and the Trustees of Social Security and Medicare themselves report that their unfunded liabilities now amount to 60 trillion dollars, more than three times what is already the National Debt.
Almost all government is like this. Although Democrats like to say "investment" instead of "spending" or "payoffs," very little government spending is really invested in anything. It is absorbed by rent seeking interests who hope to make a living at the expense of others, true parasites at the public trough. Even things that could be actual investments in future productivity, like "infrastructure" (which I put in quotes only because it has been driven into meaningless by mendacious overuse) or education, are ruined when the easy money always goes for waste so monumental that any useful purpose is squandered. Thus, the greatest real infrastructure need is simply maintenance; but there is nothing politically sexy about this, and its practice can actually be annoying to inconvenienced citizens. Instead, large wasteful projects get on the news and make it look like politicians are planning for a great future. Mass transit projects commonly fall into this category, none more massive or pointless than the high-speed train that California Governor Jerry Brown wants to run between Los Angeles and San Francisco. Few rail passenger routes fail to lose money these days, and the California project -- dubbed the "Brown Steak" by critics -- is unlikely to be any different. But "investment" in something that requires perpetual subsidies is the opposite of productive; and various rail and "light rail" projects, designed to get people off the roads, so that the limos of politicians won't get stuck in traffic, almost all end up as White Elelphants. People would rather drive, which is why politicians want expensive gasoline and other involuntary measures to get people out of their cars -- often from the fraudulent justification of "Saving the Planet." Al Gore himself demonstrated his bona fides by riding the train from Oslo airport when he went to accept the Nobel Peace Prize. However, it was noted that his luggage went in the limo provided by the Norwegian government; and, aye, there's the rub. Politicians don't need to shlep their luggage and groceries on mass transit, the way the rest of us do. It is hard to do much of a shopping with just two arms (or a small cart). And my first wife and I also needed to walk a long way, uphill from the bus stop to our apartment. Let's see Al Gore, or Bernie Sanders, Elizabeth Warren, or Jerry Brown, do that.
Similarly, most spending on education is now a fraud also. When the money just pours in, regardless of results, then working for the results, or even being competent to work for the results, is unnecessary. But I have already examined this in detail elsewhere. And when the real purpose of education is political indoctrination in anti-Americanism, rather than what is needed to be a responsible citizen in a liberal democracy, the results or non-results we get are in no way surprising.
But if Bernie Sanders were able to destroy the American banking and finance system, and let everyone get a college education for free, the money would soon run out, no one would buy the bonds to loan the federal government more money, the tax base would wither, students would know less than they even do now (which is damn little), and the United States would end up like Cuba, Venezuela, Zimbabwe, or, at best, Greece. Of course, this is actually what a large part of the American intelligentsia actually wants. It is hard to pin down a precise motive. I can't say whether they hate the American people or the United States as such more. They certainly think that Americans through all their history have been thieves and oppressors, damnable for slavery, which otherwise was fine in Islam, damnable for the subrordination of women, which otherwise is fine in Islam, and damnable for the persecution of homosexuals, while their execution in Iran (the new Best Friend Forever of Barack Obama and John Kerry) is otherwise just fine -- or at least nothing that we need to talk about very much. But then modern Radical Islam is anti-American, and this absolves it of any wrong. Which all ends up as a kind of circular argument, since slavery discredits the United States, which, at great cost of life, abolished it, but doesn't discredit Islam, which is now actually reviving it, and never abolished it in the first place except under pressure from countries like Britain and the United States. That doesn't matter. Consistency or logic is this dead white male European thing. Academics know better. Perhaps they should just convert to Islam and get it over with.
So if Bernie Madoff was engaged in no less productive an enterprise than Bernie Sanders and his friends, at least he does not seem to have hated the people who were productive. He probably knew that without them, there would be no one to generate the money to give to him in the first place. The necessities of this, however, have escaped Bernie Sanders, who has no greater ambition than to kill the goose laying the golden eggs. He probably thinks that money is just the paper that is now being flown in to add to the inflation in Venezuela. In seven miserable years, not enough damage has been done by Barack Obama. At the same time, Sanders keeps holding up the ideals of Denmark or Switzerland, which, despite their welfare state features, nevertheless run a couple of the freest economies in the world, something that would be intolerable to Sanders. Indeed, Denmark reduced unemployment by progressively curtailing unemployment benefits. It really sounds like Sanders doesn't even know things like this (and is not asked about it by a clueless press), invoking the glories of an imaginary European socialism that either doesn't exist anymore, as in Scandinavia, or that is still collapsing under its own weight, as in France or Greece. They say that people get the kind of government they deserve, but if we deserve Bernie Sanders, there will be no end to evils.