The further to the left or the right you move, the more your lens on life distorts.

Tuesday, February 25, 2020

Just Like Denmark

Supporters of Bernie Sanders become angry when one suggests that Bernie is a hard-core socialist and they become outraged when one alleges that he's a communist sympathizer, despite his 50-year history of praising communist dictators and socialist states (Fidel Castro's Cuba comes to mind). They argue that Bernie is all about "democratic socialism," you know, the kind that they perceive to be in place in Scandinavian countries like Denmark.

All of the freebies that Bernie promises in his utopian vision of a "good" America (contrasted with his dark assessment of the current racist and greedy America) will not scale up well. In fact, they won't scale up at all without bankrupting our country, crippling our economy, and putting millions out of work That's what socialism does, over and over again throughout history. The nickname — "Breadline Bernie" — might be mean, but it's not far off the mark.

Although Sanders' socialist ideology is NOT really comparable with the free market activities that occur in Scandinavia, let's for a moment accept the argument that what Bernie really wants is for the USA to become more like Denmark.

Denmark is 1.7 percent as large as the United States. That alone precludes comparisons, but let's proceed. It's social safety net is substantial, but so is its tax rate which is currently 55.8%.

Actually, it's kind of ironic. Bernie also wants a mandated minimum wage of $15.00 per hour, even for entry level jobs for teenagers. With a tax rate of 55.8 percent, that would yield take home pay of $6.63/hour (without considering payroll taxes). At the current US tax rate of 12% for people making under $40,000 per year, a person making say, $12.00/hour (far less than Bernie's mandated minimum) , would take home $9.00/hr. Hmmm, in Bernie's utopia, you know the one with high taxes and a mandated minimum wage, a person would take home less money than the poor shmoe who's currently making $12.00/hour. There's not much "economic justice" in that, is there? But ... nevermind.

Five years ago, Peter Baldwin wrote:
Can the United States be more like Denmark, or any of the other Scandinavian nations? Indeed, it can so long as Americans are willing to follow a few simple steps.

To be more like a Scandinavian country, Americans would need to pay more in taxes, and that tax burden would fall predominantly on the middle class.

First and foremost, Americans would need to pay more in taxes, and that tax burden would fall predominantly on the middle class. Marginal tax rates as high as the U.S. rate kick in at a much lower income level in Scandinavian countries. For instance, in Denmark, plumbers pay the same 50 percent income tax as hedge fund managers. And there’s also a 25 percent value added tax on most purchases (180 percent on car purchases), far above the 7 percent average sales tax in most states.

Pretax income per capita is 23 percent higher in the U.S. than in Denmark. And because so much is raised from consumption taxes, in general things are more expensive in Scandinavian countries. For example, a beer in Denmark will cost you 75 percent more in than in the U.S., a coffee a third more, a dozen eggs 40 percent more. Housing in Denmark is also more expensive than in the U.S. and on average homes are smaller.

Danish university students have their tuition paid for them by the state. But there is no choice between public and private institutions. Nor do students have the same freedom to study what they please as in the U.S. Students apply to study a specific subject. None of this liberal arts nonsense about the nation needing well-rounded citizens. And how hard it is for high school graduates to study the subject of their choice depends on whether the Ministry of Education thinks the country needs more graduates in that field. The government adjusts the G.P.A. requirement for admission depending on how many majors it anticipates needing.

So can we be more like Scandinavia? Yes. Will we? Unlikely.
Bernie and his supporters forget to mention those inconvenient facts or wallpaper over them by suggesting that the money you pay in taxes will somehow magically lead to dollar savings at an individual level. After all, BIG government is much smarter and efficient about spending your money than you are, right? And despite their class warfare rhetoric, the taxes they propose would impact the middle class hard—very hard.

And with less money in their pocket to spend, the socialist-inspired economic death spiral would begin, the middle class would contract, less spending would occur, businesses would contract, income inequality would grow and then ... true to form, Bernie would advocate still more government control of markets and profit.

In reality, Bernie's ideas, if they were ever to be implemented, would almost guarantee that we'd become a lot more like Venezuela than Denmark.


Roger L Simon spent time with deliriously happy Bernie Bros who celebrated Sanders' landslide primary victory in Las Vegas. The demographic was exactly what one would expect—a collection of young people, many college age, who have at best held entry level jobs, another cohort of 30 and 40-somethings who, for the most part, have drifted from job to job over the years, and older folks who (in Simon's words) "seemed to be in the same clothes they wore to a love-in back in 1968." They were garrulous and happy, and Simon liked them.

At the conclusion of his report, Simon makes a thought provoking comment:
Like most “social scientists” I had seen what I expected. They call it “confirmation bias” but in this case you’ll have to excuse me because I really do think what I had assumed was true. They are lost.

Bernie Sanders—who still has good things to say about Fidel Castro, a so-called revolutionary who murdered his friends, impoverished his people and ended up a billionaire—will likely lose in the general, but these boys will still be there.

Maybe we should think about doing something for them. I wish I knew what.
They will still be here, convinced that utopia can be achieved if only things were "fair." They'll continue to "believe," rejecting thousands of years of evidence that human nature doesn't really change, that people want to be rewarded for their hard work, and resent having those rewards arbitrarily distributed to others who often don't work very hard. They'll continue to buy into the rhetoric of envy, convinced that they are victims of a "system" that must be torn down.

Yep, they'll still be here, and sadly, I don't think there is anything we can do for them.