ChrisWeigant.com

Is Bernie Sanders "Rigging" His Own Election?

[ Posted Tuesday, May 22nd, 2018 – 16:44 PDT ]

That's a rather jarring headline, because it's a rather jarring thought. Is Bernie Sanders "rigging" his own election? Sanders was not a big fan (to put it mildly) of election-rigging not so long ago, after all, so the charge is especially personal. Given the evidence, I would have to say that technically Bernie isn't trying to "rig" his own election, rather he is encouraging the voters to rig it for him -- which to some may be a distinction without a difference, but to me is a hair worth splitting.

I came across the suggestion of rigging in a recent Washington Post article, which explains exactly what Bernie Sanders is up to:

The still-technically independent senator announced Monday that he'll seek reelection in 2018. That much isn't surprising, but the way in which he's doing it should raise some eyebrows:

According to campaign spokesperson Arianna Jones, Sanders plans to seek the Democratic nomination in Vermont's August primary. If he wins, she said, he would "respectfully" decline the nomination and run as an independent in the general election. Sanders would, however, accept the endorsement of the Vermont Democratic Party.

That's right: Sanders is going to run in the Democratic primary for no reason except to preclude anybody else from winning it -- despite having no intention of running as a Democrat in the general election. Sanders basically wants to ensure he will face no Democratic opponent in November. A cynic might say the guy who complained about the rigging of the 2016 Democratic presidential primary is kinda, sorta rigging the 2018 Vermont Senate race for himself.

So, the question has been asked: is Bernie "rigging" (or even "kinda, sorta rigging") his own election? Well, not really. Instead, he's asking Vermont's Democratic voters to rig the election for him, which is a different thing to me.

The article's author explains that this matters a lot to readers. The article both opens and closes with this theme, in fact:

One of the weirdest bits and most consistent reader feedback I get is from people upset that I list Bernie Sanders as the favorite for the 2020 Democratic presidential nomination. It's not even because of his age or that they're skeptical of his chances, mind you. It's that he's not technically a Democrat. The fact that this non-Democrat came pretty darn close to winning that party's nomination in 2016 apparently doesn't matter; people don't think he belongs.

. . .

It all suggests a guy who is still very much using the Democratic Party when it's convenient for him -- which is perhaps what those readers are really upset about.

This is the real heart of the issue. There are indeed plenty of Democrats who are still incredibly angry at Bernie Sanders because "he's not a Democrat." They see Sanders as an interloper who refuses to join the party through egotistical reasons. The same people usually also pin the blame for Hillary Clinton's loss on Bernie's supporters, who (they claim): "stayed home, voted for Jill Stein, or voted for Donald Trump." Whether these claims against Bernie are accurate or not, there are a lot of people out there who strongly believe them.

This is why Bernie's coy dance with the Democratic primary in Vermont will doubtless bring more charges of "rigging," or even worse. His scheme is pretty downright Machiavellian, as even his supporters would have to admit. Run in the Democratic primary to win, then decline the party's nomination, so that he can have the luxury of running as an Independent with only one major challenger (the hapless Republican who runs against him in the general election). And he'll graciously accept the Democratic Party's endorsement after he wins their primary but refuses their nomination, which seems like icing on the cake, really. Bernie, not to mince words, is clearing the field for himself. He is manipulating the system for his own ends, but he's doing so in an entirely legal and upfront manner.

To some, that would not fall within the definition of "rigging" an election. Rigging implies backroom skullduggery, far from the light of day. Secret handshake agreements, shadowy alliances, and nefarious intent are also usually necessary for an election to be rigged. Bernie's scheme seems to have none of that, though.

Bernie, rather than rigging his own election, is inviting the Vermont Democratic primary voters to rig it for him. And it won't be the first time, either, as the article does admit:

To be clear, Sanders has done this before. He ran unopposed in the 2012 Democratic primary, and in 2006, he took 94.3 percent of the vote against three unknown opponents. Each time, he passed on actually running as a Democrat.

In other words, the Vermont voters know exactly what Bernie is attempting to do and they vote for him in droves anyway. Maybe an argument about rigging could have been made the first time he did this, but not now. It's all out in the open for the voters to see. Bernie is trying to manipulate the election process, not rig it. And the voters seem not to care.

There is nothing stopping a Democrat from beating Bernie in the Democratic primary, after all. If this happened, Bernie would then run as an Independent against two major-party candidates instead of just one. Vermont voters are free to choose this route -- nobody in the back rooms is preventing it from happening in any way.

The accusation that Bernie is a tease -- dancing towards the Democratic Party when it benefits him, only to dance away again when it doesn't -- is a harder one to deny. He has indeed done so, most notably in the 2016 presidential election. It was far more convenient for Bernie to run as a Democrat, because by doing so he was able to get his message out to a much wider audience than if he had run as an Independent presidential candidate. Bernie joins the two-party system when it benefits him, but then holds himself apart at other times.

So there's at least some degree of hypocrisy with Bernie's proud independence from the two-party system. If he really were a principled Independent, then he would never run in a Democratic primary race -- for senator or for president. Instead of walking this high road, though, Bernie has chosen a more practical path.

But it is up to the voters of Vermont (and not snarky pundits) to decide whether this matters to them or not. And so far, in resounding fashion, they have indicated that it doesn't. The last time Bernie was opposed, he ran against three Democrats in the primary (who all would have assumably accepted the Democratic Party nomination), and Bernie still got over 94 percent of the vote. That's pretty overwhelming support from within the Democratic Party electorate.

It would be impossible for Bernie to achieve his Machiavellian plot without the full informed consent of Vermont's voters. Bernie is setting the process up, but it is the voters themselves who would actually be guilty of rigging their own election -- by voting for a candidate who swears he will not appear on the general election ballot as a Democrat. As long as this is all up-front before the primary election is held, there is nothing hidden or underhanded about it. If the voters don't want Bernie's scheme to work, they have the power to deny it to him. So: Is Bernie being Machiavellian? Maybe so... but is he rigging his own election? No. Not even "kinda, sorta" rigging.

-- Chris Weigant

 

Follow Chris on Twitter: @ChrisWeigant

 

59 Comments on “Is Bernie Sanders "Rigging" His Own Election?”

  1. [1] 
    Kick wrote:

    In the political environment that exists today, there's a simple two-part litmus test that clears up any confusion regarding virtually any question regarding partisanship, and it goes like this:

    Part 1: What if Barack Obama had said/done that?
    Part 2: What if Hillary Clinton had said/done that?

    Quite frequent responses to said two-part test being, in no particular order:

    A. Heads would explode.
    B. It's rigged.
    C. Impeach.
    D. Benghazi.
    E. All of the above. :)

  2. [2] 
    Kick wrote:

    The fact that this non-Democrat came pretty darn close to winning that party's nomination in 2016 apparently doesn't matter; people don't think he belongs.

    I take issue with this author's assessment that Bernie Sanders "came pretty darn close" to winning the nomination in 2016 when the fact is, Hillary Clinton trailed Bernie Sanders in pledged delegates exactly one time after Bernie won New Hampshire early in the race. Hillary regained the lead with Nevada and never trailed thereafter.

    After Super Tuesday on March 1, Clinton led Sanders by 191 pledged delegates and never dropped below a 187 pledged delegate lead for the remainder of the entire race. This is pledged delegates alone and does not factor in the super delegates. Bernie was obviously a factor in terms of platform, issues, etc., but in terms of delegate count, it's utter fantasy to claim that Bernie was "close."

  3. [3] 
    Paula wrote:

    It would be great if a real Dem in Vermont did challenge Bernie and beat him. I wish the Dem party in Vermont would not give Bernie the chance, yet again, to benefit from other people's work and effort and then sleaze out with his "I'm an Independent" schtick.

    Someone said on twitter today that Bernie is the Dem version of McCain - gets all kind of credit for being a "maverick" for saying popular things and then doing nothing about them other than flapping his yap.

    But we're probably stuck with him for awhile yet which sucks. Hopefully the Dems will not give him the same opportunity on the big ticket in 2020. He can run as an Independent and hopefully fizzle out fast. But it would be better all the way around if he just didn't.

    I don't think he will come off as particularly inspirational this time around. He hasn't "lead a revolution" and he hasn't distinguished himself as a leader during this horrible interlude. Not saying others have either, but neither has he. He spits out stuff about "establishment democrats" and all I can think is: "that's so 2016". Everything is different now. I think his chance has come and gone.

    I don't think Bernie can ever, ever win over we Hillary supporters -- I will back ANY reasonable alternative to him and I have no doubt there will be one or many. And if he does run he better pony up his tax returns. And then lose anyway.

  4. [4] 
    Paula wrote:

    ut it would be better all the way around if he just didn't (run).

  5. [5] 
    C. R. Stucki wrote:

    The very idea that the Russian's hacking of Dem emails, revealing that the Clinto faction had rigged the primaries to deny the nomination to Sanders, contributed to Trump's win in the general election by causing the most radical Dems/Libs of the Dem party to vote for Trump or at least to stay home, was ALWAYS prima fascia ridiculous, and still is!

    It was borne of Dem/Lib desperation to 1), rationalize Clinton's loss, and 2), to de-legitimize Trump's win. It served as the motivation/justification for the whole Mueller disaster, which has wasted tens of $millions of taxpayer money to accomplish nothing meaningful whatsoever.

    (No Kick, I've NOT forgotton the 13 indicted Russians, who are far beyond the reach of U.S. prosecution.)

  6. [6] 
    TheStig wrote:

    I can't bring myself to be the least bit upset by Bernie Sander's tactics. Both the Democratic and Republican parties ceased to be agencies for hammering out consensus political policy decades ago. Both are now essentially permanent fund raising/PR organizations that are periodically captured by politicians backed by, for lack of a better term, coalitions of barons. Except for the level of bloodshed, not all that different from politics in England during what is now termed "The War of the Roses."

  7. [7] 
    Balthasar wrote:

    Stucki [5]: Don't take it from me, take it from James Clapper, who has been in intelligence for 50 years, serving presidents from Kennedy to Obama. In his new book, Facts and Fears: Hard Truths from a Life in Intelligence, he says:

    “Of course the Russian efforts affected the outcome. Surprising even themselves, they swung the election to a Trump win. To conclude otherwise stretches logic, common sense, and credulity to the breaking point. Less than eighty thousand votes in three key states swung the election. I have no doubt that more votes than that were influenced by this massive effort by the Russians.”

  8. [8] 
    neilm wrote:

    The Mueller investigation has been one of the most productive in the recent history of such investigations. There is a lot of dirt, which is to be expected from anybody who had an even passing knowledge of the people who Trump associated with before and after he announced he was running for President.

    The willful blindness that CRS is enthusiastically swallowing whole is not new for this generation of Republicans - we've seen it with school massacres (of course guns aren't the problem), climate denial (they didn't have SUVs when it was hot in the age of dinosaurs) and trickle down (your bosses just need one more raise and then they'll definitely spread the wealth).

    They even rage at education, because getting a degree makes you less likely to believe in sky fairies.

    Pathetic.

  9. [9] 
    Balthasar wrote:

    Stig [6]: Both the Democratic and Republican parties ceased to be agencies for hammering out consensus political policy decades ago.

    Nonsense. You're confusing current GOP intractability with long term political trends, which tend toward the loosening or disappearance of differences on a slew of wedge issues ranging from gun control to gays to pot legalization.

    The Tea Party phenomenon and its monster child, the Trump movement, were reactions to the very real fact that many of those folks know that they're losing the culture war big time, and aren't at all happy about it. Right now they're having one last big day in the sun. But the pendulum, as always, will swing back to the center.

    America isn't a land of hardened fascists any more than it's a land of wide-eyed liberal naifs. Most folks are sensible, albeit malleable, voters, who will eventually make the right choices after exhausting every alternative.

  10. [10] 
    ListenWhenYouHear wrote:

    I take issue with this author's assessment that Bernie Sanders "came pretty darn close" to winning the nomination in 2016 when the fact is, Hillary Clinton trailed Bernie Sanders in pledged delegates exactly one time after Bernie won New Hampshire early in the race. Hillary regained the lead with Nevada and never trailed thereafter.

    I’m with Kick on this! I love Bernie and what he brought to the political debates and I would have been thrilled if he would have won the nomination — but he got his ass handed to him by Hillary when the votes were all counted. Bernie drew bigger crowds than Clinton maybe, but people failed to realize that Hillary supporters were there; even if they didn’t have time to attend rallies, they made time to vote. Bernie was not robbed of the election, he simply lost.

    Sorry, Paula, but I was a Hillary supporter who appreciated all that Bernie did to help Hillary’s campaign after he lost the nomination. His message was inspiring and was far more ambitious than anything the Dems have ever floated in the past while still remaining attainable. I fear Bernie wouldn’t be as strong of a president as he is a senator, which is why I chose to support Hillary fully after she won the nomination.

    Bernie has great ideas for progressives to get fully behind, and the Democrats would be idiots not to heed his counsel.

  11. [11] 
    neilm wrote:

    Kick [2] - thanks!

    LWYH [10] - well said.

    I have no animosity to Bernie, I think he genuinely campaigned for Hillary - as much as any other Democratic Senator, and more than some.

    Bernie voters who constructed a story about a stolen primary and subsequently abstained or worse, voted for Trump, are a big disappointment - we are meant to be the educated and intelligent party. The Republicans are the stupid party, as one of their own primary candidates noted.

    I don't really care how Vermont voters choose their candidate - just that they end up choosing Bernie, who is a positive force in Washington, and there are few enough of them.

  12. [12] 
    Balthasar wrote:

    Bernie voters who constructed a story about a stolen primary

    That was probably concocted by folks who weren't Bernie people at all. That's the maddening part of it: the people who believed the fake story became the real story (which is perceived by those people to be fake).

  13. [13] 
    TheStig wrote:

    Balthasar-9

    The point I was trying to make in 6 was that I don't think very much of the primary system method of selecting presidential candidates. The adoption of state primaries was intended as a reform measure,"power to the people," but it actually favored our country's social barons = "The One Percent." Trump is a failed middling real Estate Baron turned Telemarketing Baron who hijacked the Republican Telemarketing/Fundraising apparatus. That is how modern US politics is played, Bernie (a minor reform baron from NH) has to play the game like every other modern candidate.

  14. [14] 
    TheStig wrote:

    neilm- "The Mueller investigation has been one of the most productive in the recent history"

    and getting more productive with every passing day :). The "frog march" is beginning to look more like a parade.

    "getting a degree makes you less likely to believe in sky fairies."

    quite so, but much less likely to lead to a secure economic future than it used to be... before universities adopted a corporate model of operation. Paradoxically, a degree in theology from a rigorous program, is often very successful in banishing belief in the Sky Fairy(ies).

  15. [15] 
    Don Harris wrote:

    Asking the voters to rig elections. Sounds like a good idea.

    Why not inform the 20-30% of voters that vote in presidential elections but don't vote in off year elections about the opportunity to rig the 2020 and future elections in favor of small contribution candidates by participating in One Demand in 2018 instead of wasting their 2018 vote by not voting?

    The Vermont voters have been informed and made their choice in the past on Bernie's strategy and will again.

    Why not inform the potential non-voters in 2018 so they can decide how they want to proceed in 2018?

    Is not informing citizens about this opportunity denying them the chance to decide in itself a form of rigging an election?

  16. [16] 
    C. R. Stucki wrote:

    LWYH, [10] (plus most everybody else around here)

    Re "Bernie has great ideas for progressives to get fully behind . . ."

    Actually Bernie only has ONE idea (singular). Distilled to its essence, Bernie's one idea is "Take from the more productive, give to the less productive."

  17. [17] 
    C. R. Stucki wrote:

    neilm

    I recently stumbled across a youtube clip involving Milton Friedman's discussion of the nature of money (something you ought to peruse yourself), which reminded me of the time you made it clear to me that you equate money with 'real wealth', as that term is used by economists.

    That caused me to wonder how you explain, believing as you do about money, that poverty actually exists in the world???

    I read once many years ago, that it costs the U.S. Treasury $.014 to print a piece of U.S. currency of any denomination. So, by now maybe it might cost $.05 or $.10, still awful cheap. So that being the case, why don't we totally eliminate poverty throughout the world by simply printing and distributing unlimited amounts of paper "wealth" to every living person?

  18. [18] 
    Don Harris wrote:

    CRS (16)-
    I think you may be confusing Bernie Sanders with Bernie Madoff.

  19. [19] 
    Don Harris wrote:

    Regarding the claims that those that stayed home, vote for Jill Stein or voted for Trump are somehow responsible for Hillary losing, the "Whether these claims are accurate or not" is not accurate.

    There are still people that believe the earth is flat or is only about six thousand years old.

    Would you describe their claims as "accurate or not"?

    If you would not, then there is no reason to say accurate or not when referring to blaming those that did not vote for Hillary for Hillary losing as those claims have no basis in reality.

    "It's okay, you can say it. Everybody knows."
    -Joe Pesci to prosecutor's expert witness after it was shown that the car could not have made the tire marks
    My Cousin Vinny
    (maybe not an exact quote)

  20. [20] 
    John M wrote:

    [16] C. R. Stucki

    Actually Bernie only has ONE idea (singular). Distilled to its essence, Bernie's one idea is "Take from the more productive, give to the less productive."

    NO. You got that TOTALLY wrong as usual. It would be more accurate to say that his goal is to make EVERYONE more productive. Not just throw the weak to the wolves. Or rig the system even more in favor of the one percent.

    Trump and Bernie ARE two sides of the same coin in one respect. The downtrodden voters trying to protest just how much they feel that the current system is BIASED AGAINST them.

  21. [21] 
    John M wrote:

    [5] C. R. Stucki

    "It served as the motivation/justification for the whole Mueller disaster, which has wasted tens of $millions of taxpayer money to accomplish nothing meaningful whatsoever.

    (No Kick, I've NOT forgotton the 13 indicted Russians, who are far beyond the reach of U.S. prosecution.)"

    Apparently YOU HAVE forgotten the following, BESIDES the 13 Russians. They include BOTH guilty pleas and indictments, AMERICANS all of them:

    1) George Papadopoulos, former Trump campaign foreign policy adviser, pleaded guilty in October to making false statements to the FBI.

    2) Michael Flynn, Trump’s former national security adviser, pleaded guilty in December to making false statements to the FBI.

    3) Paul Manafort, Trump’s former campaign chair, was indicted in October in Washington, DC on charges of conspiracy, money laundering, false statements, and failure to disclose foreign assets — all related to his work for Ukrainian politicians before he joined the Trump campaign. He’s pleaded not guilty on all counts. Then, in February, Mueller filed a new case against him in Virginia, with tax, financial, and bank fraud charges.

    4) Rick Gates, a former Trump campaign aide and Manafort’s longtime junior business partner, was indicted on similar charges to Manafort. But he has now agreed to a plea deal with Mueller’s team, pleading guilty to just one false statements charge and one conspiracy charge.

    5) Richard Pinedo: This California man pleaded guilty to an identity theft charge in connection with the Russian indictments, and has agreed to cooperate with Mueller.

    And FINALLY, one BRITISH citizen:

    6) Alex van der Zwaan: This London lawyer pleaded guilty to making false statements to the FBI about his contacts with Rick Gates and another unnamed person based in Ukraine.

    All this after ONLY ONE year so far. Remember, The Watergate investigation went on for TWO years before Nixon resigned rather than face certain impeachment.

    Still contend it's a waste, has accomplished nothing?

  22. [22] 
    John M wrote:

    [16] C. R. Stucki

    Distilled to its essence, Bernie's one idea is "Take from the more productive, give to the less productive."

    Perhaps the words of Coretta Scott King would help:

    “Our Congress passes laws which subsidize corporations, farms, oil companies, airlines and houses for suburbia, but when they turn their attention to the poor they suddenly become concerned about balancing the budget and cut back on funds for Head Start, Medicare and mental health appropriations.”

    “In this society, violence against poor and black people is routine. I remind you that starving a child is violence. Suppressing a culture is violence. … Ignoring medical needs is violence. Contempt for poverty is violence. Even the lack of willpower to help humanity is a sick and sinister form of violence.”

  23. [23] 
    John M wrote:

    [17] C. R. Stucki

    "So that being the case, why don't we totally eliminate poverty throughout the world by simply printing and distributing unlimited amounts of paper "wealth" to every living person?"

    There is actually a new economic idea that is taking both Liberal Democrats and WALL STREET by storm. It is being promoted by noted Economist Stephanie Kelton.

    Kelton’s core idea is that the government can’t run out of money or go bankrupt, no matter how much it spends.

    Kelton has a radical idea she has been workshopping her entire career and it could be the next big thing in Democratic Party politics. She calls it the job guarantee ? a federal program offering a decent job to every American who wants to work, in every county in the country, at any phase of the business cycle. “The jobs pay for themselves,” she says, by creating new socially productive stuff that makes its way into the economy. What matters isn’t the deficit but whether these new work hours can generate something useful.

    It’s a practical expression of her monetary thinking. To her, governments aren’t directly constrained by how much programs cost. The serious concern is inflation, and a job guarantee would revolutionize the way the United States manages the value of the dollar, forcing the Federal Reserve to stop creating unemployment when it wants to keep prices down.

    “The basic idea is that the government can’t run out of money,” Kelton said. “It creates money just by spending.”

    When people talk about government profligacy bankrupting their grandchildren or triggering a cataclysmic debt crisis, Kelton argues, they’re conflating the experience of a typical family, which has to get money from somewhere outside the household to meet expenses, with that of a sovereign government, which creates money as part of its basic operation.

    Kelton maintains that government doesn’t actually finance its activity by levying taxes or issuing bonds. Instead, it creates money by spending it into existence. If a government wants to build a road, it calls some contractors and puts money in their bank accounts to pay for it. Where does this money come from? The same place all money comes from: thin air.

    This means, among other things, that the government can always pay for whatever it wants ? housing, health care, tanks, whatever. But it doesn’t mean governments can just spend infinite amounts without any consequences, she emphasized. Eventually inflation becomes an issue when the amount of money in circulation gets ahead of the productive capacity of the workforce.

    But even inflation doesn’t impose a hard limit on policy options. The Federal Reserve can raise interest rates to deal with it, Congress can raise taxes to pull money out of circulation or even impose price controls. All those have their drawbacks, but depending on circumstances, any of them might be preferable to reducing government spending. It all depends on what a society needs. Those needs, Kelton thinks, should be the primary focus of study ? not the immediate impact on the federal budget deficit.

  24. [24] 
    C. R. Stucki wrote:

    John M [20]

    ". . his (Bernie's) goal is to make EVERYONE more productive."

    How I wish that were true. Give me even a single example of the specifics of how he plans to "make everybody more productive."

    Also, tell me how you think "the system is rigged in favor of the one percent". Seems to me, it's rigged against the 1%, as in the top 1% pay more income taxes than the bottom 20%.

    [21] OK, a lot of little fish have been caught in Mueller's net. Next you'll point out that he's caught a lot of shoplifters at Walmart. Big deal. He is after Trump, and not even getting close, because getting dirt on Hillary is perfectly legal, even when it comes from Russians.

    [22} Regarding C. S. King's words. Please note that when I point out that Bernie Sanders' entire plan boils down to "Take from the more productive and give to the less productive", I did NOT say nor even iply, that doing that is a bad thing. I'm not against charity, compassion, etc. I'm just pointing out facts about Bernie, facts which you cannot meaningfully dispute.

    [23] Im well aware of Kelton's plan to eliminate poverty, etc.

    She is full of good will, but totally empty of principles of economics.

    It is ABSOLUTELY TRUE that "The gov't can't run out of money", because they can make more of it in unlimited amounts, but she lets that fact lead her to drawing several erroneous conclusions. For instance, it's not true that "all the government's money comes from thin air" - some comes from taxpayers. And it's not true that price inflation can be easily and completerly controlled by raising the interest rate. If that were true, the cost of food in Venezuela would not be doubling every 14 days as it currently is.

    Kelton suffers from a terminal case of economic naivete, combined with simple-mindedness.

  25. [25] 
    neilm wrote:

    Hi CRS - hope all is well. Before I address comment 17, I'd like to bring your attention to Matt Levine's latest column which has some pretty interesting thought experiments about the use of CDS.

    I read once many years ago, that it costs the U.S. Treasury $.014 to print a piece of U.S. currency of any denomination. So, by now maybe it might cost $.05 or $.10, still awful cheap.

    You are right, and the good news for the Government is that it is even cheaper than that - to create $Billions for QE all they did was change a few numbers in some computer records (I simplify, but the cost was basically zero).

    So that being the case, why don't we totally eliminate poverty throughout the world by simply printing and distributing unlimited amounts of paper "wealth" to every living person?

    This is an old idea that is gaining some momentum - albeit as a "Guaranteed Income". Alaska has a version of this already - all AK residents get an annual stipend of about $2,000.

    I'm assuming you are trying to lead to an argument that printing money results in hyperinflation. This was the panic raised in 2009 before we created $3.5T via QE (which nets to $10,000 per person in the U.S.). Sadly this money was basically given to the financial system that used it to prop up their balance sheets then play the yield curve. Inflation has remained about 2-3% since, but we may have created a new asset bubble instead. We'd have been a lot better if we had dropped $3.5T from a helicopter across the U.S.

  26. [26] 
    neilm wrote:
  27. [27] 
    Paula wrote:

    [23] John M: Yes, I think Stephanie Kelton's idea is really interesting.

    Back when the financial crisis was developing I watched an explainer that showed how banks create money out of thin air by making loans. You walk into the bank, you get a car loan and the bank has now "created" $20k. It's on the books. It will come in a month at a time via payments, but before the loan there wasn't $20k, after the loan, there is. No one delivered a wheel-barrel full of gold bars - nothing "physical" changed hands. The bank isn't forced to scrape $20k out of a vat that contains all-the-available-money - as though the amount of money in the world is finite - it creates it by writing it down (digitally, nowadays).

    Prevailing economic thought operates as though there is a finite amount of money that we all have to fight for a piece of when that's clearly untrue.

    The way forward is some version of: Socialize what we need and Privatize what we want.

    "Governments" should straight-up fund schools without any reference to property values/taxes. Every school should have all the resources it needs. Etc. Roads, infrastructure, utilities. But also have a private sector where new things can be developed and people can make profits and fortunes and all that. Some people are really good at that stuff - they need their outlet. There are always things people want; a fairly basic set of things people really need. (But needs on a realistic level - everyone needs internet access these days; it isn't a "luxury".)

    Economies thrive when money is moving - you pay me enough so that I have money to spend beyond the unavoidable bills and I'll spend it on all kinds of stuff that puts money in other people's pockets.

    We need a bigger government not a smaller government. We need people to make policies and spending decisions and we need watchdogs - lots of watchdogs. But we could all be moving in the same direction if we weren't living the lie of "scarcity".

  28. [28] 
    neilm wrote:

    Since we moved from a gold backed currency to a government backed currency during the Nixon administration, the value of our currency, many claim, is based on our ability to raise taxes to cover any debts we issue in U.S. dollars.

    If you accept this argument then you have to look at our debt wrt to our ability to generate wealth that can be taxed.

    Wealth per adult* in the U.S. has grown from $200,000 in 2000 to almost $400,000 in 2017. The total wealth of the U.S. is about $94T. Our current Government debt is $21T.

    Our debt is now growing at $1.5T/year thanks to lower tax revenues and increased spending, so we need to be creating a multiple of that in additional wealth each year. At the moment we are averaging about $4T/year of wealth creation. Thus we are spending about 35-40%/year of the new wealth we are creating on ourselves, above and beyond what we tax ourselves.

    If we look at the U.S. as a business:

    Revenue: $80M
    Profit: -$4.2M
    Debt: $64M
    Market Cap: $386M
    Market Cap increase/year: $11.7M

    Would you invest in a company that lost $4.2M/year but generated stock price increases of 3%/year?

    * Source for numbers: Credit Suisse Global Wealth Report 2017

    https://www.credit-suisse.com/corporate/en/research/research-institute/global-wealth-report.html

  29. [29] 
    neilm wrote:

    banks create money out of thin air

    Banks create money via fractional reserve banking, not out of thin air, however it could almost be, and many claim it is one of the great financial sins of our system.

  30. [30] 
    Paula wrote:

    [10] Listen: Yes, Bernie helpe at the Convention - I will give him that. At that point, though, he was actually pretty desperate - he was having to beg his followers to not disrupt the convention. Because he had allowed things to get to that point. And he was essentially claiming ignorance - he was shocked, SHOCKED! that people were so crazed. What the hell did he think had been going on?

    His failure to grasp what his rabid followers were doing/saying - quite publicly - was a failure of leadership. He'd evidently delegated all of that and was either sealed off from it, or underestimated it, or liked it. Until it went too far.

    And yes, he moved the conversation further left on some things and that was his greatest gift. But now the party is there. And he needs to recognize what he's succeeded at and realize he doesn't have anything MORE to contribute - all he's doing now is replaying old records.

    But whatever. He'll do what he decides to do. He will be a divider simply by running again because millions of bridges are burned. If he chooses to do that we will have to deal with it. It will be an act of complete selfishness and ego on his part but there it is.

  31. [31] 
    Paula wrote:

    [29] Neilm: You mean banks create money by having $20 actual "dollars" and making a $20k loan on the strength of that? (I.E. we have a percentage of this loan available this minute to begin to pay back the loan we've made if it should fail.)

    What would be the better way?

  32. [32] 
    Paula wrote:

    [32] Although would it be equally accurate that banks create a portion of their $ out of thin air? If they have a fraction of what they claim on their books - and they make loans anchored by a fraction, isn't the rest a "creation?"

  33. [33] 
    neilm wrote:

    Paula [31]

    You are right.

    If they get a $2,000 deposit in a saving account they can use that to write a $20,000 loan - effectively creating $18,000 from thin air.

  34. [34] 
    Paula wrote:

    And just a note that seems relevant: today several losing candidates on the Dem side are publicly offering their support to the primary winners - this includes the other Stacy in Georgia and Laura Moser in TX. This is a positive trend that seems to have been happening since the Virginia Gov race. I think it is, at least in part, a reaction to the Bernie/HRC primary. Post-Blotus most Dems recognize the stakes are bigger than their individual races and egos, and good for them.

  35. [35] 
    C. R. Stucki wrote:

    neilm

    That (the Levine thing) is more hypotheticals than I can deal with.

  36. [36] 
    Paula wrote:

    [33] neilm: Thanks for the clarification! So based on the fact that money IS, in fact, conjured, what do you think of Kelton's idea that the gov should conjure what is needed to meet its needs?

  37. [37] 
    John M wrote:

    [27] Paula

    "The way forward is some version of: Socialize what we need and Privatize what we want."

    Paula, I could not think of a better way of putting it, thank you!

  38. [38] 
    C. R. Stucki wrote:

    Paula [36]

    There is indeed much about money that is mysterious to damn near everybody, but if you want to understand the intricacies of it, first and foremost is to have a firm grasp on the most fundamental fact of all, that being that you cannot eat it! It only has value so long as people will accept it in exchange for things that you CAN consume.

    Peoples' inability to understand the principles of economics leads them to the concept of money being "conjured", and that's actually overdoing the mystery thing. That fact pretty much explains Stephanie Kelton's misguided conclusions and equally misguided solutions.

    It's true that the gov't can 'create money out of thin air' as the saying goes, (as opposed to collecting taxes), but the more it does of that, the less the money will buy.

    There are a great many examples of governments doing that (currently, Venezuela), and the results are not good. Ask the Venezuelans if the'conjured' money is "meeting THEIR needs"?

  39. [39] 
    Don Harris wrote:

    Paula (30)-
    If Bernie failed to grasp what his committed supporters were doing, he was not alone. Hillary also failed to grasp what was required to secure their votes as evidenced by the fact that they did not vote for her.

    Those of us not fooled by the Big Money Democrats will do what we will do just as the rabid followers of the Big Money Democrats will do. It is not driven by ego or selfishness, just a desire to vote for quality candidates instead of the substandard candidates being offered by the Big Money Democrats.

    #FU- IT'S YOUR TURN

  40. [40] 
    neilm wrote:

    CRS [38]

    We all know the effects of the money presses working overtime and generating hyperinflation, and subsequent slippery slope arguments about even running the presses a bit too fast is going to have the same outcome.

    However we seldom look at the opposite. Imagine we created $1,000,000 in 1900 and said that this was the only currency that would ever be created. The money would be in such demand for its function (acting as a medium of exchange) that two things would happen - firstly the value of money would increase with respect to the good it could buy, and secondly everybody would try to hoard their money because as more and more wealth is created the value of the money would increase over time (i.e. deflation).

    Since we create about $4T of wealth every year in America, we can afford to print $4T more without causing inflation. How we distribute this is the interesting question.

  41. [41] 
    Paula wrote:

    [37] John M: You're welcome!

  42. [42] 
    Paula wrote:

    [39] Don: Bernie's failure to grasp how toxic many of his supporters had become is a different issue from what HRC did and didn't do. It is not a defense of Bernie it is an attempt to redirect.

  43. [43] 
    C. R. Stucki wrote:

    neilm

    In theory at least, what you're describing is the fundamental function a central bank (in our case, the Federal Reserve Bank).

    Unfortunately, in reality (pretty much like everything the gov't does) oftentimes politics intrudes into the system, overriding the principles of economica.

  44. [44] 
    Paula wrote:

    [38] Stuckie: "the mystery of the thing" is coming from you, not me. The example I gave of how banks "conjure" money is quite simple.

    Also I grasp the idea of inflation and understand it can happen. That's not the same thing as saying it MUST happen using Kelton's idea, or automatically will happen or that if it did happen there's nothing on God's green earth we could do about it.

    Just maybe a different approach than what is currently considered acceptable economic conventional wisdom is worth exploring. Coz what's happening now isn't good and continually upping the numbers of people you're willing to starve isn't the answer.

  45. [45] 
    C. R. Stucki wrote:

    Paula

    Contrary to most peoples' understanding, banks do not actually "conjure money". All the "conjuring" is done by the gov't/central bank.

    I'm guessing you actually do NOT "grasp the idea of inflation". In reality, there are two definitions of "inflation" - the original one was "undue expansion of the money supply", and should be referred to as 'Monetary Inflation'. The 2nd one should actually be called 'Price Inflation'. Monetary inflation invariably causes price inflation, but what confuses people is the fact the Price Inflation can also happen as the result of the normal functioning of the Law of Supply and Demand.

    Unfortunately, for most people, the original definition has fallen by the wayside. These days, most people, even professional economists, use the word "inflation" as being synonymous with 'Rising Prices', and that fact leads to much loss of understanding of the true nature of monetary-related economic problems, which in turn gives rise to erroneous solutions.

    Kelton's "idea" would cause price inflation only if the ratio of the new money she would create to provide universal employment was disproportionate to the amount of goods and services produced at the new gov't-sponsored jobs.

    Unfortunately however, based on historical precedent, that would almost certainly be the reality of the situation.

  46. [46] 
    Paula wrote:

    [45] Stucki: Maybe price inflation would occur - you're guessing - she's guessing.

    Right now billionaires have "created" billions of dollars that theoretically exist but are not circulating. If working people were "earning" a living wage - meaning enough to pay for requirements plus extra - they would be circulating a lot of it. And wages/salaries should go up from there for higher skilled people. Basically a return to the Henry Ford idea that working people have to have enough $ to buy things. Right now there's a lot of pent-up need: millions of people can't afford dental care but if they're wages were sufficient they could, for example. There would be a lot of busy dentists. And tradespeople for all kinds of home repairs, updates, etc. And on and on.

  47. [47] 
    C. R. Stucki wrote:

    Paula

    Sorry, but billionaires do not have the ability to "create money" - only the federal gov't can do that. What the billionaires create is "real wealth" (goods and services that can be consumed).

    If they take the money that consumers give them in exchange for their production (potatoes, iphones, cars, health care, etc.) home and put it in their mattresses, then they actually would be taking it out of circulation, but that is not a realistic scenario. Odds are overwhelming that they would deposit it in a bank, and it would be available for loaning to people who want to finance their house, new car, Carribean cruise, tooth repair, etc.

    "Pent-up need" is hardly a phenomenon of"right now". There is never nor will there ever be, any shortage of "pent-up need". I have "pent-up need" for a Maseratti, but it's likely to stay "pent-up" forever.

  48. [48] 
    BashiBazouk wrote:

    Sorry, but billionaires do not have the ability to "create money" - only the federal gov't can do that.

    Chris Larsen, Joseph Lubin and who ever is behind Satoshi Nakamoto would disagree...

  49. [49] 
    Paula wrote:

    CW: my comment is getting eaten - saying it's a dupe. Release it if you can! Thanks.

  50. [50] 
    C. R. Stucki wrote:

    Bashi [48]

    Sorry, not acquainted with those guys. Counterfeiters, right? Cause only the gov't can "create money" ('legal tender') legally.

  51. [51] 
    BashiBazouk wrote:

    C. R. Stucki[50]

    Cryptocurrency. All three, or at least the first two have become billionaires (at least on paper) literally creating money. Satoshi Nakamoto or who ever is behind that name and Bitcoin should be one as well but who knows? As to the legality, well that's a bit of gray area currently in flux...

  52. [52] 
    John M wrote:

    [47] C. R. Stucki

    "What the billionaires create is "real wealth" (goods and services that can be consumed)."

    "Odds are overwhelming that they would deposit it in a bank, and it would be available for loaning to people who want to finance their house, new car, Carribbean cruise, tooth repair, etc."

    Actually, NEITHER of those statements are true. There are many company CEO's for example, whose bulk of their wealth resides not in bank accounts or bonds, (both of which are available for institutions to use to make leans to other people), but in stocks, (which are not). Furthermore, the increase or decrease in the value of these stocks and therefore the wealth associated with them, often rises and falls based on PURE speculation, and has nothing to do with any real world goods or services being produced or even with the performance of the company itself. Indeed, said company can "create" wealth simply by buying back a large percentage of its own stock.

  53. [53] 
    C. R. Stucki wrote:

    John M.

    It's hard for me to respond to something equivalent to your [52], without making you feel insulted, which I do not want to do, but you are WAY over your head on this kind of stuff, I'm talking 180 degrees wrong! But always remember, damn near everybody else is in the same condition.

    Just one example - when a company redeems (buys back) its own stock, it usually does indeed raise the price of the stock, but it does NOT automatically "create wealth", not real wealth (goods and services), nor monetary wealth (money). The stock price of the outstanding shares goes up, but now there are FEWER SHARES OUTSTANDING!!!, so the total value of the corp. changes not in the least.

    Also, billionaires do NOT create money, they create goods and then you and I convert those goods to money when we give him OUR money in exchange for his goods.

  54. [54] 
    John M wrote:

    C. R. Stucki

    "Just one example - when a company redeems (buys back) its own stock, it usually does indeed raise the price of the stock, but it does NOT automatically "create wealth", not real wealth (goods and services), nor monetary wealth (money)."

    So, by that line of reasoning, a CEO who we say is worth 50 billion dollars based on the value of the stock he owns alone, is really not rich or wealthy at all because those stocks in and of themselves do not represent either goods, services or money. That is what you are saying.

    "The stock price of the outstanding shares goes up, but now there are FEWER SHARES OUTSTANDING!!!, so the total value of the corp. changes not in the least."

    Again, this is not a true statement. Since the value or net worth of a company IS based on both its physical assets and the value or price of its stock at any given moment, since a company borrows and is loaned money by investors based on the price of its stock. The total value of a company DOES rise and fall based on the share price of its stock. That's how companies ARE ranked on stock exchanges.

    You will forgive me but it seems like you are the one who is ion way over your head, since you seem to keep talking in circles in order to justify your reasoning.

  55. [55] 
    John M wrote:

    C. R. Stucki

    "The stock price of the outstanding shares goes up, but now there are FEWER SHARES OUTSTANDING!!!, so the total value of the corp. changes not in the least."

    Another point. When the price or value of the stock has fallen to zero, essentially become worthless, the company has in essence gone bankrupt, has it not? Even though it may have physical assets that are still worth something.

  56. [56] 
    C. R. Stucki wrote:

    John M [54]

    Sorry man, this is not working for me.

  57. [57] 
    Kick wrote:

    C. R. Stucki
    57

    (No Kick, I've NOT forgotton the 13 indicted Russians, who are far beyond the reach of U.S. prosecution.)

    Okay, Stucki; you are now attempting to answer questions that you imagined I asked you. This is not a "good look" for a guy who repeatedly feigns superior intellect over everyone. *LOL*

    Since you seem so eager to answer to me, I believe I will oblige you thusly:

    Have you perchance done your homework and looked into the indicted Russians I've discussed before?

    - Yevgeniy Aleksandrovich Nikulin
    - Pyotr Yuryevich Levashov

    Bonus Question:

    Are you perchance aware that Nikulin and Levashov were equally "far beyond the reach of U.S. prosecution" until Nikulin was arrested in Prague and Levashov was arrested in Spain... on vacation... and that each of them was eventually extradited to a jail cell in America and now reside in captivity?

    https://www.wired.com/2017/04/fbi-took-russias-spam-king-massive-botnet/

    The FBI has his hardware too. Levashov is one to watch... I promise you.

    Try to keep up, Stucki. :)

  58. [58] 
    C. R. Stucki wrote:

    Kick

    If your monumental disappointment that the whole Russian witch hunt, which you've counted on for over a year to bring about Trump's downfall but which never really had a chance, can be assuaged by the prosecution of all 13 Russian hackers, more power to you.

    Actually, even though I was much more realistic about the whole collusion thing than you were, I likely feel just as bad as you do that the moron still sits in the White House.

  59. [59] 
    Kick wrote:

    C. R. Stucki
    58

    If your monumental disappointment that the whole Russian witch hunt, which you've counted on for over a year to bring about Trump's downfall but which never really had a chance, can be assuaged by the prosecution of all 13 Russian hackers, more power to you.

    You poor old man; you have no idea who or what you're prattling on and on about whilst sounding exactly like the Orange Blowhole we refer to as BLOTUS. Again, Stucki, as you so frequently are wont to do, you feign intellect of that which you know zero.

    Actually, even though I was much more realistic about the whole collusion thing than you were, I likely feel just as bad as you do that the moron still sits in the White House.

    Do us all a favor and stop emoting your "feelings" all over the place, Stucki, and don't even try to pretend you could even remotely know my thoughts unless you've spent years in training and decades... let's just say... being me. :)

Comments for this article are closed.