Bernie Sanders is the saviour of capitalism

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The old enemy is back and thank god for it, via Domain:

They left it until the very last minute, and they may not have gone in nearly hard enough.

But the Democratic Party’s presidential contenders finally got around to targeting frontrunner Bernie Sanders for his big-spending policies, patchy record on gun control and praise for revolutionary far-left leaders.

Sanders, a self-described democratic socialist, trounced his rivals in last week’s Nevada caucuses and has been rising in the polls ahead of this weekend’s South Carolina primary, putting him in a strong position to win the Democratic presidential nomination.

…Pete Buttigieg, the former mayor of South Bend, Indiana, landed many of the most effective blows on Sanders.

“If you think the last four years has been chaotic, divisive, toxic, exhausting – imagine spending the better part of 2020 with Bernie Sanders versus Donald Trump,” he said.

That’s exactly what is required. A left populist to fight the right populist. I wouldn’t expect a smooth, social policy, chardonnay leftie like Buttigieg to get it. He’s the problem.

Why? Because Donald Trump is only in power thanks to such fake lefties selling out traditional bases such as the working classes. Trump stole them with a conservative cultural pitch that at least acknowledged their existence, while slashing taxes for the rich!

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A populist leftie is the ideal candidate to tackle this. And a populist leftie president will also begin the inevitable rebalancing of capitalism back towards workers.

Capitalists too should rejoice. The smart ones know that the current globalisation has swung the pendulum too far towards capital. That risks the liberal, capitalist system itself. Either if an oligarchic capitalism with Chinese charcteristics wins out. Or if workers revolt out of the wealth imbalance.

Either way, Sanders is a liberal democratic corrective not some new Lenin.

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Would he succeed? He could. It depends upon his policy mix. If he does what Donald Trump has done, and goes big with fiscal, only this time directs the largesse towards households, then he will.

Such policies as forgiving student debt are dynamite for domestic demand, job creation and wages growth. US household balance sheets are already in rude health, with solid demographics driving household formation, to liberate so much income will drive immense demand growth.

Markets won’t like it initially because it will also bring inflation. But deflationary trends are still rock solid so there is plenty of room to stimulate without any kind disastrous inflation cycle. Equities will soon adjust and chase the new profit winners. It will also lift interest rates and give capitlaism back its most fundamental price.

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Wages may rise more strongly to threaten profits. But this will be offset be better demand and the need for investment. I am not at all convinced that wages growth comes direct from rising productivity. Indeed, it may be the other way around.

Australia is a case in point with its flat wages delivering oodles of bullshit jobs, bugger all productivity, no income gains and falling living standards. If wages are rising, the incentive to automate for capital is much stronger and the efficiency gains drive both higher wages and profits.

That is, in some ways, higher wages drive productivity.

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So, bring on Bernie Sanders. Get out of the way smooth, globlist centrists. Go schmooze with Davos Man and toast the demise of the workers you abandoned.

It’s time for some good old fashioned class war to right the capitalist ship.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.