What Could Kill Booming U.S. Economy? ‘Socialists,’ White House Warns

Karl Marx. Vladimir Lenin. Mao Zedong. Elizabeth Warren?

The White House Council of Economic Advisers on Tuesday published a 72-page report criticizing what it described as the socialist ideas of leading Democratic Party politicians, and seeking to link President Trump’s political rivals with figures reviled by most Americans.

The document departs from the council’s long tradition of delivering sober, albeit partisan, studies on current questions confronting economic policymakers, such as the value of tax cuts or the effects of increased corporate concentration. Instead, the report seeks to tar Democrats by linking them with the failed economic policies of communist governments in China, the Soviet Union and other countries.

The word “socialism” appears 144 times — on average, twice a page.

In case the point was lost on anyone, the message was driven home by a follow-up release from the White House press office with the headline “Congressional Democrats Want to Take Money From Hardworking Americans to Fund Failed Socialist Policies.”

The report does not shy away from lumping in liberal politicians and their policy proposals, such as Medicare for All and tuition-free college, with the atrocities committed by authoritarian regimes. For example, it compares Lenin’s demonization of kulaks, or yeoman farmers, to Ms. Warren’s critiques of the behavior of some large corporations. The report asserts that both are attacks on “oppressors of the vulnerable.”

The Soviet government seized land from kulaks, killing many of them. Ms. Warren says corporations should pay higher taxes and be subject to more stringent government regulation. So, not exactly beets to beets.

“It feels like the C.E.A. has a lot of free time on its hands,” said Austan Goolsbee, an economist at the University of Chicago’s Booth School of Business, who chaired the council under President Barack Obama. “Normally, the C.E.A.’s time is spent as a think tank for the president, adding up numbers. There’s not time to be contemplating Karl Marx.”

Here’s a snapshot of what the White House put out on Tuesday:

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The meat of the council’s report is a detailed accounting of the human costs of oppressive socialist governments throughout history, and it summarizes the results of one of the greatest natural experiments in economic history: During the half-century after World War II, economic growth of the Western democracies and a few countries in East Asia vastly outstripped growth in the communist bloc.

Even into the 1980s, some prominent liberals continued to insist that communism was delivering superior economic results. But the fall of the Berlin Wall ended that argument. The conclusions of the report regarding the 20th century are essentially undisputed, at least by mainstream politicians in the United States: “While socialism was supposed to make people more equal and allow the poor to escape oppression, it was the end of socialism that brought more than a billion people out of poverty and made world incomes more equal.”

Hammering away on that point, the report mentions Cuba, China and the U.S.S.R. more than 30 times each. But the star of the report is Venezuela, which is mentioned nearly 60 times. The report estimates that emulating Venezuelan economic policies would cause the American economy to shrink by 40 percent. It’s something that Mr. Trump has repeatedly suggested Democrats want to do, but neither the president nor the report presents any evidence and no Democratic candidate has come anywhere close to embracing Venezuela’s policies.

The report opens by asserting that “socialism is making a comeback in American political discourse.” The word itself is certainly enjoying a revival. A handful of high-profile politicians, including Senator Bernie Sanders of Vermont and Alexandria Ocasio-Cortez, a candidate for a House seat from New York, call themselves “democratic socialists.” A Gallup poll this year found that 51 percent of respondents between the ages of 18 and 29 had a positive view of socialism, however they defined the term.

The report acknowledges that these democratic socialists don’t see themselves as the heirs of, say, Lenin. It specifically notes that they’re not advocating violence. But it nonetheless seeks to connect liberals and their policy proposals to past socialist regimes.

“There are proposals on the table, like the ‘Medicare for All’ proposal, that are very consistent with the design of socialism,” Kevin Hassett, the chairman of the council, told reporters during a conference call to discuss the report on Tuesday.

The report frequently adopts the facile tactic of comparing or lumping leading liberal politicians and demagogues. For example:

The Chinese leader Mao Zedong, who cited Marxism as the model for his country, described “the ruthless economic exploitation and political oppression of the peasants by the landlord class” (Cotterell 2011, chap. 6). Expressing similar concerns, current American senators Bernie Sanders and Elizabeth Warren have stated that “large corporations . . . exploit human misery and insecurity, and turn them into huge profits” and “giant corporations . . . exploit workers just to boost their own profits.

And here:

The socialist narrative names the oppressors of the vulnerable, such as the bourgeoisie (Marx), kulaks (Lenin), landlords (Mao), and giant corporations (Sanders and Warren). Piketty (2014) concludes that the Soviet approach and other attempts to “abolish private ownership” should at least be admired for being “more logically consistent.”

And even in the footnotes:

“Speculators” are also blamed for high prices and other social problems, as by Marx, Stalin, Senator Sanders, Senator Warren, and Fidel Castro, who said that they “have turned the planet into a giant casino.”

When liberals speak fondly of democratic socialism, they often point to Scandinavia — and a set of higher-tax countries that provide more robust government services and safety nets to their citizens. The report acknowledges this — and then walks a fine line around it.

First, the council notes all the ways that Nordic countries don’t necessarily comport with a liberal ideal of government, including a heavy middle-class tax burden and lighter-than-you-might-expect regulation of business.

But even then, it contends, Nordic economies do not deliver in the way that the American economy does. That’s true in terms of per-capita income …

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… and in terms of pickup truck ownership.

That’s right. Pickups.

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The report leaves out some other stats that make Nordic countries look better than the United States, including several measures that show far fewer of their residents live in poverty.

It’s a strange question to ask at the end of a 72-page report, but it’s one that the authors leave up for debate. Most important, they don’t define as “socialist” anything that the United States government currently does.

The federal government has long embraced important elements of a socialist agenda, such as providing retirement benefits and health care for poor children and older people. The report finesses this inconvenient truth by defining socialism as any effort to increase the government’s involvement in the economy. Thus the current Medicare program, which provides socialized medicine for older Americans, is defined as ideologically acceptable, while proposals to expand Medicaid are termed “socialized medicine.”

Let’s be clear, though: The report is decidedly not about “communism.” The authors detail why, in a footnote on Page 4:

For classical socialists, “communism” is a purely theoretical concept that has never yet been put into practice, which is why the second “S” in U.S.S.R. stands for “Socialist.” Communism is, in their view, a social arrangement where there is neither a state nor private property; the abolition of property is not sufficient for communism. As Lenin explained, “The goal of socialism is communism.” The supposed purpose of the “Great Leap Forward” was for China to transition from socialism to communism before the U.S.S.R. did (Dikӧtter 2010). The classical definition therefore stands in contrast to vernacular usage of communism to refer to historical instances of socialism where the degree of control was the highest, such as the U.S.S.R., Cuba, North Korea, or Maoist China. This report therefore avoids the term “communism.”

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