by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Progressive Democrats and populists are political siblings. Both political movements want to undermine the foundations of our great country. Both express dissatisfaction with free market capitalism, even though the founding document and capitalism have delivered unprecedented growth, prosperity, and general well-being to the United States and the world.
Consider some examples.
Progressive Democrats and populists want to manage the economy through industrial policy, be that Bidenomics or Trumpism. They believe they have economic wisdom superior to Adam Smith’s invisible hand. Progressive Democrats and populists want to emasculate one of the core tenets of the Constitution, free speech, including free expression. Most importantly, both right-wing populists and left-wing progressives promote statism against the basic purpose of the Constitution and the nation: liberty.
Just over 40 years ago, Ronald Reagan became president. It was a period of hard times. Marginal tax rates, unemployment, and interest rates were elevated, and the nation’s spirit was low. Reagan responded with reduced government regulation, lower taxes, and a recommitment to free market capitalism. It worked. The U.S. economy has been growing faster than the economies of Europe and Japan for almost two decades. The U.S. economy has largely maintained its share of global GDP in spite of the very rapid growth rates of emerging economies.
Both progressive Democrats and populists are trying to fix something that is not broken.
Progressive Democrats embrace modern monetary theory. They like to print money. Yes, unemployment is low, inflation is falling, and the economy is growing at a reasonable pace. However, interest rates are very high, and the net deficit to GDP ratio is right around 100%. The bill is coming due for excessive spending. Interest payments on the federal debt are crowding out private investment, which drives productivity growth. Supposedly, right-wing populists also embrace modern monetary theory. They support increasing the welfare state and lowering taxes at a time of unprecedented federal deficits.