Elizabeth Warren and the new communism

The death rattle of Sen. Elizabeth Warren’s presidential hopes, and possibly the Massachusetts Democrat’s political career, has suddenly emerged in her Accountable Capitalism Act, which would mandate that 40 percent of the directors of large companies be selected by the employees. Corporations with more than $1 billion in annual revenue would have to obtain a federal charter.

OK, let’s call this what it is: The New Communism Act.  

Elected workers’ and peoples’ committees? That might have been good politics in Russia in 1917, but today? Doubtful. Communism has been a huge failure in Russia, Cuba, Eastern Europe, Nicaragua, Venezuela, and a good portion of Africa. It has never worked, and is a stillborn political idea, except on some college campuses, CNN and NBC and, maybe for a brief period, in The New York Times.

{mosads}Sen. Warren and her supporters claim the bill would address “income inequality.” The experience in all of the above countries is that the elite get much richer and the poor get much poorer. The way to raise incomes is to encourage a strong economy, which the senator’s bill would destroy.

I’ll let others explain, in detail, why it would destroy American corporate competitiveness in a world full of serious competitors. But here’s a sampling of what would happen: capital would flee the United States, just as it did under President Obama, and crater the economic recovery. All those companies that are reinvesting in the United States and building new plants would stop doing so. Unemployment would skyrocket, and the new hope now given to African-Americans, Hispanic citizens, and women in the job market would evaporate. Pensions of American workers would collapse. All those “rich capitalists” and everyone else, including union pension plans, would simply short American companies and make another bundle.

In short, it’s an incredibly stupid economic idea.

It’s also a nonstarter politically. Sen. Warren has no chance of being elected president (or vice president) in 2020, and continuing to paint herself into that tight little corner with Sen. Bernie Sanders (I-Vt.) and Democratic socialist congressional candidate Alexandria Ocasio-Cortez jeopardizes her congressional career. Just as Hillary Clinton blew her two chances to sit in the Oval Office, Sen. Warren blew hers the last time out. She could have mounted a formidable challenge to Clinton from the left, but instead she defaulted to Sanders. With broader appeal than he had, she might have won, but she wilted like a daisy on the hot summer pavement.

That was too bad, because initially she had a great case to make. Some of those investment bankers, Fannie Mae leaders, and other financial manipulators should have gone to jail after the financial crisis; they didn’t, and Sen. Warren failed in the one real job we gave her. She rightly spoke out about those who made a bundle securitizing mortgages, selling them to investors, and then shorting their own products and lying about it. She said they should be in jail, but ultimately, she did nothing about it.

Now, just look at the economic figures and the last Presidential Electoral Map. All that red indicates areas that are home to the companies she is targeting with her New Communism Act. You can be sure those workers are not stupid; they’ve heard similar nonsense from union “leaders” for years and they know how to filter it out. Many of them voted for President Trump. Now they, and others, are seeing new manufacturing plants being built, capital investment returning, lower taxes and a better life.

If the economy remains on the upswing, many more union workers — as well as African-American, Hispanic and women voters — are likely to vote Republican. The New Communism Act creates a huge rock upon which the predicted “blue wave” will crash and dissipate. It is easy for any Republican to point to jobs, income and returning plants to run against the New Communism Act. Now they can run against that and House Minority Leader Nancy Pelosi (D-Calif).

This political move, combined with Sen. Warren’s indictment of the entire law enforcement system in America as “racist,” a comment she made at Dillard University and elsewhere, suggests she is a national politician who cannot read the map. Few people in the red or blue states on that map will accept her anti-law enforcement pitch. With unemployment falling, and serious hope returning, the political tool of attacking law enforcement will be much less effective if an improved economy leads to a decline in urban frustration.  

Sen. Warren should stop and take a deep breath. Her New Communism Act will gain attention for a short while, and then die. But she will be saddled with it, along with her attacks on law enforcement. In 2020, Democratic Party politics will lie in the middle; the map is clear. The current extreme left comets in the party will fizzle. There will be a search for sensible candidates to reunite the party — and the country. New communism will never get Sen. Warren there.

Grady Means is a retired corporate strategy consultant and author of several books. He was an engineer at both Fairchild and Northrop, served as special assistant to Vice President Nelson Rockefeller for domestic policy in the Ford White House, and was an economist and policy analyst for Secretary Elliot Richardson in the former Department of Health, Education and Welfare from 1971-73.