We were at a meeting at Occupy San Miguel and watched the Meryl Streep film, “The Laundromat.” Then we had the usual post-film discussion. Naturally, everyone was somewhat depressed with the themes in the film, which was money laundering. But the negative discussion about where America is going under Trump made me think of a recent and informative article about Portugal.
“Not too long ago, Portugal stood on the brink of catastrophe: harsh austerity policies and the erosion of labor rights pushed by the conservative government lead to significant rises in poverty and unemployment. The economy dwindled due to the lack of peoples’ spending power. Today, everything has changed
“It’s been more than three years since the socialist party assumed the reins of government. Since then, the skepticism of the early days has virtually vanished. The entirety of Europe seems impressed by the success story of António Costa [the head of the socialist government.]
“The Portuguese economy has been booming for 4 years. 2017 marked the largest national economic growth of the century.
“The Portuguese are not only showing the feasibility of socially conscious policies, but demonstrating the significant potential for success.
“Hence, the socialists raised the once slashed wages and pensions, reintroduced paid vacations and retracted many tax raises, all while raising wealth taxes which affect only the rich parts of the population. Furthermore, the government introduced a property and real estate tax designed not to target the homes of average citizens. Costa’s socialists also put an end to the catastrophic privatizations that were once instructed by the EU and resulted in selling state assets at absurdly low prices.
“The remarkable economic growth of the past years is to be only the beginning. Under socialist rule, the economy grew so significantly that the money made is now set to be invested and returned to the general population. Portugal’s government plans to use the rising public sector revenue to transform the nation into a more just and modern one, after the conservatives destabilized the infrastructure.
“Costa presented a nation-wide investment proposal and surprised many once again: 20 billion Euros is considered an incredible amount of money for a country the size of Portugal. Sixty percent of the funds is to go towards public transportation. The remaining money will be invested in the energy sector and environmental projects.
“The much-used railway line connecting Lisbon and Porto is to be modernized, urban subway networks are to be expanded and public transportation in rural areas is to be invested in. This will generate new jobs, revitalize the economy and lift public transportation onto a state-of-the-art level. Furthermore, Portugal will become more eco-sensitive in the process.”
We can compare this story to what has happened recently in the United States. Costa’s program and approach seem very much to be like the ones proposed by Bernie Sanders and completely counter to what has occurred under Trump. What Portugal’s experience has taught us is that abandoning austerity and so-called conservative economic policies in favor of a socially-minded approach can result in economic improvement.
The Portuguese experience mimics what happened in the U.S. during the 1930’s and the Second World War. Boosting the money paid to the lower and middle classes while taxing the rich results in increased spending, and this results in economic expansion. The taxing of the wealthy prevents economic instability, and transferring money to the lower and middle classes increases spending. Doing the opposite (and putting more money in the hands of the wealthy) means that much of the wealth is unused. The American myth of “trickle down” economics has been proven to be false: if large portions of economic earnings are simply moved to the wealthy, those earnings go unused, which results in economic depression. (The fact that stock values may rise does little if real goods and services are not produced through an expansion of the economy).
The Portuguese experience proves that a socialist economy does not mean a depressed economy. Rather, it can mean an economy (and a society) that grows. Let’s not forget that China operates under a government run economy, and it has expanded greatly in the past 75 years. What Portugal has proved is that the economy can expand without the sort of rigid controls that the Chinese used.
What Bernie Sanders is proposing for the United States is similar to what has happened in Portugal. In many respects, the Sanders’ program is not really socialism but more akin to the programs which FDR instituted in the 1930’s. It may be recalled that in 1944 FDR proposed a “Second Bill of Rights,” which was essentially one of economic rights. In addition to healthcare, housing, education, and the right to a fair income, Sanders has added gun controls, LGBTQ equality, empowering Tribal Nations, Wall Street reform, climate control, and jobs for all (among others). He hasn’t proposed nationalizing any industries, although he has proposed federal funds for non-private internet providers. He has a broad and specific program in many areas, such as public education:
- Combat racial discrimination and school segregation
- End the unaccountable profit-motive of charter schools
- Provide equitable funding for public schools
- Give teachers a much-deserved raise by setting a starting salary for teachers at no less than $60,000, expanding collective bargaining rights and teacher tenure, and funding out-of-pocket expenses for classroom materials.
- Strengthens the Individuals with Disabilities Education Act (IDEA) by ensuring that the federal government provides at least 50 percent of the funding for special education and giving special education teachers the support they need.
- Provide year-round, free universal school meals, and incentivizes locally sourced food.
- Make schools safe and inclusive by protecting the rights of all students from harassment, discrimination, and violence and enacting comprehensive gun violence prevention laws.
- Rebuild, modernize, and green our nation’s schools.
During our post-Laundromat discussion, one of the participants suggested that the Democrats (and particularly Bernie Sanders) come up with a different term than “socialism” for what is being proposed. “Green New Deal” was one of the terms, and this has a positive linkage to FDR and to ecology. The most important aspect of the Sanders program is to guarantee certain fundamental aspects of economic life without significant personal cost to individuals who cannot afford them, and to pay for the cost by raising taxes on the wealthy. This will keep the U.S. financially stable (instead of going more and more into public debt), will boost the economy, and will create an economically just society. When compared with the unjust economy and governmental craziness that Trump has imposed, the result promises a much improved America. And Trump seems to promise us nothing but more wars and no protection against deteriorating ecology. The Sanders solution is fight climate change by drastically lowering military spending and moving towards peace as a foreign policy.