SAN FRANCISCO (Reuters Breakingviews) - Capitalism has emerged as the villain in the race to represent the Democrats in America’s next presidential election. Contenders sparring in their first debate on Wednesday agreed that the economic system has helped mainly the rich. Even on socialism-averse Wall Street that idea has gained traction.
After the 2008 financial crisis, Wall Street became the economic bad guy. The anger has now broadened out to attack the system from which finance springs. Senator Elizabeth Warren, the leading candidate in the polls out of the 10 contenders appearing in Wednesday’s debate, called for structural changes in the economy. Washington Governor Jay Inslee said it’s not right that the chief executive of McDonald’s makes 2,100 times more than workers “slingin’ hash.” Centrist Joe Biden, the former vice president who will appear with nine other candidates at Thursday’s debate, has said capitalism needs to be reordered.
Those sentiments come with progressive plans. A single-payer, government-run healthcare program, canceling $1.6 trillion in student loan debt and raising taxes for companies and the wealthy have been floated. During Wednesday’s debate, Big Pharma, Big Tech, Big Oil and other corporate sectors were attacked.
President Donald Trump and other Republicans have seized on those plans to call their proponents socialists. Yet only Senator Bernie Sanders of Vermont, who will appear on Thursday, claims that term. Warren says she’s a capitalist but wants the system to be accountable. But all of the candidates have seized on the populist anger that helped propel Trump to the White House and still exists.
Some of the attack is warranted. The top 20% of households by earnings received more than 51% of U.S. annual aggregate income each year since 2012, while the lowest fifth have gotten just above 3%, according to U.S. Census figures. That might explain why about 44% of Democrats overall and 55% of people in the party under 30 have a negative view of capitalism, compared to 33% of the general public, according to poll released on Tuesday by the Pew Research Center.
Even billionaires are sounding the alarm. Ray Dalio, founder of the Bridgewater hedge fund, has called for capitalism to be reformed while Warren Buffett has said the economic system has been “unbelievable” for extremely rich people like him. Free markets are emerging as a political bogeyman. If a Democrat wins in 2020, expect a shake-up.
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