In his State of the Union address, Trump reminded the world that “America will never be a socialist country.” Yet, Robert Reich, writing for the Guardian, has a different opinion. He writes, “Someone should alert Trump that America is now a hotbed of socialism. But it is socialism for the rich. Everyone else is treated to harsh capitalism.”
To a conservative, socialism equates to getting something for nothing, which sounds a lot like the $21 billion that the national banks saved last year due to Trump’s tax cuts. At the same time, over 4,000 lower-level bank employees experienced harsh capitalism when they lost their jobs.
After the 2008 bank bailout, some banks are too big to fail due to a hidden subsidy of approximately $83 billion a year. Now, Trump and his Federal Reserve appointees are easing the requirements imposed on the banks after the bailout, insuring that the biggest banks remain too big to fail.
The rich enjoy socialism and the poor face harsh capitalism in various other ways. General Motors was given over $600 million in federal contracts and $500 million in tax breaks, some of which has gone to the high-ranking executives at GM. Yet, the lower-ranking employees are being laid off in large numbers.
Companies can even enormously screw up and still reap the rewards of Trump’s socialism. In 2017, Equifax’s Richard Smith retired with an $18 million pension after a huge security breach that exposed 145 million consumers’ personal information.
Trump has also cut the estate tax significantly, so it only applies to estates values over $22 million per couple. Mitch McConnell is proposing that the estate tax be repealed. This has been another gain for wealthy Americans.
After a few generations of intergenerational wealth transfers, America’s wealth will be in the hands of a few thousand non-working families, while the rest of America experiences increasingly harsh capitalism. They will work harder and hader, but they will get nowhere.