Opinion: The Education of Bernie Sanders, Millionaire
Oh, I like having fun with Senator Bernie Sanders’ economic styles – his insistence that trade is bad for American workers and consumers when it is obviously not, his insistence that medical innovators and drug makers are simply greedy are, and last but not least, his get-off-my-lawn grumbles about “millionaires and billionaires”.
All of this was made worse this week by the disclosure of the 77-year-old senator and Democratic presidential candidate that he is indeed a millionaire and made big money on his bestseller “Our Revolution”.
As Pogo said in the funny papers, we’ve met the enemy and he’s us. And when the revolution comes, dear Bernie, you’ll be on the list now – even if your father didn’t give you a million by the time you were eight, as you know who.
“I wrote a bestselling book,” says Sanders defensively. “If you write a bestselling book, you can be a millionaire too. ”
As amused as I am by all of this – and not trying too hard to curse Sanders as a hypocrite as some do – I mostly wonder why Sanders thinks it is extraordinary or even unusual to be a millionaire (there are more than 7 million US households with $ 1 million net worth, excluding home equity.
Let alone a bad thing. Sanders is 77 years old. His wife worked. He’s been in Congress for 28 years and earned a salary that started at $ 98,000 and has been $ 174,000 as of 2009. For most of the years since at least 2009, they’re making in the neighborhood of $ 300,000 a year.
And people bought his book. Nobody made it. So good for him.
But really, how could this guy possibly avoid being a millionaire long before the book if he were minimally prudent about money? In America, for all its sins, could the opportunity come easier than the Senator thinks? Let alone whether he is actually frugal or a good investor? Aren’t these virtues?
Or what if he looks at the American economy and has any idea what he’s seeing? If not, isn’t that the real problem when he becomes president?
Just think of the numbers. By my calculations, Sanders’s Congressional salary has been over $ 4 million over the years. The combined income of him and his wife was $ 282,461.52 as early as 2009, according to Sanders’ tax returns. According to Jordan Weissman’s analysis of tax returns, the Sanderses give about 3% of their income – less than Senator Elizabeth Warren, but more than most of the other presidential candidates.
The incumbent famously let his charitable foundation pay his child’s $ 7 boy scout fees.
Let’s assume that the Sanderses, like anyone with adequate liquidity and financial sense, saved 10% of their pre-tax income. You’d hit well over half a million – before you earn a penny in return or get employer matches.
Suppose then that Sanders, whose financial disclosure report shows holdings in 36 mutual funds and other investments, actually had an idea of what he was doing – or even the humility to make investment decisions and buy index funds.
He’d have to try to be worth no more than $ 2 million, as the S&P 500 SPX (-0.34%) and the Dow Jones Industrial Average DJIA (+ 0.57%) have increased ten times since he attended Congress have risen (plus dividends!) He’s writing a book or buying a house anytime between the 1980s and 2007. Property prices in Vermont doubled between 1997 and 2007 – and have recovered to 2007 levels after the financial crisis, according to the Burlington Free Press.
In fact, he owns three houses, according to reliable, no-agenda Fox News.
How is this guy a socialist?
Not that the Senator from the State of Virtue, Vermont, was seduced by the comforts of creatures or bought from heaven, no good socialist would.
But how could he have owned 46 different funds or stocks in 2013 and never found out that companies that owned the funds were doing interesting things that made the world a better place? And created jobs? In particular, the workforce jobs where wages are actually rising, despite workers who may not fit his stereotypes? And that the stories of companies shrinking or laying off people are generally more complicated than his moral stories?
How could his solution to everything (figuratively) – trade, financial regulation, and health care to start with – still be to narrow the range of free-market policies and instead replace some form of centralized planning or industrial policy?
Everything points to Sander’s real problem – not that he is rich or a hypocrite, but that he doesn’t seem to be learning from experience and nuances are clearly not his pocket. In this respect he is very different from Warren, the other left of center favorite in the 2020 Democratic Race. In Warren’s version of capitalism, taxes go up and regulation tighten, but the center holds.
“I love competition. I want every start-up, anyone with a good idea to have a chance to come out and give it a try. That’s what I’m so interested in, “Warren said in an interview last year. “There have been years of imperfect, but fairly well-enforced rules that have been pretty firmly established and followed.”
Warren, the founder of the Consumer Financial Protection Bureau (and worth $ 8 million herself), at least understands where wealth and innovation come from. Or try. The CFPB itself is about helping middle-class families manage money and build wealth themselves without being rushed.
Sanders, whose fortune was rated negative by the Center for Responsive Politics as recently as 2013, shows little evidence that even little people want to do so. This is a much worse quality than accumulating some money or not giving away much of it at all.