The Trump White House blasts socialism

Alexandria Ocasio-Cortez. (Getty Images)
Alexandria Ocasio-Cortez. (Getty Images)

In one of its easier challenges, the Trump White House has issued a new report attacking the idea that Americans would be better off under socialist policies than capitalist ones.

“Socialism is making a comeback in American discourse,” Kevin Hassett, chairman of the White House Council of Economic Advisers, told reporters on Oct. 23. “Proposals like Medicare for all are very consistent with the designs of socialism.”

Hassett is referring to ideas popularized by Bernie Sanders during his 2016 presidential run, which are catching on with some Democrats. A number of prominent Dems favor some form of expanded Medicare, whether a full takeover of the U.S. health system or a more modest plugging of holes. Free college is another Sanders idea gaining adherents.

The surprise House primary win of avowed socialist Alexandria Ocasio-Cortez—who is favored to win in November, and take a seat in Congress—indicates that an American politician can run and win on collectivist ideas (though perhaps only in places like New York). And a recent Gallup poll shows that Democrats have a more favorable view of socialism than capitalism. Even 16% of Republicans say they have a positive view of socialism.

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The White House aims to change that. The new report, called “The Opportunity Costs of Socialism,” analyzes two types of socialism in modern history: Authoritarian socialism of the sort leading to Venezuela’s catastrophic decline, and the softer socialism practiced in Nordic countries such as Sweden and Denmark, where taxes are relatively high but college and health care costs are largely borne by the government. It’s easy to make the case against Venezuelan-style socialism, in which the government controls most of the economy and typically runs it into the ground. With no private property or lawful profit motive, resources go to waste and inefficiency chokes off prosperity. If you wanted a model for wasting oil wealth and other resources, Venezuela might be Exhibit A.

Better than Sweden?

The Nordic countries, by contrast, are prosperous free-market democracies with some socialistic policies that reformers occasionally cite as possible models for improvements to the American system. The White House paper argues the American way is better. It marshals data, for instance, showing that Americans enjoy more purchasing power, a lower overall tax burden, and better returns on investments in higher education. “By some measures,” the report says, “even poor American households have better living standards than the average person living in a Nordic country. There are significant opportunity costs of pursuing Nordic public policies.”