This week, the market rode a roller coaster. Actually more than usual. On Monday stock prices rallied with the thought that the previous week's decline was overdone. It was a big rally. On Tuesday, the market collapsed after the Federal Reserve lowered interest rates. Virus fears ramped higher. On Wednesday, there was another huge rally. This was predicated on the idea that Bernie Sanders had been dealt a near-knockout blow by Joe Biden on Super Tuesday. Socialism was repudiated, or so we were told. The markets loved it. Then on Thursday and Friday we suffered huge drops as virus fears ramped up once again.
Perhaps the most interesting day was Wednesday for several reasons. First, President Trump had been ridiculed when he said that one of the reasons the market declined was based on fears that Bernie Sanders might be the democrat nominee. Here's a Bloomberg Headline:
Here is what an MSNBC report shared regarding that:
"The stock market is not falling because investors fear the possibility of a Democratic presidential inauguration 11 months from now. That's plainly bonkers…Obviously, no fair-minded person could possibly take this seriously, but it's worth remembering anyway."
Yes, it's worth remembering because after Wednesday's rally, the President's theory was actually totally validated. Take a look at this headline from CNBC:
- Wall Street firms are attributing the relief rally on Wednesday to the surprising outcome from Super Tuesday.
- Former Vice President Joe Biden secured a lead in the Democratic primary over Vermont Senator Bernie Sanders.
"The race is not yet over, but immediate reaction is likely a relief rally as the tail risk of some of Sanders' policies will be seen as less likely today than last week," Raymond James policy analyst Ed Mills said in a note to clients. Stocks came back in a big way Wednesday, with many Wall Street firms attributing the relief rally to the outcome from Super Tuesday. Former Vice President Joe Biden secured a lead in the Democratic primary after racking up big wins in delegate-rich states like Texas and Virginia. Biden's performance put him ahead of Bernie Sanders in delegates, soothing some of Wall Street's fears about the Vermont senator's anti-capitalist policy proposals.
Did anyone bother to go back and apologize to President Trump? Of course not, even though an apology is clearly due. He was right and the market proved it.
Now, it's not surprising that the media attacked the President or that they failed to admit he was right. That's not the important story here. The really important story is that Wall Street does recognize the threat of socialism. And, if there weren't the dramatic story of the novel coronavirus, this would still be the talk of Wall Street. Sadly, the media and many voters fail to understand the true threat.
Here's the truth. The virus problem will be resolved. But the threat of socialism will remain.
This isn't a minor threat either. Bernie Sanders clearly has significant support among the Democratic electorate. He came very close to winning the Texas primary and with it the Super Tuesday lead (he led in Texas most of the night until a surprise last minute surge that some find questionable given his big lead in Texas polls just before the vote tally). If it weren't for the party insider superdelegates, Sanders still would be considered a very serious threat to take the nomination. And even though he may ultimately lose the nomination when all is said and done, the Democrat voters have clearly adopted socialism. This should seem incomprehensible since socialism has proven to be such a failure wherever tried. Venezuela is just the latest example. Rather than bringing fairness, it brings control. How else do you explain the Hugo Chavez's daughter is a billionaire with the people's money. This is cronyism at its worst, and it happens repeatedly. Never forget that the goal of socialism is communism and the result of socialism is misery, while communism leads to horror and death. No matter how many might die from COVID-19, the death of more than 100 million people under communist/socialist repression will prove worse.
Lest anyone think that Bernie is a better brand of socialist, just look at his history. He honeymooned in the Soviet Union. Even the NY Times has uncovered how he was targeted by the Soviets to be used as propaganda (they found this in Soviet archives). He repeatedly defends communist regimes, even if he claims to dislike their repression. He even said there was a benefit to breadlines. Really?
Here's the problem. Bernie Sander's popularity is based on a passionate desire for greater change and "fairness." Sure. Why not try socialism? Young people (especially those who are too young to remember the Cold War) think it sounds good. Of course, there are plenty of Americans who don't remember 9/11 either. The Cold War is even further back. But that doesn't change the truth that socialism always fails. It failed in the Plymouth colony. It failed in the Soviet Union and is failing in Cuba and Venezuela and North Korea. And then there's China. It failed there, too, so they adopted a combination of government capitalism and IP theft. But that doesn't excuse the massive human rights violations that are anything but "fair." Any millennial in love with socialism should take a good hard look at how the Chinese Communist Party treats the Chinese people. Human live organ harvesting is just one horrific example.
And no, it was not communism that brought China out of poverty, Senator Sanders. It's communism that kept them in it. Just compare Mainland China to Taiwan in the post-war period. It wasn't until market reforms were put in place that China began to grow, again supplemented by predatory trade practices, IP theft, and a mercantilist approach. But it was not a communist success.
Here's the problem. Socialism is creeping even if Sanders is denied the Democratic nomination.
Socialism is gaining ground in local elections and within the Democratic Party. Frankly, Sanders is a liability for that movement because he is so old and white. Younger socialists have taken Congressional seats and are taking local spots. For example, there are two serious socialist candidates for the Louisville City Council. Not kidding! Take a look at this article in Epoch Times from my friend Trevor Loudon:
March 4, 2020 by Trevor Loudon
These races should not be seen in isolation, but as part of a wider Marxist strategy to gain influence in the U.S. South.
The DSA and their allies in the pro-China communist group Liberation Road are targeting southern electoral races at every level. Their strategy is to gain power in local city councils across the South to consolidate local power and become competitive in statewide races. If the Marxists can turn only two or three southern states blue, the far-left and their Democratic allies will rule the United States in perpetuity.
Trevor goes on to explain how this strategy is also working in Tennessee, Virginia, North Carolina, Alabama, Mississippi, and Georgia. He then concludes with the ultimate aim of the socialists:
DSA and Liberation Road are building a southern "counter state" to challenge the Republican dominance of the region. County by county, state by state, the Marxists are building their power in the South, while Republicans focus their attention on the Midwest. Several high "minority" population southern states are trending blue and could easily flip to the Democrats in the next two to three election cycles.
Liberation Road and DSA are working tirelessly to accelerate that process. The Republicans need to stop taking the South for granted before it's too late. If the Republicans lose the South, the hard-left takes America.
Here's the real risk. People don't understand the creeping threat.
I found two recent Washington Post stories to be very interesting. The first was headlined, "Establishment Democrats still fundamentally misunderstand Bernie Sanders." The issue, they say, is that support for Sanders is "the politics of ins vs. outs." Basically, outsiders wanting to fundamentally change the system. Of course, they are right, but that is fundamentally dangerous. Outsider support for Trump pushes for such things as the First and Second Amendment of our Constitution. The insiders are opposed, but Trump supporters are fundamentally constitution lovers. Sanders supports want to "bern it all down." Project Veritas has shown that to be true.
The second Washington Post story is even more profound:
Shirin Ebadi, a lawyer and human rights activist, was awarded the Nobel Peace Prize in 2003.
I write this letter to my daughters and their generation, 41 years after a revolution that my generation helped to bring about. I hope you forgive us for the mistake we made. Although we did not intend it, we have darkened your world.
Yes, we wanted to make the world a better place. We were dreamers. We dreamed of creating a country where both human rights and human dignity would be guarded by strong democratic institutions. We thought that we had every right to translate these beautiful ideas into reality.
Yet the border between idealism and naivete is sometimes blurred. In our idealism, we were naive enough to think that the cleric Ruhollah Khomeini was the man to make our dreams come true. It is hard to admit it, but we started to follow him even though we knew very little about his vision for Iran. Millions of people were enchanted by him. They were captivated by his charisma without reading any of his books or listening to him in an open and free debate…
Now read that carefully. Substitute the name "Bernie Sanders" for the charismatic cleric. Or, frankly the name of any Democratic Socialist like Ilhan Omar or Alexandria Ocasio-Cortez or Ayanna Presley or Rashida Tlaib. [And, you should know that even the socialists view the Iranian Revolution as a socialist effort. Iran's love affair with Venezuela and the Soviet Union demonstrates the reality that socialist principles have been taught and promoted since the Shah was deposed.]
There is no doubt that many of the supporters of Democratic Socialists espouse important issues such as human rights and human dignity. But it is also true that many supporters know very little about the Socialist Vision for America. Millions are enchanted, captivated by charisma without reading the books or papers behind the movement.
Shirin Ebadi goes on to apologize to the current cadre of youth under severe repression:
I was ashamed of my own contribution to a revolution that went on to cause so much human suffering. Even so, I refused to give in. Seeing a need, I became a human rights lawyer, going on to defend some of the most vulnerable groups of people. It was my own small way of trying to compensate for my error of judgment in supporting the revolution.
Even so, I still feel that I owe the young generation a big apology. They were born into a repressive political system that many idealistic people like me unintentionally helped to create. As we mark the 41st anniversary of the Islamic Revolution this month, I look at the past and wonder why we were unable to create a better society for our children to be born into. They deserved to inherit a fairer society, one capable of creating the institutions to guard human rights and human dignity.
Forty-one years on, I am deeply sorry that you still have to pay such a high price for the mistake we made. I hope you can forgive me and the many others who succumbed to the thrill of revolution and did not think about the implications of their actions.
This should be a warning to today's youth who seem so eager to embrace socialism. While the stock market has been focused on the Coronavirus and the temporary effects it may have, the greater long-term threat is the emergence of socialism. If it triumphs, there is a very real risk that we would permanently lose our freedoms. America remains the last, best hope for the world.
[NOTE: We did two episodes on the "7 Deadly Sins of Socialism" in the Economic War Room. You can download the Battle Plan for Episode 12 starting at www.EconomicWarRoom.com/battleplans. This Battle Plan is designed to equip you in spreading the truth of socialism and help the younger generation understand its evil.]