A large swath of Americans are heralding the Green New Deal proposed by the left’s latest darling, Congresswoman Alexandria Ocasio-Cortez (D-NY) and Senator Ed Markey (D-MA) as a rebirth of the nation; a way forward for a country struggling with environmental and inequality issues.
has been lifted straight from their playbook.
Let’s look at a select few of the plan’s stated aims:
- “A job with a family-sustaining wage, family and medical leave, vacations, and retirement security.”
- “High-quality education, including higher education and trade schools.”
- “Economic security for all who are unable or unwilling to work.”
- “100% clean and renewable energy” production.
The goal of offering economic security via a job that will be paid for by the government, or the option to not work at all – also paid by the government – raises an important question: How does a nation afford it? In the recently released FAQ overview of the deal, AOC provides an answer that will surprise almost no one.
“The Federal Reserve can extend credit to power these projects and investments and new public banks can be created to extend credit. There is also space for the government to take an equity stake in projects to get a return on investment.”
So, debt, debt, and more borrowing. But how does this relate to Mao Zedong’s communist People’s Republic?
A Public Disaster
In China, there are companies known as State Owned Enterprises (SOEs); major organizations in which the government holds “an equity stake.” These companies are operated on behalf of the state, and they’re a habit the Chinese government just can’t quit. Invariably, they are poorly managed and run-up significant debts. Part of this debt is because they are compelled to take on unnecessary workers to lower the unemployment figures, similar to the Green New Deal’s plan to ensure everyone who wants a job gets one.
But of course, these businesses are state-owned – they can’t be allowed to fail. Accordingly, China has three ways to stop them from drowning in a pit of financial despair.
First, the government gives money. Cold, hard cash. Which somehow, whether through corruption or mismanagement, disappears quickly. Remember, the leaders of these SOEs are semi-political appointments and NOT businessmen and women with a proven track record of making a profit.
When that money is gone, they move onto the second method: bank loans. As with the New Green Deal proposal to create “New Public Banks,” China already has “The Big Four” state-owned banks: Bank of China, the China Construction Bank, the Industrial and Commercial Bank of China, and the Agricultural Bank of China. These are not privately owned businesses, but “public” banks. The government “allows” the banks to loan out more and more cash in ever-increasing sums, with the proviso that a percentage of this money goes to state-owned enterprises. More money down the hungry black hole.
And finally, when that money is sucked up and squandered, the central government announces yet another round of quantitative easing, or, as real people call it, printing more money. This devalues the cost of the currency and supposedly stimulates the markets, which is good if it is market-viable, but if the enterprise is little more than a state vanity project used to hoover up unemployment figures and meet green targets, all it does is devalue any assets these companies might own.
When the Communist party took over in 1949, SOEs were the only game in town – a situation that lasted until the late 70s. We should all remember the loss of life, the terror, the starvation, and the political extremism that took place during those decades.
It is near impossible to believe that the writers of this New Green Deal, which is an almost exact replica of the declared economic policies under Mao Zedong, have not made the connection. So, the only remaining answer must be that they do know. And if they do, why then are they ignoring history?
We have seen this exact plan before, and it resulted in the deaths of over 20 million people. China realizes this and is moving away from it! Why, then, are leaders such as Ocasio-Cortez, Kamala Harris, Cory Booker, Elizabeth Warren, Eric Swalwell, and Bernie Sanders so gung-ho for it? Perhaps it’s time to start asking the right questions.