DEMOCRATIC SOCIALISM PROVIDES IMPORTANT GUIDEPOSTS

 

On Oct. 27, Tom Flickinger presented Observer-Reporter readers with a political commentary entitled, “What is socialism and has it ever worked?” I found it interesting that Flickinger would choose this moment to debunk socialism when Donald Trump and his MAGA followers are firmly in charge. Before the Nov. election, aside from Vt. Senator Bernie Sanders, the avowed number of democratic socialists serving in office represented very few voices in a very large country.

When democratic socialist Zohran Mamdani defeated the more traditional Andrew Cuomo (running as an independent) to become mayor of New York City, Republican motivations became clearer. Going into next year’s mid-term campaigns, based on Mamdani’s election, the plan is to label all Democrats as “dangerous socialists.” Republicans are inventing a scary diversion to take attention away from the most mean-spirited, anti-democratic administration in the nation’s history.

The truth is that most Democrats, like most Americans, would label themselves democratic capitalists, not democratic socialists. The United States is a country that believes in the former while often borrowing ideas from the latter, like recent agreement on the importance of “affordability”.

It is important to understand the differences in the two ideologies. Democratic capitalism maintains a private, free-market economy while using democratic processes to regulate it and to provide a social safety net.

In contrast, democratic socialism calls for greater social ownership, worker control, and gradual redistribution of wealth. Its adherents use democratic means, never violence, to achieve these goals. 

Key goals of democratic socialism include: 1) Addressing inequality 2) Providing universal access to necessities like healthcare, education, and childcare 3) Giving ordinary citizens a greater voice in the decisions that affect their working lives and communities 4) Managing the economy with democratic goals, not just profit-making 5) Advocating for an environmentally sound economy. Many Americans support some or all of these objectives without realizing they are basic pillars of democratic socialism.

In our 250-year history, the United States has relied on democratic capitalism to contain free-markets by enacting laws and implementing safeguards to prevent abuses. Our country has never strayed far from its democratic capitalism roots. Unlike Europeans and Scandinavians, Americans are too enthralled with owning and accumulating private property and inherited wealth. However, democratic socialist principles like progressive taxes, civil rights legislation, and the Affordable Care Act have encouraged equality.

For the past year, the policies of President Trump and his right-wing administration have ambushed democratic capitalism by attacking democracy and adopting policies of unregulated capitalism. In many respects, unregulated capitalism of the wealthy is a larger threat to democracy than unregulated socialism of the masses.

I have no disagreement with Flickinger’s conclusion, in his criticism of socialism, that “Most countries experienced severe economic decline and authoritarianism, while others, which blend socialism with elements of capitalism, achieved greater social stability and prosperity.”

The examples he cites of failed socialism were either based on totalitarian communism, or were outright dictatorships. None of his failed examples were democratic. However, the Nordic countries (Norway, Sweden, Denmark, Finland) that employ many elements of democratic socialism have been highly successful. These nations have strong social safety nets, higher taxes, and a commitment to social welfare programs. They operate within a regulated market economy and democratic framework. 

Democratic socialism is a political ideology that combines democratic governance with public ownership of important societal functions like healthcare and education. It encourages economic equality. Over the years in times of crisis, the country has adopted elements of this philosophy to move the country forward. FDR did so with his social engineering in the “New Deal” and LBJ likewise with his domestic “Great Society.”

There are two important points to emphasize. First, it is time to stand firm against Republican efforts to brand Democrats as “democratic socialists.” In fact, the “large D” Democratic Party is hard at work attempting to save “small d” democratic capitalism from a cruel authoritarian president.

Second, we should stop maligning democratic socialism and seek to understand what it has to offer our pluralistic democracy. There is much to learn from its guideposts. There are elements of democratic socialism that can help the nation recover from the recent economic and social carnage caused by the Trump administration.

For those looking for a short book on democratic socialism, what it stands for, and how it can address societal problems, I highly recommend “Ill Fares the Land” by historian Tony Judt (1948-2010).  He carefully lays out the “ills” of modern society and what democratic socialism can do to address them.

Judt admits that “democratic socialism is a hard sell in the United States.” Conservatives have incorrectly equated it with communism and argued it would replace constitutional liberties. Judt believes the problem is how we talk about it. Americans seem to forget the past laws we have implemented to expand social policy in favor of equality.

One reason Judt wrote the book was to explain the difference in liberalism (tolerance for dissenting attitudes) and social democracy (tolerance with the possibility of collective action for the collective good). Judt believed one key is teaching young people the value of moving away from material self-interest toward a better way to organize our lives.

In the final analysis, democratic socialism is simply a refreshing way to view the world through different lenses. Following the Trump administration’s decimation of our democratic institutions, we may again need to call on its wisdom.

 

 

 

 

 

IMMIGRATION RESTRICTIONS ARE HURTING THE ECONOMY

 

There is more to the immigration story than the constant images of masked ICE agents chasing people of Hispanic heritage through parking lots and forcibly removing them from vehicles, schools, and workplaces. These operations, using racial profiling and aggressive military tactics, lack basic due process protections and require a full-throated protest. However, what is escaping the attention of many Americans are the negative economic effects that the Trump immigration restrictions are having on the economy.

Two weeks ago, my commentary addressed the tariff barriers that are being imposed across specific industries and against countries with whom the president has a political axe to grind. This commentary will discuss the second part of the Trump strategy to turn America into an isolated bunker at a substantial economic cost. His immigration policies are keeping talented foreigners from entering the country and is deporting those who are productive workers.

According to the Economist, until Trump took office in 2025, in every year since the 1930s, more people arrived in America than moved abroad. America’s borders have now been closed to the “huddled masses yearning to be free.”

The one astonishing exception has been a group of right-wing, White South Africans who claim to be victims of racial discrimination. Under a special program they have been resettled. This appears to be a politically motivated effort rather than a humanitarian one.

A recent report issued by the American Immigration Council concludes, “The first six months of the second Trump administration have arguably seen the most significant changes to U.S. immigration policy in the nation’s history. Taken one by one, as they have been announced or revealed, the effect can be overwhelming.”

National surveys conducted after recent ICE raids on workplaces and the deployment of Marines and National Guard troops by the Trump administration reveal the public’s changing views. Many Americans have softened their opposition to legal immigration in the space of a year. Overall, just one in three Republicans (34%) want to see lower legal immigration levels today compared to 50% last year. Regarding undocumented immigrants, a CBS/YouGov poll conducted on July 16-18, 2025 shows 51% of Americans overall now disapprove of Trump’s program of deportation, which is up from 41% disapproval in February.

This recent history provides background to review the economic fallout from the Trump immigration policies. This issue has not received the same attention as the moral/legal objections.

H1-B Visas. The H-1B visa category allows employers to petition for highly educated/skilled foreign professionals to temporarily work in “specialty occupations.”  These jobs require at least a bachelor’s degree or the equivalent and include positions like civil engineers, software developers, and researchers. Typically, the initial duration of an H-1B visa classification is three years but may be extended.

The administration claims that this type of visa displaces American workers and suppresses wages. On Sept. 19, 2025, President Trump signed an Executive Order mandating that foreign nationals seeking to enter the Unites States as H-1B temporary workers must pay a $100,000 fee.

In fact, studies have found that H-1B workers complement and strengthen employment opportunities for native-born workers in the United States. Unemployment rates are relatively low in occupations that hire large numbers of these workers. Economists have sounded the alarm that this astronomical fee will likely hurt the U.S. economy by causing a “brain drain” of qualified workers who will now move on to other countries.

Reduced GDP and Larger Deficits.  The Penn Wharton Budget Model projects that a four-year deportation program that removes 19% of migrant workers per year would cut our GDP by at least 1% over that period. Reduced tax revenues from fewer workers and the $170 billion for immigration and border enforcement in the “Big Beautiful Bill” will expand the federal deficit.

Job Losses for Native-Born Americans and Labor Shortages.  Rather than focus on the “worst of the worst,” the Trump administration has increasingly targeted worksites for immigration raids, picking up delivery drivers, restaurant employees, farmworkers, meatpackers, and other essential employees.

Because immigrant and native-born workers often have complementary jobs, there is a ripple effect when immigrants are deported. Consider the restaurants, construction companies, and farm operations that will close or reduce operations because of the inability to fill positions. The Economic Policy Institute estimated that deporting 4 million people over four years could result in nearly 6 million total job losses, including 2.6 million job losses for Americans.

Before deportations, an aging population and lower birth rates were already causing a shortage in labor-intensive jobs. As Trump’s efforts ramp up, restaurant, construction, landscaping, agriculture, and food processing businesses will experience increased labor shortages.

Trump needs to take off his blinders and consider what other right-wing populist leaders are doing to strengthen their countries through immigration. For example, in Italy, ultra conservative Prime Minister Giorgia Meloni intends to issue 165,000 low-skilled work visas next year. Even Trump’s authoritarian pal, Viktor Orban, Hungary’s prime minister, has recently embraced a guest worker scheme permitting 78,000 non-EU migrants to work in Hungary.

Four of the seven corporate leaders of America’s most profitable technology companies were born abroad. They entered America through the immigration programs that Trump is attacking. A smaller population and workforce will constrain our economy. It will devastate labor-intensive work forces including on farms (50%) and construction companies (25%). Trump’s push for net-zero migration is ill-conceived and bad for the economy.

 

 

 

 

WHY ELECTIONS MATTER

 

The well-regarded Chicago journalist, Sydney J. Harris, once observed “Democracy is the only system that persists in asking the powers that be, whether they are the powers that ought to be.” After the Nov. 4 elections, this observation was the ideal reflection to brighten the day of demoralized Democrats. In Washington County, across Pennsylvania, and throughout the country, despite an authoritarian president who ignores the rule of law and who attacks democratic principles, we were all reminded that “elections matter.”

Voting is the paramount democratic tool we have to help us build a community and nation that reflects our values and voices. The recent election results permitted concerned Americans to reimagine a resilient democracy, even when the “present powers that be” are attempting to change the rules that govern our constitutional republic. With impartial elections, we collectively get to choose the officials that make the decisions that affect our lives.

First, consider Washington County. Republicans have consistently won the latest election cycles due to a significant advantage in voter registration.

In the recent county election for controller, the ultimate political irony occurred. The Republican appointed Controller Heather Sheatler, herself a Republican, won the Democratic primary in a write-in effort. She went on to defeat the endorsed Republican candidate, Pat Phillps, 53% to 47%.

This result would not have been possible unless a number of registered Republicans ignored the “D” on the ballot beside Sheatler’s name. They voted for her based on personal observations, their values, and news reports commending her job performance.

We should all be proud of the Republican voters who were open to considering Sheatler’s record as a public servant. As controller, she consistently honored her financial watchdog responsibilities. She consistently placed the taxpayers before partisan loyalty. She refused to follow the demands or to approve the actions of the Sherman/Janis administration or of the local Republican party.  

In the race for the statewide judicial position on Superior Court, Washington County Common Pleas Judge Brandon Neuman, also broke through the local Republican registration advantage. Neuman, running as a Democrat, captured 52% of the county vote (54.6% statewide).

Local Republicans again considered factors beyond their party affiliation. These included Neuman’s name recognition, performance as a local judge, and the rare opportunity to place a favorite son on the statewide court. As reported in the Observer-Reporter, “Neuman is the first judge from Washington County to ever win election to a statewide appellate court, etching his name in history.”

Lastly, the local Republican party organized a partisan effort to unseat Washington Common Pleas Judge John DiSalle in his retention election. Once more, informed Republicans did not follow the party line. By a 57 to 43% margin, DiSalle will remain on the bench for another decade.

Throughout Pennsylvania, the statewide retention elections for three Democratic Supreme Court Justices were also great news for those who oppose the MAGA movement. Retention elections are typically low-interest, low-spending affairs. These political calculations changed last year when the Supreme Court race in Wisconsin made national headlines.

This year, the three Pennsylvania retentions became historically expensive campaigns that focused on some of the most contentious issues facing the nation. The Democratic majority on the Pennsylvania Supreme Court had handed down critical decisions including support for mail-in voting, abortion rights, and the rejection of a congressional map that it found unfairly benefited the GOP.

These decisions brought fierce opposition from President Trump and MAGA.  At least $20 million in Republican campaign spending, and an intense mailer and ad campaign were launched by Republican groups.  Despite this all-out attack, each Democratic Supreme Court Justice captured at least 63% of the vote.

Nationally, one thing was clear — up and down the ballot, it was a big night for Democrats. There were Democratic blow-out victories in the New Jersey and Virginia governors' races. Many of the most conservative counties in Virginia, that had heavily supported Trump in 2024, turned Democratic.

In New York City, Zohran Mamdani, a man with a Muslim name, an African past, and an Indian lineage, won the contest for mayor. Mamdani is also an avowed democratic socialist. He appealed to young voters by adopting a message of affordability in a city that has long been viewed as too expensive for the average American.  

In California, voters approved a plan to redraw the state’s congressional districts. In this state referendum of national significance, Democratic Governor Gavin Newsom led an effort to counter attempts in several red states to increase the Republican House of Representatives majority.

 

Why do this year’s elections give Democrats hope for the 2026 mid-terms and the 2028 presidential race? Their chosen nominees won with promises to lower costs for ordinary Americans. After the election, Trump responded to reporters in the White House, “I don’t want to hear about the affordability.” Similar to President Biden, Trump tried to use data to insist the economy has improved. Unlike the prior administration, Trump’s economic claims were often exaggerated or false.

More generally, voters delivered the message that by-and-large, they were not comfortable with the president’s narcissism or the “meanness” in his style of governing.

No one can predict whether the rising backlash against the president will continue into the mid-terms and beyond. The 2025 elections were a warning for Republicans and provided signs of recovery for Democrats. Only one fact is known – because we are a democracy, the next elections will matter.

 

 

 

 

 

 

   

MORE TARIFFS, HIGHER PRICES, FEWER SUPPLY CHAINS

 

After regaining the White House, President Trump began claiming unprecedented tariff authority under the International Emergency Economic Powers Act (IEEPA). On April 4, 2025, Trump sent international and domestic stock markets into a tailspin by invoking this emergency law to impose "reciprocal tariffs" on imports from select countries not subject to other sanctions. A universal 10% tariff took effect on April 5, with higher rates indiscriminately announced in the following weeks.

The U.S. Constitution grants Congress the sole power to regulate commerce with foreign nations. This includes the authority to impose tariffs. Most constitutional law experts agree, and so far, three lower courts have ruled, that the IEEPA gives Trump no power to impose tariffs unless there is an “unusual and extraordinary threat,” a condition not found in this case.  On November 5, the US Supreme Court will begin hearing arguments about the legality of Trump’s tariffs. A final decision is not expected until June or July of 2026.

Over the past seven months, Trump’s tariffs on various countries (friend and foe) and industries (steel, smart phones, aluminum, cars, car parts, semiconductors, and pharmaceuticals) have gone up or down without warning, often based on Trump’s political whims.

Tariff policy has become so unpredictable that financial analysts coined the acronym “TACO”, which stands for “Trump always chickens out.” This term describes his habit of announcing a tariff and then delaying the actual implementation if the stock market reacted badly. Under recent pronouncements, India and Brazil both face a 50% on most goods. Canada is at 35%, and China temporarily 47%, reduced from 100%, after the recent meeting with president Xi.

Most economists do not favor tariffs. Trade barriers raise prices and reduce available quantities of goods/services. Historically, tariffs often result in lower income, reduced employment, lower economic output, and higher inflation.

Following World War II, the United States favored an open trading system that rejected protectionist trade policies. The consensus was that international policymakers should promote free trade and the economic benefits it brings over imposing barriers to trade.

The Trump administration has rewritten these rules and turned U.S. trade policy on its head. At an average effective rate of around 18 percent, American import taxes are now the highest they have been in nearly a century.

What are the Trump administration’s justifications for imposing tariffs? According to the White House Fact Sheet: 1) The trade deficit is “an unsustainable crisis ignored by prior leadership.” Many economists disagree and The Council on Foreign Relations responds, “The trade deficit is a sign of a strong, attractive economy where foreigners invest heavily.  It allows the U.S. to consume more goods than it produces. It reflects efficient global capital markets, supports domestic investment, and provides a wider variety of goods for consumers.”

2) Tariffs encourage “Made in America.” Economists point out that this reasoning involves both potential benefits and significant drawbacks. Tariffs can support specific domestic industries. This is a reason to invoke “targeted tariffs’ on critical industries like steel rather than on entire countries. However, on the whole, tariffs lead to higher costs for consumers and businesses, trigger international retaliation, and cause broad economic disruptions.

3) Tariffs encourage the reshoring of American manufacturing. Politico points out that “President Donald Trump is pushing manufacturers to bring factories home. His policies are punishing them when they try.” Politico explains, “Tariffs meant to protect American producers are raising the cost of the very materials they need to expand their footprint in the U.S.”

4) Tariffs are a boost to government revenue. This reason is not listed on the Trump White House Fact Sheet, but is frequently brought up by the President as a reason for his tariff policy. The Republican “Big Beautiful Bill” kept taxes low for the wealthy and increases the federal deficit. To negligibly help plug this largest ever, 38 $trillion deficit, the Budget Lab at Yale recently calculated, “The U.S. has collected roughly $165 billion to $200 billion in tariff revenue for this fiscal year.”

The Trump administration fails to point out that the more effective a tariff becomes at restricting imports, the less revenue it generates. Moreover, Trump’s claim that the exporting country pays the tariff is not true. U.S. importers pay the tariffs to U.S. customs. These costs are passed on, to U.S. consumers through higher prices, or absorbed by U.S. businesses.  Americans ultimately bear the economic burden.

Recent research has pointed out another massive disadvantage to tariffs – supply chain disruptions. In the latest issue of Foreign Affairs, Shannon O’Neal, Senior Vice President at the Council on Foreign Affairs, concludes, “The Trump administration’s tariffs exclude the United States from the overall economic boost global supply chains provide…Unless American companies can buy parts from foreign firms at a reasonable cost and locate some of their operations abroad, they will struggle to make products as well, as cheaply, and as quickly as foreign competitors that are connected to global supply chains.”

O’Neal is most concerned about the ability of American defense contractors to “go it alone” without access to international supply chains.

Following seven months of new tariffs, the overall economic analysis indicates a failing "report card" for their impact on the U.S. economy. Hopefully, the Supreme Court will not be too late in reversing Trump’s illegal imposition of these harmful tariffs. This will restore prudent guardrails rather than insanity into American trade policy.

 

 

  

DEMOCRACY VS. CAPITALISM SPLITS THE NATION

 

With the constant barrage of news, it is easy to focus on the President’s newest outrage. Less obvious, permanent damage is being done to our republic’s founding principle of “democratic capitalism.” If we took a “social MRI” of the United States we would discover that, below the surface, democracy and capitalism, once compatible, have taken radically different paths.

Democracy and capitalism are no longer working together to maintain our republic. In today’s world of politics and economics, democracy is for Democrats, unregulated capitalism is for Republicans.

This conclusion helps explain why so many traditional Republicans continue to hold their noses and support Trump’s narcissistic personality and populist, authoritarian policies. For them, the Trump administration’s economic policies have added to their wealth and power. This outweighs significant losses to democratic principles and institutions.

When our country was founded, democracy and capitalism comfortably coexisted. There was limited representative government designed to protect property rights. Unlike Europe, most white male citizens in America held a "stake" in society as property owners and supported capitalism. Majority rule was restrained. The colonial system was balanced by an economy that, while fundamentally capitalist, had not yet developed the vast economic inequalities seen today.  
During the American Industrial Revolution, democracy and capitalism were in a more complex and often tense relationship. The period was defined by economic laissez-faire policies and rampant corruption. Ultimately, government intervention and social reforms won out to address the worst excesses of industrial capitalism.   

Following World War II, democratic capitalism flourished. The middle-class soldiers returning from battle were rewarded by the government for their sacrifices. The period was characterized by unprecedented economic growth and expanding consumerism.  Government programs helped the middle class economically improve.  While capitalism brought prosperity and stability, it was also a period marked by strong labor movements and public investment into important social priorities. 

To examine the unexpected breakdown between democracy and capitalism over the past several decades, I will turn to Martin Wolf, one of journalism’s most influential commentators on economics. Wolf trained at Oxford and worked at the World Bank before becoming the chief editorial writer for the prestigious London Financial Times. His two most recent books come to opposite conclusions regarding democratic capitalism.

First, in his 2004 treatise, Why Globalization Works, Wolf explained the then prevalent economic consensus following the West’s 1991 victory in the Cold War. He confidently stated that, “democratic capitalism is not only a coherent form of social organization but in fact the best one.” In 2004, Wolf was adamant that a market economy in a democracy was the only means for “giving individual human beings the opportunity to seek what they desire in life.” Most Republicans then supported democratic capitalism.

Twenty years later, in his latest, 2024 book, The Crisis of Democratic Capitalism, Wolf’s analysis and conclusions are quite different. He now believes that the global financial crisis of 2007-09 turned discontent into seething anger at governing elites and caused a loss of trust in the system. His present diagnosis is, “Neither politics nor the economy will function without a substantial degree of honesty, trustworthiness, self-restraint, truthfulness and loyalty to shared institutions. These values have run into crisis all over the world.” Wolf’s hard to dispute conclusion follows: “Without ethical elites, democracy becomes a demagogic spectacle hiding a plutocratic [government by the wealthy] reality.”

Traditional Republicans appear to be “all in” with this state of affairs. Even young tech entrepreneurs can get behind an unethical governmental that represses democracy and gives the elite power to champion unfettered capitalism. It does not matter that Trump achieved this result by building a movement under the banner of nativism, religious nationalism, and resentful populists looking to return to a glorious past.

What does unjust capitalism mean for Republicans? The “Big Beautiful Bill” guarantees hardship for those who depend on wages, disability benefits and public services. It provides state-sponsored extravagance for those who own assets.

Tax cuts are given to wealthy individuals and corporations. There are tax breaks, incentives, and inducements for investors, financial asset holders, and home owners. The bill assures a continuous wealth transfer to the already well off and to Americans fortunate enough to own assets.

What does democracy mean for Democrats? As reported in the Harvard Business Review, in a 2020 article, Democracy Under Attack, “Capitalism is the right way to organize an economy, but it’s not a good way to organize a society. Markets can allocate resources, but they cannot solve climate change, too much inequality, or the plight of workers whose jobs have been destroyed by trade or technology.”

A functioning democracy is needed to establish guardrails against both political and economic inequality. The mechanisms of democracy must be in place to push back against powerful, entrenched interests. Democratic institutions are needed to ensure that the electoral process is not compromised. Most importantly, as pointed out by Martin Wolf, “democracy needs ethical leaders to survive.”

There is no reason that the free market must remain in the hands of corrupt leaders, large corporations and the wealthy. There are over 36 million small businesses that employ most of the nation’s private sector workforce. They can help bring back a functioning civil society with a market economy and democratic resilience.

It is time to stop tribal fighting about nonsense on social media and to figure out how to reconcile democracy and capitalism for the next 250 years.