Democratic Candidate for Congressional District 1 Amish Shah was revealed to have attacked former President Ronald Reagan and the entire system of capitalism in a recently uncovered video from 2018.
In the video footage, Shah is heard to say, “What we’ve got is an economic system here that isn’t fair. People have started to realize this finally after years. What happened with Ronald Reagan starting to cut taxes on the very, very wealthy has now given us the society we have, and this is what the real travesty is.”
In full, Shah offered a distinctly socialist rebuke of Reagan-era conservative reforms, tax cuts that objectively revived the U.S. economy after the disastrous Carter Administration.
“We’re institutionalizing inequality this… this is what we’re doing. Um, what… what we’ve got is an economic system here that isn’t fair,” Shah said.
He then began to outline a socialist solution:
“And, and, and this is what the real travesty is: lack of good healthcare for example. Um… an expensive healthcare strips people of assets. Not having affordable education then takes those people and puts them at, those kids, and puts them at a massive disadvantage. And there you go.
What you’re going to get is people without opportunity and then finding themselves in a place where they can’t make ends meet. And we’re funding a school to prison pipeline and …and that’s, that’s not right. That’s, that’s just morally, uh, objectionable way for a society to run.
And so I’m… I’m happy that what we’re seeing within the democratic party is a… a huge progressive movement that’s coming up and saying this is wrong and we’re going to do something about it.”
Shah’s views do not appear to have changed. In a recent debate featuring Shah, he explained his class warfare argument and even vowed to raise taxes on Arizonans. “I’m not in favor of extending the Trump tax cuts because a lot of the folks that were helped by those were wealthy,” said Shah.
NRCC Spokesperson Ben Petersen criticized Shah heavily in a statement, “Amish Shah’s extreme vow to axe the Trump tax cuts represents a declaration of war on Arizonans’ livelihoods. Shah’s class warfare campaign and support for socialism are disqualifying in the first district.”
As previously reported by the New York Post, Shah’s heavily radicalized socialist background has caused significant controversy in recent weeks as ties to Senator Bernie Sanders found him endorsing single-payer socialized medicine.
He recently ran afoul of the City of Tempe for use of mailers depicting a retired Tempe Police officer in full uniform in violation of A.R.S. 9-500.14, which forbids the use of city resources to influence an election.
And further reporting from the Washington Free Beacon also uncovered his rental of a modest condominium in his district and listing of that address for voter registration purposes, instead of his primary residence located in the neighboring third district, in possible violation of Arizona law.
Joseph Schumpeter was an Austrian born economist who last century coined the term “creative destruction” to describe the method by which capitalism continually reinvigorates itself. Unlike the static monarchical guild-based economies or the now-pervasive socialist states, capitalism is in constant turmoil. Ceaseless competition produces winners, losers – and progress.
Schumpeter’s key insight was that failure is essential to capitalism’s success. The outmoded and inefficient must give way to more successful models for capitalism to work its magic as the most beneficial-for-all economic engine of all time.
But that doesn’t mean the short-term consequences of failure aren’t painful to those who bear them. Buggy manufacturers, candlemakers, and others overtaken by progress were convinced that the demise of their industries would inflict lasting damage not only on themselves, but on the economy.
But the harm was mostly short term. American lore is full of stories of honest strivers who learned from their disappointments and went on to great success. Reasonably flexible workers found employment in new fields where they were often more productive.
Schumpeter was right that capitalism is fundamentally a “no pain – no gain” deal. But that can be a hard sale in a culture that has come to believe nothing bad should happen to anyone, that pain and failure are indicators of injustice.
We ditch merit-based exams because some students may feel bad. We award participation medals. We mandate facemasks just in case.
Thus, the Obama administration, after the banking collapse of 2008–09, soothed the wounds of the too-big-to-fail lending banks by bailing them out with billions of taxpayer provided funds. But the banks were engaged in exactly the behaviors that Schumpeter believed free markets were designed to punish.
The banks (at the insistence of the feds) made thousands of “sub-prime” loans, using underwriting criteria which would previously have been considered unthinkable. Worse, when the loans began to go sour, instead of cutting their losses, Wall Street repackaged them as “mortgage-backed securities.” These were sold off as far more valuable than the mortgages of which they were composed.
We all know how that ended. Yet because of the bailout, no banks failed. The perps walked away from the train wreck they had caused.
The mortgage lenders 15 years ago clearly did not fear the discipline of the market. Neither did the decision makers at Silicon Valley Bank (SVB), which has also failed due to unwise risk-taking.
SVB occupied a desirable niche, serving the local venture capitalists and tech startups. The fed pumped trillions of dollars into the economy while interest rates were held near zero, making us all feel rich. The stock market, especially tech investments, soared.
Times were good. Deposits in SVB tripled in the three years after 2019. SVB could offer generous loan terms to favored borrowers and above market returns on deposits.
But the music had to stop eventually and so it did. The feds finally raised interest rates in response to roaring inflation. SVB was forced to raise capital and sell some assets at a loss, sparking a run by depositors, which SVB was unable to withstand. The bank collapsed.
SVB had been warned. It lacked the liquidity to respond to stress because the present market value of its held-to-maturity bonds was $15.9 billion less than face value at maturity, which was the number on the balance sheets. The cash wasn’t there when needed.
Most commentators deemed this a regulatory failure. But does a banker really need a regulator to tell him not to count on zero-interest rates indefinitely? That loans to shaky borrowers might default? That bond values fall when interest rates rise?
Of course they knew. They just didn’t care – enough. If they believed their losses would be borne by others, then charging ahead through all the yellow lights to maximize gain actually made sense.
SVB, its depositors, and associated banks have all been bailed out to “stop the contagion.” That’s politically astute, even though the demise of Lehman Brothers 15 years ago hardly fazed financial markets.
But relying on government regulation, rather than market forces, to discipline bank behavior has produced a chronically unstable financial sector which lurches from crisis to crisis.
Let them fail.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
