- The majority of America’s largest companies are incorporated in Delaware, and its Supreme Court chief justice, Leo E. Strine, Jr., is a highly influential and outspoken voice on corporate law.
- Strine said at a recent CEO conference that those who dismiss presidential candidate Bernie Sanders as a communist are ignorant of the markets and history.
- He likened Sanders’ policies to those in FDR’s New Deal, and said New Deal democracy is the model that allowed the US and its allies to thrive in the 20th century.
- This article is part of Business Insider’s ongoing series on Better Capitalism.
Delaware is the second-smallest American state by area and has under a million people, but it’s where 66.8% of Fortune 500 companies are incorporated. The First State has become a destination for major corporations’ legal frameworks largely due to policies that result in significantly smaller tax bills than elsewhere in the country.
This also means that its courts are among the most important in the United States for business, and the chief justice of its Supreme Court has a platform for influencing corporate law. Leo E. Strine, Jr., is the outspoken judge holding that position, and he’s got a lot to say about the current state of the American economy.
At the recent CECP CEO Investor Forum in New York, which focused on CEOs moving beyond toxic “short-termism,” Strine said that growth is largely captured by the country’s wealthiest. He explained that this can only be changed on a structural level if Republicans and centrist Democrats start supporting significant changes, and look to the past.
He pointed to the way some Americans talk about Vermont Sen. Bernie Sanders, who is running as a Democratic presidential candidate. “When people talk Bernie Sanders as if he’s a communist, they show a profound ignorance” of the market and of history, Strine said. He added that while he doesn’t agree with all of Sanders’ proposals, they’re not actually radical from a historical or global perspective. Per Strine, Sanders is actually a centrist by the standards of some of our closest and most prosperous European allies.
“There is profound economic insecurity. That is the sort of thing that happened in the late ’20s and 1930s and that we overcame with New Deal democracy, which became a role model for market dynamism that was tempered by fairness for everybody,” Strine said.
Even Federal Reserve chairman Jerome Powell, appointed by President Donald Trump, has stated that income and wealth inequality are diminishing the country’s overall prosperity and need to be corrected through policies.
Part of what’s fuelled Sanders’ critics who dismiss his ideas as too radical – or even Marxist – is how Sanders refers to himself as a democratic socialist, though he’s not advocating for anything approaching the state assuming ownership of industry. Instead, he could more accurately be seen as a social democrat, someone maintaining the capitalist system while using the state to create more equitable distribution of resources.
His proposals include significantly raised taxes on the wealthiest Americans, a higher estate tax, the breaking up of big banks consolidated during the financial crisis, Medicare for all, and increased infrastructure spending.
Sanders’ ideology is not far removed from Franklin Delano Roosevelt’s New Deal vision, and Strine suggested Americans need to shed the Cold War mindset that intensified alongside the rise of neoliberalism in the late 1970s.
“When we lampoon European social democracy,” Strine told the audience, “we’re lampooning what we did to make the market economy work for all.”
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