A Rough Week for Socialism

Socialist politicians have been getting a lot of attention lately but the good news is they haven’t been getting much done. Last week a major legislative setback for socialism in Washington was followed by a remarkable vote of confidence in American capitalism by investors at home and abroad.

Few pieces of legislation have enjoyed as much buzz as the Green New Deal from Rep. Alexandria Ocasio-Cortez and Sen. Ed Markey. So grand are its socialist ambitions that converting the entire U.S. health care system to government management is just one part of an economic overhaul estimated to cost as much as $94 trillion over 10 years.

But putting the Green New Deal to a vote on the Senate floor turned out to be a buzzkill for socialists. Not a single senator voted for it, all Republicans voted against, and the GOP was joined in opposition by Democrats Doug Jones of Alabama, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, along with Maine independent Angus King, who caucuses with Democrats. All the Senate Democrats running for president voted “present” even though they had all signed their names as co-sponsors of the Green New Deal.

While socialist economics was getting whacked in Washington, outside the Beltway capitalists were preparing for what could be a historic year for the creation of publicly traded corporations. On Thursday the money-losing ride-hailing service Lyft responded to huge investor demand by increasing the price of shares in its initial public offering. Despite being a distant second to Uber in the young industry of connecting riders with drivers, Lyft raised its IPO price to $72 per share and a total valuation of more than $23 billion and traded up from there.  

Capitalists like to talk about animal spirits in a healthy market -- the instinct to take risks and seize opportunities in an open and competitive economy. The animal spirits in this space have been so spirited and excited about the possibilities of ride-hailing and driverless cars that they’ve been pouring billions into Lyft and Uber despite years of losses. Now the capitalists who invest in U.S. stocks are showing that same spirit, and not just for young tech stars. Iconic jeans maker Levi Strauss & Co. went public last week for the second time in its 166-year history and its shares have been trading more than 30% above the offering price.