Rep. Alexandria Ocasio-Cortez (D.-NY) will turn 35 on October 13, 2024 and is therefore eligible to run for President in the election of that year. By that time, two terms of President Trump will have tired the nation of solid, sober, well-managed government and the electorate will be keen to try something new. With its long-standing reputation for bringing you the issues of tomorrow years or even decades before they become real, The Bear’s Lair this week peers into the crystal ball to examine the Ocasio-Cortez Presidency of 2025-33.
Ocasio-Cortez’s election in 2024 was a pretty easy win. Her dance videos and personality contrasted well for most Millennials with Mike Pence, who came across as elderly and dour by comparison. Even though older voters skewed strongly for Pence, based on the Trump administration’s successful management of the economy and foreign policy, Ocasio-Cortez’s status as potentially the youngest President in U.S. history, seven years younger than Theodore Roosevelt and eight years younger than President John F. Kennedy, together with her status as the first woman and first Hispanic President, attracted suburban and minority voters in record numbers.
In a year when neither the economy nor foreign policy were especially salient, her extreme policy positions registered little with the electorate, and her campaign, heavily skewed towards her marketing skills in non-traditional media, overwhelmed any doubts that voters might have. She carried 400 electoral votes, including both Texas and Florida, and elected with her a substantial Congressional majority, including many members who had “primaried” older less radical incumbents, and a small but adequate Manchin-proof majority in the Senate.
Once elected, Ocasio-Cortez and her followers in Congress quickly cleared the way for her policies to be implemented. They abolished the Senate filibuster, making her 52 Senators plus Vice President Ilhan Omar entirely able to pass legislation. They abolished ICE enforcement and passed legislation forbidding any checks on the qualifications of voters. They began the process of admitting Puerto Rico and the District of Colombia as states, ready for the next mid-term election. They pushed state legislatures to pass resolutions overruling the Electoral College if the popular vote differed from it. Finally, in the most controversial move, they appointed six new Supreme Court justices to replace or supplement those over 70, giving liberals a solid 9-6 majority on the Court even though Justice Ruth Bader Ginsberg had been replaced with a Republican during Trump’s second term.
The Ocasio-Cortez administration‘s first economic priority was to launch the spending programs promised in her campaign. The Green New Deal was the centerpiece, of course, with massive building programs for wind and solar power stations, to replace the soon-to-be-obsolete carbon-based power stations. Extending Medicare for all consumers was easy enough also, given the Congressional majority, as was a subsidy program to make college free for state college students. The total cost of the spending programs was an initial $2 trillion in the first full year (the second year of Ocasio-Cortez’s term) which was only marginally offset by the promised 70% top rate of income tax and a modest wealth tax on very large fortunes.
Paying for all this was not a problem; President Ocasio-Cortez was a strong believer in Modern Monetary Theory, and she had found a like-minded Fed chairman within a year of her inauguration. Consequently, the Fed simply advanced money to the Treasury to pay for the government spending, while keeping interest rates firmly anchored around zero. Inflation began to run at a brisk trot, but since savers were not part of Ocasio-Cortez’s voter base, she wasn’t worried. With the economy humming along, albeit with inflation, and Puerto Rico and the District of Columbia now electing Congressmen and Senators, her first midterm election presented no problem, the Democrats keeping control of both the House and the Senate.
In the third year of her term, inflation began to accelerate and the budget deficit began to widen, while unemployment reappeared. Accordingly, the President announced her conversion to Post-Modernist Monetary Theory. Being post-modernist, PMMT operated entirely without the use of money. Thus, all outstanding currency was immediately declared invalid – as the President remarked in her announcement, the major holders of large-denomination bills were foreigners and the Mafia, anyway. The seigniorage liberated by this mechanism financed much of that year’s public spending deficit. Without the ability to turn their short-term assets into dollar bills, the populace then had no way of resisting her Fed’s interest rate policy, with the Federal Funds rate set at minus 10%. The dream of Larry Summers and Andy Haldane was finally about to be tested in reality!
In the short term, Post-Modernist Monetary Theory proved remarkably successful. There was a massive building boom and surge in tech-sector venture capital, fueled by the ability to borrow at negative interest rates. After all, if an investment could be financed at substantially negative interest rates, it did not have to be successful to yield a profit to the investor – any old asset would do. Needless to say, alternative energy schemes, wind, solar and geothermal, were prominent among new investments – the cost comparisons did not matter much, with free money to finance them. At the same time, inflation continued to accelerate, and was approaching 10% per month by the beginning of the year of Ocasio-Cortez’s re-election campaign.
The President had campaigned for several years about the excessive power of social media and Internet retailing, and about how capitalism was an irredeemable system that must be replaced. Now she acted, nationalizing Amazon, Google and Facebook, giving only zero-interest perpetual government bonds as compensation. The Supreme Court, with its built-in leftist majority, upheld the nationalizations against lawsuits from the shareholders. As Ocasio-Cortez said, all three companies had grown far too powerful, so in an election year it was best that their power was brought under responsible control. Certain manifestations of dissidence, such as expositions of Austrian economics, were from now on prohibited as hate-speech.
Ocasio-Cortez’s re-election contest was fought against the background of a worsening economy and high inflation. However, her opponent Ted Cruz did nothing to help his credibility when he promised to balance the Federal budget and return interest rates to a level solidly above inflation. Nobody believed that such a policy would be possible, and to attempt it would undoubtedly plunge the economy into bottomless recession.
On election night, the totals of 50 million votes for Ocasio-Cortez from New York and 30 million from San Francisco, far above the population of those two cities, appeared surprising, but the President’s re-election campaign pointed out that Census population figures were outdated, and that enthusiasm among newly enfranchised immigrants – no immigrants were now illegal, of course – explained the figures. Cruz won the Electoral College, by 403 votes to 132, but under the new rules, that was irrelevant, and was in any case little reported in the government-controlled media.
In her second term, Ocasio-Cortez turned to regulation to implement her Green New Deal, banning coal mining and oil drilling with immediate effect, and fossil-fueled power from January 1, 2030, by which time her government’s projections showed that enough wind and solar capacity would have been constructed to replace the nation’s fossil fuel generation capacity. Air travel within the United States would be banned, except as a special exemption for Hawaii and Puerto Rico; by this measure it was hoped that Amtrak could finally be persuaded to turn a profit.
This new edict sent the economy into deep recession, since fuel was no longer available for internal combustion automobiles, and power was in short supply even for Teslas. At this point, the illicit free market started operating. In the deep, remote hills of Kentucky and West Virginia, where resistance to Ocasio-Cortez was especially strong, the Appalachian Steam Truck Company started producing coal-powered steam-driven trucks, some for cargo, some fitted for passenger transportation, all entirely without any environmental technology. On the side of each truck, to show solidarity with the nation’s environmental agenda, was painted the slogan “Fight global warming – with sulphates.”
The trucks were quickly massively successful, with the nation’s few remaining Tesla-less employees commuting in Appalachian Truck bus services, arriving at their places of work proudly covered in coal smuts. President Ocasio-Cortez attempted to send in the remnants of the U.S. Army to close Appalachian Truck’s factory but was told the Army had no fuel available for its vehicles and was hence confined to its bases.
As the calendar turned to 2030, when President Ocasio-Cortez had originally forecast the planet would cease to be habitable, she was faced with a stark reality. The planet remained habitable; all kinds of new flora and fauna were sprouting in the sunshine on the almost disused Interstate highway system. However, the U.S. economy was in collapse, with 2029’s inflation at over 1 million percent and mass starvation threatened as Appalachian Truck’s capacity was nowhere near sufficient to run a 21st Century food distribution system for the U.S. population. Only modest fraternal aid shipments from Venezuela brightened the picture.
Is this a forecast? No – look at the date at the top of this column. At least, I hope not…..
(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)