Few things are more satisfying in the era of President Trump's rising star than to read news like this from National Review:

The Democratic Socialists of America are in a “financial crisis” that will require seven-figure budget cuts and staff layoffs to correct.

News of the DSA’s financial condition surfaced as the group leads anti-Israel protests nationwide; including a pro-Hamas rally held in New York just one day after Hamas’s October 7 massacre.

“The current deficit will force us to make 7-figure budget cuts. This will require us to make painful decisions that will impact all levels of the organization. … Given our current financial state, we do not believe we can have a healthy, democratic, and effective organization while spending the amount we currently do on staff,” Alex Pellitteri, Kristin Schall, and Laura Wadlin, members of the DSA 2023-2025 National Political Committee, wrote in a proposal published last week.

“If necessary, we will then explore initiating lay-offs according to the DSA union’s contract. Be it revolved: The Personnel Committee will be responsible for determining the quantity and type of positions to be eligible for buy-out or layoff, and they will assist with logistics and a staff transition plan,” they continued.

The baseline organization of Rep. Alexandria Ocasio-Cortez and some 30 other elected officials is as socialist as such groups get.

They have long had ambitions of becoming a political party, but as of now, are a 501(c)4 organization with around 57,000 dues-paying members (at best -- groups like these have been known to exaggerate their numbers). 

Long the main rival to the Communist Party, USA, they have always played the role of the more democratic player between the two. These days we can now see that by 'democratic,' they probably meant at least the some of the kinds of rigged elections we have been seeing in blue states and now swing states -- which has contributed to their ability to drive the Democrat agenda. Until October 7 they seem to have done that very well.

But it hasn't been good for their finances and for that, and in a letter to members published at Socialist Call, they say they are a little puzzled:

But how did this decline in revenue, membership, and overall excitement happen in the first place? This should actually be a really favorable time for DSA. We’re living in a moment when revived labor struggles and the fight for a free Palestine are galvanizing so many Americans, particularly young people. Biden’s disastrous policy of fueling Israel’s genocide in Gaza has created the kind of space for an independent alternative from the Democratic Party that has not existed since Bernie. 

The New York Post cites Jewish left-wing activists who pin the plunge in revenues to DSA's position of unreserved support for Hamas, which has driven away many left-wing Jewish members.

But they're been pretty pro-Palestine for awhile, so I'm going to disagree, given that the sources cited don't seem to have firsthand knowledge, and although it's possible that DSA's stupid, disgusting stance has given the group's finances a final kick as members drop out, it's far from the whole story of why it's going belly up.

Part of its problem is long-term demographic trends:

The group insists that it's membership-funded, from member dues, which amount to about $11.95 a month for the ones who pay (about a quarter don't). If they're getting money from some Arab sheik or Vlad Putin or the ChiComs, I haven't heard it. Based on what DSA has said, it's membership dues, some online donations, swag sales, and little else.

When DSA's member shot up meteorically in 2016 with the presidential candidacy of DSA member Bernie Sanders, going as high as 94,000 members, much of the new membership was youthful voters, made woke by their university professors and energized by the Bernie campaign.

Now that Joe Biden has gotten into power and been a resounding failure on all fronts, particularly the economy, one of the biggest demographic megatrends is young people moving in droves to President Trump, according to several polls.

By sheer numbers the woke young people who were readily available for the DSA to draw into their membership are growing smaller and smaller in number.

DSA confirms this trend in its own membership numbers:

In 2022, the DSA brought in $5,345,779 in income, 14% less ($906,528) than expected. This corresponds to a decrease in approximately 10,000 members during that year.

The majority of DSA's income come through member dues. In April 2021, the DSA recorded 94,000 Members, approximately 78,000 of which were Members in Good Standing (MIGS), i.e. members who have paid dues within the last year. As of May 2023, the number of "constitutional" members was reduced to ~78,000 (as cited on the June B&F call), of which ~57,000 were recorded as MIGS. To emphasize, that's close to 25% of DSA's MIGS, a net average loss of over 1,000 MIGS per month. Our constitutional membership had decreased by 16,000 members, or about 17%.

 The downward trend has been going on for a few years and pre-dates the Hamas atrocities.

Seven months ago, in a letter to their membership published in Washington Socialist, a DSA publication, they predicted bankruptcy if they couldn't move their trendline:

We don't want to bury the lede — we are seriously concerned about the short-term financial health of our organization. We aren't in an emergency now, but under the current fiscal trajectory the DSA faces a very real — but still very avoidable — risk of insolvency within the next couple of years. The decisions made at the convention, and particularly the decisions made by elected national leaders in the organization, will be critical for pivoting off our path towards illiquidity or retrenchment.

Their chart in the newsletter forecast a $1.4 million hole by 2024.

Gradually, then suddenly, as Ernest Hemingway apocryphically explained the dynamics of bankruptcy. 

An additional spray of poison to the membership has been in recent internal organizational battles in recent years with the Political Committee, which calls all the shots as such groups do, demanding more party discipline on members. Knowing a little bit about what her voters want, Rep. Alexandria Ocasio-Cortez has clashed with DSA on its pro-Hamas stance, and DSA's National Political Committee, forgetting the star power of its most famous member, has doubled down on its pro-Hamas stance. A similar clash happened with then-DSA member Rep. Jamal Bowman in 2022, according to the Post and Wikipedia.

Young people don't like being ordered around, and as new members, the top-down command structure of all socialist groups had to come as a shock. It's likely membership fell on that one, too, and it's not in the numbers yet.

Now, what's the most common reason organizations fall into the hole? Just ask Black Lives Matter -- fiscal mismanagement, sometimes as crude as someone running off with the till.

According to DSA's most recent letter to its members, calling for layoffs, they blamed their own leadership for keeping them in the dark:

 This is not just a natural ebb in the socialist movement or technical issues in our recruitment or fundraising. We have not had strong figures at the top of the organization to lead with a political vision that inspires people to become committed socialists. Working people are inspired to transform the world, but they are doing it elsewhere.

We would ideally be scaling up our operations to meet this moment, hiring fellow capable comrades who are excited to be paid to spend every working day thinking about how to get us closer to socialism. But top directors mismanaged our dues by withholding essential information from elected leaders for years and imposed their own political objectives that would keep DSA in the model of a progressive non-profit rather than a mass party that is capable of getting us closer to a rupture with capitalism. As a result, we are now left holding the bag and tasked with cutting expenses just to keep the organization afloat. 

The top directors almost certainly would be on the National Political Committee which calls the shots, but it's possible it was one of the others, and whether they actually helped themselves to the money or just wasted it is unknown. Their structure is here.

There also was this. emphasis mine:

When we finally saw the numbers, it was much worse than we anticipated — probably too big to fundraise our way out of, and mostly driven by the unstrategic hiring practices over the last few years. This is an example of the dysfunction and distrust created by a lack of transparency between directors and members.

So someone mismanaged dues by hiding something, witholding information? It's pretty interesting that they admitted it openly on a public forum. They claimed they were in surplus a couple years ago. One wonders if some of the people at the top helped themselves to the incoming cash, following the Black Lives Matter economic model, or something else happened. Whatever it was, it sounds like something the government regulators who hand out the 501(c)4 designations ought to look into. This phrase in their membership letter tells us they already know that their membership doesn't know much about economics:

Before getting into it – we want to acknowledge that budgets and numbers can be intimidating and exhausting, but it is incredibly important to understand the shared resources we have available to use. The collective management of financial and capital resources is textbook socialism, and it’s something delegates and lay-members alike should take seriously as we consider what is possible, or what can be done, by the organization we are all building and operating in pursuit of democratic socialism.

All told, the internal conflicts, the ordering around, and open criticism of money mismanagement suggests an organization in very bad shape, and probably heading for a breakup. Back in San Francisco, when some far-left marginal group was breaking up as an organization in the early 1990s following the fall of the Berlin Wall, I recall that a popular button worn around the Mission District by those who had had it with the party's autocratic New York leadership read: "Mass, party, sect, gone." 

It sounds like DSA is on approximately the same trajectory. Good riddance.

Image: Logo, via Wikipedia, // fair use