America loves “socialism”

One of the more baffling attacks during the recent presidential campaign were stern warnings from John McCain and his running mate Sarah Palin that the election of Barack Obama would lead to socialism. Pretty much anything Barack Obama proposed in the way of new government programs amounted to socialism. Health care reform: socialism. Raising taxes on those who make more than $250,000 a year: socialism. According to their campaign, Obama’s programs were designed to take away your freedoms and give the government more power. These tactics seem to have worked to some degree. Since Obama’s election, gun sales have gone way up. Despite promises from Obama to the contrary, gun owners believe that Obama will take away their right to bear arms.

Ironically, the Bush Administration, through its own ineptitude, is moving us closer to real socialism than anything that is likely to happen during an Obama Administration. This is because many Americans have no idea what socialism actually is. They confuse new government programs with socialism.

In a true socialist state, the government controls the means of production. If you want to see socialism at work, take a trip to Venezuela. President Hugo Chávez Frías has nationalized the country’s oil industry, its telephone industry and dozens of other industries. He is working to nationalize the country’s health care system too. If we had socialism in the United States, there would be no GM, Ford and Chrysler. Instead, we would have the Agency for Automobile and Truck Production, which would probably be part of a new Department of Industrial Production. Yet, because of the market meltdown, we are moving in that direction. As a condition for providing bailouts to banks, investment firms and other industries, Congress demanded an equity stake in many of these firms. After all, if these institutions revive and become profitable in time then after providing all those billions of tax dollars to keep them afloat, taxpayers should enjoy their share of the profits.

Still, having a major equity stake in a company like AIG, or a bank like WaMu, is a long way from managing these institutions. Given that these institutions collapsed from their own mismanagement, it is unlikely that federal overseers will do a worse job of managing them. Nor are federal bailouts unprecedented. We have done it many times before, with Chrysler in the early 1980s and with many savings and loans later that decade. Sometimes, as in the case of Chrysler, taxpayers actually got their money back. In general, the government has no long-term interest in owning these companies. It wants to make sure the American taxpayer is not fleeced, if possible, before returning them back over to the private sector. That is not socialism; that is being fiscally responsible to the taxpayers.

If programs that redistribute wealth are socialism then clearly Americans are comfortable with socialism. The whole point of government is to redistribute personal wealth. We could have eschewed taxes when our country was formed. We learned that it is hard to protect the nation by hoping many unpaid farm hands toting guns would show up when faced with insurrection or invasion. We form governments to handle common societal problems too big to be solved individually. Duh!

No Republican or Democrat that I am aware of (except possibly for a few cranks, like Ron Paul) has called for abolishing our social security system. An attempt by the Bush Administration to just tinker around the edges (their proposal to allow younger workers to redirect some of the money going into social security into private accounts) was soundly rejected by Congress. Now, with the collapse of the financial markets, just the idea is laughable, never again to be resurrected. It turns out that mortgaging our retirement on risky and uncertain financial markets is unacceptable. We want some assurance of a reliable income in retirement.

After forty years of success, Medicare is also not going to be abolished either. Currently it is the primary means for older Americans to get health care after retirement. It is in effect a national health care system for senior citizens. It has had its issues over the years, but has been widely embraced by Americans since it was enacted during the Johnson Administration. Indeed, it has been expanded. The apparently “socialist” Bush Administration, as one of its early initiatives, expanded the Medicare system to include a new prescription drug benefit.

Moreover, if we are going to promote rugged individualism, what is with all those hundreds of billions of dollars in agricultural subsidies? Most of that money goes to predominantly red states. How many farmers who voted for McCain/Palin are anxious to lose their subsidies and take their chances in the free market?

No, when Republicans rail against expanding the size of government, what they really mean is they do not want to expand it for those they feel are not “enfranchised”, i.e. not “real” citizens (people like them). This means they are perfectly okay with programs like the Medicare Prescription Drug Benefit, but are leery about programs that, say, subsidize housing for the poor. The way Republicans see the world, the poor need to be more miserable, because if they are more miserable then they will have more incentive to escape from poverty through their own wits. They will become little Horatio Algers by working their fannies off and moving to the middle or upper class, just like George and Louise Jefferson. Then maybe they will be part of the enfranchised class and get more of those nice federal benefits, like that sweet home mortgage interest deduction. Never mind that most of those who do move from the lower to the middle class do so only because the government lent a helping hand. (My wife and I are examples. Our first home was financed with the help of FHA. We are now prosperous upper middle class adults.)

These “socialist” programs continue year after year because they are popular and they generally seem to work. If they were not they would be abolished. It is hard to escape the conclusion that Americans tend to like government programs in general. If there is a disconnect, it is that while Americans want these programs, they do not necessarily want to pay for them. This really is the root of our deficit spending problem. As I discussed elsewhere, deficits simply drive down the value of the dollar overall, so deficit spending tends to be counterproductive in the end.

We are about to see the return of a progressive administration. Yes, we are going to see bigger government, just as we got it under Bush and every administration in memory except possibly under Carter. While government will grow, government is likely to change in different ways under an Obama Administration, with less money being wasted in military adventures and more money being directed to solve problems closer to home. We will not mind that much either. We will not even care if our taxes go up, so long as we get national health insurance as part of the deal. What is most important is the net effect on our wallets. If we can find a way to get health care less expensively through a government managed program, we are going to embrace it. Simply having the certainty that health care will be there when we need it, whether we are employed or not, will be an enormous relief to the vast majority of Americans.

If this is socialism, Americans say: bring it on.

3 thoughts on “America loves “socialism”

  1. I’m appalled.
    I am NOT comfortable with the government collecting and spending my tax money. I don’t care for most of the things it spends my money on. I would rather their NOT be Social Security, because the government already squandered that money instead of properly disbursing it. (Will the retirement age be 80 by the time I’m 70? Lock-box, indeed!)
    I am NOT comfortable with the wasteful pork barrel projects my tax dollars are spent on. I shudder to invision the bloat, corruption and mismanagement of socialized healthcare, just like the government mismanagement of Fannie Mae and Freddie Mac (and inept government regulation of private loan institutions that forced those institutions to make bad loans for politically correct reasons) that lead to our current financial woes.
    The duties of the Federal government should be limited to the common defense of the States and keeping the State borders open for commerce. Period. No redistribution of wealth. The Federal government has no business doing anything else. You call up the corruption and mismanagement of the Bush administration, and I won’t disagree with you, but the Clinton administration was equally as bad. And as far as the next administration is concerned, B.H.Obama is just another crook from the Chicago machine complete with his list of shady associates, CHANGE in terms of hiring the crooked old Clinton administration to serve with him, and his resurrection of FDR’s failed New Deal. That’s change, alright, change for the worse.
    You and I both trust the government. But where you trust the government (run by the Democrats you trust) to do the fair and equitable thing, I trust it to bloat and bungle no matter who is in there. That’s why government should be limited: the fewer things it has to deal with, the fewer things it can screw up.
    Have a happy next 4 years. And remember: socialism is like cocaine–fells good at first, too much or too long and you die, and it’s a bitch to quit.

  2. Hey Chris, I guess you don’t like the interstate highway system, and never ever use it, right? Or national parks — you don’t use those do you? I really enjoy it when somebody says they hate government and think all government activity other than national defense should be abolished. Great. So stay off the roads, don’t send your kids to school, and when crimes get committed, you’ll be paying out of pocket to pick up the offenders, right? And when you get to be 65, don’t bother to sign up for Medicare, ok?

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