Henry Paulson, Socialist
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Henry Paulson, Socialist
Republicans admit the free market doesn't work.
Posted Sunday, September 21, 2008 - 8:41pm
Of course, the ironies and the potential pitfalls of this administration enacting a socialist takeover can hardly be overstated. This is the political party that for decades has insisted on deregulation and free markets, has scolded Hugo Chavez for nationalizing the oil industry, and even now is attempting to tar and feather Barack Obama with the label of socialist. But if this bill is enacted at its advertised $700 billion price tag—and many people believe the price will ultimately prove higher—it means that the Bush administration has undertaken the single largest socialist investment in the history of mankind. The Bolshevik revolution of 1917 couldn't dream of an economy worth $700 billion; the figure dwarfs anything ever attempted by Fidel Castro or the Sandinistas.
Focusing on ironies and hypocrisy is fun, but Paulson's socialist prescription actually provides a rare opportunity to advance the state of American political and economic debate. During the Cold War, socialism became an especially unsavory idea because it was linked to the countries that pointed missiles at us. This was less the case in Europe, where democratic socialism grew to become the norm, with sometimes rocky but mostly successful results (you don't see the Spanish having to take over their banking sector, at least not yet). Paulson's relatively untainted socialism offers America a genuine Nixon-goes-to-China moment, a chance to have a more honest, less demonizing conversation about where, when, and how government intervention in the economy is effective and desirable.
Will that conversation take place? Probably not. No matter what this lame-duck government does, facts don't really matter to the dominant Rush Limbaugh wing of the Republican party. Pink-baiting, especially at the congressional-district level, remains an effective political tactic. And Americans' general ignorance about the true nature of socialism is a vacuum that will likely be filled by those whose best bets are evasion and distortion.
There's another problem, too. State socialism is intrinsically unstable and thus doesn't have a great track record; the Soviet Union collapsed for a reason. Purists of Marxist theory viewed state socialism as at best a condition to be temporarily tolerated; ultimately Marx wanted the proletarian class to take power and then run the society as it saw fit, without a state to interfere. Unsurprisingly, Paulson is not talking about that. Still, it is by no means obvious that those who practice state socialism without invoking Marx's name will be more successful than those who did invoke it.
(Photo of Henry Paulson by Chip Somodevilla/Getty Images)
Comments
'third way'
If you believe the Ron Paul crowd, they would say it is not socialism but a form of fascism. The 'third way' as a form between capitalism and socialism. We need to be very careful as were playing with fire.
Great article. But in
Great article. But in response to the first comment which blamed this current crisis on the Community Reinvestment Act is pretty absurd. There is PLENTY of blame to go around, one of which could be the lack of oversight of Freddie and Fannie - which BOTH Rubin (Clinton admin) and I believe Bush wanted to reform but both failed. To blame it on one piece of legislation is quite laughable.
Ledbetter does make a great point. This is, in essence, socialism; the philosophical debate about the U.S. government's role in the marketplace won't happen, which is sad especially in an hugely important Presidential campaign. Instead, we will just have to hear talking points and the same old bull.
CRA is the starting point
I said the CRA was the starting point. Mortgage companies, especially Freddie and Fanny, took advantage of CRA and poor Fed money management to become very lax with their lending policies. Greenspan warned of this in 05 and the Senate banking committee was going to further regulate Freddie and Fanny, the Dems killed it. One cosponsor for the killed bill to fix Freddie and Fanny’s lending practices was McCain. Meanwhile it turns out many Dems, and a few republicans, were on Freddie and Fanny’s payroll, including Obama, Dodd, and Biden, so much for “regulation.” As for the socialism charge, it is true and despicable what the Fed is doing. My point is that this was not caused by deregulation; it was started with bad regulation and followed up with worse regulation. Insanity is doing the same thing over and over again and expecting different results, let’s regulate it more than before because that worked so well.
Not either/or option
The American public understands compromise. We live with a form of government that is both socialist and capitalistic at the same time. We have lived this way for many years and a tweak to the left or a tweak to the right will not bother most folks. It will take a steady calm leader that communicates a plan. FDR made people feel he was talking to them as individuals, straight and honest. He made it look easy, because it is. Be honest, be smart and communicate a balanced plan, and the American public will follow; basic unencumbered leadership.
"Socialism"?
"Gunsmoke" is right.
No TRUE free-market system would have allowed the government to impose DICTATES over the internal marketing decisions of private enterprises, and no TRUE free-market system would have allowed the multi-national corporate oligarchy to feed at the taxpayers' trough. It is the Congressional crypto-Socialist and corporate OPPONENTS of a TRUE free-market who got us into this mess, and now, the government-subsidized and government-protected corporate oligarchy have succeeded in starting this country on the road to a Mussolini-style state/corporate socialism. Why, in the name of all that is rational, are we permitting corporate executives . . . who have driven their own companies into the ground through incompetence and fraud . . . to walk away with multi-million dollar bonuses and severance packages while their shareholders and we, the taxpayers, get ROYALLY sc***ed? Those white-collar thugs, AND their partners in Congress . . . who previously turned a blind eye to their deceptions . . . are EVERY BIT as much of a criminal as the punk who robs a 7/11 for a measly hundred bucks. The only difference is that the petty punk, in contrast, has still not BANKRUPTED the entire country.
It is not unreasonable to wonder if all of this may, in fact, be part of a long-term PLAN by some closet Socialists, Federal government bureaucrats and Corporate oligarchs to CREATE a crises, in order to IMPOSE government-dictated Socialism.
Socialism for the rich
Excellent article, although I think you are too kind to the conservative philosophy. It seems to me that Republicans have long favored socialism – but only for the rich, and only when it allows them an opportunity to shift loses onto society at large. Our current $700 billion bailout is nothing new; the difference is only in the massive scale of the event.
To cite one example: the Savings and Loans scandal of the 1980’s, in which key investors – Neil Bush being one – stuffed their own pockets while managing hundreds of millions of dollars of other peoples’ money into oblivion. These financial ‘experts’ took advantage of sloppy deregulation and absentee oversight (via Republican leadership) and kept short-term windfall profits for themselves. Savings and Loans failures were shifted to the public via taxes and state ownership of the remaining assets.
This is business as usual in the United States: the impacts of calamitous failures are borne by the entire population, while the responsible individuals are allowed astronomical profits. I have never heard a Republican criticize this, nor have the intellectual fortitude to call it what it is: Socialism for the rich.
The conclusion that 'facts don't matter' to the dominant wing of the Republican Party, is absolutely dead on... whether we are talking about WMD’s, the environment, or economics. For eight years we have endured the intellectual dishonesty of conservatives, and this bailout is perhaps their greatest flash of hypocrisy yet.
regulations got us in this mess
First, many people would argue, republicans and especially libertarians, that Bush’s policies over the years are very un-republican.
Second, the idea that laissez faire economics didn’t work is unfair as there have always been regulations. Is it really deregulation to go from 1000 laws to 800? It is still heavily regulated. In addition, this whole mess started with the Community Reinvestment Act (a democrat bill) to force and or coerce banks to lend to the poor and minorities. Government influence started this mess. Who would have thought down payments, collateral, and credit history mattered.
Third, the dream of ownership is still there, but there must be the freedom to fail as well. For the last few decades the prevailing thinking is that these companies are too big to fail. In a truly free market they would be allowed to fail and the market would limit the size of these companies. It looks like regulations will do it instead.