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When Do We Call It Socialism?   April 7th, 2009
Just as importantly, will anyone recognize it?       

 
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Remember back during the 2008 presidential campaign when the word "socialism" was invoked? It was whispered in right-wing circles earlier, but it became a potent firestorm after Joe the Plumber was able to get then-candidate Obama to admit that he thought "spreading the wealth" was a good idea.

At that time--even as we effectively socialized banks, insurance companies, and the bad bets of Wall Street bankers--the very suggestion that Obama would lead this country further towards socialism was mocked. Those that raised this suggestion were derided as right-wing fearmongers and extremists. In fact, it seemed like fear of being labeled a right-wing extremist led many public figures to not even use the word "socialism."

So, that being the case, Joe the Plumber was thoroughly investigated by the media while Obama's worrisome ideology was entirely ignored.


Reviewing the Last Half Year

In approximately the last half year, the government (by way of the Treasury and the Federal Reserve) has effectively socialized the economy to the tune of more than $7 trillion.

Banks have been bailed out. Insurance companies have been bailed out--sometimes multiple times. Automobile companies have been bailed out. Twice. In addition, automobile parts companies have been bailed out (because automobile companies didn't actually build anything with their bailout money, they just burned through it). Many homeowners facing foreclosure have been bailed out.

The government is now meddling in the market to the extent that the government is deciding which companies succeed (by way of a bailout) and which companies fail (due to not getting one). AIG was bailed out. Lehman Brothers was allowed to fail. Chrysler was forced into the arms of Fiat because otherwise it wouldn't receive another $6 billion bailout. GM, on the other hand, seems to be facing bankruptcy because it's unlikely any plan it can come up with will satisfy the administration.

The administration has taken the unprecedented step of firing the CEO of General Motors--even though the president has no authority to do that, and even though it seems the CEO was well-respected by employees and had a history of being able to negotiate with the union. Treasury Secretary Geithner has threatened to fire people at financial companies, too, even though he doesn't have that authority either. Meanwhile, others outside of government are actually suggesting that the government wield its non-existent authority to fire more executives at financial companies.

It has also been reported that banks have been forced to take bailout money whether they want it or not, and that some banks aren't being allowed to pay back the money they don't want... yet these same banks remain vulnerable to government meddling regarding the salaries these private companies pay their employees. And the bank stress tests (expected to be published at the end of this month) could actually force more banks to accept more money which would subject them to the whims of the administration regarding who to lend money to and what to pay their employees.

Government is now paying for the medical industry's conversion to electronic health records, it apparently wants to pay for the energy industry's "smart grid," and seems intent in taking over the health industry to one extent or another.

And Obama's budget, combined with his "Making Work Pay" component of the stimulus bill already passed, amounts to taking more money from the rich in order to give cash money to the poor.

The degree to which the government has inserted itself into the free market by way of socializing businesses, private risk, wealth redistribution, and through command decisions is breathtaking.

It's Being Noticed

For what it's worth, this is no longer going unnoticed.

Russian Prime Minister Putin has advised us, and the world, against turning to socialism.

Socialist President Chavez of Venezuela, perceiving the same thing as Putin, actually invited Obama to join him on the road to socialism.

Rolling Stone Magazine has asked "just how far down the road to socialism are we?"

Newsweek famously published an article called "We're All Socialists Now."

Saturday Night Live made fun of Obama's command decisions of the economy.

And an oped in the Wall Street Journal has openly suggested that the administration is intentionally taking control of the banks.

While it's good that it's starting to be reported, the actual use of the word "socialism" is still being used infrequently. And while Saturday Night Live skits making fun of the situation are humorous, it's hardly a laughing matter.

When Do We Call a Spade a Spade?

Clearly conservatives were mocked during the election campaign for portraying Obama as a socialist. We were told we were overreacting or overstating the case.

Now, however, it seems that we may have actually understated the case. Less than three months into the Obama administration Saturday Night Live is mocking the government intrusion in private firms, Obama is redistributing wealth and planning to socialize medicine, Putin is warning us against socialism, Chavez is chiding us towards socialism, and Newsweek is saying we already are socialists.

Obama's budget proposal results in total government spending (state plus local) that would reach close to 50% of the economy. If we assume that Obama's goals include socialized health care--or at the least extreme government control of that sector--that'd be about another 17% under government control , which brings the total to around 67% of the economy.

And that's just what's officially planned. Add to that any potential takeover of the automobile, banking, insurance, or housing market and the percentage goes up from there.

At what point is it no longer unseemly or inappropriate to use the word "socialism?" And will anyone even notice when we get there?

    Afterthought: I can't help but think of the famous Margaret Thatcher quote "The problem with socialism is that you eventually run out of other people's money." Well, we've already run out of other people's money and now we're just printing it. If we're already running out of other people's money, aren't we already in the "endgame" of socialism rather than just getting started with it? The Soviet Union collapsed when it ran out of money. It's enough to make you stop and think.


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