Socialism really is a bad idea

As I noted last week, whenever a critic of Democrat policies uses the term "socialism," Democrats bristle. But if a policy or measure gives ownership of some business or industry to the government, (e.g., General Motors), socialism being defined as government ownership of the means of production, then it is entirely fair to call it socialistic. Not that this offends or renders defensive everyone on the left. Despite the fact that Democrats last year defended "spread the wealth" schemes - - without acknowledging their socialist pedigree - - last spring liberal columnist Evan Thomas of Newsweek devoted a cover article to proving that socialism is not such a bad thing even as he conceded that that is what the Obama Administration stands for.

Liberals know that Americans are not supportive of socialism in spite of their interventionist policy changes over the last 76 years, beginning with the New Deal, which brought massive government controls, intervention and regulation with the National Recovery Act, the Agricultural Adjustment Act and the Social Security Act; supplemented by the Great Society’s War on Poverty, Medicare and Medicaid.

The liberal strategy largely has been to advance in increments, their big innovations depending upon massive electoral victories in 1932 and 1964. They have been quite successful in getting the camel’s nose under the tent for years, without acknowledging the ultimate goal of their legislation.

One wishes that the American people as a whole could discern more readily that socialism by degrees is still socialism, even if we must be grateful to the American Constitution for making it difficult for American liberals to go as far as European social democrats.

The question must be posed: what’s wrong with socialism? Isn’t it right that the people have protection against wealthy corporations that have unlimited power to hire and fire thousands of people and earn unconscionable profits at the expense of the public? If the foregoing were an accurate description of the American marketplace, I might support socialism too. But it is not.

In the past I have written about the uncoerced trading relationship that exists between businessmen and their customers, and indeed their employees. Unlike the peasants of old in Europe, or millions of unfortunate people in unfree countries around the world today, no one in America  is forced to work for anyone in business or to fork over money to them. Despite government intervention that has distorted the marketplace, there is more "upward mobility" among Americans than any other people in the world.

Much of what rightly offends Americans is actually a product of government intervention. Why did three companies dominate the automobile business for so many years? The oligopoly of General Motors, Chrysler and Ford was necessary to pay the inflated wages and benefits of their employees who had the advantage of being represented by a powerful union that could negotiate contracts for the entire industry, thanks to the National Labor Relations Act of 1937. The Obama Administration is attempting to perpetuate that advantage through its majority control of GM.

Why do utility companies enjoy local or regional monopolies and have their rates set by a government agency? Where’s the competition in that? Why were there so few broadcasting networks which were (and are) practically mirror images of each other? Government regulation of these industries has restricted competition.

The real driving force of socialism is hatred of the marketplace which, governed by the profit motive, is alleged to be nothing more than greed. Members of Congress who enabled the reckless lending of Fannie Mae and Freddie Mac, thereby causing an unprecedented credit crisis, believe that such government-sponsored entities (GSEs) are morally superior to private corporations. That is why they are trying to take advantage of the recession, ignoring GSEs’ miserable performance.

The truth is, major government programs, such as social security, medicare, medicaid, stimulus packages and so on either do not pay for themselves or are facing bankruptcy. Meanwhile, Democrats think it is better for their cronies in GSEs to pull down huge salaries than for corporate executives to do so.

Socialism assumes that the amount of goods and services available is always limited, overlooking America’s incredible increase in individual wealth. The object of socialism is to establish "equity," but actually punishes people for being successful and rewards the unsuccessful. Every government program depends on taxing those who have earned their wealth in the marketplace and redistributing it to others, especially the well connected in politics and government. The key element is coercion, which betrays the lack of charity by that very fact.

Illusionist in Chief

I've long argued that the basic premise behind liberalism is that you, as an individual, aren't capable of taking care of yourself properly. You need help. You need to be protected from your own mistakes, and further inured from being hurt by the countless others out there who are equally inept at life. Its a confederacy of dunces out there -- a mass population of the victimized, vanquished and violated. You need help, you poor thing. You can see this now at work in every aspect of the Obama presidency. Government has stepped in to remake industry and finance with your tax dollars to ensure that the UAW keeps their jobs and that banks don't have to suffer the penalty of making bad decisions. On the horizon are massive new rules on what you can eat, what cars you can drive, how much heat you can have in the winter and how much air conditioning you can use in the summer. And don't forget the impending health care entitlement, which is going to force you into a massive government-run insurance program. You need the government to provide -- and ration -- health care, because you just aren't capable of getting the coverage you need on your own. You are helpless, after all -- so in the great spirit of paternalism, the government is going to treat you like the child you are give it to you. For your own good, of course.

Remember, people! You are s-t-u-p-i-d!

And further proof is how Obama is saying one thing and doing another -- talking about "balanced budgets" and "being fiscally responsible", and yet embarking on the runaway spending that will result in crippling deficits for years to come. He has packages his health care reform as a "public option" -- that will preserve private insurance. But that's also a lie -- everyone knows that this is just a feint to a single payer system that ultimately forces out private insurance. Once there is a government (read "tax-payer" funded) option on the table, employers who are now footing the bill for their employee's insurance will quickly dump it. Why not have tax payers foot the bill? It's clear that Obama believes that the most important thing about universal health care is the "universal" part. The "health care" aspect -- meaning the quality of care -- is really secondary. Again, this is in line with the left's cornerstone belief that equality of access is more important than the outcomes it produces.

Today's Wall Street Journal has more on the Obama deception machine and its worth reading: Some things in politics you can't make up, such as President Obama's re-re-endorsement Tuesday of "pay-as-you-go" budgeting. Coming after $787 billion in nonstimulating stimulus, a $410 billion omnibus to wrap up fiscal 2009, a $3.5 trillion 2010 budget proposal, sundry bailouts and a 13-figure health-care spending expansion still to come, this latest vow of fiscal chastity is like Donald Trump denouncing self-promotion.

Check that. Even The Donald would find this one too much to sell.

But Mr. Obama must think the press and public are dumb enough to buy it, because there he was Tuesday re-selling the same "paygo" promises that Democrats roll out every election. Paygo is "very simple," the President claimed. "Congress can only spend a dollar if it saves a dollar elsewhere."

That's what Democrats also promised in 2006, with Nancy Pelosi vowing that "the first thing" House Democrats would do if they took Congress was reimpose paygo rules that "Republicans had let lapse." By 2008, Speaker Pelosi had let those rules lapse no fewer than 12 times, to make way for $400 billion in deficit spending. Mr. Obama repeated the paygo pledge during his 2008 campaign, and instead we have witnessed the greatest peacetime spending binge in U.S. history. As a share of GDP, spending will hit an astonishing 28.5% in fiscal 2009, with the deficit hitting 13% and projected to stay at 4% to 5% for years to come.

The truth is that paygo is the kind of budget gimmick that gives gimmickry a bad name. As Mr. Obama knows but won't tell voters, paygo only applies to new or expanded entitlement programs, not to existing programs such as Medicare, this year growing at a 9.2% annual rate. Nor does paygo apply to discretionary spending, set to hit $1.4 trillion in fiscal 2010, or 40% of the budget...

The real game here is that the President is trying to give Democrats in Congress political cover for the health-care blowout and tax-increase votes that he knows are coming. The polls are showing that Mr. Obama's spending plans are far less popular than the President himself, and Democrats in swing districts are getting nervous. The paygo ruse gives Blue Dog Democrats cover to say they voted for "fiscal discipline," even as they vote to pass the greatest entitlement expansion in modern history. The Blue Dogs always play this double game.

The other goal of this new paygo campaign is to make it easier to raise taxes in 2011, and impossible to cut taxes for years after that. In the near term, paygo gives Mr. Obama another excuse to let the Bush tax cuts he dislikes expire after 2010, while exempting those (for lower-income voters) that he likes. In the longer term, if a GOP Congress or President ever want to cut taxes, paygo applies a straitjacket that pits those tax cuts against, say, spending cuts in Medicare. The Reagan tax reductions would never have happened under paygo.

The main political question now is when Americans will start to figure out Mr. Obama's pattern of spend, repent and repeat. The President is still sailing along on his charm and the fact that Americans are cheering for an economic recovery. But eventually they'll see that he isn't telling them the truth, and when they do, the very Blue Dogs he's trying to protect will pay the price. And they'll deserve what they get.

Obama is betting, of course, that we are all too dumb to see past the charm offensive, and that he can keep peddling his programs with a wink and a nod, talking about fiscal discipline all the while enacting the biggest expansion of government largess since...well...since forever.

Watch the shiny thing...see how it moves back and forth...isn't it pretty?

Obama Motors revs up

President Obama claims to "have no interest" in running General Motors. He does so with a straight face - and the same monotonous cadence that he employs whether condemning North Korea for nuclear explosions or joking with Jay Leno. But his actions, as well as his words, betray him. The significance of the bankruptcy and restructuring of General Motors isn't that it happened but the way it happened.

His protestations notwithstanding, this is Barack Obama's General Motors. Just read from his statement earlier this month:

** "Two months ago, I laid out what needed to be done to save two of America's most storied automakers."

** "I made it clear that I would not put any more tax dollars on the line if it meant perpetuating the bad business decisions that had led these companies to seek help in the first place."

** "I decided, then, that if GM and Chrysler and their stakeholders were willing to sacrifice, then the United States government would stand behind them."

Which is more absurd - his implication that he is the embodiment of the U.S. government or that a former community organizer, part-time lawyer, part-time lecturer, part-time author, and fulltime politician knows beans about running the nation's largest automaker?

Then again, Nancy Pelosi and Harry Reid scolded the auto execs last fall for flying - instead of crawling - to D.C. to ask for a government bailout and then arrogantly demanded that they come back when they have a "viable plan."

Not that it's ridiculous to demand a viable plan. What's ridiculous is the assumption that the Speaker, the Majority Leader and most other Beltway politicians could recognize a viable plan for a 25-cent lemonade stand - much less a multi-billion-dollar auto company.

Remember, the reason government is funded by taxes is because it produces almost nothing that people will pay for willingly.

It wasn't necessary for President Obama to interject himself into these proceedings. As Commentary magazine columnist Jennifer Rubin points out, GM and Chrysler have had bankruptcy attorneys working on those plans for months.

"Why make this all about the president throwing his weight around and personally firing the head of a major corporation?" she asks.

The simplest explanation is that Obama wants these details signed, sealed and delivered to prevent their scrutiny in a court of law where, for example, the United Auto Workers Union would not get preference over holders of secured corporate bonds.

As Hans Bader points out at OpenMarkets.org, "the UAW will receive at least ten times as much value as the bondholders even though the bondholders are owed more ($27 billion vs. $20 billion). This is neither legal nor fair."

Which brings us to President Obama's oft-repeated claim that his decisions are guided by the way they "affect the daily realities of people's lives."

Well, the ordinary folks whose retirement or savings were ravaged by automakers' plummeting stock prices are suffering doubly from Obama's devastating policy to force them to take pennies on the dollar if their portfolio also included GM bonds, which were once considered relatively safe.

By contrast, the very labor unions whose bloated benefits and anachronistic job protection schemes put GM at a competitive disadvantage are now rewarded with nearly $10 billion and 17.5 percent ownership in the company.

While Obama says UAW will be required to make "painful sacrifices," the union boasts that its members will see no reduction in 'base hourly pay, no reduction in health care, and no reduction in benefits."

Might the $13 million that UAW spent on last year's election have tipped the scales in its favor? Heavens, no!

So, GM hinges its recovery on the marketing genius of politicians who gave us Medicare, Social Security, Amtrak, a 3.4-million-word tax code, and $11.3 trillion in debt.

It's hard to imagine how a fire sale administered without Obama's oversight could have been more destructive or more expensive.

Mark Hillman served as senate majority leader and state treasurer. To read more or comment, go to www.MarkHillman.com