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The Dirty Little Secret in McCain’s 'Socialism' Charge
John McCain’s drowning campaign has grasped at the straw of “socialism” to try to smear Barack Obama’s economic proposals. The dirty little secret is that socialism is much more characteristic of McCain’s policies than Obama’s. But it’s socialism for the rich.
It has been an explicit tenet of Republican economic policy since at least Ronald Reagan that the rich need more money and that it is the essential job of government to make sure they get it.
This is what David Stockman, Reagan’s first Budget Director, meant when he let slip that supply side economics was really a “Trojan Horse” intended to pass the nation’s wealth upward. Reagan pursued that goal with evangelical fury.
He enacted a dizzying array of tax and spending policies, all designed to benefit the wealthy. He cut the marginal tax rate for the highest income earners from 75% to 38%. A huge bonanza in its own right, this was only the beginning of the ladling.
Reagan’s massive budget deficits drove up long term interest rates, another boon to the rich. The rich are lenders and lenders prefer higher interest rates. Reagan and his successor, George H. W. Bush, delivered in spades, turning the U.S. treasury into a printing press for the rich. The data speak for themselves.
Jimmy Carter's last deficit was $77 billion. By the end of the Bush I era, deficits had reached $300 billion a year and the national debt had quadrupled, from $1 trillion when Reagan took over, to $4 trillion. Interest payments on that debt had soared from $70 billion a year under Carter to over $300 billion a year.
Virtually all of that went to the plutocratic elite that rents the Republican party as a political front for its predations on the treasury. And since payments on government bonds are tax exempt, it was all tax free.
Clinton reversed Reagan’s tax cuts, at least partially, and began running budget surpluses. As a result, long term interest rates declined 40%, a huge blow to the magical fiscal money machine Republicans had constructed to funnel wealth to themselves. This is the real reason Clinton was so relentlessly, viciously hounded while in office.
George W. Bush reinstated the Reagan supply-side tax cuts, handing, in true socialism-for-the-rich fashion, the better part of $1.6 trillion to the top 1% of income earners. And just as his father and Reagan before him had done, he ran up massive budget deficits, again re-igniting that interest paying money machine that works so effectively, so covertly, to lard the coffers of the very rich.
In fiscal year 2009, just begun, the deficit will exceed $1 trillion. Interest payments on the now $15 trillion national debt will exceed $500 billion a year, virtually all of it going to the very richest, Bush’s “base” as he calls them. In the process, the wealthy have conscripted the working and middle classes to generations of debt peonage to pay for these debts.
But the socialism hardly ends with the deficits. Military spending of almost $1 trillion a year — more than all the rest of the world combined — is another favorite Republican device for transferring wealth upward.
Bush’s unprovoked war in Iraq will cost more than $3 trillion before it is over, according to Nobel-laureate economist Joseph Stiglitz. The bounty to weapons makers and logistics companies, both favored Republican charities, is incalculable.
Ignoring anti-trust laws and in the process enshrining monopolies; refusing to enforce environmental laws so as to convert public natural resources to private gain; hundreds of the largest corporations in the country paying no income taxes; literally outlawing competitive bids for pharmaceutical companies servicing government contracts.
In these and a thousand other ways, Republican economic policy carries out its one enduring, central goal: using government to enrich those who are already the richest, everybody else be damned.
And now, the finishing touch, the financial coup d’ etat of the Wall Street bailout.
Middle class taxpayers are being forced to hand over more than $2 trillion to the very wealthiest people on the planet, not because the taxpayers themselves had failed, not because it’s fair, not because it will do anything to solve the underlying problems with the economy, but because the Republican reign is now visibly at its end, and the gangsters in charge want to carry out one last plunder on the bank. So they have.
The result of decades of such policies is staggering. In 1980, the top 20% of income earners garnered 44% of national income. Today it’s over 51%. The top 1% alone make more than the 40% of the lowest income earners combined.
In wealth terms, the disparity is even more staggering. The top 1% own more than 60% of all assets in the U.S. while the bottom 40% have a combined net worth of zero.
Supreme Court justice Louis Brandeis once commented, “We can have great disparities of wealth or we can have democracy. But we cannot have both.” That’s where we’ve arrived at today.
McCain is right. There is socialism going on in the management of the economy, but not in the way he wants us to believe. It is socialism for the rich. And that’s they way they’ve planned it. It's the shaft for working Americans but for Republicans, it's just another “Mission Accomplished.”
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17 Comments so far
Show AllTruth at last. Truth at last!
-30-
Another secret...socialized countries like Sweden and Norway enjoy a much higher standard of living with less inequality than America
I am really getting tired at this "socialism for the rich" nonsense.
This so-called "Socialism for the rich" isn't by any stretch of the imagination, Socialism. The correct word for state intervention for the benefit of the owners of capital is simply called "Capitalism", or just "the long-running status quo".
To call it "Socialism" is utter butchery of the word's meaning. Socialism means putting the means of produciton into the hands of the grrater society - particularly it's worker majority. Mere state intervention in the economy has nothing to do, with socialism. It is WHO the state is intervention is benefiting that defines the action as socialist or not. By the ridiculous definition being used by these pundits, the US military and police massacres of striking workers in the 1877 railroad yards, Homestead or Haymarket would be "socialism too!
This idea of "Socialism for the rich" seem to be simply a relic of the discredited Ayn Randite notion of economic libertarianism - the idea of some kind of pure, dog-eat-dog state of being as some kind of perfect natural order(forgtting that wild or ferile dogs are actually quite cooperative and socialist in their pack scocieties). Apprently the wooden stake through Ms. Rands heart needs a few more good blows - or is the still alive Greenspan her Nosferatu-like incarnation?
First off, I'd agree that this "Socialism for the Rich" line of B.S. is just a total non-starter. To me it seems VERY "ivory tower" to assume that the common People are so ignorant of the concept of Socialism that they wouldn't understand that it doesn't really apply in this way.
Considering that "large majorities are for government guarantees of free or cheap Health Care for All" as poll after poll shows, I wouldn't be surprised if the whole "Socialist" label that the Corporatist Media keeps reminding us McCain has placed on Obama is actually a very sneaky form of Pro-Obama Propaganda.
Secondly, if we want to get exact, terminology wise, with what this situation should be called, the term is "State Capitalism". And as Noam Chomsky and others have been pointing out, it is THE prevelant form of Capitalism today.
More broadly, I'd say that originally "Socialism" was a philosophy espousing basically that "society formed the man" from the old Nature/Nurture argument. Then it derived from this understanding the idea that Society should be working for the benefit of Society as a whole -as opposed to a minority of klepocrats.
It is really a perfectly logical extension of Enlightenment philosophies into the Industrial Era. Jefferson is acting as what we might name a "proto-Socialist" when he writes "That TO SECURE THESE RIGHTS, Governments are instituted among Men, deriving their just powers from the consent of the governed". The only difference is that he leaves these "rights" in the general categories of "Life, Liberty, and the Pursit of Happiness" instead of enumerating them clearly.
The reason Jefferson can get away with not being more specific is that he is applying this moral and ethical understanding of the purpose of States and their Governments to the kind of Agrarian Society -of many, essentialy equal, small farmers, some independent tradesmen, people who are working to become either of those, and a small landed "aristocracy"- that had been typical for 1000 years. He had no way of anticipating the large changes in the means of production and the ordering of Society that Corporations, Industrial Manufacture, and the explotation of Fossil Energy that the next 200 years would bring.
So, once again to get a bit technical, I would say that Socialism is NOT "puting the means of production into the hands of the greater society".
BUT, I would agree that that is the necessary step that Socialists SAW, and the one that they played a large part in bringing about.
I would just say that this occured because of the already existent underlying Socialist philosophy's REACTION to specific changes brought on by Industrialism, and because of the emerging communist, anarchist, collectivist, syndicalist, and union movements' acceptance of Marxist economic theory (now amusingly coming true). Not by concepts that were (or are) inherent in the larger and deeper theory of Socialism itself.
A very minor point really. But since the article was so stupid I thought I might get an interesting discussion going.
On Ayn Rand, I had always thought of her existing as a horrible, tentacled monstrosity in a nearby, but dark, dimension -like Lovecraft's Cthulu- but the Greenspan-incarnation is an intriguing counter-theory, I'll have to think about it.
Don't Panic,
-matti.
I think we should stop this negative spin applied to the concept of socialism. Collecting some of the value of the labor of each citizen and using it to provide goods and services for everyone's benefit is a wonderful thing. I like free roads to drive on and firefighters that put out fires at everyone's home. True, a completely socialist state has proven to be a poor model. However, a limited socialist state has proven to be very effective and a wonderful counter balance to the effects of the open market. The United States has always been a limited socialist government and we gladly participate in the benefits of a socialist society. Everybody who walks on a public sidewalk, enters a public library or visits a national park enjoys the benefits of a limited socialist government. Our military, for that matter, is a socialist program.
I still cant get a good grasp of how much this latest 'crisis' was engineered or was simply a big blunder by the oligarchs. Freeman suggests it was somewhat planned because the repubs are on their way out. So?...
only in a country that looks at politics and economics like it does religion - superficial lenses or as a faith-based ideology, where the ideology in question is not questioned or taken serious, but is made a personality trait - could McCain's charge be an insult.
and its a weak charge to say that McCain is the biggest socialist, even if we point out that his brand is for the rich. because this still paints socialism negatively.
A fine analysis lacking the one answer most of this sort usually do: why? Why is too much never near enough? Why does a tiny band of fellow Americans have such an insatiable need for more than they could ever spend in 10 lifetimes that they're willing to "do whatever it takes," no matter the consequences?
Clearly, the answer is this: they're insane. Period. Sadly, they've managed to convince us that they are just normal, everyday people who deserve all they've stolen and/or inherited.
And I thought I couldn't get any more furious about this..
I've wondered why Obama hasn't countered McCain by pointing out that both he and McCain earn well over $250,000 per year (Obama is worth about $4 million, mostly from his book sales; McCain about $100 million, mainly from his wife's beer distributorship) so they would each pay higher taxes under Obama's plan. He could add that he has put 'country first' before his personal economic interests in order to help the majority of average Americans while McCain is holding onto every dollar he can under the guise of helping the country. Who is more to be trusted on the economy -- the Democrat who is willing to sacrifice his own money for the common good, or the Republican who wants to continue to feather his nest?
Still, I can't complain about Obama's 'chess game' strategy -- after all, he's looking at a landslide on Nov. 4th, so he must be doing something right -- excuse me, correctly.
I agree with several of the posters here that the "socialism for the rich" argument is both terminologically abusive and politically unproductive. It is quite a leap to move from the concept of "socializing losses and privatizing benefits"--an accurate description of the Treasury's original plan simply to buy up banks' bad assets--to calling everything from government bailouts of the financial sector to regressive taxation schemes that favor the wealthiest Americans "socialism." This is just another of the many faces of late capitalism, not "socialism for the rich."
Matti is both right and wrong about the connection between socialism and "putting the means of production into the hands of the greater society." Matti disputes that socialism makes such a demand,while USAn says it does. The correct answer is that it depends greatly on the particular framework of socialism within which one is working. Some varieties of socialist theory either assume or require the eventual socialization of the means of production, while others involve either complete or selective state control. Ultimately we're talking about rather complex disputes among self-identified socialists about the mechanisms for achieving the socialist goal of creating a society in which wealth (in the broadest sense of that term) and its benefits are socialized rather than privatized.
As an aside I should point out that dragging the discourse of rights into a discussion of socialism will only muddy the waters. Marx--to name only the most notable socialist theorist of the 19th century--was highly critical of rights discourse and expressed skepticism about its compatibility with marxist theory. But I digress.
Matti's bigger point (about public interest in guaranteed social benefits like health care) is a very good one, and I worry that opportunities are being missed to educate people about the fact that most of them already support the idea of "spreading the wealth" around. Why does no one ever ask John McCain, "if you are opposed to 'spreading the wealth around,' then are you saying that you would support changes in federal funding of public education that would allow rich states to invest disproportionately larger sums of money into their public schools than poor states? What about wealthy districts within a state versus poorer ones?"
I suspect that John McCain couldn't answer this question because he is a jackass who knows only that phrases like "Obama is a socialist" work marginally well as part of his stump speech. If he went into rural Arkansas, however, and said "My friends, you know I oppose redistributing wealth so I'm here to tell you that under my administration poor states like Arkansas will receive less federal funding for public education than they do at present" he'd be run out on a rail.
How about welfare for the rich? I think that would work better...but there is already the term corporate welfare.
One last thing: It always perplexes me when I hear people with presumably progressive social views advocating paradoxically regressive proposals.
Case in point: My sister-in-law has become a big fan of Rachel Maddow and recently expressed enthusiasm for a debate Maddow had in which she argued passionately for health coverage for all American children. When asked how the government would pay for it, Maddow explained that they should simply tax cigarettes (50 cents or a dollar, I think).
Bad bad bad. It makes no sense to pursue progressive goals (universal health coverage for children) through regressive taxation schemes.
Tax cigars instead?
One little problem with the appealing theory that the bailout is the Republicans' way of taking it with them on their way out: It was primarily voted in by Democrats, with Republicans offering the main resistance. I certainly hope we get an Obama landslide coupled with big majorities in both houses, but don't be naive. Look at what the Democratic takeover of 2006 won us: nothing. A large Dem majority would take away the Democrats' excuse for inaction on climate change, refusal to end old wars and resist new ones, inaction on economic issues, etc. But as long as we have a system in which the media controls access to power and we continue to have a choice between "one corporate party with two heads wearing different makeup" as Nader termed the "two" parties, we will continue to have policy designed to benefit the people to whom Members of Congress owe their seats--big monmey contributers, not their pissant constituents.
And I thought socialism was nothing more than public ownership.
Well put and amazingly succinct. Your post prompted me to research Socialism since my own definition did not include the necessity of public ownership. I always associated Socialism with essential goods and services provided by a government in exchange for the labor of its citizens (or the value of labor, through taxes). I always figured Socialism and a private market place could co-exist. However, it appears that most expressions of Socialism include control of industry by the government or by the workers. I stand corrected! Government ownership in a financial institution could be a Socialist activity. We should have the workers on the floor of the stock exchange wear red jackets.