Socialism Without a Soul

Newt Gingrich is right: "It is European
socialism transplanted to Washington." How else to describe an economy
in which the government controls the entire financial center and is now
supplying life support for the auto industry? That's on top of the
existing socialist economy run by the military-industrial complex,
which, thanks to George W. Bush, now absorbs upward of 60 percent of
the non-entitlement federal budget.

Although we still have a way to go to
catch up with the good parts of the European system, including
universal health care, high-quality public education and decent working
conditions, we do have a system that is now as socialist in budget size
as Europe's. That part I get when I listen to the right-wingers on Fox
News bemoaning the reversal of the Reagan Revolution. But what I don't
understand is how in the world they can blame this startling turn of
events on Barack Obama.

The vast majority of money allocated so
far on President Obama's watch is an extension of Bush's banking
bailout, which has committed trillions to failed Wall Street
conglomerates. I certainly don't want to defend the bailout and
personally think the banks and stockbrokers deserve to go belly up, but
what does that mess have to do with Obama, who was in college when the
Reagan Revolution launched the deregulation that allowed Wall Street to
run wild?

Didn't Obama inherit the current financial
meltdown less than two months ago from the Republicans, who for eight
years under Bush assured us that the markets were not in any need of
tighter regulation? Wasn't it GOP congressional members led by folks
like Gingrich who pushed though the deregulation legislation that
enabled the growth of "too big to fail" financial institutions that now
have to be saved by the taxpayers?

Nor has Obama demanded anything more in
the way of accountability from those Wall Street swindlers than had the
Bush administration. Under both presidents a total of $170 billion was
given to insurance giant AIG, and, as The Wall Street Journal reported,
at least $50 billion of that money was passed on to top foreign and
domestic banks without any public accounting. Indeed, the second in
command at the Fed told a Senate committee last week that he wouldn't
reveal the names of the banks that grabbed our money.

Nor has there been any serious demand put
on the banks to use the hundreds of billions in federal funds they
received to increase liquidity. Indeed, the banks are raising interest
rates and cutting limits on credit cards at a time when the government
is hoping consumers will use those cards to pump some life into the
retail market. As bank industry analyst Meredith Whitney wrote in a
Wall Street Journal Op-Ed article, consumer credit card lines "were
reduced by nearly $500 billion in the fourth quarter of 2008 alone."
She estimates that credit card limits for consumers will be halved over
the next year, mostly on consumers who have not done anything wrong.
This will take "credit away from people who have the ability to pay
their bills," she notes.

So what we have here is socialism without
even the pretense of a soul. Certainly that has been the case with the
abject refusal of the banks that received government bailouts to be
more aggressive in preventing home foreclosures. And the Obama
administration has made it clear that it has no intention of taking
over the operation of any of the mega-companies that are in trouble,
even when, as in the case of AIG, the government already owns 80
percent of the shares. The reason? Because that would be viewed as
nationalization.

So what exactly would Obama's critics do
differently? Nothing on the bailout side. Instead, they have settled
for carping criticism of the stimulus package, playing games by
nitpicking lesser-cost programs while ignoring the big items that most
governors, be they Republican or Democrat, eagerly want. The great fear
of the GOP seems to be that some of the stimulus program might actually
prove helpful to struggling Americans, but the Republicans can't just
come out of the closet and say so.

What they have picked up on instead is
that Obama's tax cuts provide some redistribution of income to favor
the rapidly disappearing middle class at the expense of the
super-wealthy, who have profited wildly from Bush tax cuts. Which
brings us back to Gingrich's complaint that Obama is importing European
socialism. If that means a system of governance in which a robust
middle class is rewarded for work with a strong social safety net
supported by higher taxes on the most affluent, well, let's get it on.