The New America: Socialism Expands, Freedom Contracts By Herb Denenberg

Source: http://www.thebulletin.us/articles/2009/02/18/herb_denenberg/doc499ba5bccc6ab240756740.txt

February 18, 2009

We’ve had another miracle on the political-media scene. And I’m not talking about the appearance of President Barack “The Messiah” Obama. I’m talking about another miracle of that magnitude: Newsweek magazine, also known as the “Obamaweek Magazine,” finally told a bit of the truth with its headline, “We Are All Socialists Now: The Perils and Promise of the New Era of Big Government” (Feb. 16).

Newsweek starts off fast early in the article: “Whether we want to admit it or not — and many, especially Congressman Pence [Mike Pence, R-Ind.] and Hannity [Fox News host Sean Hannity], do not, the America of 2009 is moving toward a modern European state.”

The sub-headline of the story tells it all, “In many ways our economy already resembles a European one. As boomers age, we will become even more French.”

That’s not all that’s remarkable about the article. What is just as remarkable is that Newsweek, in the article, doesn’t make any criticism of turning our capitalist economy into a French-style socialist one.

It pays no attention to history that shows socialism has always produced failure, not prosperity. It shows little understanding of the relationship between expanding government and advancing socialism and contracting freedom and economic viability.

Newsweek expresses no cautions or solution that might avoid our descent into socialism, likely to bring chronic unemployment, economic stagnation and distortion, exploding regulation and restrictions on freedom. It shows no understanding how the excesses of the stimulus package, packed with pork and spending not related to economic recovery, are compounding economic problems, already serious enough.

During the campaign, President Obama and his campaign supporters and advocates tried to downplay Joe the Plumber and his question that suggested Mr. Obama’s spread-the-wealth-around advocacy made him a socialist. Now, apparently, Newsweek is willing to admit that Mr. Obama is taking us down the road to socialism. The truth might have been even more useful during the campaign, but it is still quite valuable even at this late date.

With socialism, we also get big government. Newsweek writes, “Bush brought the Age of Reagan to a close; now Mr. Obama has gone further, reversing Bill Clinton’s end of big government.” Newsweek asserts that the big-spending Bush administration and the Bush bailout started us down the path to socialism, an argument with some merit, but that does not justify accelerating that unhealthy trend.

Another article in the same edition of Newsweek confirms that big government is with us again: “Big Government Is Back — Big Time: U.S. policymakers reconsider the relationship between government and the private sector.”

The article’s very lead notes how Mr. Obama is indeed taking the French approach:

“Have you noticed that Barack Obama sounds more like the president of France every day? When Obama said in his Inaugural Address that it is time to get past stale arguments over whether government is big or small, he was echoing the eclectic philosophy of Nicolas Sarkozy, who champions markets one day and state industrial ‘champions’ the next.

“When Obama called Wall Street ‘shameful’ and greedy, he was articulating what the French have always thought, and endorsing Sarkozy’s recent dismissal of the ‘crazy idea that markets are always right.’”

In endorsing “Buy America” rules in the stimulus package, he was also echoing the French approach of ‘economic patriotism.” And when Mr. Obama moved to cap the pay of executives of financial firms in line with the federal bailout, he was always following the French lead on bankers’ pay.

Newsweek notes that until recently, business bashing and protectionism was reserved for the far left, but now Mr. Obama reflects those two approaches. Apparently, Newsweek is unaware that Mr. Obama has always been a man of the far left, reserving any centrist approach for campaign purposes only. Newsweek also fails to acknowledge that business bashing will retard economic development and protectionism in the long run will slow economic recovery, as so clearly demonstrated by the Smoot-Hawley Tariff Act of 1930 during the great depression. (You might add to that the Obama gloom-and-doom talking down of the economy to also explain part of our economic troubles).

Newsweek goes on to admit that the stimulus package means we’re in for a European model of governance, regulation and paternalism. America is already starting to resemble Europe in the proportion of the economy going to government. Newsweek thinks that in the absence of a robust private sector, government “will be forced to fill the gap, firmly directing businesses in all sorts of ways — regulating some industries (particularly banking and the automotive sector) with big-brother vigilance, favoring others like clean energy with grants and loans, and turning still others — health care and pensions — into virtual wards of the state.”

This is all pointing toward the European socialist model, with greater government intervention and direction of business and massive welfare programs that crowd out robust economic activity and growth.

Newsweek says this trend will be popular if the conventional wisdom is right: The bailout may stabilize the financial system but the stimulus will be too small and insufficiently “timely, targeted and temporary.”

That will mean a slow recovery over a decade or more. And that will in turn generate more demand for publicly funded social services for many years. Newsweek doesn’t note that critics said the bailout would prove to be ineffective, as it was not timely, targeted and temporary, and was more of a spending bill than a stimulative bill.

Newsweek predicts this slow growth may kill American rugged individualism. If job numbers look bad, more and more people will look to government for health care, which has been tied to employment. And if the stock market follows the Tokyo model of its decade-long recent recession, there may be demand for a shift away from the present model, which relies on wealth generated by the stock market for 401(k)s for retirement, 529 plans to help defray tuition costs, and the like.

Newsweek writes, “Think about it, and its very easy to imagine a chorus of former American individualists demanding cushy French-style pensions and free British-style health care if their private stock funds fail to recover and unemployment inches upward toward 10 percent and remains there.”

Mr. Obama has helped create this environment in which people think government is there to solve all their problems and there will be a new program to solve every problem. One congressman pointed out when someone asked Mr. Obama what his programs will do for him, who has worked at McDonald’s for four years and is not getting raises or promotions, the president said his tax cuts will put more money in his paycheck. A wise congressman replied that the person ought to get more education and skills so he could demand more money in a better job.

He might have added perhaps he should seek employment elsewhere that would afford more opportunity, advancement and money. But the Obama way is to let the Messiah solve all problems. As one woman said during the campaign, now she would not have to worry about making mortgage payments or buying gas.

Our government spending is already approaching European levels and Newsweek thinks a period of slow growth and growing demands on the public sector, may force a reordering of priorities, away from defense and toward social programs. This trend is likely to bring some form of national health insurance, however named. Newsweek also fails to point out that a weakened national defense may also make America vulnerable to its enemies that are now at war with it.

Mr. Obama demonstrated in the stimulus package that he has reordered the old American battle cry to “Millions for pork and Democratic special interest spending, but not one cent for defense.”

With all these problems and trends, we will also have to dig ourselves out from a mountain of debt, now being accumulated by bailouts, stimulus packages, home mortgage rescue measures and all kinds of new social programs such as universal health insurance waiting in the wings. That all foreshadows higher taxes, more inflation, slower growth and stagflation.

Unlike the first Newsweek article concluding we are now all socialists, this article on big government takes a slightly different tack. It says bailouts, protectionism, bank nationalization and a trillion dollar stimulus package are “not a socialist conspiracy.”

Even if there is some nationalization, Newsweek argues it will be only temporary. Even if the Obama government is the only employer still hiring, “it will remain generally easier to hire and fire workers, and start and close down businesses, in America’s rougher form of capitalism.”

The bottom line is that Newsweek thinks our descent into socialism or whatever it might be called may well be a sound middle path between European style safety net and socialist government, on one hand, and American capitalism, on the other. But that might be an optimistic party-line view of what is going on.

The huge spending bills and the huge expansion of government may be a tipping point, and not just a temporary compromise to get the economy running again. The new spending programs, in the tradition of government programs established in the past are not likely to be temporary and the direction of the Obama administration seems to be more spending, bigger government, more social programs such as universal health insurance, more unionization to further cripple business brought on by the card-check bill to abolish secret ballots in union elections, more regulation to also cripple business, and all the other plans of a far-left president backed by a far-left Congress.

That radical trend is likely to be accelerated as Mr. Obama’s court appointments are made, with those going on the court being those that Mr. Obama determines have empathy for the underdog, and not those that follow the law and the Constitution.

And add to that, a possible revival of the Fairness Doctrine to cut off conservative talk radio and criticism of the Obama administration. There is growing evidence that this kind of censorship will be enacted by the FCC after the go-ahead signal from Mr. Obama. During the campaign then Sen. Obama said he opposed the Fairness Doctrine. But when his senior adviser, David Axelrod, was asked about it, he did not reaffirm that position.

He said that will be a matter of discussion between the president and the new chairman of the FCC. Translation: He is sliding away from his campaign position, and getting ready to break another campaign promise. This favoring of the Censorship Doctrine comes in the background of an Obama campaign that tried to suppress criticism of the campaign, by improper methods. So I’m not surprised by the faint odor of fascism anymore than I’m surprised by the strong odor of socialism.

Yes, Joe the Plumber may have been the great prophet of the recent election campaign, as the centrifugal force of our present political power seems to veer toward the big government, big spending, big welfare model of socialist Europe. That might not be what the American people want and what has made America the greatest economic power and country in the history of the world.

The voters may have thought they were voting for the Messiah, but without fully appreciating reality, elected a far-left liberal, radical and socialist. And those who demand bigger government and more social programs may not yet understand as government expands freedom contracts, as socialism advances liberty tends to retreat, as does economic growth and activity. Big government and socialism cannot deliver prosperity and the free society that has historically been central to America.

Elections have consequences and they are not always good ones. If the voters have second thoughts, they still have power through exercising their rights as citizens to slow or reverse a trend they do not like, and that may destroy America. The direction of the Obama administration is clear, and it is clearly the wrong direction. So Americans better get ready to fight such things as the anti-Democratic card-check bill, the anti-free-speech Fairness Doctrine, and the out-of-control spending bills such as the new stimulus bill.

That battle will not be easy, as the Obama administration has demonstrated it talks openness, transparency and bipartisanship, but does the opposite. The task will also be difficult as the president is delegating power that he should exercise to the likes of Rep. Nancy “San Francisco Values” Pelosi, speaker of the House, and Sen. Harry “Wave the White Flag” Reid, majority leader of the Senate. So you’re dealing with an inexperienced, unvetted, inexperienced, radical leftist president, but something of a triumvirate. You have to deal with a president who is arrogant and unengaged in the work of the presidency (such as drafting the most important legislation of his term).

The battle will also not be easy as the Democrats in the House and Senate now think they can ram any radical, leftist legislation down the throat of the American people, and the stimulus package is only the first chapter in a frightening book. If you can pass the biggest economic package in history without even allowing time to read the bill in advance of the vote, you may get the idea that anything goes, and anything will go unless the American people rise up in protest.

Herb Denenberg is a former Pennsylvania Insurance Commissioner, Pennsylvania Public Utility Commissioner, and professor at the Wharton School. He is a longtime Philadelphia journalist and consumer advocate. He is also a member of the Institute of Medicine of the National Academy of the Sciences. His column appears daily in The Bulletin. You can reach him at advocate@thebulletin.us.