Copyright The Big Money
For years, the Republican Party has preached the virtues of the “ownership society.” Americans should own their own homes, goes the songbook; they should own stocks; they should take ownership of social benefits like heath care; they should approach their lives as if they are in charge rather than look for dependency-inducing welfare programs.
It’s a compelling visionâ€šÃ„Ã®and it has completely collapsed. The only important ownership that the Bush administration is peddling today is government ownership of the country’s financial institutions. On Friday, Treasury Secretary Henry Paulsonâ€šÃ„Ã®the former CEO of Goldman Sachsâ€šÃ„Ã®announced an unprecedented plan to salvage the largest banks in America. Just days after declaring that a bailout of Lehman Brothers would constitute an unacceptable moral hazard, a Republican administration has decided that the only way to keep the American economy alive is to have the federal government take the reins of some of the largest financial institutions in the world.
There is a term in political philosophy to describe a government takeover of a critical industry: That term is socialism. The government is telling us that capital and credit markets cannot, for several reasons, solve the current crisis on their ownâ€šÃ„Ã®only the federal government and its massive taxpayer base have the authority and the resources to solve it. That is state socialism: the philosophy preached by the founders of the Second International, by the radical wing of the American labor movement, through the formation of the Soviet Union and its satellites, and now by Henry Paulson…
…Focusing on ironies and hypocrisy is fun, but Paulson’s socialist prescription actually provides a rare opportunity to advance the state of American political and economic debate. During the Cold War, socialism became an especially unsavory idea because it was linked to the countries that pointed missiles at us. This was less the case in Europe, where democratic socialism grew to become the norm, with sometimes rocky but mostly successful results (you don’t see the Spanish having to take over their banking sector, at least not yet). Paulson’s relatively untainted socialism offers America a genuine Nixon-goes-to-China moment, a chance to have a more honest, less demonizing conversation about where, when, and how government intervention in the economy is effective and desirable…
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James Ledbetter – The Big Money
Copyright The Big Money