One minute John McCain is calling Barack Obama a socialist. The next minute he's suggesting the federal government should buy up distressed mortgages at inflated prices to save home owners from their bad investments. Guess what John? That's a little bit of socialism right there.
None of the candidates is advocating literal socialism, a system whereby the government controls the basic means of production, least of all Obama, who is advised by Warren Buffett, one of the most successful capitalists of all time. If McCain were to suggest that, he should be disqualified from being president on the basis of mental deficiency.
On the other hand, as I pointed out in the opening paragraph, little bits of socialism can be found in policies espoused by all of the candidates. Sarah Palin's stump speech includes the line,"Now is not the time to experiment with socialism." The truth is we've been experimenting with socialism since the republic began.
Capitalism is our way of life. It's arguably the best economic system ever invented. But it's flawed. It needs help. Unchecked capitalism is subject to unchecked greed. And that can lead to problems, such as we experienced in 1929 and the 1980s and are experiencing now. So, over the years, we've built a few checks and balances into the system. Many of these checks and balances might be thought of as socialism but they are integral to the American way of life.
Start with the very idea of taxation. All taxation is redistribution of wealth. The government takes our money, then uses it as it sees fit for the betterment of our lives. The decision was made long ago that the free market could not adequately provide everything we need: defense, police, firefighters, bridges, roads, etc., So the government takes money from individuals and spreads it around society. McCain is proposing a tax break for rich people and a tax refund as part of his health insurance plan. Palin pushed for a windfall tax on oil companies that she then redistributed to the people of Alaska. So, while they attack Obama for proposing a tax cut for the middle class, they are both for redistribution of wealth.
We learned after the Great Depression that we needed to insure people's deposits in the bank. Everyone is happy about the FDIC insurance they get for free from the government. The government agreeing to replace your cash if the bank screws up? Not exactly free market capitalism. We also discovered that we needed to provide for the basic needs of our elderly. Social Security was born. And even though it has the word "social" right in it, very few people, other than folks on the fringe like Joe The Plumber, would like to face old age without it. Another safety net that most Americans would not like to live without is Medicare. Socialism! Wait until Rush Limbaugh realizes he can use his Medicare card to get cheaper pills than he does in the parking lot.
Anyone notice that tiny little bailout that President Bush spearheaded a few weeks ago? The one where the government committed $700 billion to buy up chunks of American companies? The one that both McCain and Obama supported? Yeah, some socialism in that one.
Our next venture into socialism will provide us with needed health care. We already spend more on health care than any nation in the world, yet 47 million people go without health insurance. In addition, insurance companies do not encourage preventative care and can choose to deny coverage even if you've paid your premiums. In 2000, The World Health Organization ranked the U.S. 37th in its list of health systems, behind Costa Rica, Morocco and Colombia, to name a few. That's a pretty low return for our money. When it comes to health care, capitalism needs a little bit of socialism.
More of my writing on the economy, taxes and "trickle down."
Abe The Accountant
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