Conservative Socialism: Spreading Debt Around

At a campaign rally last week, Obama said, "My attitude is that if the economy's good for folks from the bottom up, it's gonna be good for everybody ... I think when you spread the wealth around, it's good for everybody." He made the comment in the face of massive corruption and greed on Wall Street, and in the context of the resulting financial meltdown.

Note, up front, that Obama did not say that wealth would be redistributed through a shift in tax policy. But let us assume for the moment that was indeed his intent. From that, in the last dying breaths of a cancerous campaign, McCain has implied through a grand leap of logic that Obama is now a Socialist. Yes, we almost hit the finish line before the dreaded "S" word was bandied about, but McCain just could not help himself in a spasm of reactionary labeling.

The big "S" claim primarily depends on the false notion that using tax policy to distribute wealth is a socialist idea. The absurdity of that assertion is laid bare when we consider that existing tax policies were implemented specifically to distribute wealth to the upper 1% of earners in the country in the discredited hope of stimulating trickle down growth. All tax policies redistribute wealth. The only question is who gains. Somehow if the beneficiaries are the extremely wealthy, Republicans view that government intervention as laudatory, but if the middle class benefits the tax policy is deemed to be the worst case of socialism. What we see in McCain's claim about Obama is the most cynical double standard.

Oddly, the agitators proven to be true socialists in this latest financial fiasco are the conservatives. Conservatives support privatizing gains on the way up and socializing losses on the way down. Conservative socialists do not spread the wealth; they keep our profits for themselves but spread their debts back to us. That is exactly what the $700 billion bailout accomplishes. Conservative socialists pocket all gains earned by investing our money while we shoulder all losses. Conservative socialists take our money to Las Vegas; if the gambling pays off they walk away with a thick wad of cash; if not, we pay the pit boss. The problem for the rest of us is that only conservative socialists can board this sweet money train.

McCain impugning Obama's economic policies by calling him a Socialist is like Britney Spears challenging Pavarotti's credentials as a singer. McCain should take a good look in the mirror with a bit of introspection before flapping his lips. What could possibly be more socialist than nationalizing our largest banks? Using taxpayer dollars to purchase an equity stake in financial institutions would make a Soviet central planner blush with pride.

Obama's tax policies cannot be described as socialist except by those too ignorant to know the difference or too cynical to reveal the truth. Obama simply wants to re-introduce a tax code that treats the middle class equitably, reversing Reagan-era policies of wealth distribution from bottom to top. Recovering stolen money cannot properly be described as stealing money from the thief, yet that is exactly McCain's absurd accusation against Obama.

Let us round-file this nonsense about "spreading the wealth" as a socialist threat from Obama and instead focus on the real problem of spreading the debt as a form of welfare for the extreme rich. The people who created the mess in which we find ourselves today are not the ones to whom we should turn for a solution. Hopefully, in less than two weeks McCain will be nothing but a senator who twice ran for president and twice failed.

Comments

[TroyInSoCal]

And what happened to those jobs, and higher wages? Companies CUT JOBS, REDUCED WAGES, ELIMINATED BENEFITS, and DECIMATED the middle class. I guess their idea of "trickle down" began with unzipping their fly.

So when is Barack Obama going to shut McCain and Palin up by pointing out that the American middle class has been ROBBED and RAPED by these corporate fat cats for YEARS? That his plan is designed to TAKE BACK the money that was siphoned from the middle class so that the rich could be SUPER RICH? And that through his tax cuts to the middle class, he is going to GIVE THAT MONEY BACK TO ITS RIGHTFUL OWNERS?

People who say there is something wrong with 5% of the country paying 65% of the taxes are right -- there IS something wrong with that. The reason they pay so much of the taxes collected is that they make such obscene amounts of INCOME. And where do these obscene incomes come from? From profits they collect when consumers are forced to pay ridiculous prices for goods and services, and from offering fewer jobs to Americans, at lower wages.

[TroyInSoCal]

Credit card companies and lending institutions had their leashes removed, and found they could hand out credit like candy to college students, and get them hooked on debt for decades, even calling these higher-risk customers their best investments, because they knew that one missed payment could result in higher fees and finance charges. I've closed my share of credit card accounts as a result of these ridiculous increases in interest rates, and have learned to kick the credit habit. But some of that was MY MONEY.

The house I bought three years ago is now estimated to be worth half what I paid for it, even though I knew the risk I was taking, the mortgage I signed up for, the terms, and that I could pay the bill every month. But more than half of the other houses on my street have either been abandoned, or sold dirt cheap. And some of the others are being renegotiated by the banks, so that the homeowner can stay in the house, have half its value written off, and all they get is a 2-year ding on their credit. Meanwhile, I continue to pay responsibly on my mortgage every month like a SUCKER -- for a house that will likely take years to see any equity. Again -- MY MONEY.

[TroyInSoCal]

I know this article is a few days old, but I am so sick and tired of the "spreading the wealth" bumper sticker that McCain and Palin want to slap on Obama. Yeah, I know he used those words. But here's the problem -- that's MY wealth, and I WANT IT BACK.

With the help and participation of politicians who subscribed to the "trickle down" economics that was supposed to help our economy flourish, the rich corporations used far greater influence than they should have ever had to create the economic environment that led to the crisis we are now in. We were all supposed to benefit, with that prosperity "trickling down" in the form of more jobs, higher wages, and things like cost of living increases, and lower prices for goods and services, blah blah blah.

Instead, what happened?

Enron executives got super rich by artificially inflating the price of energy through dubious accounting and speculation, something they were only able to do after the energy industry was deregulated. Some of that was MY MONEY.

Oil companies enjoyed record profits when speculators realized they could get filthy, stinking rich by playing games with the price of oil, so we all had to pay higher prices at the pump so they could get richer. Some of that was MY MONEY.

[ssaz]

Interesting that the republicans are hell-bent on spreading or "socializing" wall street's losses around but they despise the thought of spreading the wealth!

All we've heard from the McCain campaign this week has focused on "spreading your money around" but he fails to point out that, due to the republican's controlling washington for the last eight years, we've all been given a huge portion of Wall Street's losses. I suppose they don't consider this socialism? Hey repugnicans, you can't have it both ways!!

[DuganS1]

The Republican have not "controlled Washington for the last eight years." The Democrats have controlled congress for the last two. Also, "we haven't all been given a huge portion of Wall Street's losses", first because nearly half of workers (not including those who don't work) don't pay any federal income tax and second because the preferred shares the govt has acquired in these financial companies will almost certainly appreciate and make the taxpayers money.

[Jeff Schweitzer - Huffpost Blogger]

The Democrats have a majority of one in the Senate, hardly what one would call control given the Republican ability to prevent the passage of any legislation. The fact is the Republicans have controlled the agenda in Washington for the past 8 years, and need to take full responsibility for the mess we are in today. Praying at the altar of deregulation, reducing taxes while expanding spending, creating historic debts and deficits, waging an illegal and poorly-executed war, destroying America's image abroad, overseeing the implosion of our financial sector and record numbers of foreclosures and ignoring climate change all rest squarely and solely on the shoulders of Republicans. You simply cannot run from that record now matter how hard you try.

[WIpatriot]

Speaking of the "s"-word, somebody sent me this cartoon today:

http://www.cagle.com/politicalcartoons/PCcartoons/stantis.asp

[mamacat]

While I see the point in showing why the Republican accusations for this week are wrong, I am so used to their lies that, in general, I do not see the need to respond to them. I have come to believe that those who have hijacked the GOP are not in the least interested in an honest dialogue about or an intellectual analysis of our latest problems. The GOP operatives are interested almost exclusively in finding ways to fool people into allowing them, the extremists in the GOP, to keep exploiting their stranglehold on the reins of power, for their own benefit.

It is a very bad time in America, when the Republican party is recognised by a majority of Americans as being both unethical and out of touch with the needs of the middle class. It should not be necessary to have to counter deliberate lies from the Republican Party, but that is what we have come down to.

[Jeff Schweitzer - Huffpost Blogger]

We cannot afford to let Republican propaganda go unanswered. That is one clear lesson from 2004. Calling Obama a socialist will have resonance with some voters no matter how false the statement. We need to combat these type of lies.

[joebhed]

Socialism, and debt.
We need neither.
Just a smidge of nationalism, and no debt.

It's scary talking about even a smidge of nationalism.
But that's my interpretation of Obama’s version of trickle-up economics.
I am sure he meant tax and fiscal policy in support of the American worker.
I am talking about an America-first monetary policy.
You know, the kind you would want if our debts were dollar-denominated and payable by the taxpayers.

What I do not want is to nationalize the US banks.
Let the banks be private.

But, take away their power to create money.
Nationalize the money system.
United States Taxpayer Dollars.

Like Paulson said:
""The American taxpayers are ALREADY on the hook"".
People do not understand what that means.
Why didn't anybody call Paulson on it?

A private banking system based on 100-percen­t-reserves would remove the commercial and investment bankers ability to create another financial conflagration. It simply could not be done with bankers lending real money, rather than creating debt-money through the fractional-reserve lending system.

Then put the people, acting through their government, in charge of creating new money.
A system of debt-free, government-issue credits made directly to both US citizens and the states, would eliminate the basic fallacy that actually DID cause the current crisis.

We don't need socialism, and we don't need debt.
Let's get on with an honest money system.

[Rule Of Law]

Obama's response was a populist one, and one that recognizes that the economic health of the working class dictates the health of the rest of the country. That's what he meant by "good for the folks from the bottom up..." Let us work, create, build, contribute, and this country will be better for it.

[debwk]

Thank you for directly attacking Republican claims of Obama's apparent "Socialism". Your use of the
term "Conservative Socialist" to describe the economic and credit fiasco is dead-on, and should be used often to immediately refute untrue claims of Obama's "Socialist leanings".

[Jeff Schweitzer - Huffpost Blogger]

You're welcome. I hope the term Conservative Socialist catches on, because I believe it to be accurate, and a good contrast to social conservative. Calling Obama a socialist is absurd, and I hope the majority of the electorate understands the outrageous nature of that claim.

[JBS]

Actually, there's a shorter term that's more accurately descriptive of the so called "Conservative Socialists" - COMMUNIST.

They just have a different view of who the "new class" that's going to get all the wealth.

[Jeff Schweitzer - Huffpost Blogger]

B arney Frank is hardly the primary villain here. Start with Bush and McCain, and their worship of deregulation, then move to Greenspan and work your way down from there.

[DuganS1]

Deregulation has been a bipartisan phenomena for the past 30 years. It got going with Jimmy Carter and moved on from there. Also don't forget that Rubin backed the Gramm bill and Clinton signed it, and that the Democrats refused to allow more regulation of Fannie and Freddie. As for calling Obama socialist, that is ridiculous. It seems the Republicans tone becomes more negative as they drift downward in the polls.

[WIpatriot]

Don't leave out our own home-grown financial trerrrst, Phil Gramm.

[billyboil]

"McCain impugning Obama's economic policies by calling him a Socialist is like Britney Spears challenging Pavarotti's credentials as a singer".
What an accurate, clever and appropriate comment!
You must be an Aussie, Mr Schweitzer!!!!!!!!

[Jeff Schweitzer - Huffpost Blogger]

I'm not an Aussie, but am honored you would think so. Thank you.