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Joan Williams

Joan Williams

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Stop Socializing the Downside and Privatizing the Upside

Posted: 02/ 1/11 04:09 PM ET

Cross-posted from New Deal 2.0.

I have been watching Clint Eastwood films lately and thinking about his role in fueling the belittlement of government. In Dirty Harry, for example, the Eastwood character is a loner who stands up to lily-livered bureaucrats who lack the cojones to do what needs to be done and to morally corrupt politicians who cave in to bad guys for a living. This kind of film was part of a sustained, and dazzlingly effective, cultural agenda to discredit government.

A key mechanism of enforcing this view is the snarl -- it's not really an argument -- that having the government undertake any given task is... socialism.

For thirty years, Democrats have lacked a cogent response. In the debate over health care, they tried to counter the socialism charge by designing reform according to Republican principles: no to single payer, no to the public option, yes to private health insurance (an industry so inefficient that Americans spend one third of their health care dollars on paperwork, but I digress).

Democrats are left still facing sneers of socialism. Trying to counter this charge by messing around with policy design details is a strategy fated to fail. What we need instead is a way of reframing the debate that begins to reverse the discrediting of government.

The financial crisis presented a golden, largely squandered, opportunity to begin this process. No better time than the present. Americans recently heard reports of bank profits so high that major banks are declaring dividends. This presents a teachable moment to send a much more effective message than Obama's old fashioned populism that demonizes bankers as "fat cats."

Here's a fresh response: What conservatives are proposing is to privatize the upside of the economy while socializing the downside.

Take the banks. Back during the Great Recession, they were only too happy to socialize risk. But now, with profits aplenty, banks have lost interest in sharing. After we socialized the downside risk, now they want to privatize the upside risk.

This doesn't make a whole heck of a lot of sense. But it's a consistent theme in Republican proposals. Take the new Republican health care proposal. It wants to preserve for private industry the right to insure relatively healthy people off whom insurers can make a profit. Again, Republicans want to privatize the upside and let industry keep those profits, and socialize the downside -- and then deride government for needing to levy taxes to cover the costs of shouldering that risk.

A similar dynamic is at work at the local level. A recent California ballot initiative makes it more difficult for local governments to impose fees on developers as a condition of approving development. The fees required the developers to pay for the costs of the water, sewers, schools, and parks that would serve the new subdivisions. Not surprisingly, the developers hate fees because they prefer to socialize the costs of infrastructure and privatize the profits of development.

So here's the message: The next time Republicans snarl "socialism," Democrats need to re-examine the baseline assumptions. Often you'll find a proposal to privatize profits and socialize risk. Calling that out is the first step towards changing Americans' negativism towards government.

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Cross-posted from New Deal 2.0. I have been watching Clint Eastwood films lately and thinking about his role in fueling the belittlement of government. In Dirty Harry, for example, the Eastwood chara...
Cross-posted from New Deal 2.0. I have been watching Clint Eastwood films lately and thinking about his role in fueling the belittlement of government. In Dirty Harry, for example, the Eastwood chara...
 
 
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HUFFPOST SUPER USER
thirdcloud
09:34 PM on 02/03/2011
We absolutely need a way of reframing the debate that begins to reverse the discrediting of government despite the fact that it is often warranted. The logical and most practical solution to this treadmill of dialogue leads to election reform and the passing the Fair Elections Now Act an essential first step toward restoring trust in our democracy. http://www.fixcongressfirst.org/

Election reform that eliminates the inherent conflicts of interest that pit the interesst of the people of this nation against the corporate lobbies and thier attended interests is the first step towards correcting this practice. (((Fix Congress First)))
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HUFFPOST SUPER USER
thirdcloud
02:52 PM on 02/03/2011
Socialism or state capitalism take your pick, America does not have a free market economy. The real issue is that if universal health care ever comes to America, the corporations are likely to stay intact but will no longer have to satisfy customers, only the politicians.

On the one hand are those who have become disenchanted with the current system and on the other are those who've misattributed the problems to the free market. Expansion of government interests needs to balance and defend the legitmate systems of profit and private property. But Americans need understand how it is that the recent expansion of Medicare has been both the greatest augmentaton of the American welfare state and a giveaway to large pharmaceutical corporations.

Partisan politics does nothing to help our nation understand the inherent trade-offs. The dumbing down of the debate is insulting, dishonest or clearly not understood. Most likely the later as evidenced by uneducated claims and statements from the politico likes of Sarah Palin, Michele Bachmann and other's regurgitating self promotional nonsense.
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HUFFPOST SUPER USER
thirdcloud
05:56 PM on 02/03/2011
http://thirdcloud-yourhonormayibeheard.blogspot.com/2011/02/reframing-our-debates-and-stop-snarl.html

A summary review of Corporatism and Socialism in America would reveal that in more recent years, corporate interests have often cheered on big government programs.
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03:42 PM on 02/02/2011
Ms. Williams,
Privatize the profits and socialize the losses is what is at the heart of our housing finance approach since the New Deal. Nothing new here.
ThePeacemakers
Concerned Citizen
12:52 PM on 02/02/2011
Ms. Williams,
Privatize the profits and socialize the losses is also the neo-liberal economics being imposed on foreign countries: it's one of the complaints of the Egyptians (just one example).
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HUFFPOST SUPER USER
blueken
Finger Picking blues man
11:41 AM on 02/02/2011
"It was the best of times, it ws the worst of times." It's a tale of two cities. There is us and ther is them. They have drivers, we have cars. They eat in restaurants we can't afford. They fly first class, we fly coach. They live behnd gates and walls. They don't rub elbows with us unless it is election time. All of their friends are wealthy. They have no clue what it is like to live on a budget, shop at WalMart and try to save enough to retire. They get sick, they get the best medical attention, we get sick, we wait for hours and hours in the ER waiting to see a doctor. "It's just the way it is, somethings will never change".
11:17 AM on 02/02/2011
You know what else might work? If the Dems didn't also cave in to their corporate paymasters on every issue. Health care "reform" turned out to be mandated coverage from the same corrupt insurance industry who've instituted and profited from the current mess. Paid for, of course, by a tax on working people who already HAVE coverage through their jobs and retirees who've worked decades to secure their benefits.
Reforming the current lobbyist written "Free Trade" agenda somehow morphed into additional Nafta-style trade agreements with Korea and Columbia.
And let us not forget the two ongoing, treasury draining, wars of choice (fought exclusively by the lower class, benefiting exclusively Haliburton, Blackwater and other "defense" conglomorates).
Social security "reform"? Of course, decrease benefits and raise the retirement age. Raising the regressive CAP is not even open for discussion.
Dems & Repubs pretend to disagree on immigration, gay rights, abortion etc. (they don't) while allowing NOTHING to impact the real agenda of the multinational corporations by whom they're wholly owned.
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beerbagger
12-pack of genius
03:29 AM on 02/02/2011
meh... it's called corporate welfare.

GO PACK GO!!!
GO PACK GO!!!
GO PACK GO!!!
12:55 AM on 02/02/2011
Unfortunately the American public is incredibly stupid. Many people support politicians and businesses that are screwing them royally. Why do not Americans demand that hedge fund managers pay an ordinary income tax rate versus a mere15%? Why do American allow the top 25 hedge fund managers make enough money to fund over 400,000 teachers. How can we be so dumb as a nation. This is not capitalism, it is pigs at the trough. How come we defend salaries of Wall Street managers, but say that teacher pay is not the problem? Why does pay motivate one group, but should not motivate another group? We are just a nation of greedy SOBs. God Bless America! Where is my flag pin?
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HUFFPOST SUPER USER
MeinNH
Ooooo Silly Me
10:45 AM on 02/02/2011
F&F Spot on!!
HUFFPOST SUPER USER
kamact
Market Observer
10:14 PM on 02/01/2011
Or "I take,...and you give"
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HUFFPOST SUPER USER
Dave F
Former Republican. Liberal means FREE.
10:09 PM on 02/01/2011
"Here's a fresh response: What conservatives are proposing is to privatize the upside of the economy while socializing the downside."

I like the idea behind this - it's one of the first, good responses to the conservative charge of "SOCIALISM!" with anything and everything the government does. But I think it needs to be a tad more emotionally charged - to both encourage liberals to really get fired up about it, and also to put conservatives on the defensive more.

Something along the lines of "Conservatives want to privatize their greed, and socialize their losing bets" or similar. Make it emotionally appealing to liberals/progressives, yet push the buttons of financial conservatives while making social conservatives squirm at the religious applications.

I'm not saying my interpretation is the best language, but with a tweak or two, it could become a powerful counter-narrative. Kudos.
Genders
Love, Tolerance, Enlightenment
08:46 PM on 02/01/2011
Reagan's " fear the government" is really fear the Democracy, trust the super rich and the multinational corporations. When are we going to figure that out. Ike was the last good "conservative" republican.
Democrat in the South
Empathy, the most important word
08:40 PM on 02/01/2011
This is the most brilliant thing yet.

The rich get the profits and everyone else gets the losses.

I heard someone say at the beginning of the great recession, "it's capitalism on the way up and socialism on the way down". Lets hammer the GOP with that a million times a day til the end of time.

If Republicans were ever forced to explain how their policies benefit the public, they would look and sound like fools.
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HUFFPOST SUPER USER
bllnsinchnge
peace, markets, freedom
06:44 PM on 02/01/2011
Governments are like the cover charge at a nightclub, the flashier the people are inside, the more expensive the charges.
ThePeacemakers
Concerned Citizen
06:43 PM on 02/01/2011
We need campaign finance reform.
Both parties will continue to participate in privatizing profits and socializing losses because they get paid to do it - through financial contributions, job offers, you name it.
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05:30 PM on 02/01/2011
'What businesses are proposing is to privatize the upside of the economy while socializing the downside.'

Fixed it for you. And both parties/ideologies actively support this model if they are on the receiving end of the profitability. The debate is merely which industry sector should receive the greater largesse.
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DiogenesOfAlaska
Mitt Romney for president - of the Cayman islands!
07:13 PM on 02/01/2011
Even if that were anywhere near the truth - and it is far from it - it would still be a problem for republicans mainly, and less so for democrats.

Because - again assuming your premises were valid, which they are not - it would still only mean that republicans are self-contradictory while democrats would be having potentially naive hopes.

And if there's one thing that's certain, then it is that entering the political realm with self-contradictory views cannot be healthy. In fact, it cannot even be conducive to mental health. It undermines mental health. Because it's unhealthy to argue with foolishness. The only thing you can do with foolishness is to point out that it's there. And then step away. Which is precisely why political discourse in the US has deteriorated. It's simple. It's called well poisoning. It always works. But it's about time people realize that it's not frowned upon because it might not work. It's frowned upon because it does.