Monday, March 2, 2009
What is Socialism?
As there are several political balls in the air as we begin the first week of March 2009, I want to talk a little about the word socialism. It seems that this word socialism has crept into the political-economic discussion on TV and radio since President Obama and his administration have taken office. I could be wrong, but I do not recall the word socialism being used when President Bush was asking Congress for the TARP program to help out the banks and the insurance company known as AIG. We all know that words have their own power for good or evil, as anyone that reads just a little history will acknowledge.
What is socialism? Here are three definitions of socialism. Socialism is any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods. Second, socialism is a system of society or group living in which there is no private property, a system or condition of society in which the means of production are owned and controlled by the state. Third, socialism is a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done.
When you have a dead battery and you get someone to give you a jump start, you do not agree that those jumper cables are going to be attached to your car for the rest of your life. This point I am making may sound stupid, but it is no more stupid than to believe that the “jumper cables” that are being used to get our domestic economy moving forward again are going to remain a permanent fixture of our economy in the United States.
Even the talking heads on TV news programs are beginning to recognize that the philosophy of deregulation, and the weakening of the government agencies that were responsible for the enforcement of the banking and securities regulations that remained, is at the center of the toxic assets, meltdown of the structured asset bond market and the collapse of our banking and investment banking industry.
All of these measures that have been taken by the Federal Government to date, have been done to keep people in their homes (private property) and to save the commercial banking system in the United States. This is hardly a move towards socialism. Socialism would not bother with giving cash to the banks in exchange for preferred stock. Socialism would simply nationalize the banks and be done with it.
The Stimulus Package is designed to get the private sector of our economy moving again by supporting basic necessities such as police, fire and teachers, as well as other state workers that provide basic services to people in each of our 50 states. That spending along with the infrastructure programs will get people back to work and rebuild our country for the 21st century.
Remember the jumper cables story, no one is driving around town or country with jumper cables hanging from their car because they need a jump start. What we do need is better regulations for the securities and banking industry in the 21st century. Hopefully, that will be an important part of what the Obama administration has in mind for our economy.