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.

Stay tuned.


Butch said...

Interestingly, CNBC is promoting REGULATION of the industry this morning. Maybe someone will look back at that 1999 Clinton story and see when this really all began.

These men, our Presidents, have pretty much all made mistakes along the way. Unfortunately, there is on doubt in my mind that someone in the wings helping to sell or selling them on these proposals is guilty of having an agenda.

moneythoughts said...

I agree with you about everything you say; however, it goes back further than President Clinton in my opinion. Reagan broke the air trafffic controllers and that was just the start. Republican presidents have occupied the White House for the last 28 years, except for the 8 years Clinton was President. From Reagan through Bush #43, the program has been to destroy the gains and regulations made during and since the New Deal, and put the middle class back where they belong, struggling to keep the heads above water. Look at all the legislation that hurt the American family, their jobs exported and their rights as workers compromised. This was no accident, the weakening of the working class has been the objective and what we have now is that objective run wild. Now the people are coming back to their senses and voting Democrat. But as soon as they are feeling better about their finances they will think they are Republicans in-training again. And then the process will start all over again. Even as things are now, there are people out there that don't know on which side their bread is buttered. This last election showed me that the American people can look beyond color to elect the better man. Now the people need to get behind this President and give him his four years to make something positive happen.

Butch said...

Your so right. Like I have said before and maybe you too, when the economy does come around, we, the American population will not be the first to recover. Control is needed on Wall Street, on Main Street and in our Ports.

"NAFTA was signed by U.S. President George H.W. Bush, Mexican President Salinas, and Canadian Prime Minister Brian Mulroney in 1992. It was ratified by the legislatures of the three countries in 1993. The U.S. House approved it by 234 to 200 on November 17 and the Senate by 60 to 38 on November 20. It was signed into law by President Bill Clinton on December 8, 1993 and entered force January 1,1994."