The loudest cry I've heard lately about this stimulus package is, "it's socialism!" Who are we kidding here? We practice and participate in socialism everyday, in what most would say are very necessary ways. Police and fire services are socialized, aren't they? Roads, bridges, water and sanitation systems, public schools are all socialized infrastructure and services. The cost of our armed services is also socialized. How come nobody seems to scream over these things, is it because we have no problem socializing the cost of things that provide a benefit to us all? The socialization of these things seems quite acceptable doesn't it? That's what taxation is all about.
What is not acceptable is the privatization of business profit while socializing the risks. Here is someone's comment from another blog I read that I think sums this up nicely.
Many businessmen claim that, the right to profit is theirs by virtue of what they've risked and, to some extent this is true, they're correct. The small businessman who mortgages his home in order to create a startup business SHOULD be rewarded for his effort. He works hard and should be able to profit. And, in a free market that doesn't subsidize his competition in the form of tax breaks to larger businesses that can afford campaign contributions (i.e. bribes) to the public officials who write them, that would be true.We've been doing this for the past 30 years with various forms of corporate welfare and currently the bank bailouts. For years, big business has wanted government out of the way, and for the past 8 years that's what they got, and look where their "laissez-faire" economics got us. Now, the same crowd who wanted free markets, deregulation and smaller government involvement are begging for welfare because they are "too big to fail".
Our problem isn't that we practice socialism. It's that we allow the socialization of risk while not requiring a directly proportional socialization of profits.
I'd like to refer anybody that wishes to go to this New York Times article (notice the date 2003)
ReplyDeletehttp://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63
It would safe to say that the reason the banks are in this situation is because of the government interviening with the risk involved in mortgages as well as the tinkering with the prime rate all the time. That is not deregulation, the only deregulation was letting commercial and investment banking cross their lines. I'll give you that one. Until this adjustment in this housing bubble gets worked out nothing will totally recover. The government is just temporarly propping up allot of people with mortgages that will eventually default again anyways. You can see how the market responds to non capitalistic ideas. This country didnt get this far by government alone. A little government, Capitalism that welcomes risk, and the best military in the world to protect this system, has always worked. You try and take the later two out of the equation which is the message Obama is giving. Don't forget 10% cut in defense spending and nuke dissarmemant possibly this fall.