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Over the last few days, we’ve been hearing a lot about Joe the Plumber. Joe recently asked Barack Obama about a business he’d like to buy, and which would put him above the $250,000 income level at which Obama’s tax plan kicks in a tax increase. Joe was afraid that Obama’s plan would make it tougher for him to buy that business. Obama’s answer was, in essence, that his plan would not increase the tax burden for most small businesses, but that he did want to “spread the wealth around.”
Those four words have been quickly latched onto by the McCain campaign and many conservative commentators as a code word for what they’ve called “wealth redistribution” and, more strongly, “socialism.” It’s got legs – during a campaign stop on Sunday, a McCain supporter screamed “Socialist, socialist, socialist!” at Obama. You can even buy T-Shirts. Thanks to our country’s struggle with totalitarian communism for much of the 20th century, “socialism” is a political Scarlet Letter, and Obama has dutifully rebutted the charges, citing his endorsement in particular by Warren Buffet, the patron saint of capitalism.
But I wish he wouldn’t. I wish he’d take the time to point out that it is, in fact, John McCain who is allied with the ideological movement that has pushed America far closer to socialism than any Democrat with a few piddly social programs and progressive taxes.
You see, one basic tenet of economic conservatism in recent decades has been that when you get rid of rules and taxes, you leave people free to create wealth and prosperity for everyone. Phil Gramm, for example, was completely in line with the most extreme forms of deregulatory doctrine (not to mention tactics) when he inserted the Commodity Futures Modernization Act as a last-minute rider to an omnibus spending bill in 2000. The Act ensured that financial products offered by banks or traded privately could not be regulated as futures – it was purely negative legislation, a guarantee of government nonintervention.
The foolishness of this legislation has been revealed early and often. Deregulated products included the private energy trades that fueled Enron’s boom and bust (producing California’s rolling blackouts along the way) and the credit default swaps that brought down Lehman Brothers and AIG (If you missed some of that terminology, I recommend listening to the first few crucial episodes of Planet Money). We’ve all seen where things went from there – not towards capitalist free-market utopia, but to a massive government bailout of the banking industry, funded by borrowing against future Americans. Yes, it’s hard to believe, but right-wing socialism actually redistributes wealth from people who haven’t been born yet.
And it’s a volatile, secretive kind of socialism, one that can only respond spasmodically to the crises it inevitably creates, throwing gobs of money to the last desperate survivors of financial ships it deregulated to the bottom of the ocean. We’ve had bubbles in stocks (1920s), commercial real estate (1980s), energy (2000s), and housing (2000s), based on finance-backed feeding frenzies. At the end of each of these you’ll find socialism on a grand scale instituted to repair the damage, including, of course, the S&L bailout of the 1980s and the current bailout package. But it’s too often forgotten that the New Deal itself, that devilish boogeyman of the right, only became possible because deficit spending was needed to keep afloat a financial system gutted in part by stock speculators borrowing on margin – a risk that has since been abetted, not by removing rules, but by making more of them, and making them smarter.
In short, if it weren’t for the socialist largesse of government spending that has saved the U.S. from multiple economic debacles in the past, it would be perfectly clear just what the consequences of irresponsible deregulation are – and we’d all have taken that knowledge straight to the poorhouse. If the deregulators hadn’t been bailed out time and again by tax dollars, we wouldn’t have free markets, we’d have nomarkets.
The contradiction between the stated aims of deregulation and its real consequences couldn’t be clearer. Deregulation leads to wild speculation in which financiers make big bucks and industries get destroyed, and then the public gets stuck with the bill. Conservative Republicans have effectively cultivated and based their power on the mass delusion that every man is an island, reaping the rewards of his own hard labor. But in reality, most of their primary constituents are corporate welfare kings, grown fat, lazy, and corrupt on risky bets, riding around in Cadillacs secure in the knowledge that a big-government safety net is there if anything goes wrong.
When Barack Obama talks about “spreading the wealth around,” he IS talking about socialism. He’s talking about a system in which the government protects people from predatory lending, stops wild energy speculation, and yes, makes the rich help the poor.
But when Joe the Plumber and others on the right talk about free markets and deregulation and lowering taxes on “everybody,” he’s ALSO talking about socialism – the only difference is where the money’s coming from, and who it’s going to. Deregulatory ideology supports a system in which childless couples don’t contribute to their local elementary school, drug companies pocket profits on drugs they know to be harmful, and the government borrows from future Americans to bail out irresponsible financial institutions. That’s not keeping what you earn – it’s getting someone else to pay the price for your success.
I can understand the appeal of taking sole credit for all of your achievements, of being a cowboy – a maverick. But most of us are grownups, through with our days of playing cowboys and Indians. What we are, instead, is socialists – part of a system larger than us, which requires careful management and sane regulation, preferably by someone who doesn’t stand to gain from ripping the rest of us off. We are all socialists, whether we like it or not – the only choice you have now is what kind of socialism you want to live under. You can choose to support a socialism that calls itself capitalist until the profits run out, and then runs crying to beg a loan from the public piggybank. Or you can support policies that recognize how much we all depend on one another, and that seek to help us work together for a secure society.
Say it ain’t so, Joe!
DAVID MORRIS lives in Fort Worth, Texas. He can be reached at: email@example.com