SOCIALISM IS COMING TO AMERICA
By Cliff Kincaid
In his classic 1932 book, Toward Soviet America, Communist Party boss William Z. Foster wrote about how “The United Soviet States of America” will come about. As a result of various capitalist crises, the national government would assume more and more control over the economy. “In finance,” he wrote, “it will mean the nationalization of the banking system and its concentration around a central State bank…” Foster is dead, but the Wall Street financial “bail-out” plan offered by Treasury Secretary Henry Paulson, in coordination with the Federal Reserve, will bring about a socialist America.
It would be an exaggeration to say that we are getting close to anything resembling the Soviet system. But it is also a big mistake to call this a “bailout.” It is socialism. Why are so many in the media afraid of using this term?
Over at Political Affairs Magazine, a publication of the Communist Party USA, writer John Case is gloating. His article about the crisis is headlined, “A Dose of Socialism to Forestall Disaster.” He thinks that Paulson and Federal Reserve Board chairman Ben Bernanke have been reading the works of closet Marxists.
But none of this is secret. At a time when many pieces of legislation before Congress take up thousands of pages and do their best to hide pork barrel spending, Paulson’s three-page plan for Wall Street socialism is straightforward and simple. If passed by Congress, Paulson would assume the dictatorial power and authority to designate financial institutions “as financial agents of the Government” and order them to perform “all such reasonable duties related to this Act as financial agents of the Government as may be required of them…”
The bill gives Paulson automatic access to $700 billion and raises the limit on the public debt to $11.3 trillion. He gets the power to issue regulations, hire people, establish various financial “vehicles,” and take other “necessary actions.”
Conservative Senator Jim Bunning is brutally honest, saying that “…the free market for all intents and purposes is dead in America.” He said Paulson’s plan “will take away the free market and institute socialism in America. The American taxpayer has been misled throughout this economic crisis. The government on all fronts has failed the American people miserably.”
“After reviewing the Administration’s proposed bailout plan, I believe it is completely unacceptable,” said conservative Senator Jim DeMint. “This plan does nothing to address the misguided government policies that created this mess and it could make matters much worse by socializing an entire sector of the U.S. economy. This plan fails to oversee or regulate the government failures that led to this crisis. Instead it greatly increases the role for Secretary Paulson whose market predictions have been consistently wrong in the last year…”
Every newspaper in America should print a copy of his plan. Every news anchor and commentator should read it out loud to the American people. The American people have a right to know that President Bush and Congress are officially creating a socialist America.
Over at the “conservative” Fox News Channel, however, some commentators think this is just great. “I love it,” Fred Barnes of the “conservative” Weekly Standard said of the temporary market rise in response to the anticipated Paulson plan. “Look,” Barnes said, “when I keep hearing this is going to cost a trillion dollars, and so on, it may not cost anything.” The U.S. may “come out ahead” in the long run, he confidently predicted. He praised Paulson and Bernanke for acting “boldly.”
Another “conservative,” Charles Krauthammer, was almost giddy. “It took FDR a decade to put in place all the institutions of the New Deal,” he commented. “Paulson and Bernanke did it in ten hours. I mean, in one night, they created a whole new world.”
However, on the September 21 edition of Fox News Sunday, host Chris Wallace pointed out that Paulson has already been caught making reassuring but false statements about the crisis. In March, also on Fox News Sunday, Wallace had asked him, “Are more Wall Street firms in danger, at risk, of going under? Paulson replied, “I’ve got great confidence in our financial market, our financial institutions. Our markets are resilient. They’re flexible. Our institutions, our banks and investment banks, are strong.”
And this is the guy being entrusted with virtual dictatorial power over Wall Street? Rather than praise him for his intellect and ability, why aren’t Barnes and Krauthammer demanding that Bush fire him?
The liberal media are, of course, also trying to keep the American people in the dark about what is happening. The Washington Post deceptively calls it a “rescue plan.”
The “debate” taking place in Washington and the media is being carefully controlled. The Republican Bush Administration supports the plan and Congressional Democrats want to take it further. The Democrats want even more federal involvement in the firms that are being acquired. In other words, it is a question of how much socialism they want. The Democrats want more socialism; the Bush Republicans want slightly less. But it is still socialism.
There is a bipartisan note: both sides agree that there should be a new government board assigned to monitor America’s transition into a socialist economy.
Both major party presidential candidates, John McCain and Barack Obama, have not objected to the proposed federal takeover, although McCain has raised questions about giving Paulson too much power.
Constitution Party presidential candidate Chuck Baldwin, who has been endorsed by Rep. Ron Paul, is ripping the Democrats and the Republicans. “That deer in the headlights look on the faces of Obama/Biden/McCain/Palin when discussing this crisis should tell Americans everything they need to know about these candidates,” he said. “Not one of them is letting on they know what’s really happening, much less how to fix it!”
He said, “So far, the only solution being talked about is more of the same failed monetary policies that got us into this mess in the first place—more fake money, more debt, more usury. It is time to demand a return to sound money.”
On the House side, 31 members of the House of Representatives have voiced public objections in writing to going further down the socialist road. They are members of the Republican Study Committee (RSC), the Caucus of House Conservatives. They have sent a letter to Paulson and Bernanke.
Rep. Mike Pence, the former chairman of the RSC, said, “The Administration’s request amounts to the largest corporate bailout in American history. Congress should act, but should act in a way that protects the integrity of our free market and protects the American taxpayer from more debt and higher taxes. To have the freedom to succeed, we must preserve the freedom to fail. Any solution to our present crisis must preserve our essential economic freedom.”
“Government bailouts and takeovers are nothing new,” points out financial advisor Ric Edelman.
He cites the following: “In 1971, Richard Nixon rescued Lockheed by providing $250 million in loan guarantees. When the Penn Central Railroad failed in 1971, Nixon created Amtrak. Jimmy Carter gave $1.5 billion in loan guarantees to Chrysler in 1979. Under Ronald Reagan, the FDIC in 1984 spent $4.5 billion to rescue Continental Illinois, which still holds the record as the largest U.S. bank failure. Then, during the S&L crisis of the 1980s, George H. W. Bush approved the bailout of 747 savings and loans at a cost to taxpayers of $124.6 billion. In 1998, under Bill Clinton, the Federal Reserve Bank of New York bailed out Long Term Capital Management at a cost of $3.6 billion. During the Mexican Peso Crisis, Clinton arranged for loans and guarantees to Mexico totaling almost $50 billion. Then, following the September 11, 2001, terrorist attacks, George W. Bush approved $15 billion in subsidies and loan guarantees to aid the faltering airline industry. This year, the Federal Reserve approved a $30 billion credit line to help JP Morgan Chase acquire Bear Stearns and engineered takeovers of Freddie Mac, Fannie Mae and AIG. The names, dates and amounts are different, but that’s about it.”
fact, however, the massive scope and price tag make the Paulson plan
Meanwhile, some “progressive” economists and writers are urging the Democrats in Congress to take the plan much further by implementing the first phase of a global tax.
James Parrott of the Fiscal Policy Institute says that Washington needs to establish a “new regulatory regime that covers all financial institutions (including hedge funds), controls risk and introduces a tax on financial transactions to help repay U.S. taxpayers for coming to the industry’s rescue.” A tax on financial transactions, which would affect stocks and mutual funds, could be part of a global “Tobin Tax,” named after the late Yale University economist James Tobin, to bring in billions and even trillions of dollars a year to national governments and international institutions such as the United Nations. Such a plan has usually been marketed as a way to diminish “global financial instability.”
Dean Baker of the Center for Economic and Policy Research says that “The government should impose a modest financial transactions tax, comparable to the one in the United Kingdom. This can both restrain excessive trading and raise more than $100 billion a year in revenue.”
One cannot exclude the possibility of such a proposal being slipped into the final legislation. It is being reported that Senator Christopher Dodd, Democratic chairman of the Banking Committee, has been circulating a 44-page version of the bill. But Dodd’s Banking Committee website only has a three-page summary. What is in the rest of the proposal?
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The next few days are critical. The American people can stop this rush into socialism, if only the liberal and conservative media start telling the truth about the socialist “new world” into which we are about to enter.
© 2008 Cliff Kincaid - All Rights Reserved