Thursday, October 9, 2008

Is this the year America goes full-monty socialist?

Treasury Secretary Henry "Lenin" Paulson is sending up a test balloon about "plans for the U.S. government to invest in banks as the next step in trying to resolve the deepening credit crisis." The report adds, "The Treasury's program would be voluntary and officials may begin injecting capital through purchases of shares starting as soon as the end of the month."

OK, here's the deal: as voluntary as the purchase of stock in heavily regulated banks by their regulators may be (they're free to say "no"! Honest!), the process of government acquisition of private businesses belongs to an ideology called socialism.

I'm not just engaging in knee-jerk reaction to this rise of the red flag over the U.S. Treasury, either. Paulson proposes to risks enormous quantities of taxpayer money on investments in an industry that's in the midst of a thorough shakeout. That's a game best played by savvy investors with their own money, not government officials with cash picked from other people's pockets.

And if these investments are successful, it will give the government unprecedented control over the financial sector, with all of the concentrated power that implies over the rest of the economy. Where will companies get their financing? From government-controlled banks. And will banks' lending policies remain better-divorced from political priorities than did the policies of Fannie Mae and Freddie Mac, which were run into the ground (at great cost to the U.S. economy) as tools of lawmakers' schemes? Don't count on it. Governments are all about politics, and politics will govern the way banks owned by the government are administered.

To put the financial sector in government hands is to give political officials enormous and far-reaching power over the rest of the economy.



Blogger Ward Griffiths said...

This post has been removed by the author.

October 11, 2008 7:24 PM  
Blogger Ward Griffiths said...

As Tom Knapp pointed out in his link to your article on RRND/FND:

" [editor's note: Well, actually, no -- or at least not
necessarily. Socialism is "worker ownership of the means of
production." In theory, that might be done through a state, but it
would have to be a "workers" state. All government ownership is bad,
but not all government ownership is "socialist." Words mean things -
TLK] (10/09/08)

Much (most, historically) government ownership is feudal. Such as the large tracts of the King's Forest (oops, National Parks and National Forests) that the government "owns" such as over half of the area from the Rockies west (and northeast of the Rockies as well, in the Dakotas and back to the Great Lakes and a fair amount in New England, mostly north of Massachusetts). I'm not even including the Reservations, other land the Federal government prohibits from trade on any nominally free market.

I don't often disagree with you, J.D., but this is one of the spots where the feudalists are ahead of the federalists in the "command and control" race.

I will not be a serf again. I live in the worst US satrapy when it comes to victim disarmament. I'm armed. (And legged, but I hold my weapons with my hands, not my feet).

Ward Donald Griffiths III

October 11, 2008 7:24 PM  
Blogger Ward Griffiths said...

This post has been removed by the author.

October 11, 2008 7:25 PM  
Blogger J.D. Tuccille said...


Granted. I was using socialism in the common sense, which refers to state control of capital and the means of production. That's what most socialist political parties propose. But the original definition of socialism referred to worker control, and that sort of socialism is certainly not incompatible with a free society. Feudalism is probably a more accurate term for what's occurring in D.C., or state socialism.

October 12, 2008 9:31 AM  
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^^ nice blog!! ^@^

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March 19, 2009 2:11 AM  

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