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COMMENTARY:

Wall Street Socialists

by Alice Cherbonnier
Wednesday, 11 March 2009
There's no way our vaunted "free market" can correct itself without government help. All these bloviating pundits and think tank shills know this. They should be groveling at the taxpayers' feet. Instead, they're in denial. "Socialism!" they cry, as if that's a bad thing.
Our challenged media gurus, unable to do the slightest research these days in their rush to bloviate, are taking the easy way out and flogging the "talking points" fed to them by "think tanks" whose "thinking" is based on who fronts the big bucks, and who stands to benefit.

Lately, the story line for our idiot punditocracy has been that Obama's budget, especially his planned tax policies, are 'bad for Wall Street.' When the Dow and S&P indices drop, this is reported as a sign that Obama's budget is 'bad for Wall Street.' Never mind that these indices represent very few stocks, mostly of the has-been variety of corporation. The pundits' vocabulary word of the moment, in discussing this alleged cause and effect, is 'socialism'—a term they insert it into their sorry discourse because it's a code word that can scare, alarm, and churn fear. Think tank people, especially the 'free enterprise ilk,' are masters at crafting such messages. They know perfectly well that there are many definitions and degrees of socialism. The insurance industry, for example, "socializes" its rates in order to cover a range of risks.

To suggest that the government is to blame for a bear stock market is to say that the stock market is nothing but a crybaby quasi-governmental entity.

To suggest that the government is to blame for a bear stock market is to say that the stock market is nothing but a crybaby quasi-governmental entity. Our "free market" is therefore nothing but—gasp!—"socialism" disguised as "free enterprise."

The American people are bailing out their financial system because this is the only way it can be saved. Is this socialism? Yes, it is: because socialism at its essence is the pooling of assets, redistributing them to achieve a goal that (ideally) is for the greater social good.

The only 'socialism' so far in our current huge rescue effort to save our financial system (on which Wall Street very heavily relies) has been advancing federal funds (meaning citizens' indebtedness) to forestall this nation's fiscal collapse. This is not an exaggeration. And chances are these huge public outlays designed to ease the crisis aren't large enough. This doesn't mean all the money poured into the financial institutions will be lost; some of it will be recovered, and the public might even make some income out of this, but in the end, yes—this nation is taking a big fiscal hit to rescue its financial system. The Bush people had to choke on this, but they knew they had to step in to help. They didn't do it right, and didn't monitor TARP sufficiently, but they were headed in the right direction—the only direction—they could go. The Obama people are tightening up the monitoring, and are learning as they go, but they too see that there's no choice here. The American people are bailing out their financial system because this is the only way it can be saved. Is this socialism? Yes, it is: because socialism at is essence is the pooling of assets, redistributing them to achieve a goal that (ideally) is for the greater social good.

Okay: let's agree that bailing out the financial system is a socialistic move. So what? It's a necessary move, in a crisis situation, and it's for the common good. All of us, over the past 28 years or so, have been subjected to poor economic advice and even fraud; we've countenanced disastrous deregulation that's allowed murky 'debt instruments' to emerge and be treated as assets; idiots in our midst have taken on more debt than they could reasonably hope to repay, back when loans were ridiculously easy to get, and cheap.

Wall Street doesn't like this? Hellooo—Wall Street did this! Without federal intervention, there quite possibly wouldn't even be a stock market right now. It's bad enough that credit's hard to get, and there's a lot of uncertainty, and things could crash still more. This nation's financial system can be likened to a metatastic lymphatic cancer; the government intervention is chemotherapy to slow the spread and remove the most diseased parts. The situation is dire. But look around: our government, which means us: we're pumping in the money and this nation is still functioning. There's no way our vaunted "free market" can correct itself without government help. All these bloviating pundits and think tank shills know this. They should be groveling at the taxpayers' feet. Instead, they're in denial. "Socialism!" they cry, as if that's a bad thing.

In better times, we taxpayers sure wouldn't want to touch the huge quantities of toxic fiscal waste the Captains of Finance created and profited mightily from. But we responsible citizens know that this situation came about because of greed, corruption, and lack of oversight. Too many of us were seduced by the idea that we too could get rich quick, and that the good times would roll on forever. We didn't demand that our elected representatives, and our regulatory agencies, assure accountability and provide oversight of what's been going on. We stockholders really dropped the ball in failing to fight corporate management about the ridiculous Golden Parachute and Golden Coffin deals. Looks like Ye Olde "It's Okay for You to Win the Lottery Because I Want to Win It Too" gambling syndrome took root. We should never have expected real estate prices to continue to spiral upward forever. Yes—we all played, and now we've got to pull together to clean up the mess, and learn from all the mistakes.

Let's get real here: A modest overall average investment return of 5%, including dividends, should have been a realistic expectation for investors all along. Going back to the stock indices of 1997 is probably where we should be. If we're lucky, real growth at a modest rate can start from this point.

The U.S. government for too long has failed to meet its responsibilities and obligations to its citizens. This is true not just in the financial arena, but with other essentials that we as a people must provide for one another as basics: our mutually supported framework for functioning as a civilized society.

For nearly three decades, this country's been riding on the rim of its tire, not getting the infrastructure maintenance and advancements it needs. Since jobs are needed, and the nation's infrastructure is an embarassment, what's wrong with fixing things up now? This will stimulate the economy while giving all citizens the benefit of improved highways, clean water and air, effective schools, civilized health care, energy efficiency, improved sewage treatment, and on and on. We're talking about this country taking corporate (as in, "all of us together") responsibility to vouchsafe what's basic and essential.

Awwww.....gee whiz, does this mean that this much-needed, much delayed work will have to be paid for in part by increasing the top tax brackets by a few percentage points? Those with higher taxable incomes can choose to invest their money in ways that stimulate the economy (the tax code offers many inducements to those willing to establish businesses and hire people) or they can choose to pay more taxes toward the common good. This is good public policy. Socialism, it's not.

Next time you hear some pundit or reporter or paid shill utter the word "socialism," know that you're hearing propaganda. Inform yourself.


The "socialist" screamers never mention that the IRS tax rate schedule treats every taxpayer the same. Rich people pay the same lower rates in the lower brackets as everyone else. Check it out.



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This story was published on March 11, 2009.