Sunday, July 15, 2012


Is Obama a socialist? In a recent commentary, Socialist Party USA Chairman Billy Wharton says, definitely not. He's correct, “if”, you compare Obama, to Wharton's party which has just about enough members to fill a high school auditorium. Socialist Party USA lives in the Nineteenth Century and its program sounds a lot like the goals of the Paris Commune during its brief existence in 1871. SPUSA wants to nationalize all industry and distribution systems and hand them over to the workers; create a non-hierarchical business model, a “democratic” “classless”, “feminist” society and provide free government services for everything. Even on his worst day Obama doesn't approach these largely imaginary goals.

Although similar socialist movements have had better success in attracting membership and even political representation, if not political power, in Europe, history and modern economies have moved on and the few surviving socialists of the old school are an ideological and theoretical fringe. The new face of socialism, often called “social democracy” in Europe, while eschewing “government ownership of the means of production”, manifests itself in policies of hyper regulation of the private sector, strong support for organized labor, redistribution of wealth through high taxes and the creation of a cradle to grave government subsidies to individuals, and the embrace of social engineering to create equality of outcomes rather than equality of opportunity. The economic crisis in the seventeen nation Euro-zone and in much of the wider twenty-eight nation European Union, which in relative terms, far exceeds the economic downturn in the U.S., offers a stark example of these economic and social policies.

The “old socialism” as an economic system, including the more common undemocratic forms in the former Soviet Union, the Peoples Republic of China, Vietnam, and which currently remains in Cuba and North Korea, has failed wherever it has been tried. In the West, it has been replaced by the “advanced welfare state”, a big government dominated system which is funded and regulated at the expense of economic growth through free markets. Using this template, Obama and his supporters in the far Left, come closer to today's “new socialism”.

Look no further than Obama's class warfare campaign rhetoric and his attack on private wealth i.e. “millionaires and billionaires”. “corporate jets”, “hedge fund managers and Wall St. bankers”. These fortunate few are viewed as somehow immoral or undemocratic for achieving significant financial success. They allegedly “don't pay their fair share” of taxes which Obama assumes to be a higher percentage of their income than they do now, which is already a higher percentage than everyone else. Of course mega-wealthy Hollywood actors and rich rap stars are exempt from these criticisms.

The publicly stated rationale for criticism of the business wealthy and his goal of raising their taxes is that “they can afford it”, which of course some of them can. But Obama wants to raise taxes on individuals who make $200,000 a year and couples who together make $250,000. Such people are certainly well off but hardly in the class of “millionaires and billionaires” and many are small to medium sized business owners. But the real reasons for the “fairness and affordability” claim is that the government needs their money to maintain high spending levels, and economic envy can be a workable campaign tactic. The new higher Obama personal income tax rate would be 36 %-39.6% In addition Obama's tax proposals call for an increase in the tax on corporate dividends paid to investors from the current 15% to as high a 44.8% depending on income thresholds.

Obama's and the Left's support of a lower threshold (3.5 million) and high tax rate (45%) on estates, the so called “death tax”, also fits the “new socialist” mold. Again, it apparently isn't “fair” that successful people who have accumulated and paid income taxes on their wealth over their lifetimes, want to divest it according to their personal preferences, often to surviving family members. Instead, Obama and the Left want to “redistribute” it by funding the ever growing welfare state.

The Left leaning Huffington Post blog has suggested that Obama had plans to make a “financial transactions tax” a part of his reelection campaign. Liberal Senator Tom Harkin (D-IA) and Rep. Peter DeFazio (D-OR), the founder of the Progressive Congressional Caucus, introduced legislation in the Fall of 2011 to create such a tax on the purchase, sale and transfer of financial assets; essentially a tax on investors both individual and institutional. The far Left (“progressives”) are anxious to punish institutional investors (“Wall St. bankers”) who they blame for the recession and Obama is quoted by reporter and author David Suskind as saying “we are going to do this!” However, opposition by key economic advisers has so far kept the FTT in the background, probably until after the election.

In May, in spite of the historic 15 trillion dollar federal debt, Obama called for the creation of a government “infrastructure bank” to provide billions of dollars of tax payer money and debt, for government sponsored roads, bridges, dams etc.

The president has long called for hiring more teachers and in June, Obama campaign strategist, David Axelrod said that the country needs to “accelerate” job creation in the private sector “by hiring more teachers, police and firefighters.” Axelrod was unable to explain how hiring thousands of new public sector (government) and unionized workers would help the recovery of the private sector, but he stuck to the claim.

The “Obamacare” health care law isn't the single payer, “socialized medicine” of England or Canada but that was the preference of Obama and the Left after he was elected in 2008. It simply wasn't politically possible with the makeup of the 2009 Congress. A single payer (government funded and administered) healthcare system has the advantages of simplicity and affordability on the part of recipients but the issues of quality, efficiency, and affordability on the part of the government in the face of huge federal deficits and monstrous accumulated federal debt would have to be closely examined in the context of American culture and economics before its adoption. The private insurance company/government health care hybrid of Obamacare brings with it mandatory participation, intervention and regulation. Massive government subsidies to newly insured individuals who are required to purchase it, but by some arbitrarily and bureaucratically divined standard, can't afford it, didn't address these issues. The result has been significant political and popular opposition.

Under Obama, while private sector employment has crashed, the number of federal government employees has grown by 123,000 . Attempts by governors and mayors across the country to rein in public employee unions and excessive wages, benefits and pensions have caused political crises in Minnesota, Ohio and California. Opponents of these efforts, most notably in the attempted recall of Minnesota Governor Scott Walker, included Obama and his core supporters.

Obama and the far Left of the Democrat Party, including former Speaker of the House of Representatives Nancy Pelosi, were quick to support the absurdity of the Occupy Wall Street and everything else, movement which was blatantly, if simplistically socialist, with its “general assemblies”, lack of hierarchical leadership, “international solidarity”, clenched fist banners, verbal attacks on private economic institutions and demands that virtually everything in life be “free” i.e. provided by government.

The “new socialism” is highly visible in France where the head of the actual French Socialist Party, Francois Hollande, has recently been elected President. Hollande's platform includes the following:

Increase to 75% the tax rate on top earners i.e. “ millionaires and billionaires”.

Abandon the German government led Euro-zone austerity plan to cut government spending and reduce deficits, and increase France's government spending.

Implement a financial transactions tax (FTT).

A new 3 percent tax on company dividends and a lower threshold on tax exempt inheritance.

Hire 60,000 new public sector workers, mostly teachers.

The parallels in terms of public policies between Obama and Hollande are striking and while Obama can't be the Socialist Party president in the United States, it appears that he could be in France.

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