Eurosocialism in the USA

One of the concerns I expressed during the campaign was that Barack Obama would move us toward European-style socialism.  That process has proceeded much more rapidly than anyone could have ever predicted last summer before the conventions.  And there is probably much more to come.

A number of writers have commented on the problems associated with our gravitating toward this type of political system.  While the general public's current approval of Obama suggests that a majority of Americans might feel at least somewhat comfortable with the prospect of socialism, perhaps they have not thought deeply enough about the issue.

Michael Barone:

The European model sacrifices growth in the hope of reducing economic inequality. American experience suggests that this can work, but not perhaps at an acceptable cost...

Still, Obama may take us some distance toward the Europe whose "dynamic union" he hailed in Strasbourg, with some marginal gains in economic equality and, if Europe's experience is a guide, considerably less economic creativity and growth...

Polls show voters ambivalent about Obama's expansion of government, skeptical of global warming theories, and appreciative despite the financial crisis and recession of the efficacy of market capitalism to produce economic growth. They are also confident, as Franklin Roosevelt and John Kennedy were, that America is a special and unique country. Obama audaciously believes he can lead the country in a direction it's not sure it wants to go.

Alexander Benard:

Americans must learn from our brethren across the Atlantic how social-welfare states operate, and what impact social welfarism has had on European society...

To Americans, all of this is unfamiliar and may seem largely innocuous. But Europe affords us an opportunity to see where these policies lead, and the picture is an extremely disturbing one...

Government ends up with more, so government-funded projects look nicer; people end up with less, so they do not live as well or have as many economic choices and opportunities as citizens in economically freer countries...

The effect of all this is to stifle independent thought — precisely the kind of thought that results in a vibrant private sector, fueled by creative entrepreneurship. Such entrepreneurship becomes increasingly less relevant in the public’s eye as the federal government, not the free market, makes the critical decisions on which products, ideas, and projects merit attention and funding...

Having paid excessive taxes throughout his life, the European retiree usually has not amassed personal wealth or had the opportunity to purchase a significant parcel of property. He has never truly had to rely on himself and those close to him, because he has always known that the government would be there for him — like it or not — should he ever need help.

Some may think this an enviable prospect, but one brief look at the average European retiree tells a different story. The human spirit does not respond well to dependence. It withers. The freedom to make choices, to succeed and stumble on our own merits, the hardiness that comes from having to rely on ourselves — these are the things that make us whole. And that, really, is the most cautionary part of this tale: Americans must resist the creeping welfare state, lest we lose not only our quintessential Americanism, but ultimately also some unquantifiable measure of our humanity.

Mark Steyn:

(H)ere we are 20 minutes in, and full-scale Europeanization is already under way: Europeanized healthcare, Europeanized daycare, Europeanized college education, Europeanized climate-change policy . . .Obama’s pseudo-SOTU speech was America’s first State of the European Union address, in which the president deftly yoked the language of American exceptionalism to the cause of European statism.  Apparently, nothing testifies to the American virtues of self-reliance, entrepreneurial energy, and the can-do spirit like joining the vast army of robotic extras droning in unison: “The government needs to do more for me.” For the moment, Washington is offering Euro-sized government with Euro-sized economic intervention, Euro-sized social programs, and Euro-sized regulation. But apparently not Euro-sized taxation.

Hmm. Even the Europeans haven’t attempted that trick. But don’t worry, if that pledge not to increase taxes on families earning under $250,000 doesn’t have quite the Continental sophistication you’re looking for in your federal government, I doubt it will be operative very long.

Most Americans don’t yet grasp the scale of the Obama project. The naysayers complain, Oh, it’s another Jimmy Carter, or It’s the new New Deal, or It’s LBJ’s Great Society applied to health care. You should be so lucky.

Paul Rahe:

In the face of Europe’s all-too-obvious moral, political, and demographic decline, Americans should not gloat or be smug. Unless something changes in the near future, the odds are good that we will follow our European cousins on the path that leads to servitude...

In our mores and manners, in our attitudes with regard to religion and morality, as well as in our political institutions and practices, we are more like Tocqueville’s (French) compatriots than like the Americans of his day. And the fears that he expressed with regard to the French now apply with considerable force to us as well, for we have forgotten that human life is sacred, that it is unjust to take from one to give to another, that libertinism is fatal to liberty, and that strong, stable families and personal self-discipline are prerequisites for sustaining a government limited with regard to the ends it may pursue and the means it may employ. In the process, we have jettisoned much of the equipment — political, social, moral, and psychological — that in the past enabled us to join together, stand our ground, and resist liberal democracy's despotic drift; and now, denied the benefit of that equipment, we face a worldwide financial panic and an economic downturn more severe than any encountered since the stock market collapsed in 1929...

(O)ur new leader poses as a secular Messiah; his minions believe, as did the progressives of an earlier time, that “there has come into the world” in recent times “some new element which makes it necessary for us to undo the work of emancipation” achieved by our forebears and “to retrace the steps men have taken to limit the power of rulers”; and in the ranks of our compatriots they will find many prepared to sacrifice self-reliance and personal independence for a promise of security no government can keep. The hour is, indeed, late.

To those caught up in the maelstrom, recent developments may well seem dramatic, but, in truth, they serve merely to highlight the plight that we have been in for more than three-quarters of a century.
 

Barone is not sure the American people want socialism.  But the other three writers look darkly at the prospects for this eventuality.  I tend to agree with them.  It is already well under way-- it is just a matter of degree. 

The American people, to some extent, have already made their choice, even if they did not entirely understand what they were doing. 

 

 

Comments

[scharrison]

The elephant in Europe's livingroom isn't Socialism, it's Parliamentary governing. There's actually really high numbers of Conservatives in both France and Britain, but, due to the demands of achieving and maintaining alliances, a whole lot of conflicting programs end up being funded. And then reversed, and then reinstated, etc.

I'm not saying out two-party system is completely immune from trying to institute some of the growth-stifling programs we see in Europe, and I'm not saying we don't have a lot of back-scratchin' going on here as well. But our corporations are simply too powerful to allow our government to stray too far. There's a reason why third (or more) parties have to struggle to raise enough contributions to even qualify for elections.

[Joe Guarino]

The problem, Steve, is that corporate America is complicit with the new brand of socialism that is being entertained. The banking/financial industries, the domestic automobile industries, and likely the health care industries are all, to a varying extent, demonstrating they are amenable to rolling over and playing dead at the hands of an aggressive state.

In fact, this approach almost suggests some tinges of fascism-- which, of course, is one of the forms that socialism can take.

And the voters have been amenable to installing a government that will take the centralizing influence further than some corporations would like. But recent events have demonstrated that corporate America is not necessarily averse to socialism.

Obama and the national Democrats know this moment is probably the best shot they will have to achieve these ends in many years; and they have been working to maximize those opportunities.

[scharrison]

Joe, as you've probably figured out by now, I'm not totally against adopting some aspects of Socialism, even some that Europe has experimented with. But even though we might be seeing what appears to be Socialist tendencies developing here in the U.S., that's not really what it is.

It's a neo-Mercantilism, wherein the government and big business form a powerful partnership to control the wealth of the nation. Just like the Soviet Union wasn't a "true" Socialist institution, the direction we're heading is also not Socialism. If you look at the relationship between the Oligarchy and the Supreme Soviet of yesteryear, you can see some frightening similarities with the role of money in politics here in the States.

This is one reason why I really wish more Conservatives would push for campaign finance reform. They (and many on the Left) have been led to believe that limiting contributions will stifle freedom of speech. But not doing so is much more dangerous in the longrun.

[Joe Guarino]

Steve, I agree with you that we now have big business and government partnering to control the nation's wealth. I, too, am concerned about oligarchy. That is very worrisome to me.

If you read the Wiki description of fascism, under the subhead "national corporatism", you will see that Fascism attempted to do similar things:

http://en.wikipedia.org/wiki/Fascism#Economic_policies

I am not sure campaign finance reform is the answer; and I do not think it corrects all the pathologies that have gotten us to this point. And some of those pathologies are in the collective hearts of the people. That is difficult to fix. And the collective weight of economic and political changes of dubious constitutionality enacted over the last century is also difficult to fix.

[scharrison]

There are some frightening similarities there, Joe.

But here's the thing: the opposition movements in this country (Yes, I'm referring mostly to Republicans here) have some Fascist characteristics of their own:

"Thus fascism tends to be anti-intellectual.[92] The Nazis in particular despised intellectuals and university professors. Hitler declared them unreliable, useless and even dangerous."

"Fascism tends to promote principles of masculine heroism, militarism, and discipline; and rejects cultural pluralism and multiculturalism."

It may appear that I'm trying to counter-attack your implied position that our Democratic-led government is heading towards Socialism or Fascism, but what I'm really trying to do is expose neo-Mercantilism (I call it neo because it's much more complex than a few centuries ago) for the opportunistic machine that it is.

The only value morals and ideology and tenets have under neo-Mercantilism is how they can serve the monied interests. That's why you see a hodge-podge of different traits and beliefs coexisting rather comfortably in our body politic. Conservatism? Liberalism? Socialism? Fascism? Capitalism? They're just make-believe games we're allowed to play.

Lord, I'm starting to sound like a Libertarian. If I start talking about dismantling the FED or stocking up on gold, you have my permission to slap me. Except for Bubba. He's already slapped me with enough insults to last through the 2010 Election.

[Bubba]

"Except for Bubba. He's already slapped me with enough insults to last through the 2010 Election."

Are you kidding?

You get much better treatment from me that what some of your Venceremos Brigade/Michael More-ons/Looney Tooner cohorts get.

[Joe Guarino]

Neomercantilism as described in Wiki:

"Neomercantilism is a term used to describe a policy regime which encourages exports, discourages imports, controls capital movement and centralizes currency decisions in the hands of a central government. The objective of neo-mercantilist policies is to increase the level of foreign reserves held by the government, allowing more effective monetary policy and fiscal policy."

It seems that right now we encourage imports and discourage exports to a significant extent with certain trade partners, although Obama may ultimately try to change that at least in some cases, I suppose, bringing us closer to this neomercantilist concept.

I see your point, though, and I don't like the Goldman Sachs/financial industry connections of those who have pushed the changes we have seen over the last 6-7 months at the Fed and Treasury; and in the Bush and Obama administrations overall. The bailouts and TARP just seem the wrong way to go.

But this post is also, very importantly, about another set of issues-- the enlargement of the governmental role as reflected in more bread-and-butter policymaking-- the SCHIPS expansion, the stimulus package, the Obama budget, health care reform, cap-and-trade, the vision for education, etc. There are some fundamental differences about the role that the national government should be playing, or not playing; and the way it should be relating to the states and to individual citizens. And the road Obama travels inevitably leads us much closer to the European socialist model in that regard.

[scharrison]

"Neomercantilism is a term used to describe a policy regime which encourages exports, discourages imports"

Wiki can sometimes be the dull edge of a broken blade. In the age of Globalization, an individual nation's trade balance has very little impact on the amassing of wealth. If importing makes more money for the corporatocracy, but hurts consumerism by draining manufacturing jobs, then they'll just throw some money at the people to keep them buying stuff.

Neo-Mercantilism is about protecting monopolies, but how that is applied is often hard to predict or detect. Sometimes it takes the form of the exact opposite of protectionism. But it's in there somewhere.

[Joe Guarino]

That's interesting, Steve. What do you think the neomercantilist position of the Obama administration will be, in the long run, with respect to the bailouts/takeovers of Chrysler and GM? What is the administration trying to do there in the neomercantilist framework?

[Bubba]

"If importing makes more money for the corporatocracy, but hurts consumerism by draining manufacturing jobs, then they'll just throw some money at the people to keep them buying stuff."

And you're whining about me insulting you?

Making a statement like you did almost qualifies you for the Protzman treatment.

[scharrison]

"What is the administration trying to do there in the neomercantilist framework?"

Well, if you work from the assumption that it really doesn't matter which party is at the helm, a partial government takeover of the big auto manufacturers could help facilitate a radical renegotiation of labor contracts in favor of management.

If that is going to happen, it will probably happen pretty soon, too. Like within 9-12 months. And it will probably take the form of a quid pro quo, where management is "forced" to restructure their business model (escape from bad investments), and labor is called upon to sacrifice as well. The government would be seen as a neutral yet powerful mediator in this action, making it far less likely that a labor revolt would ensue.

[scharrison]

"And you're whining about me insulting you?"

I'm really not sure what you found insulting about that comment, Bubba. I think the larger U.S. corporations have demonstrated quite clearly they are no longer worried about our trade deficits and they are no longer "in love" with the American worker.

Our value has increasingly been more about our consumerism than our productivity, and there's a lot of money to be made outsourcing and partnering with foreign business.

[Joe Guarino]

Steve, when the UAW is the majority owner, they become the "management", no? Or are they non-voting?

Now, making them the UAW majority owner may lead them to act more responsibly in various ways. And meanwhile, the feds get to decide what the product line will be. And if the whole enterprise fails, then what? Are the taxpayers on the hook for more, and more, and more?

There is much about this deal that is very murky to me. But it is not clear to me that what is happening is in service of the previous corporate management, even though it was their hands that were outstretched for the bailout dollars. It seems the situation may have evolved to some extent beyond their control because they accepted the federal money. Am I wrong?

[scharrison]

"Steve, when the UAW is the majority owner, they become the "management", no? Or are they non-voting?"

Actually, it looks like UAW will control 39%, while the government controls 51% or so. But the union will also have to manage (pay for) the retiree health care plan, which is going to be an even bigger monster in the years to come.

As far as voting, I would imagine they will be, but it remains to be seen who will be picked to represent. And as far as current management, the ones that stay will have 24 billion less debt to worry about, and the ones that are forced out will probably throw a short party before taking their seat on another board(s).

[Joe Guarino]

Steve, I misspoke. I should have asked assuming that UAW was the majority nongovernmental owner. My understanding (correct me if I am wrong) is they were granted a very large stake even though they did not possess a proportionate level of the company's stocks or bonds. This is a curious arrangement, to put it mildly.

[Bubba]

"I'm really not sure what you found insulting about that comment, Bubba."

It went over your head, didn't it?

That sentence was in reference to the cluelessness of this:

"If importing makes more money for the corporatocracy, but hurts consumerism by draining manufacturing jobs, then they'll just throw some money at the people to keep them buying stuff."

That is patently absurd prima facie.

Then there's this:

"Actually, it looks like UAW will control 39%, while the government controls 51% or so."

....which means the union controls 90% in this arrangement.

Do you not understand the widespread implications of an arrangement like this in the current political power structure?

Finally:

"Our value has increasingly been more about our consumerism than our productivity, and there's a lot of money to be made outsourcing and partnering with foreign business."

You don't really understand the domestic auto industry and the lessons learned and unlearned from the past 50 years, do you?

Here's a place for you to start learning something on this subject.

http://www.lii.net/deming.html

[scharrison]

Joe, my understanding is: the UAW deal was put forward by GM itself. They've got an approximately 20 billion-dollar debt/liability to cover retiree health care, and they offered UAW (I'm not sure if they've taken the offer yet) a stock trade worth something like 10 billion to take over the health care thingie.

Now, I don't know if that's "new issue" (or whatever) stock or existing stock. But it would almost have to be new since GM shares are held by such a wide range of entities. I think the largest single entity only holds 4% or something.

I don't know, this stuff is really confusing sometimes. The "Float" shares, which are held by hundreds of fund portfolios, represent something like 49% of total shares. So maybe this government/UAW deal is really just 89% of the controlling 51% of shares? Too much for my little monkey brain to sort out.

[Joe Guarino]

New York Times today:

'According to restructuring plans proposed this week, the union will have more than half the stock in Chrysler and a third of General Motors, meaning it will have tremendous influence, with the government, in determining the future of the companies."