I had a series of thoughts this morning that started with social security and ended up at G(overnment) Motors and Chrysler.
Remember when there was a conservative party, and they espoused privatization of a small portion of individual social security accounts, allowing individuals to invest as they saw fit and potentially earn higher returns. The opposition has always seen themselves as better stewards of personal earnings that those who actually earn, and scared the retired or near-retiring population into pressuring their “representatives” to “save” social security from those evil conservatives. Their reasoning was that you could lose money through investments you choose yourself, which is, of course, a potential. Especially if you invested your money in corporate bonds, which we now know can be completely devalued by government intervention even more than by free market pressures and fluctuations.
Fast forward to today, when the current government is spending money that we do not have at a rate that would embarrass even the most profligate spenders. Surely they realize that this spending will – someday – have to be covered.
It may seem a bit Machiavellian, but how about this? We use all the government and political machinations at our disposal to drive a major segment of US industry into the ground. We mandate what they produce in spite of market demands and hobble them with Corporate Average Fuel Economy standards. Insist they build tiny, unsafe plastic cars that won’t carry a family, never mind the buying public wants, and is willing to pay for, a mini-van, mid-sized SUV, or a full sized pick-up. When the industry finally succumbs to government/political intervention, we use the power of government printing presses to bail them out, and then mandate how they are divided up in a “surgical bankruptcy”. Ignoring all established bankruptcy case law, not to mention the constitutional prohibitions against government “taking”, people who have never managed a lemonade stand divide up the remains. They give the lion’s share to the unions, claim a disproportionate share of the remains to the government, and leave the stripped bones to the rightful, secured creditors, the bond-holders. Now we have “labor” in a position where they can fire “management”, and the government in position to pocket a large percentage of any potential profits, assuming there is an improvement in the market someday in the future. Does that not define nationalization?
Consider this definition of fascism, from The Library of Economics and Liberty (www.econlib.org)
“Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the “national interest” — that is, as the autocratic authority conceived it. (Nevertheless, a few industries were operated by the state.) Where socialism abolished all market relations outright, fascism left the appearance of market relations while planning all economic activities. Where socialism abolished money and prices, fascism controlled the monetary system and set all prices and wages politically. In doing all this, fascism denatured the marketplace. Entrepreneurship was abolished. State ministries, rather than consumers, determined what was produced and under what conditions.”
So … back to how we pay for all the “stimulus spending in which we are engaged. We nationalize large, wealth producing segments of the economy and use the proceeds to pay off the vote-buying spending in which we have recently wallowed.
Hey … isn’t that what Hugo Chavez would do?
Is this “Change We Can Believe In”?
Is this change we can survive?