Having learned nothing from the bank bailout fiasco, some have actually proposed to turn taxpayers into involuntary shareholders in General Motors and Chrysler. Britain nationalized their legacy auto companies for decades, wasting billions in a futile effort to save brands that ended up being owned by companies in India (Jaguar) and China (Rover).
Politics and economics mix badly, like oil and water. Those with the most political clout get subsidized or bailed out, while taxpayers bear the costs and risks. In less than a year, the government’s contingent debt alone — all those loans, securities and deposits guaranteed by the Federal Reserve, Treasury and FDIC — has increased by more than $3 trillion. If things go awry, guess who pays?
During the presidential campaign, Joe the Plumber became famous for criticizing as “socialist” Mr. Obama’s plan to hand out $400 checks to those earning less than $75,000, while raising tax rates and curbing deductions for those earning more than $250,000. Trying to redistribute income through the tax system is what Karl Marx called “vulgar socialism.” It doesn’t work. When the government takes money from those who earn it and gives it to those who didn’t, that discourages both of them from earning more.
Compulsory health insurance isn’t necessarily socialism either, but it is compulsion — an intrusion into personal freedom and choice. I eschew Medicare in favor of a health savings account, but suspect that Obama’s central planners would rather not leave me that option. Unlike free markets, where the consumer is king, centrally planned economies favor the simplicity of one‐size‐fits‐all uniformity.
An occasional nasty recession is no excuse for runaway federal spending. Even welfare state economies like Sweden have experienced worse recessions than the U.S. Purer socialist economies like Maoist China, or North Korea and Cuba today, avoid booms by keeping the economy in perpetual depression.
The more we drift toward a socialist/fascist state, with the government grabbing a larger share of our dwindling GDP, the more we allow government bureaucrats to decide who shall produce what for whom. Such power is inherently corrupting. The results are always bad.