The Politics of Socialism, Why it Never Works, and Lessons for the U.S. [Reader Post]

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The Politics of Socialism – Obama’s Policies

This post is for Greg and all the other socialists who hang out here. I am anxious to see what references they come up with to refute this treatise. With a h/t to MataHarley.

As taxpayers forked over $700 billion to bail out Wall Street and $787 billion to “stimulate” the economy, questions are now being asked about Obama’s economic policies and whether he is leading us toward socialism. The proposed 2012 budget is expected to be about 40% of this country’s GDP, very similar to European socialist states. Government spending in the European Union nations averages 47.1 percent of the GDP, meaning the U.S. is roughly seven points behind. We are getting close. In a socialist state, the government owns the production, it owns the factories or the plants or the businesses. But that government spending runs counter to the idea of Jeffersonian democracy, that it’s the individual who knows best. “We are looking at an economic crisis caused by the collapse of our financial sector,” Heather Boushley said. “If we don’t get people back to work, the problem will spiral out of control.” Critics warn that’s exactly what happened in Europe when it implemented socialist reforms, forcing unemployment into the double digits.

Obama is pursuing a “stealth socialism” policy by advocating economic justice. “Economic justice” (social justice) simply means punishing the successful and redistributing their wealth by government fiat. It’s a euphemism for socialism. The closest we can get to a specific definition came when Obama said of the Warren Supreme Court (you know, the one that gave us the concept of criminal rights) in a 2001 radio interview, that the Warren Court hadn’t “ventured into the issues of redistribution of wealth and sort of more basic issues of political and economic justice in this society.”

Obama is driven by one thing above all: social justice. He believes that prosperous Americans have a moral obligation to help the deprived in the United States. The problem is that Obama does not really understand what drives poverty. Poverty’s deepest and most debilitating deficits are moral, not financial; the most serious deprivations are cultural, not economic. Many people living at the bottom of American society have cell phones, flat-screen TVs, and some of the other goodies of consumer culture. For Obama, social justice is all about money. And he is well on his way to bankrupting the nation in attempting to achieve it.

Why It’s the People’s Choice

There are four primary reasons why socialism is the people’s choice.

  1. Socialism allows people to spend other people’s money without feeling guilty about it. Socialists deny the concept of ownership, but even they know that they are using the fruits of others’ labors for their own purposes, desires, and decisions.
  2. Socialism satisfies the deeply felt and widely held emotion of envy. Envy is a strong emotion that has always had a powerful impact on society and politics. But because no one admits to acting on the basis of envy, the term “equality” is used instead. Socialism is the perfect political expression of envious people because it purports to rein in greedy and wealthy capitalists and foster social equality.
  3. Socialism relieves people of the burden of worrying about their economic well-being. Free-market capitalism emphasizes the individual’s responsibility for his own economic welfare. Many people are happy to be rid of this burden and glad to be able to blame others for their problems. They do not see the downside: laziness, profligacy, and passivity.
  4. Socialism is a secular substitute for religion and offers people (false) solace against the traumas of this life. Socialism acts as a religion-substitute. Socialism purports to offer a solution to virtually all human problems. In contrast, the claims of capitalism are seen as too modest, and hard work is required as well.

Economic View

Socialism is a Big Lie that always fails. While it promised prosperity, equality, and security, it delivered poverty, misery, and tyranny. Equality is achieved only in the sense that everyone was equal in his or her misery. In the same way that a Ponzi scheme or chain letter initially succeeds but eventually collapses, socialism may show early signs of success. But any accomplishments quickly fade as the fundamental deficiencies of central planning emerge. In the long run, socialism has always failed. Under socialism, incentives either play a minimal role or are ignored totally. A centrally planned economy without market prices or profits, where property is owned by the state, is a system without an effective incentive mechanism to direct economic activity. Without the incentives of market prices, profit-and-loss accounting, and well-defined property rights, socialist economies falter and fail.

The temptress of socialism is constantly luring us with the offer: “give up a little of your freedom and I will give you a little more security.” The offer is tempting but never works – we lose both our freedom and our security.

Academic Example

An economics professor at the University of Florida said he had never failed a single student, but had once failed an entire class. The class insisted that socialism worked, that it was a great equalizer. The professor then said, “OK, we will have an experiment in this class on socialism.” “All grades will be averaged and everyone will receive the same grade.” His three exams went thusly:

  1. After the first exam the grades were averaged and everyone got a B. The students who had studied hard were upset while the students who had studied very little were happy.
  2. After the second exam, the students who had studied little actually studied even less; and the students who had studied hard studied less. The second exam average grade was a D.
  3. After the third exam, the average grade was an F.

The scores never increased as bickering, blame, name calling, all resulted in hard feelings and no one would study for anyone else. To their great surprise all failed. The professor told them that socialism would ultimately fail because: the harder people try to succeed, the greater their reward (capitalism); but when a government takes all the reward away (socialism) no one will try nor succeed. Anyone who states Socialism helps those who can’t help themselves is full of it. It helps those who don’t want to help themselves.  [emphasis mine]

Consequences, Lessons, and Warnings

Consequences

The deficit crisis that threatens the Euro has also undermined the sustainability of the European standard of social welfare. Europeans have bragged about their social model, with its generous vacations and early retirements, its national health care systems and extensive welfare benefits, contrasting it with the comparative harshness of American capitalism. It has benefited from low military spending, protected by NATO and the American nuclear umbrella. But all over Europe governments with big budgets, falling tax revenues and aging populations are experiencing rising deficits.

Changes have now become urgent. Figures show the severity of the problem. Gross public social expenditures in the European Union increased from 16 percent of gross domestic product in 1980 to 21 percent in 2005, compared with 15.9 percent in the United States. The French state pension system today is running a deficit of 11 billion Euros, or about $13.8 billion; by 2050, it will be 103 billion Euros, or $129.5 billion, about 2.6 percent of projected economic output.

President Nicolas Sarkozy has vowed to pass major pension reform this year. The French government, afraid to lower pensions, wants to increase taxes on high salaries and increase the years of work. But the unions are unhappy, and the Socialist Party opposes raising the retirement age. Europeans say the Continent will have to adapt to fiscal and demographic change because social peace depends on it.

Lessons

In 2009, European government spending as a share of GDP rose to 51 percent, and to 36 percent in the US with the Obama stimulus plan. With Obamacare, America’s number will rise into the low 40 percent range. If the present administration realizes all of its ambitions, the American profile will look more like Europe’s. And that will be disastrous news for America. What the global debt crisis should tell us is that the European socialist model leads to disaster. The lesson Americans should draw from the market turmoil of recent weeks is that America requires a sharp about-face, away from the statist direction of the Obama administration.

President Barack Obama has made great strides toward implementing the European Socialist form of government with passage of his recent health care reform plan. It appears, however, that the European Union is finally waking up to the fact that nothing in life comes for free. So what does all this mean for the U.S.? Why should we care what happens across the Atlantic? People want the government to provide them with everything, but they don’t want to pay for anything. When the government does begin to provide its citizens with everything, it creates an unsustainable entitlement.

The socialist ideal contained three ideas at its core: economic central planning; the belief in collective or group rights; and the case for nationalized social services. The application of these three ideas in socialist countries resulted in economic chaos, social conflict and ethnic warfare, and the collapse of all basic services. The American people seem oblivious to the lessons to be learned from the socialist experience in other lands. And the ideas leading us further along our road to socialism are the same ones that lead other peoples to the dead-end of state control, economic stagnation, group conflict and societal decay.

Warnings

If Americans think fuel and food prices are high, they should try Europe, particularly Italy. In theory, Italians accept that they are going to have to be a lot more like the Germans, and less like the Irish, Portuguese, and Spaniards. In reality, they may end up like the Greeks, who are still striking and occasionally rioting because too few foreigners wish to continue subsidizing their socialist paradise. All this European turmoil raises a paradox. If Europeans are conceding that something is terribly wrong with their half-century-long experiment with socialism, why in the world is the Obama administration intent on adopting what Europeans are rejecting?

So where are we now?

We have seen that Obama’s political policies are leading the U.S. toward socialism. We have seen why it is that some people favor socialism. We have learned that economists do not like socialism. We have seen the consequences of socialism, and have received lessons and warnings from Europe. The question now is: Will the U.S. heed these consequences, lessons, and warnings?

But that’s just my opinion.

37 Responses to “The Politics of Socialism, Why it Never Works, and Lessons for the U.S. [Reader Post]”

  1. 26

    Ivan

    @johngalt:

    You can believe that. I don’t. I’ve talked with many who support the TEA Party, and they are just as outraged at the GOP, either enabling the liberal/progressives, or supporting the ideas of them, like the Maine sisters.

    Sad. You’re a smart man, obviously still under the spell of your university professors.

    ;->

  2. 27

    Gary G. Swenchonis

    @ilovebeeswarzone: I agree with you Bee. But again my frustration and anger lie with both parties for their total disregard of the welfare of the country. I agree with Johngalt that people should be outrage at where we are at, and not with only one party but both of them. Think about it Bee. They sold us all out for personal gain. That outrage is growing, and maybe if we are lucky it will consume both parties. Maybe, just mabe we can get our government back to what the forefathers envisioned so long ago.

  3. 28

    Ivan

    @johngalt:

    You can believe that. I don’t. I’ve talked with many who support the TEA Party, and they are just as outraged at the GOP, either enabling the liberal/progressives, or supporting the ideas of them, like the Maine sisters.

    Talk is PHUCKING cheap, John. The “tea party” took to the streets in 2009 to oppose Obamacare. They then went AWOL when the Republicans continued to piss-away the US treasurey with it’s BUDGET-BUSTING BUDGET in 2011.

    Not a peep from the TP after the budget was passed, other than some tokenism to give dead-enders like yourself cover.

    Let’s face it, you’re easily impressed and I’m not.

  4. 29

    MataHarley

    premium_subscriber

    Warren, I too would like to congratulate you on a very well written opinion piece. While you graciously offered me a h/t (?), it’s all you, and there is no credit reserved to me for your work and perspectives.

    Greg may not have weighed in, but predictably Ivan did, in order to again bash the GOP. At least you got something…. LOL

    Frankly, I saw nothing in your piece that attempt to give any party in Congress a pass. Therefore Ivan’s red herring seems to be seeking yet another outlet for his continued frustration, always offered with venom and without solutions or suggestions. And apparently, the concept of opinion/op’eds (…i.e. “Wow, this is an excellent example of partisan writing. Good work on your part!”) escapes him since “partisan” or opinion is the intent of an editorial op’ed. well duh…

    I think you did outstanding.

    The point is, Obama – with the help of Pelos and Reid’s majorities – does bear the bulk of deserved criticism for failed economic policies that took an already bad situation – created over decades of bad legislation and government meddling – and further tanked it over the past two and a half years into a dangerous and possibly unrecoverable spiral.

    And, as usual with Ivan’s ungracious and rude commentary, accusing Gary of being a drunkard (i.e. “lay off the sauce”) demonstrates why Ivan’s opinions is worth precisely what we pay for it here… nothing. I would, of couse, be quite curious as to what “biggest budget busting budget” vote occurred in the spring of 2010 since we never got a budget, and haven’t since this POTUS took office.

    That said, there is shared frustration with Ivan over elected officials in general… tho it’s difficult to find much pleasure in having an opinion in common with someone as personally offensive, and emotionally hyper, as Ivan. There is no doubt that decades of Congress… both parties… are the culprits that have put us in our fiscal fragility. And tho TARP was a GOP erroneous piece of economic legislation, the same has been compounded and distorted by both Obama and the Pelosi/Reid dominated Congress when they illegally used those funds – specially written to apply only to financial institutions – to seize GM and usurp federal bankruptcy laws by awarding control to the unions instead of the rightful shareholders to boot.

    The House majority is also straying far off the reservation of logic with a July vote planned for a balanced budget Constitutional amendment proposed by VA Goodlatte (R), in July.

    There is no way in hell I support such an amendment. It simply legitimizes tax increases to be Constitutionally mandated in order to justify their spending, which all parties seem to be reticent to reduce. Considering that even Ryan’s budget, which wouldn’t be balanced for decades, wouldn’t even muster compliance with such an amendment, we can all only look forward to creative ways Congress would invent to cover their proverbial spending butts.

    Not with my support… nope.

    Which then brings me to the TP darling, Rand Paul… who definitively states that there will be no raising of the debt ceiling without such an amendment.

    News flash… even under Ryan’s budget, the debt ceiling has to be raised. Without immediate and notable slashes in spending, it’s inevitable. And what concessions the GOP are holding out for are nothing more than a bad joke.

    Add to the campaign talking points the new seer skill of Obama’s HUD appointee, Shaun Donovan, who portends that home prices are not only slated to be on the rise this fall, but that…

    “It’s very unlikely that we will see a significant further decline,” Donovan said yesterday on CNN. “The real question is when will we start to see sustainable increases. Some think it will be as early as the end of this summer or this fall.”

    Now we’re supposed to believe that house prices can’t fall anymore? Woof… Exactly what does he think will happen when Bernanke raises the prime rate? Something that has to happen if we are ever to be ablel to control inflation.

    Talk about rose colored glasses…. I half expect the man to roll up his sleeves and show us watches for sale, rimming the span of his forearm. I’m not sure who Donovan thinks is that gullible. The Case Schiller revelations are that prices are back to 2002 levels (and need to be even lower realistically). And the late June’s Radar Logic report plainly states that an overwhelming foreclosure inventory and negative equity fuels further declines on the horizon.

    “Clearly, the very large supply of homes for sale or potentially for sale is weighing heavily on the market,” said Michael Feder, president and CEO of Radar Logic.

    “Perhaps more worrisome,” Feder continued, “is the clearly established discount on distressed properties. Reason would suggest this discount reflects the level at which buyers are comfortable they can achieve a reasonable rate of return. We expect this situation will continue for some time and will deter any truly robust economic recovery.”

    Oh yes… and the buyer market pool dwindles with each tick up of unemployment, which doesn’t show any promise of abating any time soon either.

    This little wizard of political fairy tales was pulled back into HUD action, and promoted to the head cheese, when he was part of the problem during Clinton’s HUD crew. So it becomes even more laughable that this Clinton resurgent oversee’s FHA and that FHA’s fiscal obligations and loans dominate the top 20 markets in the nation… the same markets that are on the decline.

    Snake oil. We are being peddled snake oil here. All of Congress appears to be clueless to solutions, mostly because free markets are the solution and it requires that Congress get out of their way. But that doesn’t sell votes for a gullible and desperate nation.

    We have only two choices… bad (old school GOP), and piss poor worse (lib/progs). The solution seem to be to select a reasonable (not Romney/Huntsman/Paul) “bad” and then hold their feet to the fire for proper legislative remedies. Most of which means to get government out of the housing, insurance and financial reform business.

  5. 30

    Christopher-Conservative Perspective

    @Ivan:

    Ivan,

    I thank you for honesty on the very topic of socialism; “out the part where he is able to do this”. I agree with what led to this, however I remain amazed at your honesty?

    We may not agree on certain topics but we sure do here and once again say thank you as it pertains to clarification!

  6. 31

    Ditto

    Socialism fails because it destroys the human creative flow that leads to wonder and illumination. and in return draws back into itself to under duress and depressed. the verdigris of what remains of the brig-en pshyci of the arts. Art means nothing, Music means nothing, Al that exit is the will of ther leadership

  7. 32

    Nan G

    Since the government (central planning) bailed out some US automakers BUT not others, it is educational to see what transpired afterward.

    General Motors, the bailed-out automaker, made public that it now has a growing inventory in its truck lines of 122 days worth of sales, nearly twice that of its non-bailout domestic competitor Ford Motors for similar lines.
    http://www.bloomberg.com/news/2011-07-05/gm-s-widening-truck-inventories-risk-return-to-bad-habits-of-2008-cars.html

    Huh!

    Peter Nesvold, a Jefferies & Co. analyst, points out that GM averaged 78 days on hand at year end from 2002 to 2010.

    He put a ”hold” rating on GM stock, saying:
    “It’s unbelievable that after this huge taxpayer bailout and the bankruptcy that we’re right back to where we were. There’s no credibility. Is GM falling into old, bad habits?”

    To be fair, Ford had updated their truck line to include a popular V-6.
    GM has NOT updated their truck line since 2006!

    So, even with the HUGE taxpayer bailout, GM has not been able to operate in a profitable and efficient manner.
    Bad for us.

    A little over a year ago, the Wall Street Journal predicted exactly all of this.
    Read it all and weep.
    Abrogating bankruptcy law, screwing over secured creditors and rewarding Democrats’ union supporters with billions in equity, tax breaks and subsidies didn’t really fix GM….DUH!

    But that was ”central planning’s” big idea.

  8. 33

    Warren

    @MataHarley: MataHarley, you deserve a h/t for inspiring me with your positive comments.

    Also, I LOVE your name! One, the first part of your name: Mata. I assume you chose that part because of Mata Hari:

    Mata Hari was the stage name of Margaretha Geertruida “Grietje” Zelle (7 August 1876 – 15 October 1917), a Dutch exotic dancer, courtesan, and spy who was executed by firing squad in France for espionage for Germany during World War I. BTW, the “j” is silent in Dutch.

    I would never accuse you of being a courtesan, although you are quite exotic, judging from your picture.

    Two, Harley. I used to have a ’48 Panhead chopper that I built. I worked on it two hours for every hour I rode it.

  9. 34

    MataHarley

    premium_subscriber

    That’s kind words, Warren. Here’s hoping you are further inspired by many, because it will be a pleasure to read your penned posts.

    Correct on the take off of Mata Hari…. it’s a handle I’ve used on the internet for years (since the mid 90s), combining the politics of both m’cycles and in int’l/national in general, and the attitude that I needed to read and hang in “enemy camps” in order to best understand opposition views.

    BTW, there are no photos on the internet that I know of. There is a Spanish queen… LOL… who uses the name mataharley. (I had it first…). Calls himself a “big b*#tch” and has a YouTube account. That’s not me… I also understand there’s a porn star, German I think. That’s also not me…. LOL

  10. 35

    Ditto

    I do apologize for that rather cryptic post above (#31). I had a rough night following a medical procedure and I had to take a sedative to get to sleep. It must have kicked-on while I was reading, I barely remembered posting.

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