A conservative economist says yes.
And just the other day, I talked to another prominent conservative economist who suggested a somewhat similar plan. I asked whether all these plans didn’t smell of socialism. The economist’s answer: “I think that bridge has already been crossed.”
Actual socialists have been hollering that these plans are not socialist at all, but bailouts for the wealthy. Well, maybe some of them are. But Fannie and Freddie, who own 50% of the mortgages in the US, have effectively been nationalized by the federal government, as has AIG, the biggest insurance company in the world. And that is, without question, socialist.
But the bridge has been crossed. The credit markets have seized up, as witness California saying it may need a short-term federal loan because it can’t access the credit markets. That’s where we’re at now. Their can’t be a plan because, as a British banker said recently, “No one has experience with failure on this scale. No one.”
So, rightfully or wrongfully, the government will do whatever it deem necessary to unfreeze the credit markets, as if part of it is socialist, then so be it.
Unfortunately the feds have yet to deem necessary controlling their own impulses to spend. Sure there are other contributing factors, but the major barrier to freeing up the credit freeze can be summed up in three words: inflation, inflation, inflation.
I cannot see how, in principle, doing anything to prop up a capitalist institution and keep capitalism running smoothly can be considered socialist. That’s nuts, that is.
My point, probably clumsily made, was that the entire US system of capitalism has been derailed these past few months, no one really has a clue what’s coming next, and for conservative US economists to accept as needed what they see as a socialist takeover is utterly outside what anyone ever thought possible.
Also, I’m probably using “socialism” in the US sense of the word, which basically means the government replaces private enterprise in running certain essential institutions. This is not what socialism means in the UK, or anyplace else where there are actual functioning socialist parties and the population generally understands what socialism is.
I’m with Wood. The converse situation of Cuba allowing their citizens to have limited market gardens to support their beleaguered socialist existence does not constitute, per se, capitalism.
Sadly, however, Bob is right in that Americans’ automatic response to any function performed by the state is to characterize it as a step down the road to socialism. So even if banks are temporarily nationalized, recapitalized by sovereign force, and then sold back into the market, some (perhaps many) Americans will consider this an act of “socialism.”
State ownership and socialism is a bit like black and white, completely different.
State Ownership of the corporate – the wedding of Corporation and State, as Mussolini put it – is decidedly not socialist.
It is Fascism.
‘yer either wit ‘s, ‘er agin ‘s