Balkinization: Karl Marx, Call Your Answering Service

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# posted by

"When I was talking to members of Congress back then, they believed they were voting to buy up troubled assets, not to make capital infusions in banks," said Alan Blinder, a Princeton economist and a former Fed vice chairman. "If I were a member of Congress, I would be wondering about bait and switch because that was not really discussed."

This is how roads to serfdom are paved.

Time to call my Congress critters to vote against any more money for these liars.

# posted by

Bart DePalma : 9:15 AM

If Marx were able to pick up the phone, he would be explaining to anyone who calls that it is not socialism when the capitalist state bails out the capitalist banks in order to prevent the collapse of the capitalist economy. Call it state capitalism if you want (although that term has a different history). But don't call partial nationalizations socialism until their purpose and result is to democratize economic decision-making for the long run.

# posted by

Bob Richard : 11:10 AM

so .. when do we raise the debt limit to actually authorize this "welfare-to-the-fat-cats" program ??

# posted by

Jkat : 11:32 AM

when do we raise the debt limit to actually authorize this "welfare-to-the-fat-cats" program ??

Congress already raised the debt limit to account for the $700 billion. This is using that same money.

# posted by

Mark Field : 1:02 PM

bob richard said...

If Marx were able to pick up the phone, he would be explaining to anyone who calls that it is not socialism when the capitalist state bails out the capitalist banks in order to prevent the collapse of the capitalist economy. Call it state capitalism if you want (although that term has a different history). But don't call partial nationalizations socialism until their purpose and result is to democratize economic decision-making for the long run.

Socialism is government ownership of the means of production. Treasury using my tax money to purchase preferred shares in the nine largest banks in the nation is a pretty damn close fit under the definition of socialism.

We are now looking at a two tiered banking system. The government partially owned and largely controlled major banks and the free smaller banks. Given the government "success" in running the mortgage markets through Fannie and Freddie, any shareholder in the new government banks ought to bail as soon as possible.

# posted by

Bart DePalma : 1:03 PM

I can hardly wait to see the $1 trillion deficit for the next fiscal year as we pay for this grand experiment in socialism.

Unless he wants to reduce the US dollar to junk bond status, a hypothetical President Obama as just lost all ability to finance any of his new programs.

# posted by

Bart DePalma : 1:07 PM

a hypothetical President Obama as just lost all ability to finance any of his new programs.

Since when are Republicans (you) concerned with how to finance programs? I thought you guys replaced "tax and spend" with "don't tax and spend more" years ago.

# posted by

PMS_CC : 1:36 PM

Socialism, at least as Marx understood it, was *worker* control of the means of production, not "government" control.

# posted by

Unknown : 2:22 PM

pms_chicago said...

BD: a hypothetical President Obama as just lost all ability to finance any of his new programs.

Since when are Republicans (you) concerned with how to finance programs? I thought you guys replaced "tax and spend" with "don't tax and spend more" years ago.

True. That is why the GOP lost their seat to the fiscally conservative Blue Dog Dems last election cycle.

BTW, there is no "you" involved here. I have repeatedly hammered the GOP for spending like drunken Dems here and elsewhere.

I am hardly alone in this regard among GOP voters. The biggest applause line in McCain's stump speech out here in Colorado Springs was when he promised to freeze spending across the board. GOP voters have not left small government, rather we simply cannot find enough politicians to carry out our wishes.

# posted by

Bart DePalma : 2:23 PM

jslater said...

Socialism, at least as Marx understood it, was *worker* control of the means of production, not "government" control.

Never worked out that way.

Socialism has always been about the accumulation of state power.

# posted by

Bart DePalma : 2:24 PM

playing the devil's advocate, if the proposals by academic economists, which are (finally) being executed by the administration are carried to fruition, for the most part this is not socialism. merriam webster defines socialism as

1 any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods
2 a: a system of society or group living in which there is no private property
b: a system or condition of society in which the means of production are owned and controlled by the state
3: a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done

since the government wouldn't even have voting shares in these companies, i don't think we have (as of yet) broached into socialism. There is simply no control or administration of the banks themselves, rather its a passive investment. instead, this capital injection is probably the best idea for a controlled government intervention into the market. the original Paulson plan was (what I call) "Gipper socialism," a hybrid where profits are privatized, and costs are socialized.

so i just think we are getting a little hysterical here. if the plan is for temporary, passive ownership with ex post regulations and accounting procedures, it appears to be exactly what most economists thought would be the best idea, including nobel prize winner krugman. this is a far superior plan (in that it actually addresses the problem instead of simply transferring risk from banks to taxpayers.) next step is a coming to account and transparency on all MBS for all the banks. they need to eat their losses now.

# posted by

nerpzillicus : 2:33 PM

nerpzillicus said...

...if the plan is for temporary, passive ownership with ex post regulations and accounting procedures...

How can directing the bank's activities be considered "passive ownership?" Indeed, the government does not appear to be bothering with pesky things like shareholder votes to impose its will.

Furthermore, we can only hope this socialism is temporary and the government voluntarily sells its shares back to the banks. There is nothing requiring it to do so. Given the near immortality of other government programs, forgive me for being more than a little skeptical about the government terminating this one.

Lawyers say that bad facts make bad law. I would suggest that economic panics do the same thing.

# posted by

Bart DePalma : 3:08 PM

"Bart" DeSpenda said:

I can hardly wait to see the $1 trillion deficit for the next fiscal year as we pay for this grand experiment in socialism.

Funny that the Dubya/Republican nearly half a trillion deficits (in supposedly "good" times) didn't bother him, nor the fact that both Dubya and his nearly-Christlike Saint Ronnie doubled the national debt under their maladministrations (while Clinton's the only one to run a surplus in recent memory).

Cheers,

# posted by

Arne Langsetmo : 3:09 PM

PMS_Chicago: "Since when are Republicans (you) concerned with how to finance programs?"

Pat, first, why don't we just put the troll in conventry? Plenty to talk about with the Mark Fieldses and Bob Richardses (just to name two) of the group. Second, I've heard here and there that part of the neo-con agenda is/was to preclude any social welfare programming precisely by this kind of pre-emptive strike on the coffer. If all the money is already in the war or the banks then there's none left for programs.

Looks like it's working.

# posted by

Robert Link : 3:14 PM

Bob Richards: "But don't call partial nationalizations socialism..."

Thanks for saying it. I think it bears mention that much of the electorate is incapable of making the distinction you offer. For instance, most can't separate Socialism from it's most egregious historical excesses (Hitler, Stalin, Mao). The bailout, like the New Deal itself, is aimed at saving our Capitalist society. Unlike the New Deal, it's not even creating jobs for people.

But it is gutting the coffer, which makes much of the social welfare agenda moot for quite some time, which, as I said to Pat, may be consistent with avowed policy aims of certain power centers in the GOP.

# posted by

Robert Link : 3:37 PM

Bart:

I'll grant you that workers' control of the means of production hasn't happened much, but we were talking about what Marx said and thought.

Beyond that, the idea that "more state power = socialism" is way too broad. It makes any powerful government, of any political stripe -- far right, far left, theocratic, autocratic, etc., -- "socialist." Which robs the word of any specific, useful, or even recognizable meaning.

# posted by

Unknown : 4:04 PM

jslater said...

Beyond that, the idea that "more state power = socialism" is way too broad. It makes any powerful government, of any political stripe -- far right, far left, theocratic, autocratic, etc., -- "socialist." Which robs the word of any specific, useful, or even recognizable meaning.

You are giving me a flashback.

Back in the late 80s, my poli sci prof and I were discussing the nature of totalitarianism. I made the argument that communism always ends up in totalitarian state power enforced with the gulag. The rather upset professor snapped back by asking me: "What about the fascists?' I replied that the Nazis and the Communists were two sides of the same coin. There is no fundamental difference between totalitarianisms apart from the propaganda they feed to their people to justify their power.

For the purposes of this discussion, we are referring to socialism in particular because it is most identified with government ownership of the means of production.

# posted by

Bart DePalma : 4:21 PM

Funny that the Dubya/Republican nearly half a trillion deficits (in supposedly "good" times) didn't bother him, nor the fact that both Dubya and his nearly-Christlike Saint Ronnie doubled the national debt under their maladministrations (while Clinton's the only one to run a surplus in recent memory).

The real irony is that the cost of the bailout is pretty much exactly equal to the cost of the Iraq War (to date).

# posted by

Mark Field : 4:22 PM

Bart:

I guess the point your poli sci professor was making is that Nazis and Communists, although both totalitarian regimes, have some important differences. And he was right.

And then we get to socialism, as practiced, say, in Europe, and that's quite different from both. Which was my point.

# posted by

Unknown : 4:45 PM

Bart: .. the Nazis and the Communists were two sides of the same coin. There is no fundamental difference between totalitarianisms ...

In my view, fascism is what rushes in to fill the vacuum when the capitalist class cannot rule in its own name. Stalinism is what rushes in to fill the vacuum when the working class cannot rule in its own name. So there's a very abstract sense in which I can go along with Bart's "two sides of the same coin". But, contra Bart, this difference is fundamental to understanding either one.

# posted by

Bob Richard : 7:34 PM