Thursday, October 30, 2008

Is Obama a socialist?

Don Boudreaux has a thoughtful article which concludes that, while not a socialist in the classic sense, Obama shares many of socialism's beliefs.
A principal promise of socialism was to replace the alleged uncertainty of markets with the comforting certainty of a central economic plan. Of course, socialism utterly failed. By making the state the arbiter of economic value and social justice, as well as the source of rights, it deprived individuals of their liberty...

Anyone who speaks glibly of "spreading the wealth around" sees wealth not as resulting chiefly from individual effort, initiative, and risk-taking, but from great social forces beyond any private producer's control. Wealth, in this view, is produced principally by society. (And) because wealth is produced mostly by society (rather than by individuals), taxing high-income earners more heavily will do little to reduce total wealth production.

Consider the words of longtime Socialist Party of America presidential candidate Norman Thomas: "The American people will never knowingly adopt socialism, but under the name of liberalism, they will adopt every fragment of the socialist program until one day America will be a socialist nation without ever knowing how it happened." In addition to Medicare, Social Security, and other entitlement programs, the gathering political momentum toward single-payer healthcare – which Obama has proclaimed is his ultimate goal – shows the prescience of Thomas's words.


Unknown said...

Twas the night before elections
And all through the town
Tempers were flaring
Emotions all up and down!
I, in my bathrobe
With a cat in my lap
Had cut off the TV
Tired of political crap.
When all of a sudden
There arose such a noise
I peered out of my window
Saw Obama and his boys
They had come for my wallet
They wanted my pay
To give to the others
Who had not worked a day!
He snatched up my money
And quick as a wink
Jumped back on his bandwagon
As I gagged from the stink
He then rallied his henchmen
Who were pulling his cart
I could tell they were out
To tear my country apart!
' On Fannie, on Freddie,
On Biden and Ayers!
On Acorn, On Pelosi'
He screamed at the pairs!
They took off for his cause
And as he flew out of sight
I heard him laugh at the nation
Who wouldn't stand up and fight!
So I leave you to think
On this one final note-

Scott Grannis said...

The country is learning much more about Obama these days, but it's pretty late in the game.

Unknown said...

funny poem, Chris, but as far as the actual socialism critique goes I think it is dramatically overdone. Obama's remark was merely a poorly phrased description of what our income tax was designed from the beginning to be - progressive. I expect to see an undoing of the excesses of the Bush years which have resulted in an unprecedented concentration of wealth (hence the need to "spread it around"). I dont expect to see a return to the tax levels of the 60's and 70's. I do expect to see weapons spending rationalized, saving billions of dollars. None of these changes will be that onerous to the wealthy or bad for our country - on the contrary, they will dramatically improve our nation and our quality of life. You people who throw words like "socialist" around forget that our country has been socialist at least since Teddy Roosevelt created the first national park instead of letting some rich person build an estate there.

FilmFlam said...

Gimme a break. We have had decades of redistribution of wealth from the middle class to the rich precisely because of the government's policies. Cry me a river. I am in the 5% whose taxes will go up, and I will be fine paying them because at least now they won't go towards destroying democracy, rewarding dictators, devaluing our currency, and enacting policies to drive up the price of oil.

And socialism worked just fine for Scandanavia. Not that I want socialism, or that Obama is going to bring it, but it does work when you have an educated electorate. Oh yeah, it will obviously not work here since education and thinking for oneself is in short supply.

Use your brain for something other than parroting other peoples crap.

But, if you insist on repeating someone else's words, you don't you just quote McCain himself.

McCain would have done much better by telling the RNC to shove it and run the campaign the way he would have 4 years ago or even 2 years ago. I always liked McCain, and would have voted for him over Hillary for a variety of reasons, but his campaign is a frickin' joke to anyone with more than a 15 minute memory.

Scott Grannis said...

Roy: If you want to pay more taxes so that those who work less productively than you can benefit, that is your prerogative. Just don't impose your values on everyone else; send a big check to Treasury voluntarily.

And just because we've survived under a very progressive tax code does not imply we couldn't have done better with a less progressive one.

Finally, I fail to see how government policies have transferred wealth from the middle to the upper classes, given that the "rich" pay a greater share of the tax burden today than ever before. Care to explain your assertion?

FilmFlam said...

The proof is in the results. The middle class has seen virtually zero growth in income and wealth over the last 8 years, while the highest incomes grew their wealth at 10% (or is it 10% a year). Either way, that may not be the case now that "The Lost Decade" can be factored in. Maybe they didn't actually have that growth, but just now figured that out.

The reason that is the case is because on the items that comprise a large portion of middle class' expenses, like health care and energy costs, the government has maintained policies that raise their costs. These are a very small portion of the expenses for the rich. Plus, the reductions in capital gains taxes (which I support) act as a further stimulus to the wealthy.

I think we can agree on one thing. I want to see dramatic cuts in government spending and taxes, but until we get those spending cuts, I refuse to go along with the further destruction of our country and our currency through lower taxes.

Bringing it all back around. That is why I support Obama. He will bring to the fore a new generation of economic and bureaucratic leaders who know how to use technology to reduce costs. What did Bush bring to the bureaucracy? Partisan hacks whose only qualifications where blind faith to a stupid ideology.

PS - I notice there was no comment on McCain's montage of support of "socialism."

Scott Grannis said...

Martin: Your assertions are not based on facts. I've seen many argue that median incomes, for example, haven't risen in real terms for the past 8 years. I've looked at the numbers, and others have too, and it is not true. Statistics can be manipulated to all kinds of purposes; never trust anything unless you've done the research yourself is my motto.

One reason some measures of income look like they haven't grown much is that most middle class people have been receiving a lot of additional income in the form of benefits, such as health insurance, and that isn't counted as regular income. But if you adjust for things like benefits and family size (Alan Reynolds comes to mind as one who has done this) then it is clear that incomes have been rising in real terms.

I think you need to revisit your understanding of how taxes work. That includes the Laffer Curve (see my post on the subject) and the writings of Jude Wanniski.

Tax rates have been cut, but tax revenues relative to the economy are about where they've been on average for many decades. There is nothing destructive about that.

Obama does not understand taxes, and that is a huge deficiency in my view. Increasing the tax on capital gains and dividends is especially pernicious, because that reduces the incentives to invest. Investment is absolutely key to prosperity. The ideal tax on capital is ZERO. Anything higher and we are just punishing ourselves.

FilmFlam said...

Wow, where to start?

"Your assertions are not based on facts. " They are based on the CBO findings. I guess you are saying they are full of crap. Ok, I guess.

Sure, if you "adjust" for things it is pretty easy to make numbers say anything. But, I doubt that even with that, you could argue that they have increased in real terms if you also "adjust" inflation for the actual inflation rate rather than the government published rate.

I understand how the Laffer Curve works. That is why I just said that I support lower taxes and lower spending in theory. But, the Laffer Curve is a theory. Like the Efficient Market Theory. Both have turned out to be equally dubious in actual practice. Crucial to your position is that you know what the value of t* is better than everyone else. I would argue that you don't and that you can't.

I guess I don't really feel the need to defend against your assertion that Obama doesn't understand taxes. That is a funny assertion considering his policies are basically those espoused by the University of Chicago which has probably the deepest history of academic and actually implemented tax policies in America and around the globe. Just because he doesn't believe that the philosophies that you believe in aren't the best ones, doesn't mean that he doesn't understand. He just disagrees. I cannot wait the three days until we reach the end of the "I am right, you are evil" ideology comes to an end.

FilmFlam said...

If you would like to see where I believe you are mistaken about Obama's policies, you can watch this interview on Charlie Rose with one of Obama's earliest economic advisors.

Scott Grannis said...

I'd recommend reading a study done by Treasury that demonstrates the impressive upward mobility of lower-income taxpayers. This is indeed the land of opportunity.

Martin Snider said...

While only reading the first page, I would say that any article coming from the Treasury Department is more partisan than not. Second, taking the period of 1996 to 2005 takes the gains made in the late 90's and offsets with the losses from 2002 forward. Also, the last 3 years have been some of the worst ever on the lowest incomes since the cost of food and fuel which is disproportionately borne by low-income persons has risen so quickly.