Wednesday, October 22, 2008

Socialism with a Republican Face

Statue of Karl Marx and Friedrich Engels in Berlin, Germany, photographed by Flickr user Pete Johnston, used under a Creative Commons license.

Am I wrong, or is this "socialist" canard the Repubs are throwing at Obama a brand new tactic from the Rovian playbook? I don't remember Kerry or Gore or Dukakis being red-baited like this. And all because Obama wants to "spread the wealth around." The horror!

Anyone else notice that the "socialist" accusations have escalated just as the wealth is being spread around very generously indeed? Spread upward, that is?

Economist Dean Baker explains at TPMCafe how this works:
The public has a real interest in keeping the banking system functioning. It has zero interest in subsidized the pay checks of wealthy bank executives or enriching the bank's shareholders, which Secretary Paulson is now doing.

There is no question about what is going on here. The public is providing massive subsidies to the country's major banks. The terms of the bailout were far more generous than what the banks could get from the private market. As a result, banks that might not have survived otherwise, or at least would have been forced to make serious cutbacks, can now keep operating as they had been.

This means that their high level executives will continue to draw salaries in the millions or tens of millions of dollars. It also means that the shareholders will continue to receive dividends.

This was not inevitable. Paulson could have imposed serious pay caps on executive compensation. In Germany, the banks that are getting government money can't pay their executives more than 500,000 euros, about $680,000. The United Kingdom also limited executive compensation as part of its bailout.
(Read the rest here.)

Huh. I'm confused. If socialism with a Republican face means feathering the banker's nests, and if our European friends are refusing to spread the wealth to the bank execs, does that make them not socialists? But how can that be? Haven't we been taught that the French, especially, are socialists by definition?

Who wants to bet that by November 4, we'll hear the rumor that Obama is a French socialist?

(Apologies to Alexander Dubcek for warping his slogan unforgivably.)

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