Socialism And Obama
By Timothy V. Gatto
30 June, 2009
Countercurrents.org
If you believe that you are fully aware of what the Federal Government, the media and the two major political parties are doing in regard to the economy and also our civil liberties, you needn’t read on. If you have a nagging feeling that something is definitely wrong with the direction that this country is headed, or you believe that the situation is somehow different than what’s been reported and what you have heard from the politicians and the mainstream media…read on. I’m going to attempt to clear away all of the rhetoric and fear-mongering, and try to give you a perspective that isn’t a Democratic or Republican perspective, but one that once the rhetoric is cleared away, is very simple and straight-forward.
Let me start by telling you that everyone in the so-called Middle-Class and those that fall below the median income are all being taken for the biggest ride in recent history. The GOP tries to portray President Barack Obama and his administration as “Socialists”. The truth is that the people who claim this know that it just isn’t true. This is just another way to influence people that have difficult time thinking for themselves. Unfortunately, that accounts for 80-90% of the American public. Why do I say this? Let’s look at the facts.
The recent economic crisis was caused by predatory lending and inflated profit projections by the banks and investment concerns. Profit projections were used to justify outrageous loans that lenders knew would never be paid back. The trouble was that the people making these loans were making money hand over fist by bundling mortgages into investment vehicles called derivatives. There they bunched mortgages into class A and class B derivatives, supposedly by the ability of the mortgagee to pay back these loans. All of this was based on extremely optimistic scenarios that gave the borrowers the benefit of the doubt. This wasn’t based on reliable economic data, but by the amount of profit the people selling these derivatives could make at the time. Their thinking was based on the present, not of the future.
These derivatives were sold to municipal pension funds, private pension funds, incorporated in 401K’s, and sold to the boards of hospitals, unions and to individuals. Most of the people selling these investment vehicles knew that they were bound to fail. This was an unregulated market for derivatives that was in reality, nothing more than a camouflaged Ponzi scheme.
Eventually, like with all such investments, the derivative market started to fail. What was hidden from the American public was exactly how much money was tied to these investments. The entire scheme threatened to bankrupt many banks and most of the largest players on Wall Street. Morgan Stanley, AIG, Merrill lynch and others. The immediate concern of the government was how they could stop a meltdown of the banking system and Wall Street. A massive bail-out by the Bush administration was enacted, costing just over 800 billion dollars that the federal government would admit too. (Some have claimed that the bail-out was in the trillions of dollars). This money was pumped into banks and investment houses without hardly any accountability to the American public, who were in effect, providing the funds from taxpayer dollars. To this day, the American people still don’t know where most of this money was spent. The government gave the rationale that if the public knew who needed this money to stay afloat, public confidence in the banking system would fail and make the situation worse.
Meanwhile, many Americans were complaining that in our system of capitalism, the people who put up the money for investments and new enterprises reap the profits because they were the ones that took the risks. In this particular scenario, the people that normally took the risk of failure (the capitalists), were no longer doing so, the American people were. Therefore, some argued, any profits made should belong to the American taxpayer, because they were the ones taking the risks. Eventually this question became moot because this first bail-out did not provide solvency to the financial sector and there were no profits to be made. Banks didn’t start lending, and the most new loans were not approved, credit was frozen and the economy came to a grinding halt.
Enter the Democrats. Now the new President was faced with banks no longer offering credit to even the most credit worthy. Most of the financial markets on the planet were freezing their assets. The American financial markets looked toward Washington to bail them out again. This is where economists like Richard Cook proposed that instead of bailing out those financial entities that caused this economic crisis in the first place, that the government, instead of attacking the problem from the top down, should do it from the bottom-up. Instead of spending billions or trillions on the financial sector who were, under capitalism, responsible for taking the risk anyway, the government should spend the bail-out money in the form of stipends to the taxpayers.
This would cause the economy to heat up again. Money in the form of a $1,500 stipend to every adult per month would drive the market for consumer goods. The only stipulation on the money would be that the money be used on necessities (IE: mortgage payments, insurance, utilities, car payments, appliances, ect.) Eventually the markets would start moving again, the financial sector that made bad decisions that put themselves in jeopardy in the first place, would either work their way out of their predicament or fail, after all, isn’t this the premise behind capitalism?
This however, wasn’t even considered. Instead, President Obama, enacted another set of bail-outs for the financial industry. This time however, there was a little more oversight and transparency; still, it was, in reality, just another gift to the people that caused the problem in the first place. The American public would again became the ones that would pay for the greediness of the capitalists that put personal profits before sound financial policy.
Now we are hearing from the GOP that Obama is the worst kind of socialist. Meanwhile, the same people that brought this country toward bankruptcy are still reaping the rewards that should in reality go to the American taxpayer that pulled them back from the brink of financial ruin, largely due to their own greed. GM and Chrysler went into bankruptcy and the workers at these companies had to make huge concessions in order to keep them afloat.
Everywhere you turn in this country, it isn’t the financial sector that has had to bite the bullet, it’s been the American public that has had to endure staving-off the bankruptcies that in reality, most of the financial sector deserved. The entity that has actually profited the most from these bail-outs is the Federal Reserve. Our central bank charges the government approximately 8% interest on the money that they print. We pay them for printing money that could just as easily be printed by our Treasury. Who thought that system up?
Here is where this gets a bit mind-boggling. I’ve read that the bail-outs have cost America upwards of 14 TRILLION DOLLARS. If anyone figured this out, the Federal Reserve, made up of private for-profit banks, made somewhere in the vicinity of 1.12 Trillion Dollars in interest alone just printing this money! So how does this affect your perception of fiscal responsibility? Will you file this article away in a small, dusty and dark part of your mind and relegate this information to the “I can’t do anything about it” file? Just dwell on the numbers for a bit. This is over a Trillion dollars! That could fund single-payer medical insurance for the entire nation! (http://liberalpro.blogspot.com/2009/06/america-inc.html)
So let me ask this question; If Obama’s administration is practicing “socialism”, how is it that the only ones benefitting from their own malfeasance, are the people of the American financial sector? Where are the people of America benefitting from their sacrifice to prop up the very people that brought this state of affairs on us?
The largest sector of our budget is devoted to the military industrial complex. Again the corporate sector, not the people are the ones that take the lion’s share of the U.S. budget. Under “socialist” Democratic rule, we are fighting two wars that are based on resources. We are an empire that has military bases on every continent in over 130 different countries. The United States spends 48% of the entire planets military budget. How’s that for a reasonable military budget? Meanwhile Congress failed to enact legislation that would provide funds for Americans to refinance their mortgages so that they could stay in their homes. The very next day they approved a military supplemental bill in the amount of 60 Billion.
Socialism is a word that Republicans are using to keep the average American guessing. In actuality, the truth is that this nation has become a corporate-state. The entire Federal government is actually being run, not by the people, but the financial sector and the corporations that pay for almost every politician’s political campaign. It took $730 million dollars to elect Obama, $333 million for McCain. That’s over a billion dollars! The fact is that the U.S. is now a corporate-state, run by corporations in tandem with the two corporate political parties. The American people are merely observers.
Many are starting to believe that capitalism works only for the rich. The poor and middle-class receive nothing but surf’s wages to keep the status quo for the rich. Nothing illustrates this more than the economic policies in the past year. Is Obama a “socialist”? Figure it out for yourself Ask the old question: Cui Bono? (Who benefits?)
Look around, it’s sure not the average American family. It would be better if Obama was a socialist. It’s apparent that capitalism isn’t working for the majority of us. We only get to pay for it.
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