How Socialism Comes to America

[Myrhaf]

By Myrhaf from Myrhaf,cross-posted by MetaBlog

In TIA Daily Rob Tracinski writes of Obama's planned $50 billion bailout of the "Big Three" Detroit auto manufacturers:

It is actually a plan for de facto nationalization which will turn the Big Three into permanent wards of the state whose purpose is not to make a profit but to serve the "social goals" set by government.

Obama is

backing a plan

to pump $50 billion into the big American automakers, while also establishing "a czar or board to oversee the companies"—call it

Gosplan

—which will supervise "a restructuring of the auto industry." That's exactly what Detroit needs to recover: the benefit of government central planning.

In essence, this is a plan for nationalization of the American auto industry under a new government-appointed board of directors who will supposedly tell the Big Three how to make a profit again.

Blinkered pragmatists will sputter, "But the government is not seizing the property, so it's not socialism!" No, that would be socialism on the communist plan. This is socialism on the fascist plan, in which the property remains nominally in private ownership, but the government dictates what the owner will do with his property. In America the dictation is called "regulation." In this case the dictator will be an "auto czar."

As Tracinski goes on to demonstrate, this is being done to protect a powerful pressure group, the unions. If the Big Three went bankrupt and were bought up by other auto makers, the power of the United Auto Workers would suffer.

American fascism makes corporations bureaucratic managers of the welfare state. Instead of just paying workers, corporations also provide health care and retirement pensions. These functions, along with a sea of regulations, give corporations two missions: make a profit and serve as a mini-welfare state. By passing welfare state functions to the corporations, the government expands the welfare state, but evades any censure for the expansion or any blame for the corporations' failures.

The Democrats are driving this intervention in auto manufacturing, but is there any doubt they were emboldened by the Republicans' bailout of Wall Street? (The Republican led bailout started at $700 million, then was revised to $1 trillion. Now the cost is estimated at $1.8 trillion. The plan has been around less than two months.)

Michael Barone writes,

The Detroit Three are taking advantage of the passage of the $700 billion financial bailout to argue that they, too, need government money to go on.

The conservative David Brooks thinks the bailout is a bad idea, but gets the cause wrong:

It is all a reminder that the biggest threat to a healthy economy is not the socialists of campaign lore. It’s C.E.O.’s. It’s politically powerful crony capitalists who use their influence to create a stagnant corporate welfare state.

But if America had a laissez-faire capitalist economy, then C.E.O.'s would have no influence and no recourse but to pursue a profit in the free market. By Brooks' thinking, if we just had virtuous people in the private sector, then statists such as Obama would never dream of increasing state intervention in the economy.

America's descent into fascism proceeds by the script written by Ludwig von Mises. Government intervention (regulations and government backed union power) have created a crisis in automobile manufacturing. This crisis does not inspire the government to withdraw its intervention, but to increase it with a $50 billion subsidy and the creation of an auto czar who will dictate even further to the industry. In the end we will have the same result as communism, but with private ownership serving to hide the extent of state control.

We are at a turning point in America. The state is about to make an enormous power grab. In addition to the de facto nationalizing of Wall Street and the auto industry, House Education and Labor Committee Chairman George Miller (D-CA) and Rep. Jim McDermott (D-WA), Chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support are plotting to nationalize 401k pension funds. This plan would give the government trillions of dollars in pension funds to spend now; the money would be replaced by government IOU's like the nonexistent social security trust fund. With Obama in the White House and increased Democrat majorities in the Senate and House, can this looting be stopped?

Cross-posted from Metablog