During the past several months along the road to the White House, I have heard programs offered by Clinton and Obama as socialistic or as socialism, but are they really? The quick answer is NO. But I know all want to know why I say this. The term is used for the Boomer generation, for it has some residual fear reaction left to it. But as far as the younger generations, they would not know socialism if it walked up and bit them in the ass. Basically calling something ‘socialistic’ is a tired old tactic which needs to be retired and politicians and surrogates need to address the real problems faced by the people, most of all, problems of the working class.

But wait! The interventions by the Federal Reserve, and the US treasury department have been dramatic and unprecedented in many ways. Against hysterical and ignorant criticism from the free-marketers in their own party, Ben Bernanke and Henry Paulson appear to have drawn the correct conclusions, albeit some years after the they were due – that a measure of socialism is the only, repeat only, course that can avert catastrophe. The only question is: will it be enough socialism to stay the dragon of world-wide depression and the fires of war that would surely follow in its wake?

Bernake and Paulson have clearly been reading Hyman Minsky and and Charles Kindleberger – latter day closet Marxians and “long wavers” – and they GET IT: When markets fail, the chaos that follows is NOT self-correcting, and governments MUST act. This is a profound fact that neo-classical economic training – which pays virtually no attention to history – tends to ignore; thus many, but fortunately not all, economists simply cannot believe the scale of the dangers at hand, nor do they have the intellectual or scientific tools to evaluate them. I do not argue that mathematical models are not important, even mandatory in developing economic and social policy. But seeing the big picture requires careful attention to economic history, which gives abundant evidence that raw capitalism is NOT a stable system.

Recent history gives solid examples of how smart socialization is the only corrective. Sweden, for example, confronted financial collapse in the 1990’s by nationalizing its banks and absorbing the toxic bubble before selling the institutions back in a more carefully regulated environment, and sustained growth was the result. Japan, on the other hand, allowed its real estate market to collapse without intervention 20 years ago, and they have not recovered growth rates since.

Call it what you want, but when the government takes over the running of a company or industry, it is SOCIALISM! Sorry, critics but you cannot blame the Left for this…….it is a situation of your own making.