Tag: Nationalization

Is It Socialistic?

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.

This Is For All You Commie Haters

I remember back in the day all those haters of socialism said that if it was to come to the US then all the economy would be in the hands of the government.  Remember those days?  Well, dipsticks, what do you think the bailout of Fannie and Freddie are?  Do not hurt yourself–it is a form of nationalization, something that you say the commies want to bring.  Let us begin with my favorite couple–Fannie and Freddie, poster children of corporate greed.

The Financial Times has hailed the effective takeover of Fannie Mae and Freddie Mac by the US government as “what could become the world’s biggest ever financial bail-out.” Treasury secretary Henry Paulson has promised he will pump in ‘unlimited liquidity.’ Don’t you wish the government would grant you unlimited liquidity? When it comes to the food and fuel bills of the poor and the working class, the British and American governments find that the cupboard is bare. But now it’s not bare. Predictably markets all over the world have breathed a sigh of relief. Fannie and Freddie have effectively been nationalised – and big business thoroughly approves!

In the Financial Times (08.09.08), Clive Crook comments, in an article significantly entitled ‘Nationalisation in all but name,’ “The eventual cost to taxpayers is unknown. If the housing market rallies before long, it could be in the low tens of billions of dollars. If things keep getting worse, it could be in the hundreds of billions. But Fannie and Freddie have made themselves indispensable to any housing market recovery: the cost, whatever it is, will have to be paid.”

Like it or not….my favorite couple has been nationalized.  The best part about it is that it is being done by Republicans, who for years have seen hidden commies everywhere.

What Does The Bailout Mean?

As the New York Times acknowledged Sunday, “The plan to bail out the firms will probably do little to stop home prices from falling further. And foreclosures are almost certain to rise.

“The bailout will give the mortgage industry a stability that we haven’t had in a couple of years,” Rich Cosner, president of Prudential California Realty told the Associated Press. “But frankly no, it won’t help (struggling borrowers) to refinance.”

Its real aim is to bail out the banks which bought Fannie’s and Freddie’s unsecured debts as investments with the understanding that the US treasury ultimately stood behind these so-called “government-secured enterprises.”

The immediate cost of the bailout will be borne by taxpayers as well as shareholders, who will see their investments wiped out. Part of the plan announced Sunday authorizes the government to buy up existing assets at a nominal price of less than a $1 a share. A significant portion of these investments are held by mutual funds handling 401K plans that constitute the sole retirement savings for large sections of the American workforce.

One of the triggering factors in the government intervention was apparently the dumping of Fannie-Freddie holdings by Asian and other foreign investors. Bank of China, the country’s third-largest bank, announced at the end of August that it had shed some $3.14 billion in debt holdings from the two companies over the previous two months. Other central banks were apparently following suit.

Russia’s central bank, meanwhile, reportedly dumped some $40 billion in Fannie Mae, Freddie Mac and Federal Home Loan Bank securities over the course of this year and further cuts were expected.

The flight from investment in these government-backed companies clearly raises the specter that a similar pull-out could be threatened from US government securities. At present, the US economy is dependent upon foreign investors, principally in Asia, purchasing up to $20 billion in US agency debt monthly.

But wait!  Would this be a form of nationalization?

Candidates And Their Answers To The Fuel Problem

Just like every other social problem confronting working people—from home foreclosures, to the massive loss of jobs, the growth of social equality and the danger of war—capitalist political parties around the world have no solution for the staggering rise in fuel prices, whether they call themselves, conservative, labor, Green or socialist. Instead, they all agree working people must accept a massive reduction in consumption to pay for the crisis of the world capitalist system.

In the US neither the Republican nor the Democratic candidate for president has anything to offer. John McCain has called for a $300 million reward for the design of an electrical car, the suspension of the 18-cent federal gas tax for the summer months and lifting environmental restrictions on offshore drilling.

In an effort to pose as a populist opponent of the oil companies and speculators, Barack Obama has called for energy corporations to pay a windfall profit tax and for the closing of the so-called “Enron Loophole.” This will go nowhere, however, since large sections of Democrats, particularly from oil states, oppose any tax on the energy conglomerates, and Wall Street—which has thrown the bulk of its money behind the Obama campaign—opposes any serious regulation on speculation.

Obama himself has close ties to the bio-fuel industry and counts among his top advisors a former lobbyist from the American Petroleum Institute and ex-officials in the Clinton administration officials who played key roles in deregulating the financial markets. In order to win the approval of his corporate and financial paymasters, Obama has repeatedly insisted he will take no measures that undermine their profit interests. The Democratic candidate’s web site declares, “Barack Obama recognizes that it is critical that oil companies and shareholders have strong incentives to run well managed businesses that invest in efficiency and innovation.”

What a crock!  Just bite the bullet and nationalize the industry–bet the guys woiuld find ways to bring gas porices down and still have money for development.

Oil Companies Still Control Congress

This is an editorial that was sent to me in an email–the source was not given.

Senate Republicans gave people a slap in the face June 10, voting to block a windfall profits tax on oil companies that are robbing us blind at the gasoline pump with $4.35 per gallon gasoline. Democrats mustered a majority, 51 senators, but GOP leaders rallied 43 senators to block the bill, effectively killing it.

It would have imposed a 25 percent tax on “unreasonable” profits of the five largest U.S. oil companies, which reported $36 billion in profits in the first three months of this year. The legislation would have given the government more power to curb oil company speculation and would have made energy price gouging a federal crime.

The AFL-CIO Working Families network called for a “Week of Action” to protest the price gouging. AFL-CIO President John Sweeney said both George W. Bush and John McCain “have handed the reins of the economy over to Big Oil and other corporate interests whose only concern is maximizing their profit margins.”

Since Bush-Cheney seized office in 2000, the five oil giants have reaped $525 billion in profits and presided over gasoline prices that zoomed from $1.47 per gallon to well over $4 per gallon. Oil CEOs are wallowing in money. Exxon Mobil CEO Rex Tillerson reports $21.7 million income last year. Occidental Petroleum’s Ray Irani pocketed $34 million.

GOP presidential nominee McCain voted in 2005 against curtailing windfall profits for oil companies. In 2007, he was the only senator to miss a vote on an energy bill that repealed billions in tax subsidies for oil companies. McCain promises if elected to push through a new $3.8 billion tax giveaway for the oil companies. His election in November would ensure another four years of Bush-Cheney giveaways to Big Oil. Democratic nominee Barack Obama, by contrast, vows to “make oil companies like Exxon, pay a tax on their windfall profits.”

If this highway robbery continues, can calls for nationalization of the oil companies be far behind? Venezuela’s example of using nationally-owned oil wealth to lift the living standards of the people is becoming an ever more attractive alternative.

I have said that I would not be opposed to the nationalization of the oil industry…my state has a monopoly on the liquor sales and it generates mush needed revenue for state programs–so I say why not?