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Friday, October 17th, 2008

[digg-reddit-me]Following up on this post

All in all – there’s a lot of talk about socialism these days – driven by a fear, especially among the financial elite, that a blowback is coming. At the same time, after the better part of four decades of Republican rule, the Republicans need to scare people out of voting for the charismatic candidate who’s offering to help them in this time of crisis. And certainly this ongoing financial crisis has demonstrated to many the insufficiency of the Republican approach to regulation and governance and the limitations of the market. (Though not to Republicans and free-market ideologues who continue to insist that the problems that have spiraled out of control in the shadow banking system were the result of too much government in the more stable, regulated banking system.) I could easily see a populist candidate gain power today by railing against the big money elites. But Obama is not this candidate, let alone an advocate for socialism, class warfare, or any similar ideology. (In fact, McCain’s rhetoric comes closer to populist demagoguery of Wall Street.)

Obama’s economic plan is not about socialism or revolution or any such radicalism. He’s not that type of politician. The goal of his Obamanomics (if you will) is not a socialist paradise or a European-style market socialism but a restoration of the economic justice that made 1950s and 1960s America so stable. Unless you think Leave It To Beaver took place in a socialist nation, then Obama’s economic plans shouldn’t strike you as far left. As Andrew Sullivan pointed out while thoroughly debunking the right-wing spin that Obama is “far left,” Obama is to Richard Nixon’s right on taxes, which you would never guess from the ads Senator McCain has been running. Even the “code words” that the Investors Business Daily finds to be so fraught with meaning – “economic justice” – which they insist is just code for socialism – are from1950s era American thinkers Kelso and Adler. They were the authors of the 1958 Capitalist Manifesto, a book which sought to figure out how to make American capitalism more just – while acknowledging that “capitalism [is] the only just form of economic life.”

Barack Obama’s economic plan falls well within the mainstream of American economic history.

Alexander Hamilton – that first budding capitalist of a new nation – believed that government must create and maintain infrastructure, encourage industry, and maintain financial stability through central banks and financial regulation. Henry Clay promoted (and Abraham Lincoln supported) what he called “the American system” – which included various government interventions to build up American industry. After the Civil War, industry gained more and more power – and by the time the Panic of 1873 gave way to the Gilded Age, extreme capitalism had taken over America – with extreme concentrations of wealth and vast amounts of power concentrated in the hands of a few magnates.

McCain’s hero, Teddy Roosevelt, believed that we needed to protect essential institutions and elements of society from extreme capitalism – and focused on environmental conservation, on breaking up monopolies and other concentrations of power, on increasing regulations and beginning government’s role as a protector of consumer rights. This conservatism of Teddy Roosevelt’s resembled that of William F. Buckley – who defined conservatism as a man standing athwart history, yelling, “Stop!”1

As a result of Teddy Roosevelt’s reforms, and then the turmoil of the Great Depression, World War II, Hoover, FDR, and Truman – America had reached a point of social and economic stability. This stability of the 1950s and 1960s came at the expense of tamping down certain social and economic forces. The social stability was torn apart by the Civil Rights movement, feminism, free love, and the later radicalisms of the late 1960s and early 1970s. This culture war has been dominating politics since then.

The economic stability of this period was destroyed by the forces of extreme capitalism, greed, deregulation, and other economic radicalisms of the 1970s and early 1980s – as labor unions were undermined, executive compensation grew exponentially, social mobility was impeded, and economic power concentrated in a handful of large corporations.

The excesses of the social radicalism of the 1960s have been cataloged by the conservative movement – and many of the worst excesses have been reversed – while other elements have become accepted by the vast majority of Americans. There has been no similar concentrated political effort to moderate the other radicalism that destroyed the status quo of the 1950s and 1960s America, extreme capitalism. Just as the social radicalism of the 1960s produced great good – from the Civil Rights Movement to women’s rights – and the mainstream opposition today accepts these progressive strides forward, so the economic radicalism introduced market forces, encouraged competition, and has elevated many people in Third World nations from abject poverty as it’s mainstream opposition today accepts these positive effects of the market.

Obama belongs in this camp of mainstream opponents of extreme capitalism. His agenda stems from an understanding of the middle class best encapsulated in this clip from West Wing, which though it aired ten years ago, seems eerily relevant today:

Obama’s economic plan is a response to this wish to make things “just a little bit easier.” It is an attempt to temper the forces of globalization and extreme capitalism that have wreaked havoc in our society and position us to compete in a globalized marketplace. Like Teddy Roosevelt, he’s attempting to protect the core values of our society from economic radicalism; like Alexander Hamilton, Henry Clay, Abraham Lincoln, and Americans throughout history – he is proposing investments in our infrastructure and incentives for industry. Obama’s plan isn’t perfect – it’s just a start. It’s just tinkering – which is how that sage Nassim Nicholas Taleb describes “the best we can do” to improve our condition. It’s an attempt to make things “just a little bit easier.”

When Obama talks about “economic justice” he is not referring to some obscure Communist codeword – he is calling us to remember the world of Leave It To Beaver – a world where firemen and bankers, lawyers and plumbers, could all live in the same neighborhood. Obama doesn’t pretend he can bring back this past – but he believes we must stop the forces of extreme capitalism from destroying this American ideal and that we must take pro-active steps to reduce the destabilizing effects of globalization and capitalism while protecting our core values as a society.

This isn’t socialism – this is common sense – and it has been the American system since our founding. The radicals are those who propose we do nothing in the face of attacks on our way of life and in the face of economic calamity – the nihilists among the House Republicans and the Hooverites and those who continue to favor deregulation and oppose sensible  government intervention in the markets. The radicals are those who believe the free market will cure all ills and will heal itself.

Those who claim that Barack Obama would be the most liberal president in history must have skipped the American history classes covering the period before 1980. Those who claim he is a socialist are just plain wrong.


  1. Of course, Buckley came to distance himself from contemporary conservatism – which dropped this moderate approach with preemption and prevention. []

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