The Crisis of Socialism

September 19, 2011 By Leave a Comment

by Adam Yoshida, on American Thinker
One should not make the mistake of thinking that the pathetic floundering of the Obama administration and the imminent doom of Europe’s spendthrift welfare states spells the end of global socialism. Socialism has rarely attempted to make any claim to being a more efficient or economically creative system. Instead, it has always touted “fairness” and “equality” as its primary virtues. Any and all failures of the system are being — and will be — attributed to its opponents: the “greedy” rich, the distastefully aspirational segment of the middle class, and a “working” class blind to its “interests” as hallucinated by Manhattan-based academics.

Most of its supporters will never be able to confess the defects inherent in their creed, even if the alternative is to embrace extreme and previously unthinkable measures. The crisis of socialism is, like the crisis of communism that preceded the fall of the Berlin Wall over two decades ago, an hour of maximum danger for freedom.

As things stand today, most of us live under systems which mix features of capitalism and socialism. For many decades now in the West, capitalist systems have sustained and nurtured socialist programs that have always been fundamentally unsustainable, because they were based upon demographic assumptions — such as an ever-growing population base and an increasing ratio of workers to dependents — that the programs themselves helped to undermine. Anyone with a modicum of common sense and the ability to perform basic arithmetic can see that a growing dependent class and a shrinking productive class equals an inevitable disaster. It has always been a question of when the crisis would arrive.

How can these government programs be sustained under economic conditions such as exist today? By what means are we to pay medical and pension bills — never mind interest on debt — that will eventually consume all of our national income? Time and time again the tiresome truth has been pointed out: either the benefits that have been promised by generations of politicians will have to be radically restructured or taxes will have to rise to levels that outwardly appear absurd.

Perhaps, at least in the minds of some, this was the design from the start. There were always those who pointed to the basic flaws of the social democratic model. Possibly those who supported such schemes anyway did not care because, in their hearts, they always believed that such programs represented nothing more than a temporary resting place on the road to a less adulterated version of their utopia. Thanks to government programs and taxes that can easily consume half of what a middle-class worker produces, today we have a society in which the citizen is half-slave and half-free. This basic contradiction cannot stand. One cannot both be a free citizen and have more than half of the rewards of his labor appropriated by the state. One cannot be a free citizen while most of his income is a gift of the government. No one can permanently endure, pace Lincoln, both half-slave and half-free. Everyone will have to become all one thing or all the other.

That is why the crisis of socialism presents such opportunity and peril for liberty’s advocates. While many have awoken from their long slumber and become aware of the flaws of the economic system under which we toil, still others are likely to respond to any threat to their well-being — dependent as it is upon the ability of the state to pay them for doing either nothing or little of value — by demanding and supporting ever stronger measures in order to meet the unimaginable financial demands of the system. There are those who will, to save the system, enslave others, and there are some who will willingly enslave themselves in order to hold onto their little chunk of imagined security.

It is difficult to imagine any conditions under which the socialists will willingly concede defeat. It is easier to imagine that they will resort instead first to increases in taxation even more massive than those that they now advocate, then to the use of something resembling conscription to acquire the necessary labor for their system, and then, as a final resort, to the wholesale confiscation of wealth in the form of nationalizations and the like. It appears to be indisputable that the funding of the socialist elements of our economy will require ever-increasing inflows of cash. A good question — indeed a litmus test — to ask of your socialist friends will be at what point they will consider the system to be unsupportable.

There are many who benefit from the system as it stands today. Those who receive their incomes directly from the government — both in the form of cash giveaways and as part of the vast class employed by the state — are obvious enough. The less visible, but perhaps most important, beneficiaries are among the upper class. They, after all, are able to comfortably accept most of the costs of the system while, in return, they gain protection from countless would-be climbers who might be found among those men “in trade” and whose ambitions are obstructed by the tax and regulatory barriers erected by the state. Their way of life absolutely depends upon the perpetuation of the existing state of affairs.

When blandishments calling for solidarity have failed, they will resort to harsher tactics. We have already seen some of this overseas. I have one wary eye trained towards the plans by some left-wing radicals, at the urging of openly anti-capitalist Adbusters magazine, to “occupy” Wall Street on September 17th. The best-case scenario for the day is that we will witness a limited amount of vandalism by black bloc anarchist types. The worst is that it will mark the arrival of London and Athens-style chaos on American shores. The former is likely; the latter is possible. There will be no dignified surrender that marks the defeat of socialism. Instead, the crisis may well prove an invitation to hooliganism and other acts injurious to liberty. Mark my words: if it is not New York on Saturday, it will be some other place and some other pretext; socialism will not go easily. First they will threaten, disrupt, and attempt to intimidate. And then, when that does not work, they will attempt to guide us ever deeper into the abyss.

read the article on American Thinker

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The Solyndra Fraud

September 18, 2011 By Leave a Comment

by Andrew McCarthy at National Review Online

The Solyndra debacle is not just Obama-style crony socialism as usual. It is a criminal fraud. That is the theory that would be guiding any competent prosecutor’s office in the investigation of a scheme that cost victims — in this case, American taxpayers — a fortune.

Fraud against the United States is one of the most serious felony offenses in the federal penal law. It is even more serious than another apparent Solyndra violation that has captured congressional attention: the Obama administration’s flouting of a statute designed to protect taxpayers.

Homing in on one of the several shocking aspects of the Solyndra scandal, lawmakers noted that, a few months before the “clean energy” enterprise went belly-up last week, the Obama Energy Department signed off on a sweetheart deal. In the event of bankruptcy — the destination to which it was screamingly obvious Solyndra was headed despite the president’s injection of $535 million in federal loans — the cozily connected private investors would be given priority over American taxpayers. In other words, when the busted company’s assets were sold off, Obama pals would recoup some of their losses, while you would be left holding the half-billion-dollar bag.

 

As Andrew Stiles reported here at NRO, Republicans on the Oversight and Investigations subcommittee say this arrangement ran afoul of the Energy Policy Act of 2005. This law — compassionate conservatism in green bunting — is a monstrosity, under which Leviathan, which can’t run a post office, uses your money to pick winners and losers in the economy’s energy sector. The idea is cockamamie, but Congress did at least write in a mandate that taxpayers who fund these “investments” must be prioritized over other stakeholders. The idea is to prevent cronies from pushing ahead of the public if things go awry — as they are wont to do when pols fancy themselves venture capitalists.

On the Energy Policy Act, the administration’s malfeasance is significant, but secondary. That’s because the act is not a penal statute. It tells the cabinet officials how to structure these “innovative technology” loans, but it provides no remedy if Congress’s directives are ignored.

The criminal law, by contrast, is not content to assume the good faith of government officials. It targets anyone — from low-level swindlers to top elective officeholders — who attempts to influence the issuance of government loans by making false statements; who engages in schemes to defraud the United States; or who conspires “to defraud the United States, or any agency thereof, in any manner or for any purpose.” The penalties are steep: Fraud in connection with government loans, for example, can be punished by up to 30 years in the slammer.

Although Solyndra was a private company, moreover, it was using its government loans as a springboard to go public. When the sale of securities is involved, federal law criminalizes fraudulent schemes, false statements of material fact, and statements that omit any “material fact necessary in order to make the statements made . . . not misleading.” And we’re not just talking about statements made in required SEC filings. Any statement made to deceive the market can be actionable. In 2003, for example, the Justice Department famously charged Martha Stewart with securities fraud. Among other allegations, prosecutors cited public statements she had made in press releases and at a conference for securities analysts — statements in which she withheld damaging information in an effort to inflate the value of her corporation and its stock.

That’s exactly what President Obama did on May 26, 2010, with his Solyndra friends about to launch their initial public offering of stock. The solar-panel company’s California factory was selected as the fitting site for a presidential speech on the virtues of confiscating taxpayer billions to prop up pie-in-the-sky clean-energy businesses.

By then, the con game was already well under way. Solyndra had first tried to get Energy Act funding during the Bush administration, but had been rebuffed shortly before President Bush left office. Small wonder: Solyndra, as former hedge-fund manager Bruce Krasting concluded, was “an absolute complete disaster.” Its operating expenses, including supply costs, nearly doubled its revenue in 2009 — and that’s without factoring in capital expenditures and other costs in what, Krasting observes, is a “low margin” industry. The chance that Solyndra would ever become profitable was essentially nonexistent, particularly given that solar-panel competitors backed by China produce energy at drastically lower prices.

Yet, as Stiles reports, within six days of Obama’s taking office, an Energy Department official acknowledged that the Solyndra “approval process” was suddenly being considered anew. Eventually, the administration made Solyndra the very first recipient of a public loan guarantee when the Energy Act program was beefed up in 2009 — just part of nearly a trillion dollars burned through under the Obama stimulus.

Read the rest of this important article at NRO.

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Racism and Obamacare

April 6, 2010 By Leave a Comment

We can no longer afford to be both a big government entitlement state and a free, creative, and prosperous nation

Like chewing gum stuck to the heel of your shoe, racism seems to be stuck forever to American public discourse.  No matter what we do or what happens, somebody will find a racial motive.

Democrats have passed government health care with no Republican votes.  Their leadership threatened and bribed their own members to eek out a majority.  They resorted to an arcane procedure that maybe 100 people in the whole country can explain in order to pass a massive bill that polls show a majority of Americans don’t want.

The federal government, for the first time ever, will force every American to buy, with a big chunk of their income, a product designed by government bureaucrats, with an army of IRS agents snooping on each of us to make sure we did it.
And how are many liberals explaining why so many Americans are ticked off? 

It’s because our president is black.  It’s about racism.

Even me.  I’m steamed.  And even though I happen to be black – I’ve even spoken at some tea party rallies – I still must be a racist.

Obama’s approval rating has dropped from 70% when he was elected to 50% today.  His disapproval has skyrocketed from 10% when he was elected to 42% today.

Per the Washington Post, in January 2009 58% of Americans said that the Obama presidency helped race relations.  By January 2010, this was down to 40%.
Has this wave of disillusionment with Obama been driven by a sudden realization that the man Americans elected president is black?  

House Speaker Nancy Pelosi’s approval has dropped from 41% in January 2009 to 36% today and her disapproval has risen from 42% to 54%.  Is she black?

Were the raucous townhalls last summer – which gave birth to the tea party movement-  where irate constituents gave their representatives a piece of their mind about Obamacare, racially motivated?  

Care to understand what all this is really about?

Consider a powerful observation about a former time by one of America’s great historians, Jacques Barzun.  Barzun was a professor and dean at Columbia University and a Presidential Medal of Freedom winner.

“We make a great mistake in calling the American War of Independence, the “American Revolution,” he wrote.  “In 1776 the Americans rebelled against recent rules and impositions.  What they wanted was not a new type of government, but the old type they enjoyed.  They were used to many freedoms, which they claimed as the immemorial rights of Englishmen.  Once they defeated the English armies and expelled the Loyalists, they went back to their former ways, which they modestly enlarged, and codified in the Bill of Rights.”

In a similar fashion today,  Americans are rebelling as the freedom we have enjoyed, freedom which defines life in this country, is being taken away and new “rules and impositions” are being imposed.

It’s not about theory or some abstract ideology. The intense feelings flow from losing what you have and what you know is vital.

What is new today is we can no longer continue the illusion of having our cake and eating it.  We can no longer afford to be both a big government entitlement state and a free, creative, and prosperous nation.   It’s the prosperity created by our freedom that has financed the entitlements.  But now the entitlements are overtaking and strangling our freedom.

So now is a time of choosing.  We’re either going to remain the land of the free or transform into the land of the bureaucrat. 

The antipathy of activists toward Mr. Obama is not about how he looks but what he has done.  That he has chosen and imposed on us the path of bureaucracy.

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