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Sunday, April 18, 2010

The Barack: People's Champion, or Corporate Champion? 

The title, referencing former wrestler, Dwayne Johnson, is a good introduction for debate on Obama economic and regulatory policies. Conservative critics have called Obama a socialist. The president's supporters have decried that the "socialist" label is nothing but a racial code-word. Libertarian-Republican Ron Paul has offered up a different take on the situation: Obama can't be a socialist, because he's really a corporatist.

The distinction between the ideologies of socialism and corporatism is very fine. In both systems, the lines between the government and large corporations are blurred, and free-market forces are thwarted. More government regulation tends to favor a few large corporations in each sector rather than small businesses. Only the large corporations can afford to do business once the regulations, lawyers and lobbyists start getting involved. The difference is that in corporatist systems, corporations dictate policy, bend the system to do their bidding, and generally wrap the government and taxpayers around their finger. Under socialism, the government dictates terms of business to the corporations.

Under the Obama Administration, there have been three major forays into the merging of corporate and government power. The first was TARP, which bailed out large banks to the tune of $700 billion in a largely-unaccountable manner. In fairness, TARP started under George Bush, and John McCain shamefully joined Barack Obama in voting for it. But TARP has been an instrument for the president to attempt dictating corporate CEO salaries and other corporate governance. Additional measures proposed by the administration, like the financial regulation bill and closing some tax loopholes, have run into significantly more resistance. It's unclear who is truly playing who in the TARP game.

When it comes to the government takeovers of Chrysler and GM, it's clear that the government has both hands on the wheel. The existence of a government auto czar certainly reinforces that relationship. Chrysler is now the company which will produce the fuel-efficient, subcompact cars that are demanded by the government, rather than the market. GM will push America towards gasoline alternatives with its Chevy Volt. The president's allies in the United Auto Workers get a piece of the pie; the UAW health insurance fund now holds a controlling interest in Chrysler after the White House leaned on Chrysler's secured creditors and the bankruptcy courts. Still, the auto industry has gotten a few choice deals, such as the "cash for clunkers" program which took running vehicles off the road and subsidized the purchases of new ones.

Surprisingly, the most clear-cut example of corporatism during the Obama Administration has been the health-care bill. The portion which was most objectionable for me was also the component that received broad support from health-insurance companies: the mandate for individuals and corporations to purchase health insurance. The government is fattening up insurance companies, delivering them a large group of unwilling clients who, if given the choice, would opt to purchase smaller levels of coverage or none at all.

Whether you call it socialism or corporatism, the Obama Administration has taken some very firm steps towards melding corporate and government power over the lives of individuals. The stereotype has held that Republicans favored the corporations over individuals; the Dems have, up until now, successfully conflated the free market with unchecked corporate power. Admittedly, Republicans actions have been more corporate than free-market, even if the rhetoric says otherwise. But the actions of the Obama Administration have been no better and in many ways have been more corporatist than those of Republicans. Only when the government refrains from subsidies will we truly get a competitive marketplace that is responsible to the consumers.

Friday, April 09, 2010

Obama's Dream, America's Nightmare, and Stark Reality 

President Obama's recent review of America's nuclear weapons doctrine and his negotiation of nuclear reductions with the Russians is being spun as "a step towards the president's dream of a nuclear-free world." Some conservatives and Republicans are taking umbrage with elements of the new doctrine such as not using them against non-nuclear states. Most of those changes do not bother me; rather, they're a reflection of a world where the shadow of nuclear warfare between superpowers is a fading memory.

The downside to the new policy is that nuclear weapons will no longer serve as a deterrent to America's true nightmare: the use of weapons of mass destruction by terorrists and rogue states. The commander-in-chief should not take any options off the table if the nation is attacked by nuclear, chemical, biological or radiological weapons. Even the use of high-explosives like hijacked airliners should make the president at least consider the possibility of using nuclear weapons.

Ongoing deliberations within the administration highlight the issue they're sidestepping: the US lacks any coherent policy for deterring nuclear attacks by terrorist groups and suicidal regimes, and it will be caught frozen like a deer in the headlights if it should ever need to retaliate against such scoundrels. Rep. Tom Tancredo once suggested that the US should destroy Islamic holy sites like Mecca if Islamic Militants ever used nuclear weapons against the US. He was widely chastized for his remarks. While his strategy would prove counter-productive, he deserves credit for at least considering an issue that we may have to deal with at some point in the future, and to which few members of the US government have given any thought.

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