Saturday, November 08, 2008

Socialism: Medicine Worse than the Disease

An everyday fellow from Toledo, a workingman named "Joe the Plumber," stepped into the limelight in the last few weeks of the election. His brief conversation with Barack Obama about tax increases led to the "leaking out" of Obama's plan to "spread the wealth."

I don't know about you, but phrases like "spread the wealth" instantly raise a "red flag" with me. But with 63,000,000 Americans? Apparently not so much.

For those of us raised in the Cold War and practiced in some measure of discernment, "spread the wealth" is code for "socialism." And what's astonishing to me is that even the word "socialism" evidently does not seem to threaten a whole sector of our citizenry.

Perhaps a brief refresher course on the basics of socialism are in order.

Socialism is a set of ideas built upon the theories of 1. Central Economic Planning, 2. Collective Ownership of Property, and 3. Social Organization. The stated goal of socialism is the creation of an egalitarian society (ie: a society of equals). "Central economic planning" is code for the nationalization of industry. In other words, industry owned and managed by a centralized government, as opposed to individuals or privately held corporations.

1. Central Economic Planning. Little doubt exists that the goal of some in leadership at our national level is the nationalization of industry. Recently, in a perfect example of political theater, our Congress held hearings on the rapid rise in gasoline prices this spring. During the hearings, Congresswoman Maxine Waters (D-CA) let slip the unspoken goal of nationalizing the oil industry. Watch it here.

But this is nothing new. President Roosevelt created Fannie Mae (Federal National Mortgage Association - FNMA) in 1938 to buy home mortgages from lenders in order to free up more money to loan to those who wished to buy homes. When the banks package their loans and sell them to Fannie Mae, they are freshly funded and able to keep loaning to new customers. To be able to sell loan "packages" to Fannie Mae, loans had to meet certain criteria set by FNMA. Loans meeting this criteria are referred to as "conventional loans." Loans not meeting this criteria and thus not available for packaging and sale to Fannie Mae are considered "non-conventional" loans.

Freddie Mac (Federal Home Loan Mortgage Corporation - FHLMC) was formed in 1970 to help handle the increasing load of new mortgages. Freddie Mac does essentially the same job as Fannie Mae. The nature of both of these entities has been hard to pin down. Prior to the "bailout" this summer, both organizations had been privately funded, and were considered to be a part of the private sector. And yet, like the Federal Reserve Bank, leadership in these two organizations is by federal appointment. Quasi private? Quasi public? No one can seem to pigeonhole these organizations.

They both fall under the heading of "Government Sponsored Enterprise" or GSE. GSEs are organizations that are privately funded but backed by the full faith and credit of the U.S. government. They are not taxable, and they have an open line of credit with the U.S. Treasury. They are exempt from the oversight of the Securities and Exchange Commission (SEC).

The recent near collapse and subsequent bailout of these two entities paints a perfect picture of the ills of "central economic planning." Succumbing to pressure from the activist group ACORN, the Department of Housing and Urban Development (HUD) under the Clinton administration agreed to loosen Fannie and Freddi's lending standards in order to help more people purchase homes. Proof of income, source of down payment, and credit history would no longer be required. This change was made in order to assist those unable to purchase homes under the old lending system.

We now know the result. Millions, previously unable to buy, bought. Housing prices soared. Borrowers over-extended themselves because lenders were making high risk loans that any common sense businessman would never have made. But they did it because they knew they could package and sell these loans to Fannie and Freddi.

But then the bottom fell out because the interest rates on Adjustable Rate Mortgages (ARMs) increased, and balloon payments came due. Borrowers defaulted. Foreclosures began. Housing prices plummeted. Borrowers in trouble seeking to refinance could no longer do so because they were now "upside down" in their equity (owe more than the home is worth).

Here we have the "perfect storm" of government intervention into private industry, and the subsequent debacle and bailout with taxpayer money. Rather than let the business community make loans based upon their own good judgment, assessing the risk themselves, politicians stuck their noses in, demanding that the underprivileged be given opportunities they were not qualified for, and created this disaster.

2. The Collective Ownership of Property. The idea of the "collective ownership of property" is bound up together with the concept of "central economic planning" as described above. The opposite of "collective ownership of property" is a "free market" system where individuals own both real property and other kinds of property. To understand this concept, one must understand the idea of "property" itself. Property can be many things: Land, a home, a car, clothes, all material things; money in the bank or other types of monetary assets; intellectual property such as an idea, or a copyright or a patent. And philosopher John Locke (1632-1704, at left, click to "embiggen") even wrote that our "conscience" is "the most sacred of all of property."

Collective ownership of property means public ownership of the means of production and distribution of all kinds of goods and products, and the elimination of private property ownership. In other words, it is the government who holds the power to control all material goods, how they are used, how and where they are sold and distributed, and how much they are valued.

3. Social Organization. The "social organization" component of socialism is complex. The goal is to reshape the thinking and behavior of the populace to produce a certain kind of result. Social engineers (like the politicians noted above reshaping the housing market) use several means to achieve their goals. Education is a primary means and we can see it at play at just about every level. Mr. Obama's plan to "require" community service of American youth is another clear example of "social organization" or "social engineering" as it is sometimes called. The now public video of Diatha Harris, an elementary school teacher in Cumberland, NC bullying a young student because of her support for John McCain, is a clear representation of how "social engineering" works. Such bullying is far worse in higher education. I shall not take time to document that here, but recommend the films Indoctrinate U and Expelled, No Intellegence Allowed. The prodcut review for Indoctrinate U offers this description:

"Speech codes. Censorship. Enforced political conformity. Hostility to diversity of opinion. Sensitivity training. We usually associate such things totalitarian regimes, not with the American universities that nurtured the free speech movement."

Another force for "social organization" is the media. The media in today's America consists of news and entertainment including film, television, music, and literature. Through media, ideas are disseminated conveying the accepted norm. Television in its early years showed separate beds for Rob and Laura Petrie, husband and wife characters on the Dick Van Dyke Show. Today on television, unmarried people pop in and out of bed nearly naked all the time. The message is that premarital sex (we used to call it fornication) is perfectly normal. More recently, the homosexual lifestyle has become more and more normalized via this same means. Our society is slowly being "re-engineered" by those whose goal is the conversion of our Judeo-Christian American culture into a secular, humanistic, socialist culture.

All societies experience peer pressure. But in "social organization" or "re-engineering," peer pressure is done deliberately and with the specific purpose of reshaping society. Acceptance by others is a strong, human need. Few have the internal constitution to resist it.


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