Tuesday, May 04, 2010

Socialism as the Cause of Economic Problems?

I'm a little confused about the right wing machine talking about Greece as the example of why anything except unfettered capitalism is a failure.

If I get the argument correctly, they are saying that Portugal, Ireland, Greece and Spain are examples of socialist economies that are bleeding red ink and must be rescued by other countries in Europe. They say that it is the socialist tendencies of these countries that is bringing them down.

But wait, if I read the whole story, aren't Germany and Denmark two of the big "rescuers"? Isn't Germany the most socialist economy in Europe, where every corporation in the country is required by law to have half of their board of directors appointed by the union representing the workers of the company?

And is it true that the countries that are in trouble are really there primarily because they bought into the whole "absolute free trade" myth?

I don't know the whole set of facts on any of this, but it does seem clear to me that the reasons for countries like Greece hitting the crisis that they are hitting can't be boiled down to something as simple as "socialist practices". There are many economies that are very socialist and are quite robust over the long haul.

And here at home, aren't we headed down some of those same dangerous paths, even though we are probably one of the least socialist economies in the world? Did we forget that just 18 months ago, we were on the brink of leading the world into an economic disaster akin to the Great Depression?

I have to believe that a really big part of this relates to the fact that we quit "producing". I read recently that when Reagan took office in 1980, fully 20% of our economy was manufacturing - building things. And that now, after 3 decades of Reaganomics, only half that amount - about 10% of our GDP - is a result of manufacturing.

This all comes together in the notion of the Walmart economy - exporting our manufacturing to countries where we can employ slave labor, and importing cheap labor into this country to cover the service economy that we have become.

Bye bye middle class. Hello economic problems.

Not that I am advocating socialism as the answer to the economic problems that we face. My point is that whether an economy leans toward socialism or away from socialism is not really the thing that makes it strong or weak.

So those who promote socialism - promote it for a different reason. For those who demonize socialism - you need to face the truth that economic health or problems have little to do with socialism. Keep looking, and by the way, don't be surprised to find that many of the root causes might be some of your little pets...

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