American capitalism is a charade. If a years worth of bail-outs has not convinced you of that fact, I do not know what will. But, perhaps programs like Social Security, Medicare, Welfare, Medicaid might help convince you. Government subsidized loans. Need I continue? From a governmental standpoint, we are far closer to socialism than we ever have been. Is Obama a socialist? Who knows? He certainly is not a capitalist.

Fundamentally, one key aspect of “American socialism” gets it wrong. So wrong, in fact, that it threatens to do the whole system in. Here it is: The government paying for our social services has little operational control over those services and does not partake receive any revenue from said services. In a nutshell, every social service we have is contracted out. Do we have Government run health care? Not there yet. Instead, we have intricate and often arcane laws that either directly or indirectly subsidizes private health insurance. The government pays (in part) and private entities manage, provide, and profit. The economic incentives of private health care design, if we must go there, have always been profoundly perverse: private health providers skimp on product for profit (to benefit shareholders) and run opaque businesses. And why shouldn’t they? There is no free market and quality measurements to facilitate consumer choice are laughable. But, the truly fucked up aspect is this: tax money helps pay for these services and we get nothing in return. What we have is the axiom of anti-capitalism: You pay, they profit. And their profit never returns to the purse in the form of government taxes.

Of course, it is neither practical nor possible for the Government to run all of these services, nor should it necessarily. But, when the U.S. Government, the largest and riches consumer in the world, pays for a service, shouldn’t it be able to negotiate some favorable terms? First semester Contracts (or, just basic common sense). Wrong! See Medicare Part D, a federal drug-subsidizing program for seniors that, by design, does not allow the government to negotiate prices. Of course, when the government is allowed to negotiate prices, such as in the VA program, there are noticeable differences (this is an understatement).

Sometimes, though, the Government can do something. Ryan has it spot on here where the Government, unambiguously under law, could have excluded Pfizer from Medicare programs entirely. This would have been a crippling blow to Pfizer and consumers alike. Therein lies the key problem: Pfizer is “too big to fail.” Its tentacles too intertwined in the system. To bring Pfizer down would cripple consumers, send ramifications throughout the whole health care system, and is thus politically impossible to say the least. Sound familiar?

Reread the preceding paragraphs and consider another practical effect of such a system: money is siphoned from the bottom ranks toward the top. You, the tax-payer, line the pockets of them (and soon to be some of us). Money talks, especially to politicians, and when you have a lot of it you tend to speak louder. So, when it comes time to elect citizens to Congress and the Presidency, the bodies charged to either perpetuate or reform the system, we invariably elect persons dedicated to the former (even if under the facade of the latter). In case you were wondering how a system that contains largely socialist-type policies could result in such great wealth disparities and inequities, perhaps even worse than a pure capitalist regime, there is your answer. The system is stacked against you.

This economic “recovery,” if you can call it that, is a complete sham. We have simply swept the private debt under the governments tab and have not addressed any of the myriad of problems that caused this mess. Not to be the bearer of bad news, but, the system is completely unsustainable. Our government finances services and does not take in nearly enough revenue for them. This past decade has seen one knucklehead enact unprecedented debt-accumulating policies, followed by a more enlightened knucklehead who thinks we can leverage way out a situation caused by too much leverage. Note to Obama, Paul Krugman, and other Keynsians: when you don’t save during boom economic times, as our society has proven incapable of doing, Keynsian economics cannot work. It also cannot work when you are spending even more during economic booms. Will we follow Greece? Maybe, maybe not. But, psychologically, I’m preparing for worse.

“Image is everything” and truth is, socialism has an image problem. Joe the Plumber, Bill the Lawyer, and Jim the Doctor are afraid of socialism. We are afraid systems that would require us to progress modestly and within live our means. We (yours truly included) are a society obsessed with leveraging and living the illusory American dream. We should learn to be rich enough and work on making a system robust, emphasize stability over prosperity. Most of all, we should learn to not fear the word ‘socialism’ and recognize the bastardized form that we live in today. Give it a decade, though, and you might see this happen.

-- MatthewZorn - 15 Jul 2010

If the word is such a problem why do we need to use it? If american capitalism describes what you describe, so be it. It is what it is anyhow.

-- NonaFarahnik - 20 Jul 2010

I suppose because words are incredibly important things and they create connotations and ideas to the vast majority of the population. In my opinion, the only thing that stands in between socialized medicine and whatever trash we have now is the word 'social-' (insert your favorite suffix). Capitalism is okay with me too. A capitalist like purge would probably fix the system--let the banks, mortgage brokers, and what not who made bad bets lose them.

I guess my point here was that fundamental notions and linguistic deficiencies create perceptions that prevent us from seeing the mechanics of what is going on (i.e. the complete disappearance of the middle class). The whole rant was sort of an off-cuff stream of consciousness bit in honor of Bastille Day. Perhaps it would have been better and more interesting to discuss some of the historical parallels between 1788 France and 2010 USA. Growing wealth disparities, tax exemptions, large national debt exacerbated by war, contempt from the upper classes...

-- MatthewZorn - 20 Jul 2010