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EDITORIAL IN TODAYS BANGOR DAILY NEWS LEANS HEAVILY FOR A SOCIALIST AMERICA.

A Whiff of Socialism

Socialism has become a dirty word on the presidential campaign trail. Supporters of Republican John McCain increasingly say they fear that Democrats, led by their candidate Barack Obama, will lead the country into socialism, defined as a system under which the means of production and distribution are owned and operated by the community or society rather than private individuals.

In the financial realm, however, the Bush administration — led by Treasury Secretary Henry Paulson — has already stepped into the realm of socialism, at least temporarily. Treasury has begun buying into the ownership of major U.S. banks, with up to $250 billion in government funds. Those stakes are meant to be sold at a later date, when the economy has stabilized.

The response to the deepening financial crisis did not start this way. It began with pledges totaling up to $142 billion into failing giant companies including Bear Stearns and the American International Group, plus conceivable trillions in supporting the mortgage titans Fannie Mae and Freddie Mac, with prospects that much of the money may be recouped. When those ad hoc individual deals looked inadequate, the administration went further with its plan for using up to $700 billion to buy up exotic investment products whose value had plummeted because they were based on risky mortgages that were going sour.

Now it has taken a lead from the British, who first came up with a plan for direct government recapitalization of its nation’s banks.

In its venture into socialism, the Bush administration may want to listen to the advice of Europeans, who have had long experience with socialist governments. Britain and the other European governments are imposing strict conditions on their bailouts, such as restricting executive compensation, forbidding the payment of dividends until the government investment has been repaid and supervising lending policies.

The U.S. plan doesn’t do much to restrict executive compensation and golden parachutes and it permits continued payment of dividends. It seems reluctant to regulate the operations of the banks where it is taking temporary ownership positions.

The communist government of China, trying to show that it has not abandoned Marxism, calls its thriving economic system “socialism with Chinese characteristics.” The new American rescue plan could be called socialism with free-market characteristics. But even temporary socialist management requires supervision and regulation to prevent fraud and favoritism, not the free-market hands-off approach that let questionable mortgages flourish, let the housing bubble grow until it burst and let investors devise such a complex system of derivative products that it finally has come tumbling down.

It may well turn out that America can learn from Europeans in the international financial meetings now being planned. British Prime Minister Gordon Brown and French President Nicolas Sarkozy are thinking in terms of rebuilding the foundations of the financial systems.

What emerges, here and in Europe, is likely to be a mix of capitalism with stronger government oversight. That should be a stronger foundation than the one that just crumbled.
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Following is my comments I posted this morning on the Bangor Daily News Web Page, under the editorial itself.

It sounds as though the BDN is supporting Socialism, but why not, they are supporting the candidate that pretty much stands for that type of government. Are we surprised at this idiotic editorial..? What is going on in the inner circles at the BDN? Is the News ready to distribute it wealth to the citizens of Maine, say for oil bills, food and rent? However, what do we know? The News is supporting Obama, and that is what he stands for isn't it? One definition of Socialism:
"The theory or practice of those who support such a social system". So much for "A WHIFF OF SOCIALISM..
A couple of weeks ago, I suggested that the News come out early for their endorsement of Obama, and save us readers from the constant ongoing critical editorials against McCain and company. Now that they have done just that, how about coming out now for not just a Whiff of Socialism, but a true state of same. Come on BDN do save us..Larry T. Doughty, South Brewer-larrytdlarrytdlarrytdoughty@yahoo.com-www.ourstory.com/larrytdoughty/