Friday, January 28, 2011

It's Not Socialism vs. Capitalism

Republicans would have us believe that until President Obama was elected, the U.S. was a capitalist economy, pure and simple, and ever since then it has become a socialist republic, a la the former Soviet Union.

Never mind the fact that the bank bailouts they despise happened under George Bush, in 2008. Details, details.

But the fact is, even before that, the U.S. economy was a mixed economy, not purely capitalist. Business had become intertwined with government in many ways -- from businesses that depended heavily on government handouts, dating back to the construction of the transcontinental railroad in the 1860s, to the military industrial complex that began growing in the 1950s, and on and on.

This pure capitalism vs. pure socialism argument has lately focused on Ford Motor Co. being held up as an example of a company that rejected government help, in contrast to General Motors and Chrysler.

Of course, the truth is that Ford Motor Co. itself would have faced dire straits had GM and Chrysler shut down. Since Ford shared many suppliers with GM and Chrysler, those suppliers would have likely gone out of business and threatened Ford's survival. That's why Ford supported the government aid for its cross-town rivals.

Now there is more proof of Ford's lack of purity. The news that GM has dropped its application for a $14 billion loan from the Department of Energy noted that Ford itself had obtained a $6 billion loan from DOE in 2009, the same type that GM was now rejecting.

Not quite so pure, is it?

No comments: