The left is marching against free market capitalism and it is the responsibility of all conservatives to take up verbal arms against the progressive troops lining up to trash free markets. E.J Dionne, self proclaimed progressive, writes for the Washington Post today that there is something to the argument that Americans are all Socialists now, because “capitalist theory and practice were being toppled by an economic catastrophe that proved how profoundly flawed the old system was.” I guess Dionne wants to toss “old system” of capitalism in the trash, for a new Socialism-Light system with a big government nanny state to take care of us all. What Dionne misses is that one of the factors creating the meltdown on Wall Street was the the Community Reinvestment Act (CRA), requiring financial institutions to make loans to people who could not repay.
According to Investors Business Daily, if a company refused to loan to people with bad credit, they would be penalized by one of four federal banking regulatory agencies, including being listed on a CRA ratings report card. This government action was a factor in the meltdown of Wall Street, no matter how loud the left cries that the Wall Street downturn was attributable to greed and evil corporate wrongdoers.
Dionne claimed that the approach to a form of “capitalism that saw government playing an ever smaller role in economic and social life, and finance reigning over production and invention” was failed. I guess Dionne believes the converse to be true that we need government to play a bigger role in our economic and social life. No thanks.
Dionne went on to argue for “socialism’s philosophical brother,” which consists of a “cooperative system” including support for “stimulus (by government), re-regulation of finance (by government), and stronger safety nets (also provided by government).” Massive new government spending, more bureaucrats second guessing decisions of private enterprise, and more entitlement programs will send us down the road to socialism, not prosperity. In short, Dionne far prefers warmed over socialism, which resembles the left’s definition of progressivism, to the current American system of a limited government with minimal government interference in the economy.
Dionne and his progressive buddies need to understand that warmed over socialism is not the solution to any of the probems of the economy. What caused the economic catastrophy was too much government, not too little. The TARP is a great case study in how government solutions actually exacerbate the problem and are further evidence that big government is a problem that should be the subject of reform — not capitalism.