The President and Private Pay

If you were to do a word count on Fox News or talk radio over the last two days, "socialism" would show up more often than Limbaugh's Chicken Wing and Oxycontin delivery service.  

Here's the dependably nutty Glenn Beck going for a two-fer.

We're on the road to socialism. So if we're going down the road, let's really go for it. Comrades, good news on the Western Front — our glorious revolution of change is starting to take hold. Our fearless leader spoke out against capitalism today. ... On tonight's show I’m going to just tie some of these things together. How the government is moving to nationalize banks, is setting salary caps for bailed out companies' executives, the dangers of the union card check, the move toward universal healthcare, Including SCHIP to insure kids, and much more. ... And you might say, "Oh that's crazy talk." But I’m going to show you how these things happening today line up with some of the goings-on in history's worst socialist, fascist countries.

Get that? Socialist and fascist. Scary.

Beck is just one of the right wing pundits spitting pork rinds into their microphones over President Obama's decision to cap the salaries of executives. Not all executives, of course, just those whose failing companies come begging for massive loans paid for by American taxpayers. For Rush, Bill, Sean, and their crew, demanding that taxpayer dollars coming in the front door not immediately be taken out the back in the form of bonus checks is tantamount to raising the red flag over the White House and declaring that all school children be taught using the Cyrillic alphabet. All of them seem to be dead certain that trying to make sure that our funds go to help the economy in general rather than the economy of those who caused the mess is not only socialist, but unconstitutional.

You know who the right must really hate? This guy.

Richard Nixon, Socialist Hero

On August 15, 1971, Richard Nixon announced a freeze on all wages and prices in the United States. That's all wages, not just wages of those who made a deal to take government money, or government employees, or government contractors. Everybody. About the only serious protest of Nixon's controls came from union workers who felt that the freeze only cemented an already unfair gap between the wages of labor and management -- a gap about 50 times smaller than it is today.  

Why did Nixon put his freeze in place? Because inflation was rampaging at 4% -- about 1% over what we consider normal. And the wage and price freeze, parts of which persisted for almost three years, were only part of a package of actions taken by Nixon (the effectiveness of which were all set at sixes and nines when Nixon left following the revelation of Watergate and faith in all of his actions sank to nada).

Nixon was far from the first to impose on the marketplace. During World War II, the Office of Price Administration had 63,000 workers who controlled almost every aspect of product pricing and availability. One of those workers was a young Richard Nixon, so on the Beck scale the man was clearly more socialist than Lenin and Lennon put together. Even the OPA and other actions taken during the war or FDR's New Deal were far from the first time that the government had intervened to control the economy.

From Teddy Roosevelt's trust-busting insistence that the government must govern the economy and the "Square Deal" for the common man, Lincoln's creation of everything from transcontinental railroads to paper money, or the creation of the national bank following Hamiltonian ideas that were from the outset opposed to allowing the market to run wild, American presidents have always intervened in the economy. The actions that President Obama has taken are neither new nor by any measure extreme.

In the past, people were able to distinguish between capitalism and chaos, and understood that government intervention in the markets was needed when the organizing principle of the markets was sent askew. The idea that the market is inviolable and all-knowing didn't really start with Adam Smith. It's more a product of the Ronald Reagan-Ayn Rand fusion of the 80s -- the one that drove "hands off" legislation leading to the S&L meltdown. That was the source of inspiration for stripping away the protection that had kept the market sane since the last time these guys got their way.

How much power does an American president hold over the markets during a time of war? One hell of a lot, that's how much. What President Obama has done so far barely scratches the surface of what can be done, and what may be necessary, to get us out of this mess.

Let the pundits scream "socialism" and fume. Government intervention in the markets is not only necessary, it's as traditionally American as Yankee Doodle and apple pie.

(Updated to abridge the head-slappingly obvious error that was in the first draft. It's one thing to mess up history you've read in books, but when you start bumbling the things that you lived through, you know you're getting old.)