Much has been said by critics of the Obama economic policy. Generally, the criticism is that Obama’s impulse, evident in his policy initiatives, is for state socialism. There is considerable merit to that simple observation, but it misses the historical and factual mark.

In reality, Obamanomics is more consistent with Fascist economics. That is a bad thing, because fascist economics is a much more seductive policy to Americans than would be outright socialism. It is socialism’s sexier first cousin. Think of it this way; state socialism is like a bossy, domineering mother who always knows best how you should spend your time, money, and talent. Communism is like a hairy-legged, jack-booted and homicidal aunt, who also tells you who to love (her), what to think, and when to think it; fascist economics is the stylish, smiling, plausible-sounding, and non-threatening lady that promises everything…in exchange for your individual freedom to choose.

Rather than actually nationalize (seize) capital, as would be the case with true state socialism (as opposed to private socialism, which one sees in private charities designed to soften the effects of life on the individual level), Fascists left the tokens of ownership in the hands of those who properly owned the property. Instead, they simply took the rights and prerogatives—and rewards—of ownership away from owners, and vested them in the state. They also, by necessity, killed entrepreneurism.

A fundamental tenant of fascist economics—as in all aspects of fascism—was that individual interests were subservient to the interests of the state. It was, at its base, anti-individual and pro-statist. As Benito Mussolini said, “The citizen in the Fascist State is no longer a selfish individual who has the anti-social right of rebelling against any law of the Collectivity. The Fascist State with its corporative conception puts men and their possibilities into productive work and interprets for them the duties they have to fulfill”. You simply could not have all those selfish, anti-social individualists running around willy-nilly, deciding who they were and what they should do. It was—and is—the fundamental, blood enemy of the ideals of classical liberalism on which the Constitution was predicated, and under which the United States flourished for about a century and a half.

It is seemingly a great paradox of history that Fascists would find eager collaborators among the captains of industry in Italy and Germany. That seems a paradox only to those who fail to understand the great insight of Adam Smith, the father of free-market capitalism, which held that one of the greatest threats to free markets would always come from a collaboration of incumbent businesses, which always tend to seek protection from market forces, with government. Exactly the same impulse drove the leaders of labor to fly to the open arms of governmental power. By forming an unholy alliance with government, Italian and German workers could have what they could never have if they faced market forces.

Did private companies exist in Germany and Italy under fascism? Of course, and many of them flourished as they never could in a competitive environment. Did organized labor exist? Yes, the unions of which the government approved existed and did very well…if being co-opted by the state is “success”. The State made sure they were represented on the collectives, right along side the approved lists of business leaders. A player in a free market is not necessarily a capitalist. Indeed, history and today’s headlines prove that many of those who are leaders of American enterprise are, in fact, anti-capitalists; they reliably do the opposite of what a principled capitalist would do. They willingly—even eagerly—form the government collaboration that is the hallmark of fascist economics, converting their enterprises into quasi-government owned/controlled organs of state. Just like their Italian and German predecessors.

In Obamanomics, we see an exact parallel, and because the same forces of human nature are at work. The captains of American industry…especially those who are failures as capitalists…are not simply willing to take the government offer of “special” help in a crisis. They can’t take the Faustian bargain fast enough. They exhibit the same human nature that Adam Smith observed over two centuries ago; the free market (or even a market as marginally free as existed in America before 2008) is too rigorous, too hard, too “free”. They seek a harbor, and they make special pleadings that are always a lie (see “Too big to fail”) to convince government that they should have it. Statists, of whom our nation’s capital is heavily larded, are only too happy to hear the whining and respond.

The fascist collaboration is powerfully attractive to both its essential players. Big business naturally seeks it. Big, power greedy central government hungers for it. Compounding that, the American intelligencia has historically been enamored of it. The history of that is both long and sordid, and leads us to “thinkers” of today who have—and will—occupy powerful positions in government. See Robert Reich and Ira Magaziner.

Few Americans today are aware of the hot flirtation with fascism that intoxicated the minds of our leaders prior to WWII. They would scoff at the idea that the Roosevelt administration was riddled with people who were enthralled with the economics of Mussolini and Hitler before the war, and who never cleansed themselves of approval of what Mussolini and Hitler believed and did in their economic policy. It isn’t hard to find who those Americans were and what they thought, any more than it is hard to find “opinion leaders” of today who are their heirs. http://www.banned-books.com/truth-seeker/1994archive/121_3/ts213l.html

While he may not realize it—and would never admit it—Pres. Obama is one of them. Just substitute the older “collective good” with the hipper “social responsibility”, and you have the same apparent policy being touted by our current crop of “leaders” in Washington. “The state should retain supervision and each property owner should consider himself appointed by the state. It is his duty not to use his property against the interests of others among his own people. This is the crucial matter. The Third Reich will always retain its right to control the owners of property.” That was A. Hitler’s formulation of “social responsibility”. Barney Frank would approve.

The greatest danger prior to WWII and now is that the allure of fascist economic policy was not limited to the halls of power or the ivy-covered walls of the academe. Then and now, the lure of fascist policy is popular among many ordinary Americans—though they would be appalled to see their views in their true light.

Many Americans distrust markets, as they have been trained to do by our educational system and cynical politicians…and by too many American businesses. In response, they see no harm, and are told to expect great good, from the interventions of government into the free market. Many of our neighbors believe that they need to be protected, that they are powerless to guard their own interests without the “regulation” of markets. They see nothing wrong or threatening in the Obama notion of “spreading the wealth around”, or wholesale government control of entire sectors of our economy.

All of this might lead the reader to think that we are powerless to resist the tidal force of fascist economics that today is seemingly accelerating at an unprecedented pace. That is, happily, not true. The natural enemy of fascist—or any central planning based—economics is individualism. That is to say “individuals”. Individualism is expressed in one very significant way by the entrepreneurial urge, which has been and is—for the moment—the most potent force in America’s economic success.

The only power that can resist any central-power based economic scheme is enough individuals who will not stand for the loss of their freedom to choose. The only force that can resist Obamanomic’s fascist economics policy is you and I. Together we can…to coin a phrase.

“Well, keep in mind that it is precisely because of the lack of this authority that the AIG situation has gotten worse. Now, understand that AIG’s not a bank, it’s an insurance company. If it were a bank and it had effectively collapsed, then the FDIC could step in, as it does with a whole host of banks -- as it did with IndyMac -- and in a structured way renegotiate contracts, get rid of bad assets, strengthen capital requirements, resell it on the private marketplace.

So we’ve got a regular mechanism whereby we deal with FDIC-insured banks. We don’t have that same capacity with an institution like AIG, and that’s part of the reason why it has proved so problematic.” President Barak H. Obama, March 24, 2009.

That, friends, is what we call a flat-footed lie. B. H. Obama should have known a lot better. Anyone…anyone…familiar in the least with bankruptcy would recognize that what he said was needed by way of “authority” already exists. Federal courts charged with implementing our very well established bankruptcy code use their authority every day to do everything Obama said was needed.

This new Obama lie goes with the now-institutionalized lie that ANY business is “too big to fail”. If a business is too big to fail, it is too big to do business. Because, you see, failure has to be an open option for any business. It has to be one of the ways a business can go, and there can be no special pleading for any business, no special dispensation that keeps it from the consequences of its manager’s decisions. The danger to the economy of even entertaining the idea that a business…for whatever reason…cannot fail is immense. It will fail; the only question is how much it will take with it. The bankruptcy process is designed to limit the collateral damage. The bizarre process we are watching now could take out an entire national economy.

“If [AIG] were a bank and it had effectively collapsed, then the FDIC could step in, as it does with a whole host of banks -- as it did with IndyMac -- and in a structured way renegotiate contracts…” Well, funny thing, that is exactly what happens in a bankruptcy. Some of the contracts…like, say, big fat bonuses…can be completely abrogated. In the case of AIG, that might mean that lots of other financial firms, who had tried to manage their risks with AIG, would be left hanging out. Sorry ‘bout that. That could mean big losses. It could mean that those businesses failed, too. That isn’t a new situation that nobody has ever seen before. Remember Enron? Big outfit. Biggest bankruptcy ever. Lots of ripples in the larger economy, as other businesses were effected or even taken down. Did we survive? Yep. Did you know that there is still an Enron?

“If [AIG] were a bank and it had effectively collapsed, then the FDIC could step in…get rid of bad assets, strengthen capital requirements, resell it on the private marketplace.” Which is what the bankruptcy process does every day. The debtor comes in with their basket of debt, their basket of assets, and hands the tangle to the bankruptcy court. The courts have trustees, who are empowered to sort through the baskets of debts and assets, untangle the mess, and set priorities as to who should be paid what, what has to be dumped, what can be sold in the market, etc. It is a rational, known process that many people understand. It is highly rule-driven. It is even remarkably cooperative, very often.

Which makes it completely different than the Bush/Obama plans out there. They are irrational, mysterious processes (if they are even that), and nobody really understands them. There are no rules. Congress saw to that. There is nothing over which debtors and creditors can cooperate, because the process is political, not economic. If you want something, you have to go on bended knee to Congress. And Congress is clueless, or far worse. Congress is the source of the market distortions that caused the whole stinking housing finance crisis. So, we’re trusting them to make a brand new system to fix the stinking mess they induced?

So, is B. H. Obama stupid, and does not know about the fundamental power of the bankruptcy process? Almost certainly, the answer to that questions is “NO”. So, why are we not exposing AIG…or whoever…to the bankruptcy process to which all business have always been subjected? If we HAVE a process that provides EXACTLY the “authority” Pres. Obama said in his press conference we need…but somehow lack…why is it we are not using it?

My only conclusion is that our President suffers from a form of March madness.

By Presidential fiat, taxpayers of the United States will now fund embryonic stem-cell research free of any restrictions based on the ethics of creating human life for the specific purpose of destroying it. http://www.whitehouse.gov/the_press_office/Removing-Barriers-to-Responsible-Scientific-Research-Involving-Human-Stem-Cells/

In his stunning reversal of Bush Administration policy, Mr. Obama wrapped his Executive Order opening the Federal purse to biotech firms in high sounding quasi-scientific rhetoric. Reality tells us the true, corrupt motives for the move. Obama’s move was never about good science. It was all about a few special interests grubbing for taxpayer money.

Firms with a vested interest in embryonic stem-cell research were never barred from raising all the cash they could from the private sector. They just found it a very hard sell, as most investors put their private investment in other, more promising projects that involved other forms of stem-cells. People with “skin in the game”—their own skin—bet predominantly on those lines of research. Those investments have been paying off for the benefit of all humanity.

The Bush Administration never barred anyone from doing all the embryonic stem-cell research they could do. It never barred Federal spending on embryonic stem-cell research. It simply limited the lines of cells that were available for such research funded by Federal money. Of course, there were many who loved—and still love—to simply misrepresent the truth in the course of demonizing Mr. Bush.

As Mr. Obama’s soaring homage to pure science droned on, many of those with any knowledge of the reality of cutting edge science were left shaking their heads. Was he actually ignorant of the two recent major break-throughs that make it possible to create embryonic stem-cells from adult cells? http://www.sciencedaily.com/releases/2009/02/0902 and http://www.bloomberg.com/apps/news?pid=20601081&sid=avQAMWpl9H_U&refer=australiaWas he unaware that science—real science—seems to have eclipsed the political controversy? Or could it be that he cynically chose to ignore actual science as he took the political low road, paying off another cherished liberal lobby using taxpayer money?

As he spoke of a new age of non-politically tainted “pure science”, was he possibly unaware that embryonic stem-cells have yet to realize any promise, despite the literally fantastic nonsense that has been spouted by politicians about what they will do if we just throw money at research and remove the ethical safeties? Could he be so ignorant of his subject that he did not know that no cure, no treatment, no benefit to humanity has come to date from the vaunted embryonic stem-cell? Or was he really in mind of the contributions of money to his campaign made by the biotech firms who wanted Federal dollars they could not generate from private investors?

If you want apolitical investment in science—“pure” or otherwise—does Mr. Obama actually think you get it via the political process, as in Federal funding authorized by Congress? Could he be that stupid?

Of course, the answer is “no”. Mr. Obama is not a stupid man, though he certainly is a man of surmounting ignorance in a broad array of areas including engineering, ecology, biology, economics, diplomacy, defense, etc., etc., etc. He is not stupid, and he knows that his Executive Order has nothing to do with fostering science. It has to do with cynical payola. It is pure politics…which is easily the most polluted of all human activities. That is not pure science. To paraphrase the Clintonian axiom, “It’s about the money, stupid”.