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Is the Financial Regulation Bill 'Socialist'? Don't Make the Socialists Laugh | The Nation

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John Nichols

John Nichols

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Is the Financial Regulation Bill 'Socialist'? Don't Make the Socialists Laugh

Now that Massachusetts Senator Scott Brown has assured that there will be at least one Republican vote in the Senate for the conference committee report on the financial regulatory reform bill—the measure's final Congressional test—it will be harder for Republican legislators to claim the proposal offers more evidence of the forward march of socialism in America.

But only a little harder.

Republican senators remain pretty much united in opposition to the financial regulatory reform legislation, which has passed the House in final form but still needs an OK from the upper chamber of Congress.

Why are so many GOP senators so very determined to block the bill, which cannot be debated unless sixty senators senators support a cloture vote?

What's the problem?

Republicans say that it is not that they oppose regulating Wall Street and big banks. Rather, the argument goes, they are afraid of big government—of the "socialist" sort that might actually try to accomplish something useful, as opposed to big government of the Dick Cheney bloated defense budgets and needless wars sort.

Senate Republican Leader Mitch McConnell says his caucus is fighting "to prevent the Democrats from doing from the financial services industry what they just did to the health care of this country.”

Once again, the conservative chirp goes, a modest measure must be blocked because it would put the country on the slippery slope to socialism.

South Carolina Republican Jim DeMint, the Senate watchdog for against all things social, is denouncing the bill as a "massive, ill-advised piece of legislation" that would make it harder for kids to get braces. Seriously

Congresswoman Michele Bachmann summed things up when she outlined the "case"—all right, maybe the better word is "rant"—for opposing basic consumer protections and a few minor moves aimed to avoiding more meltdowns.

“This is breathtaking in the level of power that government will have over our lives when it comes to credit,” Bachmann said of the reform bill. “It gives government the authority to decide, for instance, how much a bank teller in Peoria, Illinois, will be making going forward because a pay czar will decide what anyone in banking will be able to make.”

Never mind that socialists fought against czars. 

It still sounds Soviety.

And never mind that DeMint and Bachmann are wrong, Kids will still be able to get braces, banks in Peoria will still pay tellers less than they should and the reform legislation makes no mention of czars. Indeed, to the extent that there is attention to what banks and brokers pay employees, the focus is on the CEOs that earn $1,000 an hour, not tellers who are hoping to get to $10 an hour.

McConnell, DeMint and their fellow partisans need not worry.

Legislation that does neither breaks up "too big to fail" Wall Street banks or restore the safeguards established after the Great Depression separating Main Street banks from big Wall Street firms does not even meet the standard of effective regulation.

It's certainly not socialism.

Who says? The Socialists.

Nicholas Nix, who is running for a US House seat in Texas, offers an outline of real reform: "I believe in STRONG regulation on any business that can completely destroy this country economically. I also believe in the repeal of the 1999 Gramm–Leach–Bliley Act that helped banks merge with Insurance companies, and securities companies. NEVER AGAIN should the U.S. have a proverbial gun pointed to its head and demanded to pay, or die (economically), by Big Business. NEVER AGAIN, should we shell out another dollar to a business that does not know how to hold onto their own dollars!"

That, needless to say, is much, much more than has been proposed in the compromised "reform" bill now being considered by the Senate.

But Socialists go much, much further in their affirmative arguments for real reform.

Dan La Botz, who is running the Senate in Ohio as a proud "Buckeye Socialist," argues that "none of the problems facing this country can be dealt with unless we end the domination of banks, insurance companies and multinational corporations over both major parties and over our political system."

So what's the Socialist fix for the banking issues that the Senate is wrestling with—and for the broader financial crisis?

La Botz's platform declares: "Not a penny more for the banks and the bankers! Take over the banks."

To wit:

* The US government should nationalize the banks creating something like a US Credit Union with offices throughout the country providing loans to small businesses, homeowners, and cooperatives.

* Low-interest loans should be advanced to working people for home improvements, for the purchase of large appliances, and for vacations.

* Educational loans would not be necessary because we would tax corporations to pay for free education.

* The US Credit Union should deny credit to speculators and gamblers in the markets.

Now, that actually does sound like the sort of social-democratic approach that American Socialists have proposed—not just in Ohio but in other states where they are running as alternatives to the Democrats and the Republicans.

And that, of course, is the point: Socialism is not some vague, ill-defined concept. It's a well-established approach to economic and social issues. Americans can agree of disagree with that approach—and they do—but it is absurd to suggest that a little bit of regulation for Wall Street and the big banks amounts to a dramatic abandonment of capitalism.

Almost as absurd as trying to scare people into thinking that putting an end to credit-card and loan abuses will deny braces to kids or pay to bank tellers.

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