Accuracy in Media

During the final weeks of the campaign—and especially during the third and final presidential debate— “Joe the Plumber” became a media sensation. A 34-year-old plumber by the name of Joe Wurzelbacher had told Obama that he was thinking about buying his plumbing company, which earns more than $250,000 a year, and asked, “Your new tax plan is going to tax me more, isn’t it?” Obama’s answer included the now-famous remark that “when you spread the wealth around, it’s good for everybody.”

The comment was seized upon by “Joe the Plumber” and critics of Obama as evidence of his socialist ideology.

“You see,” Senator John McCain commented in an October 18 radio address, “he [Obama] believes in redistributing wealth, not in policies that help us all make more of it. Joe, in his plainspoken way, said this sounded a lot like socialism. And a lot of Americans are thinking along those same lines.”

Tell The Truth

McCain went on to say, “At least in Europe, the Socialist leaders who so admire my opponent are upfront about their objectives. They use real numbers and honest language. And we should demand equal candor from Senator Obama.”

But the problem for McCain was that the Republican Administration of George W. Bush was already traveling down the socialist road, in a failing effort to deal with the financial crisis in the United States that emerged just six weeks before the election.

It was an early “October Surprise” that seemed designed to benefit Obama and the Democratic Party.

Critics of the bailout such as Rush Limbaugh were looking with suspicion on the role of Treasury Secretary Henry Paulson, whose former firm, Goldman Sachs, “tends to give most of its money to Democrats,”  according to the Center for Responsive Politics.

In all federal races in 2008, a category covering the Senate, House and presidential campaigns, Obama was the “top recipient” of Goldman Sachs money, taking in $742,071.

“Obama is the darling of the Goldman Sachs wing of finance banking,” noted Joseph M. Schwartz, writing in the “Democratic Left” newsletter of the Democratic Socialists of America, a group that was nevertheless backing Obama.

Both Obama and McCain voted for the $700-billion Wall Street “bailout” plan.

The Reuters news agency estimated that the cost to taxpayers of all of the bailouts and nationalization schemes could reach $1.8 trillion—more than $17,000 for each household.

Bush, the “conservative Republican,” was in danger of leaving a “legacy” of socialism. An October 15 Reuters dispatch quoted socialist Venezuelan President Hugo Chavez as mocking Bush as a “comrade,” saying that the U.S. President was pursuing a hard leftist line on economic matters. “Bush is to the left of me now,” Chavez said. “Comrade Bush announced he will buy shares in private banks.”

Washington Post columnist Harold Meyerson, a vice-chairman of the Democratic Socialists of America, wrote an October 15 column saying that Bush had “handed liberalism the task of building a more sustainable economy from the wreckage of the old.” He noted with pride that, “It was congressional liberals who insisted that the government have the power to take an equity position in the banks—something that Paulson initially opposed and today embraces.” Bush also went along.

Gratified that the U.S. was heading down the road to socialism, Meyerson added, “Now liberals must turn their attention to the kind of financial nationalization on which we’re about to embark.”

Meyerson suggested  putting “a public member or two on their [bank] boards,” an obvious reference to “progressive “ activists and radical labor union officials,  and endorsed the idea of Jeff Faux of the Economic Policy Institute, a group backed by organized labor, that the government should control outright at least one major bank. 

A Socialist Takeover

In a September 10 article headlined, “Financial crisis: We’re all socialists now, comrade,” Simon Heffer of the British Telegraph had been critical of the British government’s plan, under Prime Minister Gordon Brown, to take financial stakes in British banks. “For the Government to take stakes in our leading banks in order to re-capitalize them is not quite the sovietization of Britain, but it is a pretty good start,” he said. “Anyone over the age of 40 will recall the abiding result of the days when we had a socialist economy in this country: poverty. We had better prepare for some more of that. The state does not have its own money to engage in stock market speculations, such as buying shares in clearing banks. It undertakes this gamble with our money.”

He predicted the outcome: “The intervention, or rather interference, of the state in financial and economic matters can only lead to sclerosis, the suppression of enterprise, the raising of taxes, starvation of investment, lack of innovation, technological retardation and the rise of the power of organized labor.”

On October 14, however, Bush followed Britain’s lead. Following a meeting with finance ministers from the G7 and the G20 groups of countries, Bush said that “They announced significant steps to inject capital into their financial systems by purchasing equity in major banks. And they announced a new effort to jumpstart lending by providing temporary government guarantees for bank loans. These are wise and timely actions, and they have the full support of the United States.”

America Follows Europe

Bush then announced that the U.S. was doing the same. “Today,” Bush said, “I am announcing new measures America is taking to implement the G7 action plan and strengthen banks across our country.”

“First,” he added, “the federal government will use a portion of the $700 billion financial rescue plan to inject capital into banks by purchasing equity shares. This new capital will help healthy banks continue making loans to businesses and consumers. And this new capital will help struggling banks fill the hole created by losses during the financial crisis, so they can resume lending and help spur job creation and economic growth. This is an essential short-term measure to ensure the viability of America’s banking system. And the program is carefully designed to encourage banks to buy these shares back from the government when the markets stabilize and they can raise capital from private investors.”

Obviously aware of the socialist nature of what he was proposing, Bush claimed that the government’s role “will be limited and temporary” and “these measures are not intended to take over the free market, but to preserve it.” 

The website commented that “…only a minority of the U.S. establishment is complaining about the demise of American capitalism and the Bush administration’s unexpected devotion to the socialist cause.”

This was unfortunately the case. Major “conservative” papers, including the Wall Street Journal and Investor’s Business Daily, endorsed the $700-billion takeover plan.  

The Heritage Foundation, a conservative think tank based in Washington, D.C. endorsed it. But Heritage President Ed Feulner seemed to argue against it in a column in the Washington Times, saying that “…as lawmakers debate buying up hundreds of billions in assets, they should realize that the government’s aggressive meddling in financial decision-making is what got our economy into this mess in the first place. The long-term answer isn’t more federal control, it’s a return to free-market principles.”

Former Rep. Dick Armey’s Freedom Works organization came out against it, with Armey arguing that government intervention “would create changes whose effects will linger long into the future. The Treasury plan would fundamentally alter the workings of the market, rewarding poorly run investment firms at the disadvantage of prudent ones, and transferring the burden of risk to the taxpayer. At the same time, the $700-billion proposal does not offer fundamental reforms required to avoid a repeat of the current problem. Congress has been reluctant to reform the government sponsored enterprises that lie at the heart of today’s troubled markets, and there is little to suggest their resolve to pass the necessary reforms will increase in the wake of a bailout.”

The conservative Club for Growth, headed by former Rep. Pat Toomey, also opposed it.

“You can’t save free markets by socialism,” said Rep. Ron Paul, a former Republican presidential candidate. “I don’t know where this idea ever came from. You save free markets by promoting free markets and sound money and balanced budgets.”

Accurate news and information about the radical transformation of the U.S. economy was being provided to the American people through conservative talk radio and blogs. A short and informal survey of right-of-center bloggers found 71 percent opposing the takeover plan. Many of them were denouncing it as socialism. 

A blogger named Eric Blankenburg was horrified by Bush’s claim that the government “investing” in banks was not socialism. He commented, “First Bush claimed that this was only temporary and that at some point in the future, government would sell their ‘investments’ and all would be back to normal….[but] to paraphrase Ronald Reagan: the closest thing we’ll ever see to eternal life on earth is a government program. These ‘investments’ will only grow in time to the point where the government will eventually have nationalized the entire financial system.

“Second, Bush claimed that these ‘investments’ are part of a well thought out plan. What a joke. A few weeks ago, the Bush administration was arguing against a similar British plan. Here’s the problem: the stock market had its worst week ever after Bush signed the $700-billion bailout bill that the administration claimed would calm people’s fears. Now they are just twisting in the wind. There isn’t any plan. They are making things up as they go along, and spending your money in the process.”

 “If Bush can do this,” commented blogger Vincent Gioia, a retired patent attorney, “what would a socialist like Barack Obama do in the name of this emergency, especially if he is joined with a Democrat-controlled Congress and Senate?”

On Brit Hume’s “Special Report” show on Fox News Channel on October 15, substitute host Bret Baier mentioned what we addressed directly in our last AIM Report. He said, Some now fear they [administration officials] are taking America down a path towards socialism.”

Don’t Worry, Be Happy

But Fred Barnes of The Weekly Standard, one of the biggest “conservative” cheerleaders for the federal takeover of the financial sector, insisted that people didn’t have to worry. Look,” he said. “I’m not looking at socialism. It is designed to preserve a free market capitalist system and free market financial markets as best we can in a horrible circumstance. My only concern is one thing—will it work?..And, as Mort [Kondracke] pointed out, the best way to look at whether there is growing confidence in what’s being done is the stock market. It is always a bet on the future. It went way down today.”

But when Barnes was urging the Congress to approve the federal takeover of the financial system, he had no doubts it would work. On the October 2 edition of “Special Report,” for example, Barnes had said that “we have a crisis, and we need to do something” and pleaded for the passage of the $700-billion plan.

He criticized House Republican conservatives for opposing it, saying that “if the votes aren’t there, the market will crash. But what are these people—when they look around, do they think the lack of this legislation is not having an impact? We have a stock market crash and credit markets freezing up. You can’t sell a car, it’s hard to sell cars because you can’t get credit. Our economy is falling apart, and they’re saying ‘No, we have to wait around, and this is too expensive,’ or ‘We need to end mark to market,’ or some of those things. Those excuses are crazy. It better pass.”

Barnes also said about the House conservatives: “I think their arguments are idiotic and myopic. It is as if they are operating from some ideology that says we cannot interfere with the free market by having the government do more. But, look, Ronald Reagan would do this. Alexander Hamilton did it. When you have an economic, when you have a financial crisis that threatens to blow up the economy and put America in a deep recession or worse, that’s when government is supposed to act. If you’re a libertarian and you don’t believe in government, that’s something. But those Republicans are not libertarians. They’re just nuts.”

Who’s Nuts Now?

On the September 20 edition of the Fox News program “The Beltway Boys,” Kondracke had noted the obvious: “I would just observe that the rescue package that got put together is what you might call massive government…It is going to cost billions and billions of dollars, hundreds of billions of dollars. It is a major intervention of the government in the private economy. I would say it’s a liberal program.” But Barnes replied, “Look, this plan can’t be liberal because I’m for it. I think it’s a good idea. There’s really—there is no alternative and that’s why they did it.”

In addition to fooling himself, Barnes on September 22 had  suggested deceiving the American people about the nature of the takeover in order to get it passed. He explained, “You know we would be in a better situation, or at least the Treasury Secretary Hank Paulson would, if this were known as a ‘rescue’ rather than a ‘bailout.’ ‘Bailout’ sounds terrible. Who is for a bailout? A lot of people are for a rescue. But, look, speed is very important here. I wish they would pass something today.”

“For this guy [Barnes] to continue to pose as a conservative and be portrayed as such is just plain absurd,” noted Mike Tennant on the blog site on October 3. Tennant added that Rush Limbaugh had been “excellent in opposing the bailout” and had “pointed out that the free market is not the cause of the problem in the first place; rather, interference in the market by the government is, and more interference is only going to exacerbate it.”

Indeed, Limbaugh on his October 3 show went after Barnes directly for his comments and put the financial crisis and its socialist “solution” into context. “So here we are in America in 2008,” Limbaugh commented. “We have mostly free prescription drugs for the elderly. We have nationalized a big chunk of local and public education. We are probably and eventually going to grant 12 to 20 million illegal aliens full citizenship. Now we are in the process of nationalizing the financial and housing markets in ways that we can’t even know right now—and all of this, we are told (laughing) will save America.  (laughing)  Folks, you just have to laugh out there.”

“The dirty little secret is, folks, that nobody wants to talk about what got us into this problem: loaning money to minorities and poor people who could not pay it back,” Limbaugh added. “This was Marxist social engineering.  This was affirmative action via mortgage.”

In The Tank

Addressing his comments directly to Barnes and by name, Limbaugh said, “Do you understand that the problem we face has been caused by politicians and people who love government using the power of government to distort the free market? Do you understand, Barnes, that a bunch of people who should never have been given loans got them…”

Outraged by the coverage in favor of the takeover plan coming from various sources, even some in the conservative media, Limbaugh said, “Everybody’s in the tank on this now. Even Fox Business News—the Fox News Channel, wherever; CNBC—they’re all in the tank!”

In addition to Barnes, Republican blogger Hugh Hewitt, who has a show on the Salem Radio Network, was a big fan of the Wall Street socialist-style takeover plan. This earned him the nick name of “Blewitt” from columnist Alan Stang.

 John Hinderaker of the popular “conservative” Powerline blog also supported it, saying that “My instinct has been to support the bailout proposal…” Later, however, he reversed himself, saying, “What’s tragic about the bailout, I think, is that it was rushed through without any meaningful consideration being given to alternatives that almost certainly would have been cheaper, less intrusive and more free market-friendly.”

Equally striking, former House Speaker Newt Gingrich was against the plan until, on September 29, he issued a statement in favor of it. Then, in an article for Human Events on October 7, he called it “bad.” He stated, “If Senator McCain is not prepared to separate himself from the Bush-Paulson economic program, he has no opportunity to win.
The country is deeply fed up with the Bush presidency and angry about the Paulson bailout.”

Fox News and radio talk show host Bill O’Reilly’s endorsement of the $700 billion takeover of the financial industry was coupled with mean attacks on those conservatives opposing it. O’Reilly called them “idiots,” “charlatans” and “right-wing liars.”

Conservative talk show host Mark Levin fired back, saying that O’Reilly “doesn’t want to talk about socialism. He doesn’t want to talk about the beginnings of this scandal.” Levin called O’Reilly a “moron” and “Ted Baxter,” a reference to the bombastic, vain, pompous and untalented broadcaster on the “Mary Tyler Moore” television show.  

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