• Nick Sorrentino

Why ‘Socialism’ is economic totalitarianism and why free people must fight it. Part 1

Updated: Feb 13, 2019

When the bailouts happened we (not just us) warned that this “get out of jail free” mentality would infect the body politic. It has.

Perhaps more than any one thing the bailouts of the big banks (and car manufacturers) have done more to undermine what was left of the free market parts of our economy in the 21st Century. People saw the fat cats fail and then be saved by the government with taxpayer money and hocus locus from the Federal Reserve (that the people also pay for down the road) and they asked, “Why not us?” Why does Goldman Sachs get saved while my family is thrown into the street due to foreclosure. A foreclosure that was facilitated in my respects by the banks that were bailed out and which in some instances were doing the foreclosing. How is that fair?

It wasn’t and it’s not. And fairness was not on the minds of Hank Paulson and Ben Bernanke in the fall of 2008. Their buddies, the heads of the institutions with which they were deeply familiar were in trouble. Suddenly the “masters of the universe” weren’t masters any longer.(Or quickly might not be.) The fat cats were about to feel the correcting mechanism of the market. Pain was headed their way. Justly.

As David Stockman asserts in his classic book The Great Deformation, the panic on Wall Street was not the end of the world, as we were told. If Goldman Sachs died. It died. There’d be pain for the people who did well on the way up but life would go on. There would be some knock on pain around Goldman Sachs but life would go on. The same was true for AIG which we were told over and over was the lynchpin to the whole economy since it backed a huge number of what are called "default swaps". It was too big to fail we were told.

No it wasn’t. None of the banks that were bailed out were “too big to fail”. But many of the egos housed within the shiny bank high rises in New York thought that THEY were too big to fail, and their friends in Washington DC agreed with them. They agreed even though bailing out the fat cats would undermine our economic system and flew in the face of any anything like fair play.

More banks would have failed had we let the market correct things. But with time other banks, better run banks, would have filled in the gaps with healthy (non-bailout) economic activity. That is the way capitalism, which is a system of gains and losses it must be remembered, is supposed to run. But the big banks were imperiled and that could not be. As such the American people had to be scared into a bailout.

Few people remember now that Congress originally rejected a bailout. Then the market swooned again and Congress took another vote. This time the banks got what they wanted. It was crony capitalism, government intervention for the benefit of a connected few, on a massive scale.

Now fast forward a decade and we have the wundkind of Westchester County, Ms. Ocasio Cortez waxing on and on about a “Green New Deal”. How would we pay for this massive government intervention into our already government micro-managed economy? Who knows? Ms. Ocasio-Cortez and her ilk say, just like we paid for the bailouts. (We didn't, and haven't yet.) If the banker crony capitalists get socialism, we want socialism too. We want “free” college and rainbow unicorns and whatever else because money doesn’t mean anything. There are no consequences to spending. Deficits? Well, Ms. Ocasio-Cortez might as well just quote Dick Cheney who asserted during the Bush administration that “deficits don’t matter.”

What are these uninformed and more importantly misinformed young politicians supposed to think? Hey, socialism appears to have no cost (aside from the moral horrors, but they seem to have no problem with these.) So why not?

"Hyper-loops driven by pixie dust can happen man. You just gotta believe. Nothing really costs anything man…Gotta just have a mentality of abundance man.."

But there is a cost, a massive cost to this foolishness as we’ll explore next.