First, it was tried, in an EXTREME form in the Soviet Union. Bread lines, lines for toilet paper, lines to ask what line to get in so that you could get on a waiting list to stand in another line to get a place of your own and be able to leave the 1 room apartment you were sharing at age 35 with your wife, nine kids, your no good brother in law, your grandmother, and crazy uncle Igor who liked to re-enact the Seige of Leningrad at the most inopportune times.
Then it was tried in Eastern Europe, where again, it failed in all of the communist bloc countries.The idea was that the government owned everything, gave you your salary, got you a job, universal health care, and supposedly you lived like everyone else. No upper class. No snobs to make fun of your poor lifestyle. The only problem...there was indeed a ruling class and they lived a heck of a lot better than the rest of the populace. No freedom to vent your anger at the government if they so happened to come in the middle of the night and kidnap your parents, and another problem was that there was no motivation for anyone to work beyond their means since you couldnt exactly buy a nice piece of land eventually, a house, a nice car, or own anything that would make you different or better than anyone else for that matter. So that system of socialism failed.
Then Western Europe, realizing after World War 2 that they badly needed the government to keep things afloat formed a sort of "hybrid form of Capitalism/socialism". Now I am not talking about the hypocritical Chinese form of socialism capitalism. They aren't even a communist country anymore. They are more like a form of a capitalist dictatorship, similar to South Korea between the 50s and the 80s with a lot more people and a lot less freedom for the populace.
The rest of Europe and many countries throughout the world took many of the ideas of socialism and etched it deep in their societies. The government would take a large stake in many corporations to make sure they cant fail. They tax so much it would make a lottery winner feel poor. But in the end there was universal health care (which many feel is a waste, considering the long waiting lists), pensions for much of the populace. Basically in a lot of these countries you can be guaranteed to be taken care of from cradle to grave, you just have to pay more in your taxes.
Some corporations in these countries are deemed just "too big to fail" (sound familiar?). Canada and many commonwealth countries have "Crown corporations" where the government owns and has a big say in these companies so they dont end up the way of Chrysler.
So does it work? ask Iceland, who just ended up bankrupt, a first for a modern western democracy (if im wrong, let me know, but I cant find any other examples). But then again, Western Europe did experience the "miracles" of the late 50s and 60s where they had enourmous economic growth after being torn apart by World War 2.
In America, people have a bad taste for this sort of capitalist/socialist hybrid system. Some bloggers claim that there already was a small form of it before this recent economic mess started.
Police
Military
Some power grids
City and state infrastructure is supposedly a combination of socialism and capitalism working side by side. Or maybe just Federalism.
K-12 schooling
Some higher education is all under some sort of federal and state control. But the whole point here is corporate full blown capitalism/socialism with a planned economy and if it indeed DOES work, because it truly has never been tried here.
If you ask your grandparents, the closest the government came to owning anything was a few banks in the 70s and the famous Chrysler loan of the late 70s, early 80s. But they never had a large stake like they do in the 70 percent ownership of GM and some of the major banks. So whats supposed to happen now? If you ask your parents and grandparents, they may be as puzzled as you because they dont remember the last time the government owned anything this much!
In a way, the corporations themselves, federal and state jobs have forms of socialism. Universal healthcare for you and your spouse, a pension. But take note that many corporations have failed because they were forced to pay out large sums for pensions and surgeries of retired workers i.e. GM, Chrysler.
The bottom line is, in the past, like Flint Michigan in the 1980s, the idea of the government was, "let the natural cycles of capitalism take fold. People will lose their jobs, lives will be ruined but eventually someone will pick up the pieces and such is life." Its worked for 200 years so what I cant understand is why the government all of a sudden has this new idea that government ownership will prevent the inevitable collapse of companies that are doomed to failure because their business models just dont work.
You cant artificially inflate failed business models with money loans and government ownership. It cant work, and it wont work. This country is too big. Now dont even mention Henry Paulson and his famous Wall Street loans. The mere mention of his name makes me angry because a man like him should be brought up on corruption charges. He blindly gave money to wall street, noone has any clue where the money went, and he has a nice snug job in the very same place he helped "save" in what was one of the biggest thefts in US history, but thats another issue that I will vent about another time. In any case, it isnt the sort of Government intervention im talking about.
It sounds cruel, but its true because its worked in the past. Let the natural cycle of capitalism happen. But thats the old idea. We are in a new age, looking at a new abyss.
Noone here has ever been involved with such an experiment before and unlike the people at CNBC who have to tell everyone itll get better by the end of 2009 (thought they said the same thing in 2008), I think we are in for a recession that will not get better until the better part of 2012, 2013, when the new World Trade Center is finally FINALLY built (thats another story ill be venting about next time).
So final answer: We dont know if it will work, because it has never been tried here before. But if we look at other examples, i.e. Iceland, we may be in for a big bad surprise, or not. Its too early to tell.
"Life is so simple, but we insist on making it complicated"
Confucius
551 - 479 BC
