Socialists among us

A week ago today, the putative editor of the Las Vegas Sun came out of the closet and declared himself a socialist.

In his column, Brian Greenspun stated, "Given a choice between socialism and capitalism, I think I would like to try the first one."

Pity the poor Greenspuns. Their inherited wealth probably has shrunk 30 percent or even 40 percent in this stock market and real estate swoon. After all, their wealth is in construction, banking and media -- all taking the brunt of the decline. It is understandable Greenspun would pine for an alternative to what he perceives as the bubble-and-burst gyrations of unregulated capitalism.

The acorns of inherited wealth often fall and bounce far, far from the tree. Take that unrepentant Weather Underground bomber Bill Ayers, who once preached, "Kill all the rich people. Break up their cars and apartments. Bring the revolution home. Kill your parents."

His father was Thomas Ayers, president and CEO of Commonwealth Edison, a member of the Chicago Tribune board of directors and chairman of the board of Northwestern University.

Bill Ayers, too, is a committed socialist.

Greenspun wants the government to provide "the kind of oversight that should prevent the inevitable excesses of capitalism that led to the meltdown that has gripped us so hard."

Unlike Greenspun, I think we should try the latter, capitalism, because we've not done so for more than 70 years, since Franklin Roosevelt launched the Works Progress Administration -- the mother of all stimulus packages -- and took the country off the gold standard. It was not the excesses of capitalism that hammered the stock and real estate markets and all of those who depend on them -- sellers of houses, cars, furniture, advertising. It was unrestrained meddling in the mortgage loan business by politicians, the very definition of socialism, that was the cause.

This past summer I read Charles Morris' book "The Trillion Dollar Meltdown." At the time I was a bit befuddled by the swirling concepts of subprime loans, CDOs, toxic waste loans bundled in mortgage-backed investment securities, Fannie Mae and Freddie Mac, leveraged loans.

"The loss of faith in American markets will be far greater than a one-time trillion-dollar asset write-down," Morris predicted. Now I get it. Even his dollar estimate was dead on.

The likes of Franklin Raines and Jim Johnson, backers of presidential candidate Barack Obama, made millions while heading up the government-sponsored enterprise called Fannie Mae, which was buying up subprime mortgages that buyers could not afford.

This was because under Jimmy Carter's Community Reinvestment Act, the Fed and other government agencies could block a bank merger or expansion if some community organization, such as ACORN, protested the bank was not making adequate loans to minorities and the poor.

When questions were raised in 2005 about reforming Fannie Mae, which was buying up those aforementioned toxic waste mortgages, Senate Majority Leader Harry Reid said, "While I favor improving oversight by our federal housing regulators to ensure safety and soundness, we cannot pass legislation that would limit Americans from owning homes and harm our economy in the process."

The harm has been done, and it was not due to the whims of a free-market economy. It was a flurry of worthless paper in the hands of bureaucrats and politicians, not Adam Smith's invisible hand.

In a letter to John Adams in 1819, Thomas Jefferson warned of the excesses that could arise from use of paper money instead of gold and silver coins.

"The evils of this deluge of paper money are not to be removed until our citizens are generally and radically instructed in their cause and consequences, and silence by their authority the interested clamors and sophistry of speculating, shaving, and banking institutions," Jefferson wrote.

"Till then, we must be content to return quo ad hoc to the savage state, to recur to barter in the exchange of our property for want of a stable common measure of value, that now in use being less fixed than the beads and wampum of the Indian, and to deliver up our citizens, their property and their labor, passive victims to the swindling tricks of bankers and mountebankers."

Those who are fundamentally ignorant of history, economics and current events are easily gulled by the mountebankers and the socialist-leaning politicians and editors.

Thomas Mitchell is editor of the Review-Journal and writes about the role of the press and access to public information. He may be contacted at 383-0261 or via e-mail at tmitchell@reviewjournal.com.