As the presidential race enters the final stretch, the McCain campaign has been sharpening a new line of attack against Sen. Barack Obama: charging that his tax plan amounts to socialism. We speak to Harper’s publisher Rick MacArthur about whether Obama is a socialist and why being called one is considered a smear in US political culture. [includes rush transcript]
This is a rush transcript. Copy may not be in its final form.
JUAN GONZALEZ: As the presidential race enters the final stretch, Senator John McCain and several of his key advisers have been sharpening a new line of attack against Senator Barack Obama: charging that his tax plan amounts to socialism. McCain first inserted the charge into an address he recorded for broadcast Sunday on talk radio stations.
SEN. JOHN McCAIN: My opponent’s answer showed that economic recovery isn’t even his top priority. His goal, as Senator Obama put it, is to, quote, "spread the wealth around." You see, he 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.
In the best case, spreading the wealth around is a familiar idea from the American left. And that kind of class warfare sure doesn’t sound like a new kind of politics. In other words, Barack Obama’s tax plan would convert the IRS into a giant welfare agency, redistributing massive amounts of wealth at the direction of politicians in Washington. I suppose when you voted against lowering taxes ninety-four times, as Senator Obama has done, a new definition of the term "tax credit" comes in handy. At least in Europe, the socialist leaders who so admire my opponent are upfront about their objectives.
JUAN GONZALEZ: Many of McCain’s supporters picked up on the charge that Obama advocates socialist policies, and the issue made its rounds in the corporate media.
DREW GRIFFIN: Socialism, it’s come up on the campaign trail now.
GOV. SARAH PALIN: Sure.
DREW GRIFFIN: Governor, is Barack Obama a socialist?
BILL O’REILLY: There is a free lunch!
SEN. BARACK OBAMA: What is the free lunch?
BILL O’REILLY: The free lunch is that you’re taking the wealthy in America, the big earners, OK — you’re taking money away from them, and you’re giving it to people who don’t. That’s called income redistribution. It’s a socialist tenet!
SEN. BARACK OBAMA: Bill, Bill —-
BILL O’REILLY: Come on! You know that!
SEN. BARACK OBAMA: Bill, hold up.
BILL O’REILLY: You went to Harvard!
MICHELLE MALKIN: There’s no question that Barack Obama has been steeped in and marinated with the socialist ethos from the time he studied at Columbia University.
GLENN BECK: For months, I’ve been telling you, Barack Obama, and more his wife than Barack -— I mean, at least looking at her language — I believe there’s a socialist agenda there for America.
MIKE HUCKABEE: When you punish people for making more money and you reward them for nothing, that is socialism. And that’s a terrible, terrible way for this country to move.
JUAN GONZALEZ: On Fox News Sunday, host Chris Wallace asked McCain directly about the issue.
CHRIS WALLACE: But you did it indirectly, so let me ask you for some straight talk. Do you think that Senator Obama is a socialist? Do you think that his plans are socialism?
SEN. JOHN McCAIN: I think his plans of the — are a redistribution of the wealth. He said it himself: we need to spread the wealth around. Now —-
CHRIS WALLACE: Is that socialism?
SEN. JOHN McCAIN: That’s one of the tenets of socialism. But it’s more the liberal left, which he’s always been on. He’s always been in the left lane of American politics. That’s why he voted ninety-four times against any tax cuts or for tax increases. That’s why he voted for the Democratic resolution, a budget resolution that would raise -— would impose taxes on — raise taxes on some individual who makes $42,000 a year. That’s why he has the most liberal voting record in the United States Senate.
CHRIS WALLACE: But Senator, when we talk —-
SEN. JOHN McCAIN: So -— so, is one of the tenets of socialism redistribution of wealth? Not just socialism, a lot of other liberal and left-wing philosophies. Redistribution of the wealth? I don’t believe in it. I believe in wealth creation by Joe the plumber.
CHRIS WALLACE: But Senator, you voted for the $700 billion bailout that’s being used partially to nationalize American banks. Isn’t that socialism?
SEN. JOHN McCAIN: That is reacting to a crisis that’s due to greed and excess in Washington. And what this administration is doing wrong and what Paulson is doing wrong is not going out and buying up home loan mortgages, home mortgages, and giving people new mortgages at the new value of their homes, so they can stay in their home. They’re bailing out the banks. They’re bailing out these institutions.
CHRIS WALLACE: But you voted for that.
SEN. JOHN McCAIN: Of course. It was a package that had to be enacted because the economy was about to go into the tank.
AMY GOODMAN: Is Barack Obama a socialist? And is being called a socialist a smear?
Rick MacArthur is publisher and president of Harper’s Magazine, award-winning journalist and author. His latest book is You Can’t Be President: The Outrageous Barriers to Democracy in America. He joins us in the firehouse studio. He’s got the latest issue of MacArthur’s [sic.], "How to Save Capitalism."
Welcome to Democracy Now!
RICK MacARTHUR: Thanks for having me.
AMY GOODMAN: Well, is Barack Obama a socialist?
RICK MacARTHUR: Barack Obama is a socialist like Harper’s Magazine is a media conglomerate. It’s the most preposterous charge I’ve heard in a pretty crazy campaign. When they keep saying that Barack Obama puts socialism ahead of entrepreneurship, I keep thinking of the vast amount of money he’s been collecting from Wall Street for his campaign. His number one bundler is Goldman Sachs, which is — has given him up to this point I think about $740,000. The New York Times, just the other day, has revealed that there’s a new way the two campaigns have come up with to get cash out of Wall Street, and this is Democrats and Republicans alike, with these joint campaign committees. Twelve Goldman Sachs employees were revealed in this latest report to have given more than $25,000 apiece to Obama’s campaign.
You could make the argument that Barack Obama always puts Wall Street first. I’m not going to make that argument, because I don’t know how he’s going to turn out as president. But up to this point, he’s been a champion of Wall Street interests. His number one economic adviser is Robert Rubin, the senior executive — or chairman of the executive committee of Citigroup, the former Treasury secretary, the guy who, alongside Alan Greenspan was arguing against a regulation of the derivatives market in the 1990s very forcefully. And in his own book, in The Audacity of Hope, Obama talks a lot about how much he admires investment bankers, how much he likes bankers, how he feels comfortable with them and with corporate lawyers. So, it’s an absurd charge.
But it’s even more absurd when you realize that, as Chris Wallace pointed out in that clip, John McCain, Robert Rubin, they’re all socialists now. The only one who’s not a socialist, apparently, is Alan Greenspan. He’s just shocked at what’s happened. He’s suddenly found a flaw in the plot of one of his Ayn Rand novels. I’m not sure exactly what the plot flaw is, because he doesn’t specify. But the notion that this is a left-right argument is absurd, is patently absurd, given where the money is coming from to finance these campaigns.
Now, if Obama gets out there and denounces Wall Street, that’s fine. The question is — and McCain is doing the same thing — greed on Wall Street is a constant in our history. The question now is, is a President Obama going to take this crisis, going to take this possible mandate? Because, apparently, it’s backfiring for McCain. The polls are widening. Obama is going further and further ahead. It seems to suggest that the American people are saying, “Hey, socialism, this sounds pretty good! If he’s a socialist, I’m for it.” Everybody seems to be for it. What’s he going to do with this mandate? Is he going to appoint one of usual suspects as Treasury secretary, or is he going to do something different? Is he going to do something more specific about regulating these markets, or is he going to rely on the advice of people like Robert Rubin?
JUAN GONZALEZ: Well, not only — but his apparent definition of “socialism” as redistribution of the wealth sort of negates the fact that American taxation policy, at least at the federal level, has always been a progressive taxation policy — the more money you make, the higher you get taxed — so that this has been part of the American history since the development of our tax system.
RICK MacARTHUR: Well, since 1912, when we instituted an income tax, when the top — remember, the top rate in 1964, the last time we had this kind of crazy debate between the Goldwater Republicans and Lyndon Johnson, the top marginal rate was 91 percent. Barack Obama is only proposing to raise or restore the top marginal rate from the current 35 percent to 39.6 percent, which is what it was under the Clinton administration. This is a very modest, very, you might even say, timid response to what’s, in the last fifteen years, been a redistribution of wealth from the bottom up to the top. What is the mortgage crisis, except Wall Street picking on people who don’t know better, who are not very well educated about the finance market, and really robbing them, taking the money up to the top? That’s redistribution of wealth, upwards.
JUAN GONZALEZ: And isn’t also the issue of capital gains tax versus income tax, where the — that’s where the real money is, in the capital gains tax. And Obama has not been very radical on that, has he?
RICK MacARTHUR: Well, all he’s — again, he’s proposing an increase from the current 15 percent to 25 percent, which is where it’s been, more or less, for the last sixty or seventy years. It’s fluctuated in the twenties and the thirties.
But the important thing to know about that is, Obama, in his quest for campaign money and votes, was in a conflict of interest. John Edwards pushed him a little bit to the left when he persuaded him to call for a change in the tax code, so that you would tax hedge fund partner income at the regular personal income tax rate instead of at the capital gains rate, so instead of paying 15 percent, they’d be paying today 35 percent. But he stopped talking about that in the last three, four, five months. You don’t hear him talking about that anymore. And I think that’s a kind of a compromise he’s made, where he says, well, at least if we raise capital gains from 15 to 25, the hedge fund partners will have to at least pay 25 percent. But that’s still a lot less than the top personal income tax rate of 35 or 39 percent.
AMY GOODMAN: I mean, it’s amazing that the McCain campaign is using this line of attack, because they supported the bailout. Now, I’m not saying the bailout was socialist, but it does involve nationalizing debt and, well, ultimately privatizing the profit. The guys that get the — incur the debt now have — now gain profit, if there is profit, and taxpayers pay for the debt. But it was the Democrats joining with the Republicans in endorsing this bailout, and now he’s attacking Obama for what he did. In fact, if he had said he was against the bailout, voted against it — and, of course, it still would have passed — he could well have surged forward, because that’s the feeling of the American people.
RICK MacARTHUR: Yes, if McCain had wanted to follow popular sentiment, the popular opinion was overwhelmingly against the bailout. Obama and McCain were side by side, whipping their caucuses, as they say in Congress, to vote for it, after the rebellion in the House. The rebellion in the House, which we should remember is what used to be known as the People’s House — it’s supposed to be the closest instrument of government to the will of the people — they voted against the first bailout bill. They rejected it. People were shocked. That was shocking. And the two — leadership of the two parties, including Obama and McCain, got together to push through the second deal. Is this socialism, or is this collusion between the two parties?
I’m not saying there’s not a dime’s worth of difference between the two candidates. Clearly, there’s a difference. I mean, anybody who would put their blurb on a Reinhold Niebuhr book, which is what Barack Obama has, in one of his — has done, is obviously a thoughtful person, and he’s educable. But up to this point, he’s shown absolutely nothing to suggest that he’s anything like a left-winger. He’s a centrist, a prudent centrist conservative. You could make the argument he’s the conservative candidate.
AMY GOODMAN: What is a socialist, and why is it a smear?
RICK MacARTHUR: Well, a socialist believes in real — I mean, a serious socialist believes in real government control of industry, of takeover of private enterprise, which is an argument we’re going to have to have in the next six months. If the auto industry collapses, which is a real possibility, there is going to be an argument about whether we should save certain industries, nationalize certain industries, like they do in Europe. For a long time, Renault was owned by the government of France, and then eventually they privatized it. Are we going to take over General Motors, are we going to take over Chrysler, are we going to take over Ford, in order to save national industries?
We aren’t even at the point now where we’re arguing about real socialism. At this point, we’re talking about, as you say, debt nationalization, nationalization of Fannie Mae and Freddie Mac. But we’re not at the point now where we’re discussing the real tenets of socialism, which is state control of major industries and national economic planning. I think we need national economic planning. I’m not sure if we need state takeovers of industries, but this is something we’re going to have to decide as the recession bites.
JUAN GONZALEZ: But even state takeovers don’t necessarily mean socialism, because, clearly, after — in the midst of the Depression, many of the advanced capitalist countries opted for two forms of intervention. You had the fascist intervention, which also involved some state takeovers of industries, or at least direct government control of them, as well as the more liberal democratic models of the United States and England. So, just the mere fact of states intervening in a crisis doesn’t necessarily mean you’re going socialist; you could also be going fascist.
RICK MacARTHUR: Well, we could be going fascist, but — in another direction, but we’re also talking about worker control, to some extent. If we go a little further left, we’re talking about worker control of industries or citizen control of industries, not government ownership, strictly speaking. So, if we get to the point where the United Auto Workers union is asked to participate, let’s say, in the bailout of General Motors or the bailout of Chrysler or Ford, are we going to give the United Auto Workers ownership stake in these corporations? These are the things we’re going to have to deal with. The recession is going to be severe.
AMY GOODMAN: Rick MacArthur, I called your magazine “MacArthur’s.” I meant Harper’s.
RICK MacARTHUR: Yeah.
AMY GOODMAN: But it’s “How to Save Capitalism,” is the whole series of articles, with everyone from Joe Stiglitz to Michael Hudson, the adviser to Dennis Kucinich. How do you save capitalism? Should you save capitalism?
RICK MacARTHUR: Well, I want to save people. I mean, I’m interested in —- we’re interested in proposing ideas here that will save the American people. I’m not sure if you’re going to call it socialism or semi-socialism or semi— or mixed economy, whatever you want to call it. But these are seven or eight articles, sort of long op-ed pieces, proposing specific things that could alleviate the crisis.
I mean, you’ve got Joe Stiglitz making a very simple and interesting suggestion here. He says a simple regulation requiring mortgage transactions — excuse me, a simple regulation requiring mortgage originators to put their own money at risk in each transaction — say, 20 percent of the loan amount — would curb some of the abusive practices that have taken place.
Elizabeth Warren and Amelia Tyagi suggest the creation of a consumer product safety commission for financial products. Simple idea, just like we have — they talk about how we’ve had these tremendous advances in consumer protection when you buy a toaster, but not when you buy a mortgage, so to speak, or a stock or a bond.
We talk about — Bill McKibben talks about relocalizing the economy. We’re wasting vast amounts of money using fossil fuels to transport — thanks to “free trade,” quote-unquote — to transport products all over the world, so that they can be made by — in cheap labor locales and then sold in richer areas. The cost of fossil fuel is going to continue to go up. It’s going to continue to diminish as a resource. We need to localize. We need to grow food close to where we eat it, for example.
There are other examples. But it’s a collection of pieces that offer practical solutions. We need industrial planning. That’s what my friend here, Eric Janszen, says. We need to reindustrialize the country, but to reindustrialize the country, you have to have a coherent, central planning mechanism. But when you say “central planning,” people like John McCain or John Stormer, the guy in 1964 who wrote Goldwater’s urtext, None Dare Call It Treason, they think Soviet Union. Central planning means Soviet Union. It means bureaucrats getting into everybody’s personal life. But there’s a lot — there are a lot of things we could do, short of outright government takeover or outright socialism or communism, that could improve the situation.
AMY GOODMAN: You wrote You Can’t Be President: The Outrageous Barriers to Democracy in America. We just have thirty seconds. But given the situation as it stands now, do you still feel that way? Or even more?
RICK MacARTHUR: Well, I think that the amount of money that’s been poured into the campaign — we’re going to get up to $1 billion by the end of it, it looks like — it has raised the barriers to entry to popular democracy, in other words, you and me and Juan participating in our democracy, to a level that we can’t get past. And you’ve got — and
just talking about the term limits with Bloomberg, there’s collusion between the Democratic Party and Bloomberg, and people are afraid of Bloomberg, because he’s so rich. So he’s got two instruments to clobber democracy with.
JUAN GONZALEZ: When he started as mayor, he was the sixty-fifth richest man in America. Now I think he’s the eighth richest man in America.
RICK MacARTHUR: Right. Now, money doesn’t buy you everything in politics; you still need the approval of the — one of the two parties. But it helps. And he’s ramming this through, against the popular will. We need a referendum, like we probably would have needed a referendum on the bailout bill. If we had had a referendum on the bailout bill, it wouldn’t have passed.
AMY GOODMAN: Rick MacArthur, thanks so much for being with us. His book is You Can’t Be President: The Outrageous Barriers to Democracy in America. The latest issue of Harper’s Magazine is about "How to Save Capitalism."