Our Founding Fathers Must Have Been Paranoid Too, Like Tom Perkins

Liberals are in a feeding frenzy over Silicon Valley venture capitalist, Tom Perkins’s, irate letter to the liberal San Francisco Chronicle, reprinted in the Wall Street Journal (Is a Progressive Kristallnacht Coming?). In his complaint, Perkins calls “attention to the parallels of fascist Nazi Germany to its war on its ‘one percent,’ namely its Jews, to the progressive war on the American one percent, namely the ‘rich.’” Perkins warns of “a rising tide of hatred of the successful one percent…. This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; is its descendant "progressive" radicalism unthinkable now?

The Left has pounced on Perkins’ Kritstallnacht analogy as the “clownish” mutterings of an “aging, coddled jerk,” who has the gall to compare American “progressives” to Hitler’s Nazis! They dismiss Perkins’ fear of dangerous demonization of the one percent as the paranoid ravings of an ultra-rich guy, who like most of his kind, is “alarmingly detached from reality” (Paul Krugman Paranoia of the Plutocrats).

The faux empathetic conclusion of the Left: Pay no attention to the ramblings of this poor (but rich) fool. He cannot help himself. Imagine a rich guy, isolated in his Francisco estate and private clubs, worrying that “they are coming to get me.”

I say: Not so fast. Perkins’ fears are actually those that motivated our founding fathers to establish a limited government, secured by checks and balances and by the Bill of Rights. Our founders worried, like Perkins, that a majority can pass laws that discriminate against minorities—in particular against owners of property for the purpose of “more fairly” distributing wealth. 

go to forbes.com

We Have Met the Left and It's Obama

“What is motivating (Obama) primarily is ideology. And an ideological opening. He doesn’t like the malefactors of great wealth. He wants to “spread the wealth around.” Peggy Noonan

Anyone who dares to characterize Barack Obama as a leftist radical is heaped with scorn and outrage.  Only crazy, hateful talk-show entertainers like Rush Limbaugh stoop so low, but reasonable people do not listen anyway. Whether Obama harbors socialist views is a valid topic for intellectual conversation, but, other than errant bloggers (Is President Obama Truly a Socialist?), polite people avoid it.

Many moderate Republicans bought into the media narrative that Obama is a centrist, who moves left only to placate his base. Were it not for them, the true Obama would govern from the center, or tilt only ever so slightly to the left.

Indeed,  the carefully scripted Obama masterfully masqueraded as a centrist during his two presidential campaigns, while governing from the left. The complicit media characterized him as a softy, too ready to yield to the obstructionist Republicans.  But if the Left would only “Watch what I do, not what I say,” Obama already delivered for them the moon, and now wants the stars as well.

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Why Obama/Biden Cannot Possibly Win the Presidential Debates

If we cut through the surface images of the two presidential debates – aggressive confident Romney, subdued and passive Obama, jeering Biden, and polite Ryan – the Obama/Biden team has little chance of winning any of the four debates.  Despite recent improvements in survey numbers, the vast majority of Americans think the country “is headed in the wrong direction” and almost eighty percent are “dissatisfied with the way things are going in the United States.”

Reduced to fundamentals, Obama and Biden must defend the status quo, which voters believe is a disaster. They cannot offer major makeovers because that would amount to admitting policy mistakes, and they must somehow make voters believe that they have done a good job or that the sorry state of the country is not their fault.  It goes without saying that this is a tough and almost impossible sell after three and a half years in office.

Romney and Ryan have their hands free to blast the status quo, focus on the policy errors of the past three and a half years, and explain what they would do to fix the mess we are in.

When the current team manager is having a losing season, fans decide it is time for a new one. Romney and Ryan can play the role of the new manager with new ideas which can turn the season around if given the chance. Obama and Biden are left with explaining why, due to weather, injuries, and other things beyond their control, they have lost so many games. Fans don’t want excuses. They want wins.

 go to forbes.com

French Socialists Test Ride Obama Platform

French voters went to the polls today to winnow a ten-candidate presidential field down to the “right-of-center” incumbent (Nicolas Sarkozy) and his socialist challenger (Francois Hollande). The two will face each other in a  runoff election on May 6. A Sarkozy loss would be the first of an incumbent French president in  thirty years. It would threaten the German-French sponsored European Union rescue package. It is no surprise that Germany’s Angela Merkel openly supported Sarkozy’s candidacy.

The French election previews the U.S. November election contest between incumbent Barack Obama and challenger Mitt Romney in the following four ways:

1). Both Obama and Hollande offer almost identical leftist platforms (details on this below).

2) The bland challengers (Hollande and Romney) ignite electoral passions less than their more colorful opponents (playboy Sarkozy with his celebrity wife and Obama, the first black president).

3) The sorry state of the economy gives both challengers a hefty leg-up.

4) The French and American elections are foreshadowed by electoral disasters for the incumbent party in off-year races in 2010 and 2011. In both, the incumbent  party lost long-held majorities in one house of Congress or parliament.

Whereas the outcome of the U.S. election is currently too close to call, opinion polls show the French socialist candidate poised to win decisively in the run off. As the odds tip increasingly in favor of a Hollande victory, the risk premium on French bonds will rise. It is no secret that the investment community views a Hollande victory  a threat to France’s solvency.

A victory of France’s socialist candidate Hollande will not translate into electoral success for his American soul mate, Obama, for three reasons:

go to Forbes.com

Dr. Gregory's latest book can be purchased at Amazon.com.

Tax Breaks for Big Oil or for Big Hollywood?

Congress rejected the Obama administration’s proposal to “end tax breaks for big oil.” The White House will prominently feature the Republicans as the lackeys of Big Oil in the 2012 election.

The Obama administration tells us that “tax breaks for big oil” deprive our treasury of billions.  Besides that, the energy giants are making giant profits. They are greedy and don’t want to pay their fair share. Also we hear that tax subsidies are driving up the price of gas at the pump. (I guess no one in the Obama administration took an economics exam. Subsidies increase supply and drive down the price).

If we dig deeper into the tax code, we learn that “Big Oil” tax breaks apply, in most cases, to other industries, not just to “Big Oil” as we are led to think. These other beneficiaries are not under attack. I guess they are either less successful, less greedy, or give more to the White House.

If the Obama administration wants to be honest, it should propose to Congress to continue tax subsidies that other industries routinely receive with the exception of oil and gas, for which the tax breaks will be cancelled on a discriminatory basis.

For example: 1) Depletion allowances apply generally to industries with finite supplies of natural resources above and below ground. They even apply to timber, which I thought was a renewable resource; 2) Intangible drilling costs allow oil companies to write off in one year costs associated with drilling, such as building roads and transporting supplies. Many other companies and industries have similar provisions (see Hollywood below); 3) The sheltering of taxes on profits earned abroad applies to all companies with international operations, not just to “Big Oil.” Microsoft may save as much from this provision as “Big Oil,” but Microsoft is not a target at this moment. Maybe later.

After reading Sec. 181 of the IRS code on “Treatment of Certain Qualified Film and Television Productions,” I became more concerned about “Big Hollywood” than about “Big Oil.” It turns out the filmmakers can write off the entire costs of film or television productions up to $15 million. In a deft touch of social engineering, I further learn that filmmakers can write off more if the costs are incurred in a low-income community (under section 4-D) or an isolated area of distress (designated by the Delta Regional Authority under section 20009aa-1 of Title 7). The latter must be a pay off to New Orleans. I can also imagine an IRS agent tacking film crews through treacherous slums to make sure they are spending their money in the hood.

I favor the elimination of all tax subsidies – to oil, timber, Hollywood, renewable energy and so on (The list is without end).  All tax preferences, even beloved ones such as the home interest deduction, distort economic decision making. So let’s get rid of all of them and place all economic activity on a level playing field. In return, we can all enjoy lower tax rates, not just “Big Hollywood.”

A Community Organizer Among Hunter-Gatherers: Do We Have Socialist or Individualistic Genes?

 "I think when you spread the wealth around, it's good for everybody." Barack Obama October 13, 2008

A young community organizer is struck by lightning and is transported back to 20,000 BC, sitting around a fire as twenty five cold fur-clad men recount their day of hunting and gathering.

The community organizer feels an immediate kinship.  His Ivy League course on “Liberation Writings from Marx-Engels to Cornell West” taught him that these noble “first communists” constitute “our loving, peaceful, lyrically fair human core.”  Shared belief in collective production and equal distribution make us spiritual brothers. He is fortunate to be able to observe the “blissful conditions of a fabulous golden age of the remote past,” as one writer phrased it. This should be fun.

The glorious savages name him their leader.  Anyone who could make fire with the “flick of a Bic lighter” must be a god. Well, if our intrepid time traveler can organize tough Chicago neighborhoods, he can help this clan live up to its principles of  collectivism and redistribution.

The next day, the community organizer dispatches the hunters and gatherers. He divides them into groups of five and observes with dismay as they depart in ones and twos. He waits near the fire as they return – some with food, others empty handed. The rugged Thor returns with an antelope, and the clan gives him the place closest to the fire’s warmth.  The community organizer has to move.

Our community organizer writes observations in his notebook. Indeed, the successful hunters and gatherers share, except with two they call Hapless and Helpless. Our community organizer waits in vain for his share. Apparently hunter and gatherers think a god should know how to provide for himself. He goes to bed hungry.

The next day Gor bags a deer. He shares with all except Hapless, who got lost, and Helpless, who sprained his toe. Now Gor gets the place closest to the fire. The Community Organizer gets nothing.

Outraged, the community organizer rebukes Thor and Gor. They should pay their fair share!  Down-on-their-luck Hapless and Helpless need a helping hand. Also community organizers don’t work for nothing. In a dramatic gesture, he waves his magic cigarette lighter: “If you do not provide for me and the less fortunate, I will bring the wrath of the gods down upon you.”

The next morning Hapless, Helpless, and the community organizer awake to find the others gone. The community organizer snaps his fingers to return to the 21^st century, but he is stuck in time. He, Hapless and Helpless become weaker and weaker and die.

My story is based on Thomas Mayor’s Hunter-Gatherers: The Original Libertarians. He demonstrates that we are genetically programmed to respect  individual rights to the fruits of our own efforts. Our prehistoric forbearers did not engage in voluntary redistribution. They shared perishable food, not out of altruism, but as insurance and reciprocal gift giving. Consistent shirkers were expelled from the band. If anyone tried to force them to redistribute, they simply picked up and moved on to another hunting ground.

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My Diminished Capacity to Understand Obama's Clean Energy Policy

It took President Obama’s Press Secretary Jay Carney to shock me to my senses. As someone who favors cutting government spending on clean energy and eliminating government subsidies in general, I was particularly distressed to learn (in Carney’s words) that “I am “aggressively and deliberately ignorant of the world economy not to know and understand that clean energy technologies are going to play a huge role in the 21st century.” Even worse, I learn that “I have a severely diminished capacity to understand what drives economic growth in industrialized countries in this century.”

And I had thought that if clean energy technologies were going to dominate the 21^st century, private enterprise would figure this out and develop them itself. In my ignorance, I thought that subsidies are dictated by and for special interests not by economic rationality. I also believed that Solyndra and SunPower were not aberrations but representative of what is going on in Secretary Chu’s and Obama’s energy department. What I fool I have been.

go to Forbes.com 

Phoenix Shows Romney Right and Obama Wrong

I wrote the following advice to President Obama in late August:

“Instead of trying to prop up the overbuilt housing market, the President should propose measures to allow the economy to work off its excess inventories of housing and to find a bottom in housing prices. Only after the bottom is reached will construction resume.” 

In a campaign appearance, Mitt Romney came to the same conclusion, saying that we must let the housing market clear and then we can have a recovery. Romney was widely ridiculed and has said little since then. In the meantime, Obama has tried one scheme after another to keep housing prices up and foreclosures down.

Today’s Journal’s Rise in Phoenix Housing Prices Shows Path for Other Cities shows the wisdom and courage of Romney’s words.  Phoenix’s housing prices fell  fifty five percent and its foreclosure rate rose to number three in the nation, but Phoenix housing prices are turning around.  Whereas, housing prices continue to fall nationwide, Phoenix’s are rising as low prices have brought new buyers into the market. Buyers from Canada are flooding the market and investors are bidding for blocs of homes, which they put on the rental market. Owners of underwater homes are being offered purchase contracts which allow them to stay in their houses as renters.

As one expert notes: “Phoenix has hit bottom.”  This means that Phoenix will be among the first cities to experience a revival in homebuilding and the jobs that go along with it.

I remember well the housing bust of Houston as oil prices plummeted in the 1980s. No one propped up mortgages. Underwater homes went on the market. The inventory disappeared, and housing construction revived.

This is simple economics of supply and demand.

What appears to liberals as mean spirited capitalism actually shortens the period of pain and accelerates the recovery.  I guess they will never learn this elementary lesson.

Is There are Clearer Case of Media Bias? Gas Prices under Bush and Obama

The Times’ March 1 news piece Tensions Raise Specter of Gas at $5 a Gallon reflects an obvious media bias. As the Times news piece claims, rising gas prices are the result of international events over which President Obama has no control. I cite the first paragraph:

With no clear end to tensions with Iran and Syria and rising demand from countries like China, gas prices are already at record highs for the winter months — averaging $4.32 in California and $3.73 a gallon nationally on Wednesday, according to AAA’s Daily Fuel Gauge Report. As summer approaches, demand for gasoline rises, typically pushing prices up around 20 cents a gallon. And gas prices could rise another 50 cents a gallon or more, analysts say, if the diplomatic and economic standoff over Iran’s nuclear ambitions escalates into military conflict or there is some other major supply disruption.

Under Bush, the “rising gas price” news story would invariably mention  Bush by name, Big Oil, and his long-standing ties to the oil industry.

I was about to document this media bias by searching news archives, when I found an excellent blog of March 1 by Julia Seymour, whose main results I cite below:

The Business & Media Institute examined all the broadcast network news reports mentioning gas prices during each of those time periods and found ABC, CBS and NBC aired more than 2 ½ times more stories (63 stories to 24) in 2008 than they did in 2011.

But it was more than just the amount of coverage that showed the media's willingness to spin gas prices one way under Bush, and another way under Obama. In 2008, network reporters mentioned "Bush," the "president" or "government" in gas price reports 15 times more often than in 2011 under President Obama (15 stories to 1).

Congratulations to Julia Seymour for excellent reporting and analysis.

Widow Martha Pays More Than Warren Buffett and His Secretary Combined

Scene: Senate Committee on Finance Hearing Room. Date: Sometime in 2012. Martha, a stylish attractive woman in her 70s, raises a shaking right hand as she is sworn in. The network cameras are notably absent. They have been told by their management to stay away.  CSpan is covering another hearing and Fox News has been delayed.

Senator John Coburn (R Oklahoma) begins the questioning:

Coburn: We are meeting here to discuss the President’s proposal to raise the rate of taxation on capital gains from 15 to 23.8 percent. We understand that you have particular views on this subject.
Martha: Yes sir. I am a widow. I live in a nice retirement community in Houston, Texas. My social security check pays for most of my living expenses, and I do some part time work. But I have to cover the rest by selling off the stock I own.

Coburn: So you are one of the millions of ordinary Americans who own stock?
Martha: Yes, my late husband Sam was pretty good when it came to investments. Before he died ten years ago, he told me to hold on to my stocks as long as I could. He was particularly high on Massachusetts Investors Trust. Barron’s lists it in its “Best Mutual Fund Family,” I am told. All I can say is that Sam trusted this company. He had a big share of his assets in Massachusetts Investor’s Trust.

Coburn: How have these stocks been doing? We all know the market has been down.
Martha: My stocks have not done well since Sam died, especially the last five years. But I need more money to pay my bills, so I finally sold my Massachusetts Investor Trusts. In December, I sold $20,000 worth of shares and my broker told me that my capital gain was $2,600, and that I would have to pay a tax of $390.
Senator Schumer (D of New York) asks Coburn to yield time to him.

Schumer: Well, it seems things worked out for you. You only have to pay a small tax of 15 percent on the $20,000 sale. Hard working folks have to pay more than that on their income taxes.
Martha: Senator, it is hard for me to understand, but my broker told me that my real gain after inflation was only $30. He explained that the annual return on Massachusetts Investor Trust shares over the past ten years was 2.97 percent but inflation was 2.95. He said that everyone knows that what counts is the capital gain after inflation. He then had a shocker for me. He told me that the tax rate on my $2,600 capital gain after inflation is 1,200 percent.

Schumer: Stammers.

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Data on Tax Rates of Real Capital Gains (Nominal capital gains adjusted for inflation)

I am publishing a piece on inflation and capital gains taxation this Sunday in my Forbes Econworld blog. It is tentatively titled “Widow Martha Pays More Than Buffet and His Secretary Combined.”  In this piece, I use a Standard and Poor’s  calculator to show nominal and real gains from investments in the S&P 500 over five year intervals from 1971 to 2011 and for the whole period at the current 15 percent capital-gains rate. (I also show the same results with Obama’s proposed 23.8 percent capital gains rate).

I find that, for the entire 40 years, the effective tax rate on real capital gains was 47 percent. In three periods, real gains were negative (for an infinite tax rate). During the three five-year periods of booming markets, the real tax rate was 20 percent. In the period 1986-1990, the real tax rate equaled that of Buffet’s secretary at 30 percent. If we use Obama’s proposed 23 percent capital gains tax rate, the lowest effective tax rate on real gains is 30 percent.

period	Annual percentage S&P 500  nominal gain (loss)	Annual percentage S&P real gain (loss)	Tax rate on real gains with a 15% tax on nominal gains	Tax rate on real gains with a 23% tax on nominal gains
1971-2011	6.53	2.09	46.9	71.9
1971-1976	1.09	-5.7	Infinitely large	infinitely large
1976-1981	3.41	-6.05	Infinitely large	infinitely large
1981-1986	14.96	11.3	19.9	30.4
1986-1991	9.34	4.6	30.4	46.7
1991-1996	13.85	10.71	19.4	29.7
1996-2001	9.03	6.69	20.3	31.0
2001-2006	4.35	1.61	40.5	62.1
2006-2011	-2.57	-4.73	Infinitely large	infinitely large

A Shame the Republicans Must Let Politics Trump Economics

The extension of the payroll tax holiday is bad economics. It may be good politics, or avoids a bad political outcome.

Economists know that temporary tax breaks have little or no effect on aggregate demand. Reducing payroll taxes for the rest of the year only increases the unfunded liability of social security and increases uncertainty.  The net effect on growth and employment of extending the payroll tax reduction is likely to be negative. It is bad economics to all but die hard Keynesians.

Republicans are going along with bad economics because they are unable (or unwilling) to make the powerful economic case for ending the tax break. The longer it lasts, the more likely it is to become permanent, with disastrous results.

I guess we have little confidence in the good sense of American voters. If they are worried about the solvency of social security, clearly they could be made to understand that you don’t take away a large portion of its funding, for uncertain and unlikely short term gain.

Republican leaders wilt when they hear the President speaking about the extra $1,000 in the pockets of U.S. households.

Too bad.

Why No One Is Buying Volts: Twenty Years to Earn Back the Fuel Saving

The Journal’s “Is Chevy’s Cruze Dulling the Spark of its Volt?” runs the numbers on the Volt and the similarly sized Chevy Cruze.  

The Volts sells for some $20,000 more than the Cruze. According to EPA estimates (which has the Volt running on gas for part of its usage), the Volt consumes $1,508 gallons per year, while the Cruze burns $1.779. If the Volt is used only for short distance travel, its electricity costs $648 per year.

Thus a typical driver who mixes long distance and city driving would need more than sixty years to earn back the fuel saving. A Volt owner who drives only short distances in the city would require twenty years.

Even if our gas prices rose to European levels, it still would not make economic sense to buy the Volt.

And does anyone wonder why GM sold only 603 Volts in January? Another loss for Obama’s industrial policy.

Free to Choose Means Less Freedom: Obama on Birth Control

The Times The Freedom to Choose Birth Control convolutes common language and fails to comprehend fundamental economics. It says that “free access (to birth control for any woman), along with the ability to receive family planning and preventive health services, was at the foundation of health care reform.”  I did not know that. As I recall, Obama did his best to dodge that issue during the non-debate over his health care reform.

Most of us interpret “free to choose” in Milton Friedman’s sense. In a market economy, we are free to choose among alternatives. As long as we are prepared to pay the market price, we can buy whatever car, food, movie ticket, laptop, or anything else we want. No one can dictate to us how to choose among alternatives. That is our business, and Friedman considered this the cornerstone of economic freedom.

Obama, apparently, understands “free to choose” differently. In his version, free to choose means getting goods and services without paying. Even though birth control is a regular non-catastrophic expense, probably not higher than feeding a daily coffee habit, women are not free unless they have it free.

In Obama’s mind there are certain goods that must be supplied to us free of charge in order for us to be free. Insofar as no business can afford to part with its goods and services free, the state must dictate an arrangement that provides them to the customer at no out-of-pocket cost.  The state can only do this by mandates that force providers, insurance companies or anyone else involved to do something they would not do on their own.

The freedom to choose birth control (at a zero price) represents a loss of freedom.

Why stop at birth control? We should have the freedom to communicate. We should receive cell phones with unlimited minutes for free. Until we have Obama’s grand public transport system, we should have the freedom to move freely between point A and B. The state should dictate that every person get a free car, as long as it runs on electricity. The same applies to food, electricity, and gas. Why not? Why not admit those lacking in communications, gas and food “freedom” unlimited access to Wal-Mart. After all Wal-Mart exploits is employees and deserves it. Just throw open the doors and shut down the cash registers.

The freedom to have life’s essentials free of charge represents a loss of freedom. I assume Obama understands this and is doing it deliberately.

In my Essentials of Economics classes I used to ask students to consider what would happen if we gave things away free. The correct answer was chaos, followed by state rationing. I think the New York Times editorial board would flunk my exam.

Where Is the Outrage? The Mugging of the Five Mortgage Lenders

I try to watch Fox News’ The Panel every evening. Charles Krauthammer usually gets things right. That is a comfort.

Today’s big news was Obama’s announcement that the U.S. Attorney General and 49 states’ Attorneys General had strong armed five large mortgage lenders into a $25 billion settlement. In effect, the $25 billion blackmail will be used to rewrite the terms of mortgages of underwater homes and pay penalties to owners who have already lost their homes.

My big disappointment: Krauthammer did not express outrage but, in effect, credited Obama with a significant political victory. He did not see this as an attack on free enterprise or the rule of law.

Obama, in his announcement to the press, preened that he stands on the side of social justice and for the little man and against the villainous banking industry. He is single handedly leveling the playing field.

I guess the Obama administration expects the $25 billion bailout to pump up home prices and lend new life to the housing market. The principal relief and reduced interest payments will only keep underwater homes off the market a little longer. They will not raise home prices. Instead of the home market clearing, it will continue in disequilibrium who knows how much longer.

Most “good deeds” of the Obama administration carry with them unanticipated consequences. The $25 billion blackmail plus the threat of potential criminal prosecution of lenders send a rather chilling message to mortgage lenders. The best way to stay out of trouble is to make no mortgage loans. In the absence of home loans, housing prices will not recover. The housing industry lives from credit. Without it, it is dead.

The public will not realize that this lies in store for a year or two. By then the election is over, one way orthe other.

If we play this game out, a second Obama administration would have to coerce reluctant lenders to make mortgage loans with threats, quotas, and additional repression.

By the time we see this, we are stuck with another four years.

A Freudian Slip? “Volt: The Car America Had to Build”

I was struck by GM’s new ad: “Volt, the Car America Had to Build.”  These words are poorly chosen but revelatory of where things stand. The ad masters probably did not know what they were saying, but General Motors is now officially “Government Motors.” Yes, after Obama's bailout, GM indeed MUST produce the Volt. Its job is not to build the best and most competitive cars, nor to create value for its shareholders. Instead, GM’s task is to serve the interests of America (read: the Obama administration). 

And pundits wonder why such a large percentage of Americans stands in fear of Obama being reelected.

Why Am I Confused? We Got Into Trouble Lending on Underwater Homes. Now We Want To Do More of It

Am I the only one confused? We got into trouble in the first place by making risky mortgage loans to owners whose home value went underwater. I now see that Obama proposes to ramp up loans (using federal backing) to homeowners whose homes are underwater!

Is this another example of doubling down on a bad idea?

Someone help me out.

Is President Obama Truly a Socialist?

Pew Research finds that sixty percent of Americans respond negatively to “socialism.” It is clear why President Obama must avoid that label. Words are important. Political candidates who control the language of political discourse win elections.

Most of our elites would certainly not entertain the question: “Is Obama a Socialist?” Only irresponsible fanatics carelessly throw around such epithets, they say. Polite circles ignore such goofiness.

As someone who has professionally studied and written about comparative economics, capitalism, and socialism for almost fifty years, the reticence to probe the core beliefs of a political leader seems odd. The question is perfectly legitimate in both an academic and political context as long as we define terms and place the discussion in proper context.

By “socialist,” I do not mean a Lenin, Castro, or Mao, but whether Obama falls within the mainstream of contemporary socialism as represented, for example, by Germany’s Social Democrats, French Socialists, or Spain’s socialist-workers party?

By this criterion, yes, Obama is a socialist.

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