Is Obama a socialist? What does the evidence say?

Some critics cite government 'takeover' of business and 'giveaways' to the poor as signs that President Obama is a socialist. Members of the Socialist Party are among those who disagree.

By , Staff writer

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    A woman held an anti-Obama sign at a ‘tea party’ event held at Southfork Ranch in Parker, Texas, last summer. Tea partyers are working against further government expansion and bailouts.
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The assertion is getting louder: President Obama is a socialist, a wealth-redistributing wolf in Democrat's clothing gnawing at America's entrepreneurial spirit.

It's easy to buy "Obama is a socialist" bumper stickers on the Internet. Political commentator Dick Morris said, in a column circulated on GOPUSA.com, that conservatives are "enraged at Barack Obama's socialism and radicalism." Former House Speaker Newt Gingrich titled his new book "To Save America: Stopping Obama's Secular-Socialist Machine."

So, is Mr. Obama trying to form The Socialist Republic of America? Or are the accusations mainly a political weapon, meant to stick Obama with a label that is poison to many voters and thus make him a one-term president?

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As is often the case in politics, the answer is in the eye of the beholder. Some people feel genuinely certain that Obama aims to make America into a workers' paradise – a land where government-appointed pay czars tell Wall Street tycoons how much they can make and where the feds take large ownership positions in companies like General Motors (GM) and insurance giant American International Group (AIG). Even if Obama is not a card-carrying Socialist, they say, he displays a disdain of the private sector.

"You start with his apparent acceptance that there are major segments of the US economy for which it is reasonable for the US government to own or manage," says Michael Johns, Heritage Foundation policy analyst, "tea party" movement leader, and former speechwriter for President Bush. "Look at the auto industry, mortgage industry, the health-care industry to some extent, and, obviously, banking."

Others just as assuredly refute the idea that government involvement in failing industries defines a president as socialist – or that wealth is being redistributed from the Forbes 500 richest Americans to the nation's "Joe the plumbers."

What Mr. Johns, Mr. Gingrich, and others brandishing the "socialist" s-word are really complaining of is a return to the policies of John Maynard Keynes, the English economist who advocated vigorous government involvement in the economy, from regulation to pump priming, says labor historian Peter Rachleff of Macalester College in St. Paul, Minn.

"Socialism suggests getting rid of capitalism altogether," says Dr. Rachleff. "Mr. Obama is not within a million miles of an ideology like that."

For what it's worth, socialists deny that Obama is one of them – and even seem a bit insulted by the suggestion.

"I have been making a living telling people Obama is not a socialist," says Frank Llewellyn, national director of the Democratic Socialists of America. "It's frustrating to see people using our brand to criticize programs that have nothing to do with our brand and are not even working."

Adds Billy Wharton,co-chair of the Socialist Party USA: "I am not even sure he's a liberal. I call him a hedge fund Democrat."

The socialism tag is nothing new for the White House. In speeches, Obama chalks up the criticism to "just politics."

But he also works to counter it, sprinkling speeches with words about the appropriate role of government. "Government cannot and should not replace businesses as the true engine of growth and job creation," he said June 2 at Carnegie Mellon University in Pittsburgh.

That may be one reason some tea partyers doubt that Obama himself is humming "The Internationale" before breakfast.

"I'm reluctant to call him a socialist, but his policies are socialistic," says Don Adams, treasurer of the Independence Hall tea party in the Delaware Valley of Pennsylvania.

Which policies qualify, precisely?

Gingrich, in his book, cites a "government takeover" of GM as specific evidence of the socialistic political shift.

The United States owned 60.8 percent of the common stock of GM and 9.9 percent of Chrysler as of April 21, the latest figures available. The government's goal, according to the Treasury, is not to be long-term investors.

"With the successful restructuring of GM and Chrysler behind us, the primary goal of the administration's auto efforts now is to monitor the investments and facilitate smooth exits from our investments in the companies," says US Treasury spokesman Mark Paustenbach.

OK, so maybe Obama wants to get out of owning the companies, allows Johns of the Heritage Foundation. But the government has already used its ownership stake to impose sweeping mandates and regulations on the companies, such as closing hundreds of dealerships, he says.

"They forced changes in management that should more properly have been left to the company's private shareholders," says Johns.

Not true, according to GM. The US did not exert pressure to close the 1,100 shuttered dealerships, says spokeswoman Noreen Pratscher. "The government has taken a very hands-off approach."

How about the Obama response to the crisis in the financial services industry? Has it veered into socialism?

The largest ownership stake for Uncle Sam in the financial world is AIG, which ran into financial difficulties (not bankruptcy) in September 2008 after a complex series of financial transactions turned bad. The US government still owns almost 80 percent of AIG, which has received at least $182 billion in government assistance.

In his book, Gingrich implies that government officials stormed into AIG's headquarters and took over the company. "They have taken over AIG, America's largest insurer," he writes.

The actual "takeover" of AIG occurred under President Bush in 2008, right after the Lehman Brothers bankruptcy.

The Congressional Oversight Panel, which lawmakers created in 2008 to review the regulation of financial markets, detailed in a recent report how it became impossible for AIG to find $75 billion in private funding to save itself as the financial markets crumbled that fall.

The takeover of an ailing company whose collapse might ruin the US economy is not socialism, says Van Gosse, a Socialist and historian at Franklin & Marshall College in Lancaster, Pa. "Let's just say AIG was profitable, and you thought it was better if it was in public hands. That would be socialistic."

To Dr. Gosse, the most socialistic move by the Obama administration to date is the massive reorganization of student lending. In late March, as part of the health-care overhaul, Congress voted to force out commercial lenders. The government was guaranteeing loans made by private companies who turned a profit on the loans.

As for the assertion that Obama is pushing through policies that redistribute income from rich to poor, to some extent that is happening, says economist Mark Zandi of Moody's Economy.com.

About half the growth in personal income during the Obama presidency has come from an increase in government payments for unemployment insurance, Social Security, and welfare, he says.

"The economic recovery act increased those transfer payments," says Mr. Zandi, noting that, regardless, the government would pay out more in jobless benefits and welfare during a recession.

Tax rates for the wealthy may also rise: Obama has said he will allow the Bush income-tax cuts to expire. The highest marginal tax rate would climb to 39.6 percent, up from 35 percent. The new health-care law, moreover, raises taxes on people making more than $250,000 a year.

"Does that make it socialistic?" asks Zandi, who supported Sen. John McCain in the 2008 election. "It's not what I would define as socialism, but there is certainly a redistributional aspect to all this. The changes are taking place at the margins; there is not a sea change."

Probably the last president to be tagged as a socialist was Franklin Roosevelt, who took office during the Great Depression.

"FDR tried all kinds of things and was accused of all kinds of things," says Tom Cronin, a presidential scholar at Colorado College in Colorado Springs. "But in retrospect, he is someone who helped capitalism survive."

He suspects that Obama and his appointees are firm believers in the free-market system. But, he adds, "It's a free country, and people can say what they want about their president."

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