Sunday, May 22, 2016

George W. Bush, a supposed conservative Republican, ended Reagan era and brought European socialism to the US by effectively nationalizing the banking and mortgage industries and expanding the welfare state. 'We are all socialists now,' Newsweek cover story, Feb. 16, 2009

Feb. 16, 2009 Newsweek cover

2/16/2009 cover

"The U.S. government has already—under a conservative Republican administration (George W. Bush)—effectively nationalized the banking and mortgage industries....
It was, again, under a conservative GOP administration (George W. Bush) that we enacted the largest expansion of the welfare state in 30 years: prescription drugs for the elderly....Bush brought the Age of Reagan to a close; now Obama has gone further, reversing Bill Clinton's end of big government....The catch is that more government intrusion in the economy will almost surely limit growth (as it has in Europe, where a big welfare state has caused chronic high unemployment). Growth has always been America's birthright and saving grace."...

"Whether we want to admit it or not the America of 2009 is moving toward a modern European state," Newsweek Editor Jon Meacham and Editor-at-Large Evan Thomas write in an essay opening the February 16 Newsweek cover package, "We Are All Socialists Now" (on newsstands Monday, February 9). Meacham and Thomas write that the America of 2009 was moving toward a European social democracy, even before President Obama proposed the largest fiscal bill in American history. "If we fail to acknowledge the reality of the growing role of government in the economy, insisting instead on fighting 21st-century wars with 20th-century terms and tactics, then we are doomed to a fractious and unedifying debate. The sooner we understand where we truly stand, the sooner we can think more clearly about how to use government in today's world," they write.

Meacham and Thomas observe that this shift towards more government intervention in the economy began not under a Democrat but a Republican. "The architect of this new era of big government?...The man who laid the foundations for the world Obama now rules is George W. Bush, who moved to bail out the financial sector last autumn with $700 billion." The Obama administration is now caught in a paradox, having to borrow and spend to fix a crisis created by borrowing and spending. "Obama talks of the need for smart government. To get the balance between America and France right, the new president will need all the smarts he can summon," Meacham and Thomas write.

Also in the cover package, Europe Editor Michael Freedman reports on the extent to which the United States is turning European. When Obama said that it was time to get past stale arguments over whether government is big or small, he was echoing the eclectic philosophy of French president Nicolas Sarkozy...."But with an urgency not seen since Ronald Reagan declared that government was in fact the problem, policymakers are now reconsidering the relationship between government and the private sector."

While it's impossible to know just what the day after the crisis will look like, the broad contours of the new economic world are becoming visible...."Can America adopt a more European model, only with a faster rate of growth?" 

Freedman believes that if Obama can somehow forge a middle path that builds upon the best of the European safety net while also encouraging the dynamism and innovation that has helped the U.S. prosper, it will provide evidence that government can actually be a part of the solution."



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