Is There a ‘Socialist’ Revival in America?

Is the United States now embarked on a path toward a more ‘Socialist’ future? Given the crisis in the credit markets and the decline in the value of the dollar, that is the inevitable conclusion of Alexandre Adler, one of France’s foremost historians and strategic thinkers – often characterized as a French ‘neocon.’

In what will be an uncomfortable read for many Americans, Adler writes for France’s Le Figaro, “Is socialism, which was banished from minds and hopes by the collapse of the Soviet system some years ago, rising again out of the spectacular transformations taking place at the center of global capitalism, the United States itself?

Adler goes on, “The outcome of the current crisis will result in such a reinforcement of the state’s freedom of action, that past nationalizations will look like nothing but small potatoes.”

In regard to the U.S. presidential election, Adler concludes, “If we assume a certain stabilization of global markets and the maintenance of the same fiscal policies, we will also see an increasingly extensive redistribution by the state, including a considerable expansion of social security benefits. … The reader will understand that this is Obama’s program, which comes at the end of an economic cycle where, according to recent statistics, salary increases for Blacks and Whites since 2001 have been less than 2.8 percent and less than 1.2 percent, respectively.”

The Chronicle of Alexandre Adler

Translated By Kate Davis

March 29, 2008

France – Le Figaro – Original Article (France)

Here’s a provocation. Not a gratuitous one, but one that has some grounding: Is socialism, which was banished from minds and hopes by the collapse of the Soviet system some years ago, rising again out of the spectacular transformations taking place at the center of global capitalism itself, the United States?

Several factors, in fact, are emerging and simultaneously coming into play to challenge the foundations of the way Americans live and produce. Remaining faithful to the theory of Marx, we will start with the infrastructure.

Pressed by the imperial necessity of saving the financial system – which hasn’t been this vulnerable since 1930 – FED chairman Ben Bernanke just took the historic decision to socialize the losses of commercial banks. Up to now and to curb panics of global dimensions, the central bank [the FED] only gave loans to banks of deposit [savings banks]. Today, the necessity of saving the entire banking system not only requires a state guarantee for the past investments of investment banks, it also requires the Federal Reserve to loan these commercial banks money for its newer and riskier operations, without which the entire machine threatens to come to a screeching halt.

It must be understood that the financial slight-of-hand now in force has created such imbalance between the equity of major financial institutions and the outstanding loans that they have already incurred, that the state must be transformed into the creditor of last resort, in defiance of the entire doctrine of the free market.

Americans, we know, are much less doctrinaire when it comes to themselves than they are toward their Latin American partners, for example. The outcome of the current crisis will result in such a reinforcement of the state’s freedom of action, that past nationalizations, like that under [former Socialist President François] Mitterand [in 1981] will look like nothing but small potatoes. In effect, under the threat of an impending catastrophe, the FED has become the owner of virtually all of the most dynamic financial institutions, mainly the investment banks, where the debt incurred by the Treasury Department is equal to the strategic equity of the banks.

And the second major turning point ahead: fiscal restraint. Even if in the months ahead, everything possible is done to permit the system to be maintained, it is finished, given the level of decline in the dollar and the mistrust of international financial markets, which is what finances the America’s external budget deficit.

READ ON AT WORLDMEETS.US, along with continuing foreign press coverage of the unfolding financial crisis.