The American Socialist Tradition

Above: Recent Issue of Time. Obama as FDR.

In Obama’s The Audacity of Hope, he noted his philosophical contention by addressing his favor for FDR’s New Deal — the birth of American Socialism and the death of America’s puritanical notion of Rugged Individualism. Modern sociologists and economic theorist Max Weber wrote in The Protestant Ethic and the Spirit of Capitalism, that the entrepreneurial spirit and advancement of capitalism were directly linked to religion and not the material stages promulgated by Karl Marx. Hence, it was the teachings of religious values and ideals that allowed capitalism to flourish. It was Republican president Herbert Hoover that first used this phraseology in his efforts to keep the American economy from emulating the socialist economies of Europe; in essence, he as well as the conservative nature of American society saw a BEST society as one that was extrapolated from the premise of the individual: Hard work allowed the formation and the spirit of a capitalistic democratic society to advance. Moreover, this state of order juxtaposed to Weber’s Thesis permited the moral and responsible behavior of a society.

However, the falsity of the work ethic notion and capitalism as viewed by society was that individuals sin; individuals sought wealth and material goods feared by Marx and the utilitarians of the 19th century. Both witnessed the progress of the industrial bourgeoisie in industrial states where governments elected to be absent. In 19th century America, according to Democratic Socialist of America (DSA):

Several hundred thousand American workers of the Knights of Labor, the American Federation of Labor, and socialist and anarchist groups all demonstrated for the Eight Hour Day. It was the center of a world-wide movement for shorter working hours. Even the song lyrics of the American movement, “Eight hours for work/eight hours for sleep/eight hours for what we will,” argued for a “natural” pace of life in tune with the seasons, rather than the long hours and miserable conditions imposed by the capitalists.

Tension escalated well before the panic of 1929; America allowed rugged individualism and a conservatism to shape a culture with little remorse. Thanks to John Maynard Keynes’ Keynesian policy, the United States became a transformative state and permitted government injections (or stimulus) to move the economy. This gave birth to our modern economic system. Sure, it was Alexander Hamilton’s policies in the establishment of our economic system that created our current system; but in essence, the United States evolved into a hybrid state of capitalism and socialism. One does not function without the other. This is why Obama must continue the New Deal of FDR: American Socialism.

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48 thoughts on “The American Socialist Tradition

  1. Isn’t Weber’s notion of work dependent on Reformed notions of Original Sin? The self-denial that individuals pursue is inherently connected to the sinfulness and limited nature of mankind. Humankind could do little to determine the nature of their own salvation, therefore some outward sign had to be manifested that signaled the chosen nature of the individual. For Weber, one of those ways was material economic success.

  2. …which of course was the base of New England and Reformation Calvinism. Weber was a mere historical reporter of the historical and social impact Calvinism had on society. Puritans creating an “oligarchy” or an “elect” as a sign or symbol of morality. This morality was in essence a means of control for both institutional, economic, and gender matters. I guess I am saying yes I do agree with your comment je.

  3. Yep, and we are paying dearly for all the “great” things FDR did. Social Security chief among them.

    “America allowed rugged individualism” yeah, and that is such a bad thing. When an American wants to keep their money they worked hard for, that’s greed. If someone wants to take it away from them by force, that’s fairness or, in your words, socialism.

  4. Roland:

    SS was needed. We have failed to adjust it to a growing population. This was a great program that must be saved. Not all in society can do or have the resources to understand private programs.

  5. Oh I id not mean to say you are not; I have been to your blog and have read your stuff. I know. I am thinking that people are, as you stated, not informed enough on this stuff. I am really talking about the poor class of America.

  6. TW
    Of course we cant take care of ourselves. Thats why we elected Obama, so we can all be rich. He’s going to give us all money and free health care. There may not even be any disease anymore because stem cell reseach will be fully funded with the surplus money we have from shutting down the “war” on terror.
    People really can make it in the world on their own. You’ve convinced me. I’m drinking kool-aid as we speak. The world is fudamentaly unfair and now that the levelers are in power we can have the kind of society that we deserve. The rich will pay for everything, they have more than enough, Obama has sais so. Work isn’t goos for people anyway. What a flawed model. Poor, uneducated people have never had a chance in this racist land and its time someone stood up for them and waived the red (international) flag of freedom. Arise ye workers from your slumber! Take back what is rightfully there’s….. er your’s! America’s fat cats have renigged on their promises of the good life. Have’nt you seen “Wives of OC”, or “Cribs”? My life isn’t that good and it must be someone elses fault. We need more government stand around jobs for the poor. We need less freedom and not more.
    I envision an America where children are taken from their parents at a young age and raise the right way instead of in the filth that is the poor peoples home. I see government sponsored childhood centers where kids are educated and traned for the jobs they will be assigned in the new socialist economy of the future. They will be tested and given the jobs that will make them the most happy and fillfilled while still serving the needs of the state. It will be wonderful.

  7. I agree with Mr. Brown. Why should those who have rightfully earned their money be forced to give it away? People who defend this idea say that it provides for equality, but how can it be equality when not everyone is contributing equally and there is a greater burden on others? Why should tax cuts and refunds be given to some who already don’t pay taxes? Instead of looking for an explanation and reason for their problems and instead of looking to the government for help, why don’t people try to find jobs and work and make a living on their own? I understand that Congress has the right to levy taxes, but what gives the government the right to redistribute the rich’s wealth to the poor?

    According to Obama’s tax plan, my family would be just below the line to have to pay higher taxes (although Obama and Biden did give many different values for the middle class threshold, so I’m not quite sure if my family would or would not get tax cuts), so we would get tax cuts. However, I am not a hypocrite. Just because my family would get tax cuts does not mean that I would change my beliefs so that they would suit the present situation. I still believe strongly in the idea that one should keep what they respectfully earn.

  8. You make an interesting point about Obama. And I’m in total agreement about Keynes’s influence on the modern American Capitalist/Socialist hybrid–which has been far more lucrative in strictly monetary terms than the old system.

    As readers of my blog know, I lean pretty heavily in the Libertarian direction (NOT the Rand/crazy variety. Just a focus on liberty for the individual). But, it kills me that Libertarians have traditionally sided with the conservatives when libertarians by nature tend to have a lot of belief in the power of ideas to shape society for the better.

    Hayek himself made clear in “The Constitution of Liberty” that Libertarians were far better off siding with progressives because of a similar temperament that seeks out change, rather than conservatives who’s temperament causes them to be afraid of change of any kind. Conservatives want to regulate far more than your pocket book! They do not HONESTLY believe in freedom for the individual (gay marriage, drugs, etc).

    America is so strange because being “conservative” here means you favor the status quo of the classical liberal roots of American democracy (at least the capitalist part). But, that doesn’t mean that Conservatives would, if put in the situation of our “founding fathers” make the same choices. I say this for the same reason I don’t think many conservatives would actually LIKE Jesus if they met him. Both Jesus and the founding fathers were “long-hair’s” after all. 🙂

  9. “why don’t people try to find jobs and work and make a living on their own?”

    Chris – they do. Yes, some poor people sit around and want the government to do everything for them. And yes, some people do take advantage of the welfare system. But, for every person taking advantage of the system, there are ten single moms working three jobs who could use a bit of help. I am more disgusted by the wealthy creating elaborate tax shelters than I am by poor people who take advantage of the welfare system.

    Obama will roll back the Bush tax cuts. The rich will still be rich. The poor will be a bit less poorer. What is the problem? Call me crazy, but it seems pretty simple to me: the rich PAY more because they HAVE more. The poor PAY less because they HAVE less.

    And Roland – good idea, we should take away social security. Let’s see how many Americans older than 65 line up at the homeless shelter. With capitalism and consumerism leading to the self-destruction of America’s corporations, we can’t rely on corporate retirement plans to help out the elderly. Oh, I forgot – those old people are so lazy!

  10. Dillon-And you have just shown to me why I disagree even more with Obama’s tax plan: it will give money to people who “sit around and want the government to do everything for them.” I’m not saying that all those who will receive tax cuts fit this description, but there are those that do. I agree that those more fortunate should help those less fortunate, but it should not be the government’s place to tell the wealthy what to do. Continually giving to those who do not even try to find jobs will only contribute to a lack of motivation, and that is the problem with Obama’s tax plan because 40% of those who will receive government handouts are already on welfare. Assistance to the less wealthy should be done through charity and aid programs, not the government. The thing I have a problem with is that those who have respectfully earned their money must be forced to give it away. It should be their choice. I understand that the rich will still be rich, but it’s the idea that those who have worked as hard as any other for their money are forced to give it away.

    Take a look at Andrew Carnegie’s “The Gospel of Wealth” and tell me what you think about it.

    I’m not trying to be sarcastic, but you still have not proved to me why those with more should pay more. Saying because they have more is just circular thinking.

    Always remember you’re my favorite liberal! 😉

  11. It is true that the United States is a combination of capitalism and socialism. The capitalist move along until they have a problem and then expect the benefit of a socialist government (the bailout).

  12. Chris:

    I thought being a part of a society was to see that it advances. If that is true, it would make sense that all even those making plenty of money contribute. Why should your parents pay your private school education and taxes for public schools — which you do not attend? For the good of society. It is not that people are being forced to give it away, they have an pbligation to do so as a member of the polity. Again, why have we protected the rich for so long and allowed them to earn and protect that hard earning money? Table has turned some.

    Emily : Funny Point

  13. Mr. Carson-I’m not saying that the rich or anyone else should not contribute to society. I just believe that one group should not be forced to pay more than another group. If the government wants the income tax to be 50%, so be it. I just don’t think it is right to see one group pay 50% and another pay only 35%. I don’t want to protect the rich; I just want to see everyone contribute the same amount. Why shouldn’t all members of society contribute equally? I am in no way against taxes; I just want to see equal contribution. Yes, I agree that taxes for public school are for the good of society and are necessary for our society’s advancements. I guess I didn’t make myself clear in my previous post. I’m not against contribution to society. What I’m against is unequal contribution to society between various groups.

  14. Carson – well said.

    Chris – to be honest, equal taxation is a pipe dream. Why should someone who is making $2 million/year be in the same income taxation bracket as someone who makes $50,000/year? $1 million and $25,000 are quite different.

  15. Dillon-When you say it is a pipe dream do you mean that it is impossible to put into practice? Because you just showed that you think it’s unfair, not impossible to put into practice. And I’ll tell you why they should be in the same tax bracket; because they both have earned their salary. They both have to pay their taxes, and they both do. You speak of contributing to society as an obligation to create the benefits our society can offer; so why is it that someone that does not contribute as much to society can receive the same amount of benefits as someone who contributes more?

  16. Well said Chris. I’m sure that you know that I agree with you. Carson, I am working on a response right now, if you could please leave this topic as the first post for a couple more days, I would appreciate it. I would like to hear the input of others on what I have to say.

    Thanks and Happy Thanksgiving

  17. Chris – in theory, nothing is impossible to put into practice. You are right, the person making $2 million/year and the person making $50,000/year have both earned their salary. But equal taxation just does not make sense. The difference between $2 million and $1 million is the difference between a loft downtown or a loft uptown. The Difference between $50,000 and $25,000 is the difference between putting food on the table or not putting the food on the table, paying the bills or not paying the bills, etc.

  18. Thanks, Patirck. I know we see eye-to-eye on many things.

    Although equal taxation may be a “pipe dream,” I believe it is something to strive for. Why shouldn’t we have equal contribution?

  19. Because not all people make equal pay. Min. wage is just going up. We talk about how we need people in society to do the jobs others do not want, but we pay them little. We cannot expect equal taxes. carson is right, this is why we must have a New Deal type society.

  20. I’m always baffled by people who aren’t willing to pay taxes to better the lives of others. I am fortunate enough to have a job that provides health insurance (such as it is). Even with my recent pay cut (stupid economy), I’m not at all upset about paying into Medicare, because I know a hell of a lot of people who work just as hard as I do, do not have health insurance. I do not mind paying for public education even though I’ll never have kids, because I don’t want a bunch of uneducated morons running around. I don’t mind my money going to welfare even though I’ve never used it, because I know not everyone has a family as comfortable and generous as mine.

    Yes, there are those who take advantage. But should the ones who don’t suffer for it? When I am asked for money on the street, I give it if I have it, without fail. My job is to be benevolent. If the person spends the money on alcohol, that is his failing, not mine.

  21. I believe in a maximum 10% consumption tax. Why complicate it and make 35% for some people and 50% or whatever for another? Keep a low percentage for everyone and spend less, don’t tax one group more, spend more, and give it to someone else. You want equality try that.

  22. Josh,

    10% is awfully low. Even though I don’t support it, at least FairTax is 23%.

    And when you say consumption, are you including food, clothes, etc?

  23. “I know that this is a lot but please read it. I like to think of it as a thanksgiving dinner of thought.”

    As you have probably guessed by now Mr. Carson, this is my first utilization of the “you are full of (barnyard epithet)” card. If there is one thing that I can’t stand, it is people who see that their idea was a failure, but, rather than admitting it, they say that their idea was the genesis of something spectacular. Maybe that was a character flaw in Franklin D. Roosevelt; it’s not mine to say. However, if ever there was someone in power who looked only at partial derivatives, it was Roosevelt. If there was ever someone who focused on producers and ignored consumers, it was Roosevelt. If there was anyone who thought self-interest was only present among businessmen, not government or union workers, it was Roosevelt. Personally, I, and many others out there, have found it hard to discriminate between the policies that Roosevelt advocated and those of the average campus left-winger after ten bong hits.

    Perhaps I am being a bit harsh about the president that led us through part of the best generation. Think about it, he came into the presidency during a time when anti-capitalist sentiment was ascendant. At the time, useful idiots, such as Fabian Socialist George Bernard Shaw and Stalin-sympathizer Walter Duranty, were taken advantage of in Stalin’s genocidal regime, and it appeared that for the first time in history, eastern socialism was finally beginning to prevail over western capitalism (Ah, the beautiful price of freedom of the press). Republican President Herbert Hoover, president from 1929-1932 for you non-history buffs out there, raised tariffs by an unprecedented average of about 59% in 1930, and as a percentage of national income taxes, almost doubled from 11.6% in 1929 to 21.1% in 1932. Not only that, he surprisingly had the huevos to launch an investigation into the stock market, focusing on short-selling as a cause of the “current market decline. Everybody—please meet the one conservative that the world could have done without.

    Just when it seems that things could not possibly have gotten any worse, they unfortunately did. Sure the economy was capable of rebounding, but free markets with strong property rights show a pattern of natural growth—they are most like weeds, not beautiful flowers—and it is my contention that the economy would have fared much better than it did under the last president to ever have his own ideals and speeches, Calvin Coolidge. Roosevelt promoted the National Recovery Administration (NRA-we have a better use for that acronym now), which is known for its encouragement of big-business dominated cartels. Much of the legislation involved in the bill was eventually struck down, but it was what set the tone for the establishment of cartels (a philosophy that was supported throughout Roosevelt’s administration. Not only that, the NRA also tried to enforce “minimum selling prices” on the most basic of necessities. Things such as apparel and dry cleaning were encouraged towards a system of price fixing and therefore discouraged the construction of new business. The NRA subsequently sanctioned labor unions as monopoly bargaining agents in the workplace and workers strikes grew as a reflection of this new power. All of this maneuvering was part of a failed strategy to raise workers wages. It was Franklin D. Roosevelt who introduced the idea of paying farmers to take acreage out of production, mandating price fixation for various crops such as dairy, corn, cotton and wheat, and permitted price fixing on other commodities as well.

    The Undistributed Profits Tax signed in 1936 introduced a new tax on earnings that were to be retained by private companies—the key source of funds for corporate investment—which ranged from 10-74% of all retained earnings. This act was eventually repealed in 1939 by Roosevelt’s own allies, Joseph Kennedy and Harry Hopkins. The Undistributed Profits Tax of 1936 was instrumental in explaining the severity of the 1937 plunge, but when taxes came up below plan, treasury secretary Morgenthau branded businessmen as ‘fascists’ for not delivering for him: “The question is whether we are going to have a fascist government in this country or a government of the people, whether rich men are going to be able to defy Government and refuse to bear their burdens.” Eh-he-he, um pot meet kettle.

    In 1933, the new Securities and Exchange Committee increased all sorts of disclosure requirements. In laymen’s terms, this basically just applies a fixed cost to issuing equity. This was all part of his grandiose plan to help large extant (and connected) companies while also hindering potential entrants. He also kept the archaic unit banking systems that withheld the free-lunch of diversification (i.e. Canada had not unit banks, and no bank failures), and worsened the situation by separating commercial banking from investment banking (a detour that has never been emulated and was eventually repealed). The New federal spending program (Works Progress Administration, Civil Works Administration, and Federal Emergency Relief Administration Grants) became a distinct political maneuver, as little New Deal spending went to the southern states that gave Roosevelt such huge winning margins in 1932, but instead to battleground states that would be key to his 1936 re-election.

    In one of the most telling signs of his character, Roosevelt issued a message to congress in 1942 in which he stated, “No American Citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year.” The treasury sent a memorandum to the Ways and Mean committee calling for a 100% tax on incomes over $25,000 (about $275,000 today). It didn’t pass, though the top rate peaked at 94% on incomes over $200,000 in 1944-1945.

    I guess the man was no Mugabe or Benito Mussolini, but that far from absolves him from the evils that he perpetrated as president. (I don’t want to hear about the evils of Bush!) Chiefly among them was the Social Security System.

    First, I would like to point out that the politicians who created Social Security exempted themselves from having to pay the Social Security tax. When the federal government created Social Security, all federal employees, including the President and members of Congress, were exempt from having to pay the Social Security tax. This exemption was not repealed until more than 40 years later in 1984.

    Second, Critics, such as libertarian Nobel Laureate economist Milton Friedman, say that Social Security redistributes wealth from the poor to the wealthy. Workers must pay 12.4%, including a 6.2% employer contribution, on their wages below the Social Security Wage Base ($102,000 in 2008), but no tax on income in excess of this amount. Therefore, high earners pay a lower percentage of their total income because of the income caps; because of this, payroll taxes are often viewed as being regressive. Furthermore, wealthier individuals generally have higher life expectancies and thus may expect to receive larger benefits for a longer period than poorer taxpayers. A single individual who dies before age 62, who is more likely to be poor, receives no retirement benefits despite his years of paying Social Security tax. On the other hand, an individual who lives to age 100, who is more likely to be wealthy, is guaranteed payments that are more than he paid into the system.
    Third, George Mason University economics professor Walter E. Williams claimed that the federal government has broken its own promise regarding the maximum Social Security tax. Williams used data from the federal government to back up his claim. According to a 1936 pamphlet on the Social Security website, the federal government promised the following maximum level of taxation for Social Security, “… beginning in 1949, twelve years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year. That is the most you will ever pay.” However, according to the Social Security website, by the year 2008, the tax rate was 6.2% each for the employer and employee, and the maximum income level that was subject to the tax was $102,000 raising the bar to $6,324 maximum contribution by both employee and employer (total $12,468). In 2005, Williams wrote, “Had Congress lived up to those promises, where $3,000 was the maximum earnings subject to Social Security tax, controlling for inflation, today’s $50,000-a-year wage earner would pay about $700 in Social Security taxes, as opposed to the more than $3,000 that he pays today.” According to the Social Security website, “The tax rate in the original 1935 law was 1% each on the employer and the employee, on the first $3,000 of earnings. This rate was increased on a regular schedule in four steps so that by 1949 the rate would be 3% each on the first $3,000. The figure was never $,1400, and the rate was never fixed for all time at 1%.”
    Fourth, Critics of Social Security claim that it gives a low rate of return, compared to what is obtained through private retirement accounts. For example, critics point out that under the Social Security laws as they existed at that time, several thousand employees of Galveston County, Texas were allowed to opt out of the Social Security program in the early 1980s, and have their money placed in a private retirement plan instead. While employees who earned $50,000 per year would have collected $1,302 per month in Social Security benefits, the private plan paid them $6,843 per month. While employees who earned $20,000 per year would have collected $775 per month in Social Security benefits, the private plan paid them $2,740 per month, at interest rates prevailing in 1996. While some advocates of privatization of Social Security point to the Galveston pension plan as a model for Social Security reform, critics point to a GAO report to the House Ways and Means Committee, which indicates that, for low and middle income employees, the outcome may be less favorable.

    And fifth, Economist Thomas Sowell argues in his books and columns that Social Security is a pyramid scheme. For example, in “Social Security: The Enron That Politicians Have In the Closet”, he writes:
    Social Security has been a pyramid scheme from the beginning. Those who paid in first received money from those who paid in second — and so on, generation after generation. This was great so long as the small generation when Social Security began was being supported by larger generations resulting from the baby boom. But, like all pyramid schemes, the whole thing is in big trouble once the pyramid stops growing. When the baby boomers retire, that will be the moment of truth — or of more artful lies. Just like Enron.
    In essence, I believe that I will stick with the original contention that I provided in class and that you scoffed at. Obviously the socialistic system in America is not successful enough by any means to be able to attribute a hybrid government as the reason that America emerged from the Great Depression. Rather, when a country becomes enough of a producer that it’s most expensive military materials are bought like candy, it becomes possible for that country to now hold itself afloat and create a more effective political system. That is why supply-demand capitalism is what won the war for the United States and pulled our economy from the trash bin instead of your contention that socialism was able to do that. It just doesn’t make any feasible sense.

  24. You should give Wikipedia credit when you copy it verbatim…

    And Carson, I think you should have used the word bureaucracy a bit more… just to frighten the anti-big gov folks a bit more

  25. Yeah, i probably should’ve. I was pretty sure you’d know that I didn’t write it when all the paragraphs start with stuff like, “critics of social security-“, but yeah, ur right, i didn’t write the bottom part of my post.

  26. Walker – I am pretty sure that Patrick learned his lesson last time he copied an article verbatim. It does not look to me like he copied this one, and I think it is unfair to accuse him of such.

    Patrick – Well written post. I would love to write a response, but I do not have the time, and I prefer to avoid writing on subjects that I do not know very much about. And I do not know enough about FDR to debate/agree/respond to what you have said.

  27. Looks like I spoke too soon. I am pretty disappointed Patrick. I hope you limit your plagiarism to this blog.

    From Wikipedia:

    “Critics of Social Security have pointed out that the politicians who created Social Security exempted themselves from having to pay the Social Security tax. When the federal government created Social Security, all federal employees, including the President and members of Congress, were exempt from having to pay the Social Security tax. This exemption was not repealed until more than 40 years later in 1984.”

    “Critics, such as libertarian Nobel Laureate economist Milton Friedman, say that Social Security redistributes wealth from the poor to the wealthy. Workers must pay 12.4%, including a 6.2% employer contribution, on their wages below the Social Security Wage Base ($102,000 in 2008), but no tax on income in excess of this amount. Therefore, high earners pay a lower percentage of their total income because of the income caps; because of this, payroll taxes are often viewed as being regressive. Furthermore, wealthier individuals generally have higher life expectancies and thus may expect to receive larger benefits for a longer period than poorer taxpayers. A single individual who dies before age 62, who is more likely to be poor, receives no retirement benefits despite his years of paying Social Security tax. On the other hand, an individual who lives to age 100, who is more likely to be wealthy, is guaranteed payments that are more than he paid into the system.”

    “Economist Thomas Sowell argues in his books and columns that Social Security is a pyramid scheme. For example, in “Social Security: The Enron That Politicians Have In the Closet”, he writes:

    Social Security has been a pyramid scheme from the beginning. Those who paid in first received money from those who paid in second — and so on, generation after generation. This was great so long as the small generation when Social Security began was being supported by larger generations resulting from the baby boom.

    But, like all pyramid schemes, the whole thing is in big trouble once the pyramid stops growing. When the baby boomers retire, that will be the moment of truth — or of more artful lies. Just like Enron. ”

    “George Mason University economics professor Walter E. Williams claimed that the federal government has broken its own promise regarding the maximum Social Security tax. Williams used data from the federal government to back up his claim.

    According to a 1936 pamphlet on the Social Security website, the federal government promised the following maximum level of taxation for Social Security, “… beginning in 1949, twelve years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year. That is the most you will ever pay.”

    However, according to the Social Security website, by the year 2008, the tax rate was 6.2% each for the employer and employee, and the maximum income level that was subject to the tax was $102,000 raising the bar to $6,324 maximum contribution by both employee and employer (total $12,468).

    In 2005, Williams wrote, “Had Congress lived up to those promises, where $3,000 was the maximum earnings subject to Social Security tax, controlling for inflation, today’s $50,000-a-year wage earner would pay about $700 in Social Security taxes, as opposed to the more than $3,000 that he pays today.”

    According to the Social Security website, “The tax rate in the original 1935 law was 1% each on the employer and the employee, on the first $3,000 of earnings. This rate was increased on a regular schedule in four steps so that by 1949 the rate would be 3% each on the first $3,000. The figure was never $,1400, and the rate was never fixed for all time at 1%.”

    “Critics of Social Security claim that it gives a low rate of return, compared to what is obtained through private retirement accounts. For example, critics point out that under the Social Security laws as they existed at that time, several thousand employees of Galveston County, Texas were allowed to opt out of the Social Security program in the early 1980s, and have their money placed in a private retirement plan instead. While employees who earned $50,000 per year would have collected $1,302 per month in Social Security benefits, the private plan paid them $6,843 per month. While employees who earned $20,000 per year would have collected $775 per month in Social Security benefits, the private plan paid them $2,740 per month, at interest rates prevailing in 1996. While some advocates of privatization of Social Security point to the Galveston pension plan as a model for Social Security reform, critics point to a GAO report to the House Ways and Means Committee, which indicates that, for low and middle income employees, the outcome may be less favorable.”

    Seriously? This blog is a place for intellectual discussion. This is the second time you have done this. Not cool. I like to think that I do a pretty good job of respecting the opinions of others, but come up with your opinions for me to respect.

  28. I said it right above where you posted that I had copied that part. why rewrite what explains the problems with social security itself. besides, SS was a totally separate subject as opposed to my objections ot the new deal.

  29. I leave for a couple weeks and this is what this blog has come to?!
    *GASP*
    This is a house of higher learning! Not a den of plagiarizers…

  30. Yeah, but the point is that you did not admit to copying it until after someone called you out on it. And you are right, rewriting it does not make much sense. BUT QUOTE IT. OR LINK TO IT. Don’t try to act like it’s your own. Have we not had this discussion before?

  31. point taken. I forgot alright. Carson, could you please pull the post and I’ll repost it again with the proper citation.

  32. I know that this is a lot but please read it. I like to think of it as a thanksgiving dinner of thought.”
    As you have probably guessed by now Mr. Carson, this is my first utilization of the “you are full of (barnyard epithet)” card. If there is one thing that I can’t stand, it is people who see that their idea was a failure, but, rather than admitting it, they say that their idea was the genesis of something spectacular. Maybe that was a character flaw in Franklin D. Roosevelt; it’s not mine to say. However, if ever there was someone in power who looked only at partial derivatives, it was Roosevelt. If there was ever someone who focused on producers and ignored consumers, it was Roosevelt. If there was anyone who thought self-interest was only present among businessmen, not government or union workers, it was Roosevelt. Personally, I, and many others out there, have found it hard to discriminate between the policies that Roosevelt advocated and those of the average campus left-winger after ten bong hits.
    Perhaps I am being a bit harsh about the president that led us through part of the best generation. Think about it, he came into the presidency during a time when anti-capitalist sentiment was ascendant. At the time, useful idiots, such as Fabian Socialist George Bernard Shaw and Stalin-sympathizer Walter Duranty, were taken advantage of in Stalin’s genocidal regime, and it appeared that for the first time in history, eastern socialism was finally beginning to prevail over western capitalism (Ah, the beautiful price of freedom of the press). Republican President Herbert Hoover, president from 1929-1932 for you non-history buffs out there, raised tariffs by an unprecedented average of about 59% in 1930, and as a percentage of national income taxes, almost doubled from 11.6% in 1929 to 21.1% in 1932. Not only that, he surprisingly had the huevos to launch an investigation into the stock market, focusing on short-selling as a cause of the “current market decline. Everybody—please meet the one conservative that the world could have done without.
    Just when it seems that things could not possibly have gotten any worse, they unfortunately did. Sure the economy was capable of rebounding, but free markets with strong property rights show a pattern of natural growth—they are most like weeds, not beautiful flowers—and it is my contention that the economy would have fared much better than it did under the last president to ever have his own ideals and speeches, Calvin Coolidge. Roosevelt promoted the National Recovery Administration (NRA-we have a better use for that acronym now), which is known for its encouragement of big-business dominated cartels. Much of the legislation involved in the bill was eventually struck down, but it was what set the tone for the establishment of cartels (a philosophy that was supported throughout Roosevelt’s administration. Not only that, the NRA also tried to enforce “minimum selling prices” on the most basic of necessities. Things such as apparel and dry cleaning were encouraged towards a system of price fixing and therefore discouraged the construction of new business. The NRA subsequently sanctioned labor unions as monopoly bargaining agents in the workplace and workers strikes grew as a reflection of this new power. All of this maneuvering was part of a failed strategy to raise workers wages. It was Franklin D. Roosevelt who introduced the idea of paying farmers to take acreage out of production, mandating price fixation for various crops such as dairy, corn, cotton and wheat, and permitted price fixing on other commodities as well.
    The Undistributed Profits Tax signed in 1936 introduced a new tax on earnings that were to be retained by private companies—the key source of funds for corporate investment—which ranged from 10-74% of all retained earnings. This act was eventually repealed in 1939 by Roosevelt’s own allies, Joseph Kennedy and Harry Hopkins. The Undistributed Profits Tax of 1936 was instrumental in explaining the severity of the 1937 plunge, but when taxes came up below plan, treasury secretary Morgenthau branded businessmen as ‘fascists’ for not delivering for him: “The question is whether we are going to have a fascist government in this country or a government of the people, whether rich men are going to be able to defy Government and refuse to bear their burdens.” Eh-he-he, um pot meet kettle.
    In 1933, the new Securities and Exchange Committee increased all sorts of disclosure requirements. In laymen’s terms, this basically just applies a fixed cost to issuing equity. This was all part of his grandiose plan to help large extant (and connected) companies while also hindering potential entrants. He also kept the archaic unit banking systems that withheld the free-lunch of diversification (i.e. Canada had not unit banks, and no bank failures), and worsened the situation by separating commercial banking from investment banking (a detour that has never been emulated and was eventually repealed). The New federal spending program (Works Progress Administration, Civil Works Administration, and Federal Emergency Relief Administration Grants) became a distinct political maneuver, as little New Deal spending went to the southern states that gave Roosevelt such huge winning margins in 1932, but instead to battleground states that would be key to his 1936 re-election.
    In one of the most telling signs of his character, Roosevelt issued a message to congress in 1942 in which he stated, “No American Citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year.” The treasury sent a memorandum to the Ways and Mean committee calling for a 100% tax on incomes over $25,000 (about $275,000 today). It didn’t pass, though the top rate peaked at 94% on incomes over $200,000 in 1944-1945.
    I guess the man was no Mugabe or Benito Mussolini, but that far from absolves him from the evils that he perpetrated as president. (I don’t want to hear about the evils of Bush!) Chiefly among them was the Social Security System.
    Here is the current list of criticisms that various groups of people have with the current social security system according to Wikipedia.
    First, I would like to point out that the politicians who created Social Security exempted themselves from having to pay the Social Security tax. When the federal government created Social Security, all federal employees, including the President and members of Congress, were exempt from having to pay the Social Security tax. This exemption was not repealed until more than 40 years later in 1984.
    Second, Critics, such as libertarian Nobel Laureate economist Milton Friedman, say that Social Security redistributes wealth from the poor to the wealthy. Workers must pay 12.4%, including a 6.2% employer contribution, on their wages below the Social Security Wage Base ($102,000 in 2008), but no tax on income in excess of this amount. Therefore, high earners pay a lower percentage of their total income because of the income caps; because of this, payroll taxes are often viewed as being regressive. Furthermore, wealthier individuals generally have higher life expectancies and thus may expect to receive larger benefits for a longer period than poorer taxpayers. A single individual who dies before age 62, who is more likely to be poor, receives no retirement benefits despite his years of paying Social Security tax. On the other hand, an individual who lives to age 100, who is more likely to be wealthy, is guaranteed payments that are more than he paid into the system.

    Third, George Mason University economics professor Walter E. Williams claimed that the federal government has broken its own promise regarding the maximum Social Security tax. Williams used data from the federal government to back up his claim. According to a 1936 pamphlet on the Social Security website, the federal government promised the following maximum level of taxation for Social Security, “… beginning in 1949, twelve years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year. That is the most you will ever pay.” However, according to the Social Security website, by the year 2008, the tax rate was 6.2% each for the employer and employee, and the maximum income level that was subject to the tax was $102,000 raising the bar to $6,324 maximum contribution by both employee and employer (total $12,468). In 2005, Williams wrote, “Had Congress lived up to those promises, where $3,000 was the maximum earnings subject to Social Security tax, controlling for inflation, today’s $50,000-a-year wage earner would pay about $700 in Social Security taxes, as opposed to the more than $3,000 that he pays today.” According to the Social Security website, “The tax rate in the original 1935 law was 1% each on the employer and the employee, on the first $3,000 of earnings. This rate was increased on a regular schedule in four steps so that by 1949 the rate would be 3% each on the first $3,000. The figure was never $,1400, and the rate was never fixed for all time at 1%.”

    Fourth, Critics of Social Security claim that it gives a low rate of return, compared to what is obtained through private retirement accounts. For example, critics point out that under the Social Security laws as they existed at that time, several thousand employees of Galveston County, Texas were allowed to opt out of the Social Security program in the early 1980s, and have their money placed in a private retirement plan instead. While employees who earned $50,000 per year would have collected $1,302 per month in Social Security benefits, the private plan paid them $6,843 per month. While employees who earned $20,000 per year would have collected $775 per month in Social Security benefits, the private plan paid them $2,740 per month, at interest rates prevailing in 1996. While some advocates of privatization of Social Security point to the Galveston pension plan as a model for Social Security reform, critics point to a GAO report to the House Ways and Means Committee, which indicates that, for low and middle income employees, the outcome may be less favorable.
    And fifth, Economist Thomas Sowell argues in his books and columns that Social Security is a pyramid scheme. For example, in “Social Security: The Enron That Politicians Have In the Closet”, he writes:

    Social Security has been a pyramid scheme from the beginning. Those who paid in first received money from those who paid in second — and so on, generation after generation. This was great so long as the small generation when Social Security began was being supported by larger generations resulting from the baby boom. But, like all pyramid schemes, the whole thing is in big trouble once the pyramid stops growing. When the baby boomers retire, that will be the moment of truth — or of more artful lies. Just like Enron.

    In essence, I believe that I will stick with the original contention that I provided in class and that you scoffed at. Obviously the socialistic system in America is not successful enough by any means to be able to attribute a hybrid government as the reason that America emerged from the Great Depression. Rather, when a country becomes enough of a producer that it’s most expensive military materials are bought like candy, it becomes possible for that country to now hold itself afloat and create a more effective political system. That is why supply-demand capitalism is what won the war for the United States and pulled our economy from the trash bin instead of your contention that socialism was able to do that. It just doesn’t make any feasible sense.

  33. “Why FDR Was a Lousy President”
    ‘Bryan Caplan and Brad DeLong continue to argue about FDR (and seeing Dan Gross, Economist’s View, James Hamilton, Tyler Cowen, et al), I have to get this off my chest. I think FDR was a horrible president. My son takes better care of his ant farm than this guy took care of the economy. If ever there was someone in power who looked only at partial derivatives, it was FDR. If there was ever someone who focused on producers and ignored consumers, it was FDR. If there was anyone who thought self-interest was only present among businessmen, not government or union workers, it was FDR. His economic views are indistinguishable from a typical campus left-winger after 10 bong hits.

    Perhaps I should not be so harsh, as FDR came into the presidency when anti-capitalist ideology was ascendant. At that time George Bernard Shaw and Walter Duranty were useful idiots to Stalin’s genocidal regime, and it appeared Socialism ‘worked’ in stark contrast to capitalisms failing in the West (ah, the cost of a free press). Republican Herbert Hoover, president from 1929-32, raised tariffs an average of 59% in 1930, and as a percentage of national income taxes doubled from 11.6% in 1929 to 21.1% in 1932. He encouraged an investigation of the stock market, focusing on short-selling as a cause of the market decline. This was the conservative.

    But just when you think things can’t get worse, they do. Sure the economy rebounded, but free markets with strong property rights grow naturally–they are like weeds, not precious flowers–and the economy would have bounced back much faster and stronger had Calvin Coolidge been President. FDR promoted the National Recovery Administration (NRA), which encouraged cartels dominated by big business. Much of this was later struck down, but the tone was established an cartels were encouraged throughout his administration. The NRA tried to enforce ‘minimum selling prices’ in things like apparel and dry cleaning, encouraging price fixing and discouraging new business. The NRA sanctioned labor unions as monopoly bargaining agents in the workplace, strikes grew as a reflection of this new power, all part of a strategy to raise wages. FDR introduced the great idea of paying farmers to take acreage out of production, mandated price fixing for various crops such as dairy, corn, cotton and wheat, and permitted price fixing for other commodities.

    The undistributed profits tax signed in 1936 introduced a tax on retained earnings–they key source of funds for corporate investment–which ranged from from 10% to 74% of retained earnings. This was repealed in 1939 upon the advocacy of FDR’s allies such as Joseph Kennedy and Harry Hopkins. As I mentioned previously, I think this tax was very important in explaining the severity of the 1937 plunge, but when taxes came up below plan, Treasury secretary Morgenthau branded businessmen as ‘fascists’ for not delivering for him: “The question is whether we are going to have a Fascist government in this country or a government of the people, whether rich men are going to be able to defy Government and refuse to bear their burdens”. Pot, meet kettle.

    In 1933 the new SEC increased all sorts of disclosure requirements, which basically just applies a fixed cost to issuing equity, part of his plan to help large extant (and connected) firms while hindering potential entrants. He kept the archaic unit banking systems that withheld the free-lunch of diversification (Canada had no unit banks, and no bank failures), and made it worse by separating commercial banking from investment banking (a detour not emulated and eventually repealed). New federal program spending (WPA, CWA, FERA grants) was highly political, as little New Deal spending went to southern states that gave FDR big winning margins in 1932, but instead to battleground states that would be key to his 1936 re-election.

    In 1942 FDR issued a message to Congress and declared “No American Citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year”. The Treasury sent a memorandum to the Ways and Means Committee calling for a 100% tax on incomes over $25,000 ($275k today). It didn’t pass, though the top rate peaked at 94% on incomes over $200k in 1944-5.

    Sure, it could have been worse: he wasn’t Mussolini or Mugabe. But he was bad.’

    Courtesy of Dylan Sorenson..
    http://mahalanobis.twoday.net/stories/3174201/
    ORIGINALLY written by HedgeFundGuy

  34. Still didn’t cite the top part.

    From http://mahalanobis.twoday.net/stories/3174201/

    If ever there was someone in power who looked only at partial derivatives, it was FDR. If there was ever someone who focused on producers and ignored consumers, it was FDR. If there was anyone who thought self-interest was only present among businessmen, not government or union workers, it was FDR. His economic views are indistinguishable from a typical campus left-winger after 10 hits.

    Perhaps I should not be so harsh, as FDR came into the presidency when anti-capitalist ideology was ascendant. At that time George Bernard Shaw and Walter Duranty were useful idiots to Stalin’s genocidal regime, and it appeared Socialism ‘worked’ in stark contrast to capitalisms failing in the West (ah, the cost of a free press). Republican Herbert Hoover, president from 1929-32, raised tariffs an average of 59% in 1930, and as a percentage of national income taxes doubled from 11.6% in 1929 to 21.1% in 1932. He encouraged an investigation of the stock market, focusing on short-selling as a cause of the market decline. This was the conservative.

    But just when you think things can’t get worse, they do. Sure the economy rebounded, but free markets with strong property rights grow naturally–they are like weeds, not precious flowers–and the economy would have bounced back much faster and stronger had Calvin Coolidge been President. FDR promoted the National Recovery Administration (NRA), which encouraged cartels dominated by big business. Much of this was later struck down, but the tone was established an cartels were encouraged throughout his administration. The NRA tried to enforce ‘minimum selling prices’ in things like apparel and dry cleaning, encouraging price fixing and discouraging new business. The NRA sanctioned labor unions as monopoly bargaining agents in the workplace, strikes grew as a reflection of this new power, all part of a strategy to raise wages. FDR introduced the great idea of paying farmers to take acreage out of production, mandated price fixing for various crops such as dairy, corn, cotton and wheat, and permitted price fixing for other commodities.

    The undistributed profits tax signed in 1936 introduced a tax on retained earnings–they key source of funds for corporate investment–which ranged from from 10% to 74% of retained earnings. This was repealed in 1939 upon the advocacy of FDR’s allies such as Joseph Kennedy and Harry Hopkins. As I mentioned previously, I think this tax was very important in explaining the severity of the 1937 plunge, but when taxes came up below plan, Treasury secretary Morgenthau branded businessmen as ‘fascists’ for not delivering for him: “The question is whether we are going to have a Fascist government in this country or a government of the people, whether rich men are going to be able to defy Government and refuse to bear their burdens”. Pot, meet kettle.

    In 1933 the new SEC increased all sorts of disclosure requirements, which basically just applies a fixed cost to issuing equity, part of his plan to help large extant (and connected) firms while hindering potential entrants. He kept the archaic unit banking systems that withheld the free-lunch of diversification (Canada had no unit banks, and no bank failures), and made it worse by separating commercial banking from investment banking (a detour not emulated and eventually repealed). New federal program spending (WPA, CWA, FERA grants) was highly political, as little New Deal spending went to southern states that gave FDR big winning margins in 1932, but instead to battleground states that would be key to his 1936 re-election.

    In 1942 FDR issued a message to Congress and declared “No American Citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year”. The Treasury sent a memorandum to the Ways and Means Committee calling for a 100% tax on incomes over $25,000 ($275k today). It didn’t pass, though the top rate peaked at 94% on incomes over $200k in 1944-5.

    Sure, it could have been worse: he wasn’t Mussolini or Mugabe. But he was bad.”

    Oops. Were you not expecting me to find that one?

  35. what are you talking about? yeah i incorporated a lot of that stuff into the article, but I ask you, would you have ever thought to look at the opposing viewpoint on your own? I come here to read what the left side of America thinks. I know that you didn’t get your leftist views from air. you read it somewhere. sure you paraphrase your views in your own words but they are not original ideas. If I really wrote what I think, I’ll be the first to tell you that that If you think i’m embarrassed, i’m not. I am only trying to introduce the other side of the issue.

  36. The last two sentences came out wrong. they should have read,

    If I really wrote what I personally think, you would all criticize me for being narrow minded and not sympathetic, and I am sure that Carson would rethink his position on censorship. If you think I am embarrassed, I’m not. No I have never plagiarized, I am only trying to introduce the other side of the issue.

  37. Patrick,

    You are right, I don’t get my leftist views from air. I read, I listen, and I form my own opinions.

    However, I don’t copy and paste entire articles and repost them on here. If you said, “I have the same opinion as the author of this article, you should read this,” and then quoted the article, I would not care. But, you copied and pasted an entire article, changed a couple things, and then copied some more info from Wikipedia. You were trying to pass it off as your own opinion. Not cool.

    And you have plagiarized. Twice, on this blog. Plagiarism is not limited to what you turn in for a grade. And if you want to get technical about it, since I am pretty sure that Carson takes a grade on you making a post on this blog, you did plagiarize on a school assignment.

    Perhaps I am taking this a bit seriously and being too harsh. But, I don’t think I am. I take this stuff seriously.

    It’s never too late to say, “you know what guys, I screwed up, sorry.”

  38. Actually, Carson doesn’t grade students for posting on this blog. If he did, I wouldn’t be the only APUSH student blogging regularly. 1st off, would you have taken me seriously if I posted an entire article with one citation by Wikipedia and another by some guy named HedgeFundGuy? I suspect not, but I may be mistaken. I am only trying to open your eyes to opposing view points a little bit and trying to make you think about your convictions. If that means rewriting things and copy/pasting later to make sure that you give it more than a cursory glance, then so be it. If it means that much to you, I will say that I am sorry that you feel betrayed in some way. Don’t take this so personally though. You’re a good kid, I will give you some advice for the future though, don’t be so quick to judge others. You may just bring that upon yourself.

  39. Patrick –

    I would have taken you far more seriously than I will in the future. That is great that you are trying to open your eyes to opposing viewpoints. I appreciate it. But once again, copying and pasting entire articles and attempting to pass them off as your own is very different than “trying to make me think about my convictions.”

    And thanks for the advice. Since I am just a “kid,” I need all of the advice I can get. But you brought this upon yourself. I will give you some advice: do not plagiarize on a blog. It isn’t worth it.

    I do not feel betrayed – I do not need an apology from you. It just bums me out that you refuse to realize your wrongdoings and correct them. But, that is your choice.

  40. Alright. Well, waste your time checking my posts from now on, it really doesn’t bother me. I’m just saying that it really is not as big of a deal as you’re making it out to be. If it bothers you that much though, you have my word, no more of my posts will be plagiarized. fair ‘nough?

  41. Patrick,
    Really.. just admit your mistakes without trying to put the blame on others in a subtle way. Take the admirable road and don’t keep making excuses. I’m sure you are smart enough to post your own ideas.. We all abide by that simple rule, it doesn’t exclude you.

    Just some food for thought.

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