Your 401(k) on socialism

Maybe it’s time to turn once again to the concept of—horrors!—socialism. Aren’t we in this mess because of capitalism? Or, more precisely, capitalists?

In the ideal world, I would be a Libertarian: The government is best that governs least. But hasn’t history proven that we simply can’t trust business to Do the Right Thing, or even to use common sense?

The current target of many government haters is Fannie Mae, created in 1938 and chartered by Congress in 1968 directly to counter discriminatory practices in the mortgage-lending industry. The object was to make it easier for more people to own their own homes, with the idea that increased home ownership would contribute to social stability.

But what did the lending industry do? It abandoned common sense and made loans to people it shouldn’t have made loans to. Providing the means for someone making $30,000 a year to purchase a $300,000 home is not smart business, but that’s what lenders did.

Then big big business, Wall Street, got involved, with the bundling of packages of debt and creating bookie operations to bet on whether or not the debts would be paid, and here we are, in 2008. And how’s your 401(k) doing?

Typical of modern big business is the fishing industry in general and the Japanese whaling industry in particular.

Without government intervention, the fishing industry would have eventually put itself out of business by depleting the oceans of the product being caught and sold. Japanese whalers very nearly did that.

We’re not talking political theory here.

Where is common sense when you need it? Shareholders in Ford Motor Company should be asking. After World War II, when Volkswagens started appearing on American streets, Ford thought it would be a good idea to produce a small car of its own, and its engineers developed one, called the Cardinal.

It was to have been a front-wheel-drive compact, but Ford executives apparently determined that the small car was just a temporary fad and Americans wanted only big cars, so it cancelled the American part of the project, and the car was sold, successfully, in Europe. Wrong decision, as Volkswagen and Honda, among others, have proven.

One could go on and on about dumb decisions made by business, but every consumer has had his or her own experience. Consumers are not only aware of the dumb decisions, but the frequent incompetence of business.

So the current system simply isn’t working very well, is it? How did you say your 401(k) was doing?

The good thing about socialism is that it would remove from capitalists the responsibility of making common-sense business decisions. The bad thing about socialism is that it would give to government the responsibility of making common-sense business decisions.

And government has its own history of making not such good decisions.

Houston, we have a problem.