Is Spending And Regulation 'Socialism'?
Peterffy's confusion of socialism aside, the increase in federal public debt (the actual liabilities on the government's balance sheet) is largely the product of the government's stabilization and recovery efforts. CBO data shows that the government spent around $7.21 trillion between FY2008 and FY2010. Of that, $3.847 trillion can be accounted for in the government's various recovery and recapitlization programs
- American Recovery And Reinvestment Act: $787 billion
- Troubled Asset Relief Program: $700 billion
- AIG recapitalization: $60 billion
- Sale of Bear Stearns to JPMorganChase: $25 billion
- Capital Injection to Fannie and Freddie: $275 billion
- Quantitative Easing through 2010: ~2.054 trillion
It's important to note that most of these funds have gone to the banking sector to encourage lending and investment, and despite the guarantee of continued liability purchasing and low interbank rates from the Federal Reserve, levels of economic activity remain modest.
On regulation, claims of socialism are equally overstated because the most recent regulatory enhancements only moderately increase federal presernce in financial markets. New improvements in federal oversight come from Dodd-Frank, but as discussed in "The American Recession" Parts 1 & 2, Dodd-Frank focuses on regulators identifying systemic risks and managing the bankruptcy of banks 'Too Big To Fail." The only portions of the Dodd-Frank law that permit federal authorities to intervene in the business of financial markets are titles V, VII, and IX. Dodd-Frank grants no new authority to really intervene in financial markets by: separating commercial and investment banking, monitoring high frequency trading, or prohibiting special purpose vehicles.
Could America See Peterffy's Socialism?
No because Peterffy isn't really talking about socialism, he's talking about Communism and calling it Socialism. Thomas Peterffy was born in Hungary in 1944 and emigrated to the United States in 1965. History tells us that after Nazi Germany was relieved of its conquests in Eastern Europe, Soviet Russia's Red Army began a military occupation of Hungary and for five years tried (with varying degrees of success) to install Communists in important political positions. With reinforcements from Moscow, the communists in Hungary formed the People's Republic of Hungary in 1949, beginning the era of Stalinism in Hungary. Peterffy would have seen much of the failed 1956 Revolution and lived through the early years of the Goulash-period in Hungarian communism until he finally left Hungary in 1965.