Official Retraction & Apology

In several posts I accused Obama of pursuing socialist economic policies. After reading up on comparative economics, I realize that this accusation was unsound and slanderous. So, the Chicago Freedom Forum is offering Obama and his supporters an official retraction and apology:

Obama's policies are not truly socialist, they better reflect the tenants of fascist economics. I challenge you to read these excerpts from wikipedia's article on the economics of fascism and tell me with a straight face that the Obama administration's economic policies do not represent many of the tenants of fascist economics!

Historian Gaetano Salvemini argued in 1936 that fascism makes taxpayers responsible to private enterprise, because "the State pays for the blunders of private enterprise... Profit is private and individual. Loss is public and social."[26] Fascist governments encouraged the pursuit of private profit and offered many benefits to large businesses, but they demanded in return that all economic activity should serve the national interest.[27]

An inherent aspect of fascist economies was economic dirigisme[22], meaning an economy where the government exerts strong directive influence, and effectively controls production and allocation of resources. In general, apart from the nationalizations of some industries, fascist economies were based on private property and private initiative, but these were contingent upon service to the state.[23]

In 1929, Italy was hit hard by the Great Depression. The Italian economy, having just emerged from a period of monetary stabilization, was not ready for this shock. Prices fell and production slowed. Unemployment rose from 300,787 in 1929 to 1,018,953 in 1933.[37] Trying to handle the crisis, the Fascist government nationalized the holdings of large banks which had accrued significant industrial securities.[38] The government also issued new securities to provide a source of credit for the banks and began enlisting the help of various cartels (consorzi) that had been created by Italian business leaders since 1922.

The government offered recognition and support to these organizations in exchange for promises that they would manipulate prices in accordance with government priorities.[39] A number of mixed entities were formed, called instituti or enti nazionali, whose purpose it was to bring together representatives of the government and of the major businesses. These representatives discussed economic policy and manipulated prices and wages so as to satisfy both the wishes of the government and the wishes of business.

This economic model based on a partnership between government and business was soon extended to the political sphere, in what came to be known as corporatism

Various banking and industrial companies were financially supported by the state. One of Mussolini's first act was indeed to fund the metallurgical trust Ansaldo to the height of 400 millions Liras. Following the deflation crisis which started in 1926, banks such as the Banco di Roma, the Banco di Napoli or the Banco di Sicilia were also assisted by the state [43]. In 1933, Mussolini created the Istituto per la Ricostruzione Industriale (IRI) with the special aim of rescuing floundering companies. By 1939 the IRI controlled 20% of the Italian industry through government-linked companies (GLCs), including 75% of pig iron production and 90% of the shipbuilding industry.

Mussolini also adopted a Keynesian policy of government spending on public works to stimulate the economy. Between 1929 and 1934, public works spending tripled to overtake defense spending as the largest item of government expenditure.[44]

Finally, Italy's involvement in World War II as a member of the Axis powers required the establishment of a war economy. This put severe strain on the corporatist model, since the war quickly started going badly for Italy and it became difficult for the government to persuade business leaders to finance what they saw as a military disaster.