Is President Obama Taking Us Toward Socialism?

This is a rush transcript from "The Beltway Boys", February 21, 2009, that has been edited for clarity.

FRED BARNES: FOX CO-HOST: Coming up on "The Beltway Boys," is "Obamanomics" taking us to socialism? We'll tell you if that argument is overblown or right on the money.

MORT KONDRACKE, FOX CO-HOST: Roland Burris is pushed to explain more about his contacts with Rod Blagojevich before his appointment.

BARNES: Good news or right-wing radio, as Obama signals he's giving up on reimposing the Fairness Doctrine.

KONDRACKE: And Bristol Palin revives the national debate on teen pregnancy and the role of sex education.

BARNES: All that on "The Beltway Boys" right now!

I'm Fred Barnes.

KONDRACKE: And I'm Mort Kondracke. We're "The Beltway Boys."

BARNES: And, Mort, tonight's hot story is actually a question. And the question is, is it socialism? The answer is yes, after a fashion. That's where we're headed. It's pretty clear we've been headed that way for many years. But the trend of socialism has accelerated because of Barack Obama's policy as president. Because of Obamanomics.

Just this week, he proposed a $275 billion bailout for nine million homeowners supposedly threatened with foreclosure. Something that really begins to take — in a big way, begins a takeover by the government of the entire mortgage industry.

This angered a lot of people too. Ninety-two percent of Americans are doing fine in paying their mortgages. It's eight percent that aren't. Many of them shouldn't have those mortgages in the first place. And the 92 percent or a good chunk think they shouldn't — they're paying their mortgages, they shouldn't have to bail out their neighbors when, in many cases, the neighbors don't deserve it.

I want to make three points on this socialism question. Number one is this. It's actually Democratic socialism. Mort, you're familiar with it. It's all over Europe. It's not Marxist, Leninist. It's Democratic, governments are elected, but the government's role in the economy grows and grows and grows. You know, Germany, England, France, all of them.

Number two, Washington is running major industries right now — banking, housing, autos, energy. No telling what they'll do in health care. As I said, they moved into the mortgage industry. Health care — Obama wants a single-payer system. Now that's not what he's proposing. You know one thing about it? Government will play a bigger role than it does now.

Number three, more unions, more unemployment and slow growth. Look, Mort, you know what unions do. They get contracts and get higher wages for their workers, which means that companies hire fewer people. So we get more unemployment. The more unionization, the more unemployment there is and slower growth. I mean, that's a result. It's very simple. So we are moving towards socialism.

KONDRACKE: I think that's bunk that we're moving towards socialism. First of all, just the charge is demagoguery and used as demagoguery.

BARNES: Not me.

KONDRACKE: Oh, yes. You were very politely referring to Democratic European — during the campaign John McCain did not say Democratic socialism, European socialism. He said socialism. So did Joe the plumber. And Val Martinez, at one rally with Cuban-Americans in Florida, said this is socialism. This is communism. This is not Americanism. So it's all misused.

Secondly, is government growing? Of course, government is growing. Who started it? George W. Bush, under whom we have the TARP, $700 billion, the Fed intervention, $8 trillion, the auto bailout and taking over Fannie Mae and Freddie Mac. Did George Bush want to do it? Of course, not. It's because the economy's in terrible shape. When the private economy is lagging, the government has to step in on a temporary basis.

Finally, business supports this intervention. You know, the stimulus package had the support of both the U.S. Chamber of Commerce and the National Association of Manufacturers.

BARNES: Mort, there's a name for that: big business. You think small business did? Do you think minority businesses did? You think entrepreneurs who aren't wealthy did? No, they didn't.

But, Mort, you mentioned John McCain — you mentioned John McCain, Joe the plumber out of the past, Val Martinez, the speech that nobody heard of before, President Bush and others, but you didn't answer the question. Is this socialism or not? You may not like my definition of it, Democratic socialism, but I think that's accurate. And there is a legitimate fear among many Americans that with this uncontrolled spending under President Obama, that's exactly where we're heading — toward socialism.

Now, watch this exchange last week, but it's still very telling, this exchange between Senator Jim Bunting of Kentucky and Treasury Secretary Tim Geithner. Very telling.


SEN. HIM BUNTING, (R), KENTUCKY: By the end of fiscal 2010, there will be 38 percent of GDP. To me, that's exactly what the European Union countries are at. Most of those countries are socialistic.

TIM GIETHNER, SECRETARY OF THE TREASURY: We have to be very careful that we not go too far and that we design things in a way that allows the government to get out of this and walk it back as quickly that is feasible. But crises like this cannot be solved by the markets.


BARNES: A lot easier to get in than it is to get out. We've heard the, yeah, we'll get out of this later thing before. I think Senator Bunting said 38 percent, the prediction...

KONDRACKE: I think he said 30.

BARNES: I think he said 38. But in any case, when you add government spending, the prediction, it will be at 40 percent of GDP, the name of the economy next year.

Look, Mort, to say this trend started with George W. Bush is ludicrous.


BARNES: Mort, have you heard of the New Deal, the Great Society?


KONDRACKE: Do you want to go back to Herbert Hoover. Is that what you want to do? You want to go back to Calvin Coolidge.

BARNES: No, I'm just tracing a trend here, that is pretty obvious. George W. Bush, that's pathetic.

Anyway, the whole point is, it's been going on for a long time. and you seem happy with this big government, big business and big labor. That leaves out the little guy and leaves out small business and leaves out most Americans I think.

And, Mort, answer the question, please because you named a lot of names but didn't answer it. Is this socialism or not?

KONDRACKE: I said it is not socialism.


KONDRACKE: I said it is not socialism.


KONDRACKE: Whoa. Just a minute. It's not socialism.

BARNES: Wait a minute. I said Democratic socialism.

KONDRACKE: It is a larger welfare state and don't forget that President Obama promised that next week, when his budget comes out, that he's going to demonstrate how we are going to get long-term entitlements under control. I'm banking on that happening so that, over the long run, we will not be burdened by government debt. Now, let me... Yeah?

BARNES: Remember when George Bush in 2005 proposed to bring Social Security under control? Where was Obama?

KONDRACKE: That was a very controversial method of dealing with it.

BARNES: He was nowhere to be seen. All right. Go ahead.

KONDRACKE: In any event, just on the basis of fact, if under crisis circumstances, we get to 40 percent of GDP, we are still way far away from Sweden, which is more than half of all GDP is government. So is it in France. In European countries, in Britain, for example, they have real socialized medicine? You think we're ever going to have socialized medicine? We are not.

Furthermore, Tim Geithner said this is all designed to be a temporary style program. Allen Greenspan said, yeah, we may have to nationalize the banks the way Sweden did, but that's temporary, too.

BARNES: What about these polls you were going to cite?

KONDRACKE: The FOX poll shows the American people are ambivalent about all this. And it's a warning to Democrats that they better not go too far because Americans right now think that 76 percent of Americans say we're relying on the government too much.

But if you take a look at this poll, people also think the government should be responsible for all kinds of things. Which is to say that, if growth in this country — we're basically a capitalistic county. And people don't want to rely on government. The Democrats go too far, they will be punished.

BARNES: I'm glad we're not Sweden yet. I feel reassured.

Coming up, Roland Burris' days in the Senate could be numbered. But first, President Obama ran a post-racial candidate. So why is the candidate stirring up racial division by calling the USA a nation of cowards?



KONDRACKE: Welcome back to "The Beltway Boys." It's time for the "Ups and Downs."

Down, Illinois Senator Roland Burris. Democrats, Republicans, editorial pages, even Illinois' Democratic Governor Pat Quinn are calling for the junior senator to step aside. Burris says the revised statements he made about the contacts that he had about former Governor Rod Blagojevich's office, leading up to his appointment, and the Senators mea culpa has a familiar ring to it. Watch.


SEN. ROLAND BURRIS, (D), ILLINOIS: I ask you today to stop the rush to judgment. You know the real Roland. I've done nothing wrong and I have absolutely nothing to hide.


BARNES: You heard it from him first. I though it was Rod Blagojevich.


BARNES: The White House has jumped in too, to their credit. Robert Gibbs, the press secretary, said on Friday, Roland Burris needs to come up with a better explanation of his actions or think about resigning. It will be hard to get him out but it would be good to see finally some Democrats stepping forward. All the rest, the "Chicago Tribune" zinged Chicago Mayor Daley and Illinois Senator Durbin. And all the rest of the Democrats are kind of ducking the issue and looking at their shoes, which they shouldn't have done. He's clearly guilty. He needs to resign.

KONDRACKE: You know who's past Roland Burris is trying to follow? Larry Craig, famous from the airport bathroom caper, who, you know, refused to resign. I think Burris does not want to resign unless he's carried out.

Now, if he is, indeed, charged by the Illinois state Senate, he may very well face an expulsion vote in the Senate, and the precedent on that is, if you're expelled, you resign first.

BARNES: The plan also, Quinn, the governor said, if Burris goes, have a special election.

Down, Eric Holder. The attorney general may be compromising President Obama's desire for a post-racial America. During a speech to commemorate Black History Month, the A.G. has this to say. Watch.


ERIC HOLDER, U.S. ATTORNEY GENERAL: Though this nation has proudly thought of itself as an ethnic melting pot, in things racial, we have always been and we, I believe, continue to be, in too many ways, essentially a nation of cowards.


KONDRACKE: You know, I think Holder — that speech of Holder's was absolutely incoherent. At one point, he said on Saturdays and Sundays, we have not changed as a country since — over 50 years. A few paragraphs later he said, the country was utterly transformed by the civil rights revolution, quite correctly. No more poll taxes, no more separate entrances, no more separate drinking fountains and so on. No more lynches and stuff. And he was right. Instead of celebrating his accomplishment as the first black attorney general and Barack Obama's arrival as the first American president, you know, he is sort of making all this into a downer.

BARNES: A little chilling, too, for the attorney general to be saying this. I couldn't agree with you more. I grew up in a segregated society at least part of my youth. In Virginia, I went to segregated school for eight years. I can tell the difference, even on the weekends. America has changed economically, socially culturally, racially. Holder needs to go to the suburbs, the most racially integrated part of the country, even on weekends.

KONDRACKE: Washington D.C. is pretty integrated, too.

Up, right-wing radio. Score one for the likes of Sean Hannity and Rush Limbaugh. The Fairness Doctrine is toast after a definitive statement from a White House spokesman. The president stated during the campaign he does not believe the Fairness Doctrine should be reinstated.

BARNES: I don't either. And I don't think you do.

KONDRACKE: Well, look, I said I don't think the Republican Party should allow itself to be led around by the nose by the likes of Sean Hannity or Rush Limbaugh. But I will defend, to the death, their right to say what they think and to say it opening and not be stifled, which the Fairness Doctrine would do. What's more, re-imposition of the Fairness Doctrine would completely cancel the industry of A.M. radio. You don't want to do that in a recession.

What the left needs to do is find some talkers who can attract an audience instead of trying to prevent the right from talking.

BARNES: I thought they had those at NPR. Don't they have plenty of them there? Spread them around.

KONDRACKE: I like them, by the way.

BARNES: I know you do. That's why I said that.

Look, Obama Democrats would be crazy to try to take on the conservative talk radio. They would gain nothing by it. It would be a hornet's nest. What do they need to do that for? They won the last two elections overwhelmingly in the teeth of really strong opposition by most of conservative talk radio.

KONDRACKE: Coming up, advantage Arnold. And Bristol Palin speaks about her plight as a teenage mom and revives the debate over abstinence.


BARNES: Welcome back to "The Beltway Boys." We're continuing with our "Ups and Downs."

Up, Secretary of State Hillary Clinton. So far, so good, on her first foreign trip to Asia. In South Korea, she talked tough on North Korea nukes. And in China and Indonesia, she sought to reach out.

Then, there was this kind of diplomacy on an Indonesian talk show. Watch.


UNIDENTIFIED INDONESIAN HOST: Since this is a music show...


UNIDENTIFIED INDONESIAN HOST: I think I would like to hear you sing a little bit? (LAUGHTER) (APPLAUSE)

CLINTON: Here is the problem. (LAUGHTER)

OK. See, all these people? If I start to sing, they will leave. (LAUGHTER)


BARNES: I wouldn't have laughed.

KONDRACKE: I tried to do hip-hop one day on the show and I was laughed out of town.


BARNES: I wonder when they're going to show that tape.

KONDRACKE: So, anyway, Clinton went on this trip to Asia and her purpose was, you know, listening to her like she did in upstate New York, much to her success, as she's trying to make the world out to have a better opinion of the United States than under George Bush, which is not a difficult kind of task. Now comes the hard part. What to do about the North Korea nukes, Iranian nukes, Pakistan's nukes and the insurgents and stuff like that. This was the easy part.

BARNES: Yeah. Mort, you're right, that listening tour in Upstate New York in 2000 when she was running for the Senate, it helped her. It didn't help upstate New York, which is still in an economic recession.

KONDRACKE: She tried. She has tried.

BARNES: Mort, go to upstate New York. You'll find out nothing happened. She didn't do a thing.

Anyway, she's got trouble ahead with the White House and people in the administration I think. Look, I thought I'd never say this. Did she come off as the toughest, strongest, even wisest person with a big role in Obama's foreign policy? And yet she's got all the flakes at the State Department and what else. Joe Biden for one, and other people who aren't going to be as tough as she is. That's going to be a problem for her.

KONDRACKE: Up, Bristol Palin. as the new face of teen pregnancy, she sparked the age-old debate. We're giving her credit for her no-nonsense candid. Take a look.


BRISTOL PALIN, DAUGHTER OF SARAH PALIN: Everyone should be abstinent, but it's not realistic at all. It's something that — I don't know, you should just wait ten years. It's so much easier.



KONDRACKE: I guess so.

BARNES: I guess so. That means she's saying that abstinence actually is realistic. Either way, it's certainly not fool proof. People slip, particularly teenagers, but not only teenagers. I think the real story of her is what she did and what her mother did. She didn't have an abortion when she became pregnant outside of marriage. And her mother, Sarah Palin, the governor, didn't have an abortion when she learned the child she was bearing was going to be a Down's syndrome child. The message is, even if it's convenient, and nothing more than convenient, you don't need an abortion.

KONDRACKE: Look, four words that I have to say here are: sex education and birth control. And Sarah Palin should have gone with both at home.

BARNES: That was five words.

But, up, California Governor Arnold Schwarzenegger. The state legislature finally passed a budget ending 106 days of an epic standstill to close a $42 billion deficit. The budget includes new tax hikes and spending cuts, which the governor says is what he needs. I think we're going to see him by his clock here. You know, there was how many days we've had stalemates and so on.

Look, this isn't what California needs. California doesn't need more spending. It's already out of control. It doesn't need higher taxes, especially of the people. And these are the ones that will be hit, the people who will invest and create jobs in California.

Look, there's a big loser in this and that's Arnold Schwarzenegger, who's failed as governor. There's some big winners. As a former state legislator told my colleague, Matt Continetti, of the "Weekly Standard," and the big winners are, Nevada and Arizona. California will continue to hemorrhage people.

KONDRACKE: You said they needed to cut spending. They did cut spending. $13 billion cut spending, raise taxes, $12.8 billion. Have they done — a no new taxes thing, only tax cuts to solve the budget deficit, it would have cratered public education. It would create health programs. It could have closed down the university system. He'd have had to fire all the employees. So — and one other point — one other point.

BARNES: You don't really believe that stuff?



KONDRACKE: California faced a budget crisis. You know who presided over the biggest tax increase in order to close this budget deficit.

BARNES: Yeah, it was Ronald Reagan.

KONDRACKE: Ronald Reagan, exactly, the hero of the conservative movement. How do you account for that?

BARNES: I account for it this way. That spending has gotten wildly out of control since Ronald Reagan was there. You know this perfectly well. The Democrats won't do anything about it. Why would California — they're headed toward economic suicide. Why would they continue to do this when they watch all these people fleeing the state? California is losing population just because of what legislature's doing on spending and taxes. Simple as that.

KONDRACKE: You need legislative reapportioning.

Don't go anywhere. "The Buzz" is coming up next.


BARNES: Mort, here's your big chance. What's "The Buzz"?

KONDRACKE: You know what the Workhorse Group is?

BARNES: I don't.

KONDRACKE: Robert Pear, of The New York Times, had a scoop on Friday to the effect that big business and little business and unions and the pharmaceutical industry and the hospitals and the insurance industry are all working with Senator Ted Kennedy secretly to draft some sort of a compromise on health care reform. Do you know who they would love to have participate in this?


KONDRACKE: Republicans.


KONDRACKE: And you know who is saying just say no again — the Republicans.

BARNES: Good for them, because they know what they'll wind up with. Businesses are — businesses just want to get rid of the health care expense. And if they do, will they raise the wages of employees? I don't think they want to, but they should.

Look, Mort, what are people really talking about in Washington? That is the plunge of the stock market under Barack Obama. I'm not blaming him entirely, Mort, but it's down 800 points in the Dow since he became president. It went down 400 points when he announced he signed the stimulus plan. Like — we have these numbers wrong. It is an indication of one thing. The Dow's a bet on the future. To investors, it does not look good under Obama.


KONDRACKE: How much did it drop under Bush?

BARNES: It dropped plenty. But they didn't have faith in him either.

All right, that's all for "The Beltway Boys" this week. Join us next week when we will be back in town!

Watch "The Beltway Boys" Saturday at 6 p.m. ET and Sunday at 1 and 6 a.m. ET

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