Methinks the economist doth protest too much

Princeton economics professor, Alan Blinder has an op-ed in the WSJ with the title Obama Is No Socialist. The argument he makes should be obvious from the title.

In an effort maintain the most substantive nature possible for this blog, let me deal with Professor Blinder's first point first--that Obama is not attempting to socialize the banking system. To be fair, let me quote exactly Prof. Blinder's argument for this point.

"Secretary of the Treasury Timothy Geithner has made it clear that he opposes nationalizing banks, despite much outcry from the political left -- and even some from the right -- to do just that."

That's it. The sum total of Prof. Blinder's evidence that Obama isn't trying to socialize the banking system is that Geithner has "made it clear that he opposes nationalizing banks." Well, actions speak louder than words. Yes, the Treasury has taken preferred stock in return for bailout funds rather than (voting) common stock. So that means that the government will have no influence on the operational decisions of the banks because they hold non-voting shares. I think the bonus recipients at AIG might think differently about how much operational control the government has.

But what is really more interesting about this article is the perceptual issue this article raises. Two months to the day into Barack Obama's administration, a world-renowned Democrocratic economist finds it necessary to write an article in the Wall Street Journal arguing why the President is not a socialist. What are his defenders going to be writing about a year from now? Stay tuned.

UPDATE: This Forbes article might have been the catalyst for Blinder's op-ed.