Is Obama Really a Marxist? Puh-Lease

The almost certain Democratic presidential nominee merely wants government to take a far greater regulatory role in healthcare, energy, and other major sectors of the economy. That's all.

By SHARE

"I have said publicly, and I will again, that unless he proves me wrong, [Barack Obama] is a Marxist," said Tom DeLay, the former congressman and House Republican majority leader, in a recent radio interview. (And he is not the first GOPer to suggest as much.)

Now in the dialogue of American politics, there are few classic—and loaded—charges. "Appeaser" is one. "Isolationist" is another. And "Marxist" would have to be right up there with those two. I think to call someone a Marxist, you have to provide some evidence that he 1) believes capitalism is based on exploitation and 2) is calling for a worker's revolution.

DeLay didn't provide any evidence of either, probably because that is not an accurate reflection of Obama's views, which seem to be well within the mainstream of Democratic policy for the past quarter century. And his biggest policy idea, a cap-and-trade system to reduce climate emissions, is not noticeably different than the plan offered by John McCain. And certainly all those Wall Street folks sending him money don't think Obama's a Marxist.

Such campaign season silliness aside, it is certainly true that Obama has chosen to pursue government solutions rather than market solutions to problems such as possible climate change, healthcare, Social Security solvency, income inequality, the trade deficit, and education. Compare those views with those of Bill Clinton, who cut capital gains taxes, pushed free trade, and floated the idea of having the government invest Social Security dough in the stock market.

Here is a great example of Obama's thinking: He wants to create something called a "Clean Technologies Venture Capital Fund" and invest $10 billion a year in emerging energy technologies. Now the private VC industry is already pouring billions into alternative energy, but Obama thinks that's not enough and wants Uncle Sam to get in on the action at taxpayer expense. Interestingly, a new study by the University of British Columbia looked at the performance of the Canadian government's venture capital efforts. It found that government venture capital isn't nearly as successful as private venture capital. Here are the study's conclusions (bold mine):

Enterprises supported by private venture capital are more likely to have successful exits (IPOs or third-party acquisitions) and tend to generate higher value conditional on successful exit. The expected commercial value of an enterprise financed by private venture capital (PVC) is significantly higher than for an enterprise financed by government-sponsored venture capital (GVC). In addition, PVC-financed enterprises are less likely to go out of business over relevant time horizons and are more likely to attract U.S. investment. The extent of crowding out is very important. If GVCs appear to be crowding out private venture capital, this would be a negative finding. We find suggestive evidence of at least some crowding out. On the whole, our conclusions cast doubt on the value of government-sponsored venture capital programs.