A plaque remaining from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem.

Above, a 1934 plaque from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem. Discarded as trash in 2006.

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Entry from December 29, 2009
“Socialism for the rich and capitalism for the poor”

Michael Harrington’s book The Other America: Poverty in the United States (1962) resulted in the “War on Poverty” programs later in the 1960s. Harrington popularized the phrase “socialism for the rich and free enterprise for the poor,” crediting it to housing expert Charles Abrams. Abrams had used the phrase since at least its publication in The Nation on May 15, 1948. In the late 1960s, a slightly different second half changed the full phrase to “socialism for the rich and capitalism for the poor.”

The phrase means that the rich (or “too-big-to-fail” corporations) get corporate welfare, privatizing their profits and socializing risks (losses). The saying became popular again in 2008-2009, with the Troubled Asset Relief Program (TARP) to bail out failing financial institutions. Some critics summed up the argument in September 2008 with: “Socialism for Wall Street, Capitalism for Main Street.” U.S. Vice President Joe Biden said in November 2009 that “socialism for the rich and capitalism for the poor” was a “great expression” of Biden’s grandfather, Ambrose Finnegan.


Wikipedia: Socialism for the rich and capitalism for the poor
Socialism for the rich and capitalism for the poor is a classical political-economic argument, stating that in the advanced capitalist societies state policies assure that more resources flow to the rich than to the poor, for example in form of transfer payments. The term corporate welfare is widely used to describe the bestowal of favorable treatment to particular corporations by the government. One of the most commonly raised forms of criticism are statements that the capitalist political economy toward large corporations allows them to “privatize profits and socialize losses.” The argument has been raised and cited on many occasions.

History and usage
The notion that banks privatize profits and socialize losses dates at least to the 19th century, as in this 1834 quote of Andrew Jackson:

I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. ... You are a den of vipers and thieves.
—Andrew Jackson, 1834, on closing the Second Bank of the United States. From the original minutes of the Philadelphia committee of citizens sent to meet with President Jackson, February 1834, according to Stan V. Henkels, Andrew Jackson and the Bank of the United States, 1928 (unabridged form, extended citation)

The phrase may have been first popularized by Michael Harrington’s 1962 book The Other America. However, Harrington is actually citing Charles Abrams, well-known authority on housing.

Andrew Young has been cited for calling the U.S. system “socialism for the rich and free enterprise for the poor”, and Martin Luther King, Jr., who was assassinated in 1968, frequently used this wording in his speeches. Since at least 1969, Gore Vidal has used the expression “free enterprise for the poor and socialism for the rich” to describe the U.S. economic policies. Vidal used it as well since the 1980s for expressing his critique of Reagonomics.

In winter 2006/2007, in response to criticism about oil imports from Venezuela, that country being under the leadership of Hugo Chávez, the founder and president of Citizens Energy Corporation Joseph P. Kennedy II countered with a critique of the U.S. system which he characterized as “a kind of socialism for the rich and free enterprise for the poor that leaves the most vulnerable out in the cold”. Also Robert F. Kennedy, Jr. has become known for expressing to large audiences that America is now a land of “socialism for the rich and brutal capitalism for the poor”.

Economist Dean Baker expressed similar views in his book The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer, in which he pointed out several different policy areas in which government intervention is essential to preserving and enhancing wealth in the hands of a few.

Also Noam Chomsky has criticized the way in which free market principles have been applied. He has argued that the wealthy use free-market rhetoric to justify imposing greater economic risk upon the lower classes, while being insulated from the rigours of the market by the political and economic advantages that such wealth affords. He remarked, “the free market is socialism for the rich—[free] markets for the poor and state protection for the rich.”

Arguments along a similar line were raised in connection with the financial turmoil in 2008. With regard to the federal takeover of Fannie Mae and Freddie Mac, Ron Blackwell, chief economist of AFL-CIO, used the expression “Socialism for the rich and capitalism for the poor” to characterize the system. In September 2008, the US Senator from Vermont, Democratic Socialist Bernie Sanders said regarding the bailout of the U.S. financial system: “This is the most extreme example that I can recall of socialism for the rich and free enterprise for the poor”. The same month, economist Nouriel Roubini stated: “It is pathetic that Congress did not consult any of the many professional economists that have presented […] alternative plans that were more fair and efficient and less costly ways to resolve this crisis. This is again a case of privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street”.

Former U.S. Secretary of Labor Robert Reich adapted this phrase on The Daily Show on October 16, 2008: “We have Socialism for the Rich, and Capitalism for everyone else.”

Variations
. Privatize profits/gains, and socialize risks/losses/debts
. Markets, Free enterprise, private enterprise, and capitalism for the poor, while state protection and socialism for the rich

15 May 1948, The Nation, “The Politics of Housing: II. A Plank in a Platform” by Charles Abrams:
The proposal can best be descrlbed as socialism for the rich and prlvate enterprise for the poor.

Google Books
The Other America:
Poverty in the United States

By Michael Harrington
Baltimore, MD: Penguin Books
1962
Pg. 58:
(This is yet another case of “socialism for the rich and free enterprise for the poor,” as described by Charles Abrams in the housing field.)

Google Books
Socialism Re-examined
By Norman Thomas
New York, NY: Norton
1963
Pg. 240:
In all of this, Federal intervention tends to be haphazrd and uncoordinated. Thus has been produced one of the great scandals of our time: “Socialism for the rich, free enterprise for the poor.”

Google Books
New South
By Southern Regional Council
v. 21 - 1966
Pg. 30:
When, he asked not altogether originally but aptly for the moment, will we get away from socialism for the rich and capitalism for the poor?

Google News Archive
8 April 1969, Washington (DC) Afro-American, pg. 18, col. 4:
The speaker (Rev. Walter Fauntroy, pastor of the New Bethel Baptist Church, Washington, DC—ed.) said “the Nobel Peace Prize winner (Martin Luther King, Jr.—ed.) opposed socialism for the rich and white, and capitalism for the blacks and poor.”

Google Books
19 July 1971, New York magazine, “A Populist Manifesto: The Making of a New Majority” by Jack Newfield, pg. 40, col. 3: 
The current economic system in America can fairly be described as socialism for the rich and capitalism for the poor.

Google Books
Creating the Future:
A guide to living and working for social change

By Charles R. Beitz and Michael Washburn
New York, NY: Bantam Books
1974
Pg. 267:
The way an old slogan puts it is, “Socialism for the rich: capitalism for the poor.”

The Swamp
Bush economics: Wall Street socialism
Posted September 13, 2008 8:00 AM
by William Neikirk
President Bush has been roundly criticized by Democrats for conducting a conservative economic policy. That was true for a while, but no longer.

With bailouts of mortgage giants Fannie Mae and Freddie Mac and the investment banking firm of Bear Stearns (and possibly Lehman Brothers), Bush has turned to activist government practices to prevent a financial market meltdown.

It’s an odd mixture of policies—socialism for Wall Street and capitalism for Main Street.

Huffington Post
Socialism for Wall Street, Capitalism for Main Street
By Joseph A Palermo
Posted: September 17, 2008 12:00 PM
(...)
We witness the same over-confident, smug market fundamentalists and laissez-faire devotees, businessmen and women who hate “government” when it provides aid to families with dependent children, or food stamps, or health coverage for poor people—businessmen and women who denounce as creeping “Socialism” any attempt by the government to redistribute some of the nation’s wealth to the working middle class or to the poor—now come to Washington, hat in hand, begging the federal government to fix their self-created problems brought on by their own unbridled greed and recklessness and demanding massive infusions of tax-payer dollars in the form of bail out after bail out.

It’s Socialism for the rich and laissez-faire capitalism for everybody else.

Huffington Post
Biden On The Bailout: ‘Socialism For The Rich And Capitalism For The Poor’ (VIDEO)
By Sam Stein
First Posted: 11-18-09 09:13 AM | Updated: 11-18-09 11:12 AM
In an interview with Jon Stewart on Comedy Central’s The Daily Show Tuesday evening, Vice President Joe Biden acknowledged the anger and frustration many taxpayers feel over the way financial institutions seem to have favored status in Washington D.C.

Pointing to the hundreds of billions of government dollars that have been spent to keep banks from failing, he recalled a “great expression” of his grandfather, Ambrose Finnegan: “It’s socialism for the rich and capitalism for the poor,” Biden said.

FrumForum
Making the Tea Parties G-Rated
December 4th, 2009 at 11:31 am
by Tim Mak
(...)
Their fury is palpable – and understandable. A government which intervenes to save bankers – among the most well off in society – while allowing people like Jenny Beth to lose their homes inspires resentment easily. The old adage “socialism for the rich, capitalism for the poor” rings especially true for these Tea Partiers.

Posted by Barry Popik
New York CityGovernment/Law/Politics/Military • (0) Comments • Tuesday, December 29, 2009 • Permalink