Government Bullying of Private Industry More Serious than Imagined
And there are indications that the public is wary of this sort of thing. Most polls show that they hate bailouts, which is generally the source of the government’s power to browbeat firms. And as David Brooks observed:
The crisis has not sent Americans running to government for relief. Nor has it led to a populist surge in anti-business sentiment. In a recent Gallup poll, 55 percent of Americans said that big government is the biggest threat to the country. Only 32 percent said big business. Those answers are near historical norms.
Americans have always been skeptical of activist government, and that skepticism remains. When Gallup asked specifically about the current crisis, 44 percent of Americans said they disapprove of an expanded role for government during the crisis; 39 percent said they approve of an expanded role but want it reduced when the crisis is over; and only 13 percent want to see a permanently expanded role for government.
So it may be that as they learn the magnitude of the government’s meddling — and the details of the government’s newfound willingness to not only expand but to threaten, cajole, and extort businesses — the public may recoil.
More importantly, after getting a glimpse of this, Congress may want to re-establish the lawmaking and oversight role which it has temporarily abandoned. For a group that railed against the Bush administration’s overreaching vision of the executive branch, there has been deafening silence about the Obama administration’s brazen willingness to act with no appropriation of funds or regulatory authorization from Congress. Congressional Republicans in particular may want to get cracking on some regulatory reform, which would not only set reasonable rules for business but restrain the excesses of the executive branch. If given the choice between some new regulatory framework for government agencies or letting the Bernanke-Geither-Obama crew prowl through American industry firing executives and forcing deals at will, Republicans may decide the former is infinitely more desirable.
In the meantime, kudos to Cuomo, who may have uncovered the biggest and most dangerous racket of them all — the Obama economic team. And please buckle up. We have never seen an investigation of this type before involving a chairman of the Federal Reserve. It will, I think, prove extremely illuminating. It also may possibly complicate the Obama administration’s effort to micro-manage the economy. Once the public figures out what the government is up to, they might decide that bullying private industry isn’t the “change” they had in mind.
There is little doubt that bullying, brutish gov’t dictates are way more threatening to the public’s pocketbook and to law and order than corrupt or out of control private sector heads.
The gov’t thugs are able to apply untold and pernicious pressure upon people-even those at the tippy top-in a way which heads of companies can’t even dream about it.
Relying on the gov’t to keep the evil at bay is like relying on the foxes who are guarding the hen house NOT to eat its inhabitants.
It is precisely because of the above that our Founding Fathers warned against the encroaching powers of big gov’t.
The stories that will come out of the last several months will fill bookstores in the coming years. We do have to recognize that the events surrounding Bank of America and the Merrill Lynch transaction occurred under Bush’s watch. These were his guys. Yes, Obama has largely kept them on which is cause for more concern.
Regardless of who the president is, the underlying issue is that this cabal is operating outside of the spectrum of law from inside the machinations of law. Whether it is Bear versus Lehman, Wachovia versus Citigroup, National City versus whoever, choices were made. Why those choices were made come back to the Bernanke, Paulson and Sheila Bair. It’s clear they were not made wholly rationally which points toward what drove their preferences. And this will be the stuff of books in the coming months.
What Obama is doing is a subtle form of corporatism (google it). He’s taking over health care – likely next week. He’s got the domestic auto makers in his vest pocket. He’s shut down the domestic energy development business and is about to take that over with this greenie cap and trade and EPA. In short, he’s imposing corporatism. It is pure collectivism but is not true socialism although it would be difficult for many to distinguish the two. Most of Europe practices corporatism, for example, but are not pure socialists.
In the end, whether it’s pegged by the scholars as corporatism or socialism, The best outcome for most will be serving as a benevolent slave to the state. We all know what the worst will be. Regardless, kiss freedom goodbye.
Jennifer,
You said,
“Congressional Republicans in particular may want to get cracking on some regulatory reform, which would not only set reasonable rules for business but restrain the excesses of the executive branch.”
Reform on pieces of paper is meaningless unless it is accompanied by enough votes to become law. Republicans don’t have those votes. So just how do you propose they get them? And advocating more “rules” is simply advocating less economic freedom, and we are rapidly losing all of that. So please explain why you want more.The free market determines the “rules” of business…competition. When laws are made they need to tell people what they cannot do (because experience has proven them harmful to society), not what they must do. I suggest you go back to the non-Marxist version of Economics 101 and read Adam Smith, Hayek, Milton Friedman, von Mises. etc. Politicians make rules for their own good…to get votes, and despite their rhetoric, could care less about helping anyone but themselves. If we need another law, it’s to outlaw politicians. How many ea votes can you count?
I often felt during the Bush presidency that GWB often took some damned poor advice. Post-Bush, Paulson is a lead actor in that scenario. I remember being flabbergasted that Paulson suggested TARP without the possibility of judicial review. That the Zero’s team embraces and expands that type of government meddling is no surprise, but is incredibly disquieting.
President Obama & corrupt Timothy Geithner wants to nationalize the banks & wants to run businesses; this is essentially a back door dictatorship in the making.
Ah, poor widdle babies. The gub’mint was mean to them after they destroyed our economy. See this? It’s the world’s smallest violin playing, “My 401K bleeds for them.”
I gotta love this, though, from howiam:
“Politicians make rules for their own good…to get votes, and despite their rhetoric, could care less about helping anyone but themselves.”
Yes, it’s the politicians, not the CEOs paying themselves millions as they lay offs thousands and foreclose on your home, it’s the politicians –not greedy executives– who only care about themselves and could care less about you…Riiiiiiiight.
howiem:
Jennifer,
You said,
“Congressional Republicans in particular may want to get cracking on some regulatory reform, which would not only set reasonable rules for business but restrain the excesses of the executive branch.”
Reform on pieces of paper is meaningless unless it is accompanied by enough votes to become law. Republicans don’t have those votes
…the problem is far deeper than that.
What good does legislation expressed as regulatory reform do if Congress doesn’t care to see it enforced? (Think Fannie Mae and Freddie Mac…there were Senators who didn’t want good practices/regulations/oversight enforced…and they were, therefore, not enforced)
As long as we have a corrupt Congress, the ten commandments themselves, issued by Jehovah won’t help. (Ask Him how that has worked out over the centuries.)
“Once the public figures out what the government is up to…”
How many of these people watch Fox News, listen to center right radio talk shows, and visit insightful blogs? A high number of Americans are so confused that they don’t which way is up. The “mainstream” propagandists are confusing them to no end.
Does the Constitution insure our freedoms or not?
Are there no safeguards for this government run wild?
Are there no patriots?
Sorry, but A. Cuomo may be the greatest crook of the TARP story.Read
http://article.nationalreview.com/?q=ZDE5ZTExZDljOWYyNjZlZjM4MjY5ZTgzYjFmNzc0NTg=
Increasingly, one wonders whether Paulson was working to sabotage Bush for the benefit of the Democrats all along….
Given that Andrew Cuomo helped to create the mess when, as part of the Clinton administration, he threatened legal action against banks whose balance sheets were too good, this action is particularly curious. It’s possible, of course, that he really is just defending the law as written.
Whatever the understory, it will be pleasant to see a dyed-in-the-wool Dem like Cuomo using the threat of court action and the machinery of prosecution against the Obama administration’s attack on the free economy.
Can you imagine how much insider trading by ‘government’ officials is going on right now when they can set the price of a company stock by extortion like former Treasury Secretary Hank Paulson and current Fed Chairman Ben Bernanke just pulled off against the Bank of America stock holders. Just who made the millions if or when that information was shared. Lets start looking at these things as part of a plan to fleece the tax payers and stock holders. These are criminal actions, its the same thing the Mafia does in the garment industry. Just because they wear nice clothes, have a good government position and don’t look like a criminal, their actions speak otherwise. This was very juicy information and lots of money could be made by selling Bank of America stock short; there are records, who made the money?
This seems to be a RICO violation – extortion and wire fraud. 18 U.S.C. 1961, et seq. The question is whether a Bank of America shareholders’ derivative action for RICO would lie when the corporation is too fearful to act due to the underlying threats.
Defendants would be the United States government, former Secretary of the Treasury Paulson, Treasury Secretary Geithner, etc. And the United States government would be the racketeering enterprise.
In the early part of the last century, all levels of government consumed 12% of the economy. That number has grown to approximately 55% currently. For those who quickly blame greedy corporations for exporting millions of jobs overseas, the incredible shrinking private sector has obviously been overwhelmed by government.
What national problem has been fixed by government intervention ? Energy supplies ? No. Ridding ourselves of poverty ? Nope. A safer nation ? No. National security ? Nope. So fixing private enterprise is best accomplished by government action ?
No. So we have a federal government with a negative net worth of $43 trillion. We have a situation where after pouring literally trillions of taxpayer dollars into a failed public education system, 60% of Americans aged 16-25 are functionally illiterate.
And we have a system where it takes a new president months to fill appointments to government positions. Can we not see the trees in the forest all around us ? Maybe, just maybe government has gotten too big ? The few remaining taxpayers are getting tired of this nonsense. And very few of us really care about party labels anymore. Failure is failure. Maybe when government consumes 100% of the economy, Americans will finally wake up.
The bottom line is that we do not hand out taxpayer funded welfare to needy individuals and families without strings attached (i.e. means testing, job search and training, etc.), so we should not be handing out taxpayer funded welfare to any other entity that requests it without strings attached. The TARP money comes with strings attached. This is to protect the taxpayer (that would be me and you) from the slimy bloodsuckers who think that they know how to run a business (if only government would get out of the way, blah, blah, blah) but in fact do not know anything at all as demonstrated by their failure and request for welfare from the government to bail them out. This, of course, is why it is so comical to hear the conservatives cry of “socialism.” For a conservative the term socialism, you see, is contingent upon to whom the taxpayer funded welfare funds are directed. If the funds are directed to, say, a single mom trying to put food on the table or a family trying not to lose their home, well that’s “socialism” for a conservative. If the taxpayer funded welfare are directed to, say, big agriculture in the form of subsidies, then that’s just good business. Conservative are socialists too. They are supply-side-socialists. Therefore, if the conservative socialists want welfare it should come as no surprise to them that the taxpayer would want some form of accountability. Personally, I do not want my taxpayer dollar being spent on more failure and irresponsibility.
Unfortunately, both major political parties want big government. There are some significant differences between what they intend to impose on us with big government, but big government is the common means to their ends. And, increasingly, an end in itself.
Herb, if a Nanny State is so wonderful why don’t you go move to a totalitarian state where the absolute power is concentrated into one person? Stand by your beliefs or eat your words. I know what you will do.
16. DaveinPhoenix:
As they say in Parliament, “Hear! Hear!”
–The UnPatriot
10. HEWLESS:
“Does the Constitution insure our freedoms or not?”
Yes. But the provisions that insure those freedoms do have to be implemented by “someone”. So the question is, why are those who have that power (any Senator or US Representative); some from the judiciary?; who? why….is no one stepping up?
(And that is NOT a rhetorical question. I want to know WHY they are not stepping up. If what’s happening to the United States of America is ok with them, I think each and every one of them should be required to explain in plain English WHY they think it’s ok.)
As we speak, they are bulllying citi to fire their CEO. Why doesn’t business bully government to fire obama, Napolitano geithner?
“…for a conservative. If the taxpayer funded welfare are directed to, say, big agriculture in the form of subsidies, then that’s just good business.”
Huh? What in heaven’s name are you talking about? I am not aware of any center-right thinker who defends corporate welfare. None whatsoever. Could you please provide even one example? And please do not point to some politicians who use this issue as a trade off to pass allegedly more important bills.
Meryl nails it — it all starts with enforcing existing laws. Fraud is out of control throughout this entire financial mess; hardly anything is even being investigated, much less prosecuted.
If Ken Lewis’s testimony is accurate, not only are Paulson and Bernanke on the hook, but also Lewis himself. He totally bailed on his fiduciary responsibility to the B of A shareholders and bondholders by keeping his findings re. the Merrill Lynch deal secret from them. This is breaking the law.
Cato: Paulson’s loyalties are firstly to Goldman Sachs, and then to the Wall Street banksters. Goldman Sachs has padded plenty of politician funds in both parties. Thain, former CEO of Merrill Lynch, came from Goldman Sachs. Goldman Sachs is a central player in the Wall Street oligarchy that has our government (both parties and Obama) by the nads. You won’t hear this in any political blogs though, and especially not in any mainstream media. Check out http://www.goldmansachs666.com, which is currently being sued by Goldman Sachs.
For folks wanting to get a real good idea just how badly we’re being looted and defrauded by Wall Street, thanks to our government, check out Karl Denninger’s blog: http://market-ticker.denninger.net/
7. Herb:
Ah, poor widdle babies. The gub’mint was mean to them after they destroyed our economy. See this? It’s the world’s smallest violin playing, “My 401K bleeds for them.”
I gotta love this, though, from howiam:
“Politicians make rules for their own good…to get votes, and despite their rhetoric, could care less about helping anyone but themselves.”
Yes, it’s the politicians, not the CEOs paying themselves millions as they lay offs thousands and foreclose on your home, it’s the politicians –not greedy executives– who only care about themselves and could care less about you…Riiiiiiiight.
The above is how this is going to be played in the news media and the leftie spin factory. Yes, perhaps technically what Paulson did was illegal, but he was messing with a big corporation and probably only hurt a vicious Nazi of a corporate CEO who’s paid himself a much-too-large salary anyway, so who cares? The only people who are going to lose money here are the *Rich*, and at this point does anyone in this country admit to belonging to that group? Better to be a self-described child molester or Klan member.
The reality, that such companies as BOA have many investors, including large public pension funds, and that the health of such a company is probably very important to those investors and to the people who are going to draw on those pensions, goes right over the head of Herb and people like him. Who cares whether those pensions are endangered? The government can be pressured into guaranteeing said pensions (at a cost to the silly taxpayer, and remember, we only tax the *Rich*, so who cares how much they have to pay), and at least we’ll get that evil CEO who doesn’t deserve the money he’s earning. We should be paying it to some schoolteacher in a public school somewhere, while s/he tries to pick up on the student in the third row they’ve found true love with.
Concerning AIG and the bonuses, Obama is being a thoroughly dishonest rabble-rouser. The 40 people who created the original problem at AIG were long gone, so they approached 40 new people and said: please take these jobs, because we must have someone who actually knows what these derivatives are, to try and unwind them without losing all of their remaining value. In return, we agree in writing to give bonuses to these 40 new people for their specialized financial expertise.
Some of the new hires worked for one dollar against getting a performance bonus — and now the government has informed the world that under President Obama, a contract is no longer a contract in the United States of America. For a measly 160 million dollars out of $TRILLIONS being spread around to disreputable groups like ACORN and others — with little to no oversight — this despicable Congress and president have repudiated contract law.
How did we go from being a free country to one in which the Federal government gets to tell a CEO of a functioning bank to bailout an insolvent, politically-connected investment bank, or be replaced by a government-selected crony. How indeed.
I wonder if Iceland would like to see some companies ‘relocate’.
I know we in Canada welcome your companies with open arms.