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.