PrintMay 30, 2010
Wise Guys: The End of Free-Market Capitalism
President Obama has repeatedly demonstrated his willingness to use manufactured crises to enhance his own power and prestige at the expense of the Constitution. Positioning himself through the use of his own engineered economic meltdown, Obama has fired the executives of private companies, claimed the power to set pay, nationalized health care, and nationalized manufacturing. Obama has even gone as far as using the mistakes of some banks in over-leveraging as a door to threaten banks with "pitchforks," echoing Leninist populism. Additionally, he orders banks to lend despite the serious drop in deposits, a ludicrous directive that demonstrates his extreme ignorance.
The crisis-solution scheme is the centerpiece of the Obama policy agenda. Using the now-debunked climate change scare, Obama has attempted global wealth redistribution through unprecedented "climate reparations." Using the cover of "service," a principle revered by most Americans, Obama has created his own police force. Using hyped up fears of domestic terror, Obama has attacked free speech and sought to criminalize opponents. Ironically, Obama has given real terrorists the precious rights of American citizens while denying these rights to Americans.
And now, President Obama is exploiting the government-caused mortgage crisis to usher in councils of regulators to replace Congress in a host of key policy areas. Councils of "wise men" will now rule America. This is an open assault on the Constitution and the freedom of the American people, and it must be stopped.
Using a falsified tale of economic malfeasance, Obama asks us to accept government by councils of wise men. As part of his financial regulatory plan, Obama would create a select group, i.e. the Financial Oversight Council, charged with formulating the regulations that govern the entire financial sector. There is not an area of the economy that theoretically could not fall under the jurisdiction of this elite group. Last time I checked, the power to regulate commerce rested with Congress, not a gaggle of unelected bureaucrats.
The irony is breathtaking. Should a financial crisis that was caused by government regulation be solved with more government? "Greed," we are told, caused the economic meltdown. But if this is this case, then Obama was at the center of this greed, as were many in his party.
In reality, it is government's heavy hand in the economy that created the conditions for the Great Depression, Part II. Consider these facts:
Successive financial reforms pursued in the Clinton years exposed lending institutions to litigation if and when community organizations under the Community Reinvestment Act (CRA) accused lending institutions of discrimination against minorities. This had the effect of a punitive tax on lending institutions unless they lent to people that could not pay. These toxic loans were called subprime mortgages. Government institutions Fannie Mae and Freddie Mac then purchased these subprimes in droves and marketed them as secure investments on the stock market. This kept mortgage institutions artificially in the black and greased a well-oiled political graft machine. The share of the mortgage market tied up in subprime mortgages increased to 30 percent of the total by 2007. And the share of mortgage-related securities that were government-backed neared the $4-trillion mark. It was only a matter of time before defaults rippled through the system. The system was designed to crash.
The answer to this problem, we are told, is to give government more power. And what President Obama proposes is no trivial power-grab, but the creation of a highly detached and unaccountable cadre of wise men to govern the financial sector in place of Congress. If wise men can gather and make law in place of elected and accountable representatives, America has ceased to be a free nation. This cannot be allowed to happen. At stake is not merely the mundane financial regulations governing inside trading, but the financial freedom of the average American citizen.
Part of this intelligentsia is to be called the Consumer Financial Protection Agency (CFPA), which will be empowered to tell Americans what kind of credit card they are allowed to have and what kind of purchases they are allowed to make. Credit will no longer be based primarily on punctuality of payment, but on what private Americans choose to purchase. The advocates of the CFPA argue that this approach is necessary, since "[m]any consumers are uninformed and irrational," leading them to make "systematic mistakes in their choice of credit products and in the use of these products." In their view, consumers need to be "behaviorally informed."
This approach has been tried before. Central Committees decided how much wheat to grow and how many toothbrushes to manufacture, and they set wages based on "need." Of course, members of the governing class always seemed to "need" more than anyone else. The system failed miserably, and yet America is quickly remaking itself in this archaic image. As Russia, our former Communist nemesis, passes flat taxes and reaps a whirlwind of economic success, the President of the United States is telling businesses what to make and telling workers what they are allowed to earn. What we are witnessing is not merely a new "New Deal," or enhanced public-private partnership, but the seeds of full-on Totalitarian Socialism, with Obama and his team of Czars as the politburo. And Obama is flashing his socialist credentials at every turn, attacking such free-market concepts as "risk-taking" and "speculation." What profitable capitalist venture doesn't always involve these two principles?
The president also takes issue with "excessive" compensation, which he says "offends" American values, or at least offends his personal socialist sensibilities. Like Caesar's symbolic refusal of the royal diadem, Obama "reluctantly" accepts the breathtaking and unprecedented power of managing our nation's businesses and dictating wages. "From each according to his ability, to each according to his need" is now national policy. This is precisely what Obama intends, pledging to eliminate what he calls this "poverty of ambition, where people want to drive fancy cars and wear nice clothes and live in nice apartments[.]" With an income exceeding $5 million per year, Obama is hardly in a position to judge economic equality. It appears Obama "needs" more than others.
With the passage of the financial overhaul bill, over half the American economy will fall under some kind of government control after grouping health care, manufacturing, and the lucrative financial sector. The free market will be but a distant memory.
President Obama's financial "reform" is nothing less than the destruction of individual freedom in America. If government controls both the means of credit and the object on which it will be spent, it controls people. "We the people" must resist this despotic turn of events while we still can.
