Big government, budget deficits and reckless spending have rarely seen better days. Under Obama’s guidance, following in the footsteps of President George W. Bush, the Federal government has grown by leaps and bounds, invading the private sector at will and consolidating more and more power under the executive branch’s authority. In a recent column, noted economist and television show host, Larry Kudlow wondered “if we’ve officially entered a new era of government-controlled business." He writes:
Sen. Bob Corker (R., Tenn.), probably the most knowledgeable man in Congress about the car bailout, and someone who argued months ago in favor of a pre-planned government-sponsored bankruptcy for GM and Chrysler, calls the Wagoner firing “a major power-grab by the White House on the heels of another power-grab from Secretary Geithner, who asked last week for the freedom to decide on his own which companies are ‘systemically’ important to our country and worthy of taxpayer investment, and which are not.” Corker calls this “a marked departure from the past,” “truly breathtaking,” and something that “should send a chill through all Americans who believe in free enterprise.”
One of the more alarming things Kudlow pointed out was that
the government was now forcing banks to accept TARP money even when the banks wanted to refuse it. Kudlow writes:
Incidentally, most of the big bankers who met with President Obama in the White House last Friday want to pay back their TARP money, not take more of it. But the Treasury is conducting stress tests that could stop the TARP pay-downs and force the banks to take more taxpayer funds in return for even more federal control.
The big bankers say they are profitable. And with an upward-sloping Treasury yield curve and some market-to-market accounting reform coming from the Financial Accounting Standards Board (FASB), the outlook for banks should be getting better, not worse. So why is the Treasury jamming more TARP money down bankers’ throats, especially after announcing a new plan to use private capital to clean up bank balance sheets and solve the toxic-asset problem?
It kinda sounds like the Treasury doesn’t want to let go of its new uber-regulator status.
Scary stuff. In essence, the government, finding itself in possession of new power, is now reluctant to give it back.
The government’s power play did not stop with the country’s financial institutions but has now extended to the auto industry. Kudlow notes that because of the UAW’s weighted influence in the Democratic Party, Obama lacks the political courage necessary to do the right thing and order the auto companies in question to report to bankruptcy court.
He writes:
As for Detroit, the carmakers should have been in bankruptcy months ago. And it is a bankruptcy court that should have fired GM’s Wagoner and his board. Along with some serious pain for bondholders, bankruptcy would have broken the high-cost labor contracts with the UAW as well as carmaker contracts with dealers across the country. That’s what bankruptcy courts are for. They’re part of the free-market capitalist system.
Former SEC chair Richard Breeden is arguing against a systemic uber-regulator for banks, and in favor of special financial bankruptcy courts. Once again, the story is court-ordered restructuring, not government control by political bureaucrats who like their power so much they want to keep running the various companies in question.
And why isn’t Obama’s special auto task force ordering a replacement for Ron Gettelfinger, the UAW’s president? Weren’t their oversized pay and benefit packages a big part of the problem? Well, that’s never gonna happen. The election power of the union is too strong. But this does reveal the political nature of these government bailout operations.
How strangely ironic that this unprecedented power grab comes from the same political party that spent the past eight years complaining that the executive branch held too much power. This, my fellow conservatives, is the road to tyranny and socialism. Welcome to the era of big government.
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Update (4/1/09): This is a clip from Monday’s Kudlow Report showing an interview Kudlow conducted with Sen. Bob Corker (R-TN):
I do not mean to use hyperbole, but I find this chilling: “I think the American people…all of us, are becoming numb to this everyday erosion of what has made this country great.”
