If this doesn’t scare you

There are a couple of planks in the Obama administration’s effort to “not waste a good crisis” and radically expand the scope and power of the Federal government. Part of that is increased spending and taxation, bringing more and more of the economic production of the country under the direct control of the central government. Another major part, and one that is less onerous to the average citizen, is a dramatic increase in the regulatory powers of the Federal government over the private sector. Set aside the idea that the Feds in an oversight function over the private sector is like a blind and deaf lifeguard who can’t swim. Set aside also the fact that the big collapses we have seen have included some already heavily regulated industries and a couple of companies that are creations of and were protected by the same government that wants MORE control (i.e. Fannie Mae and Freddie Mac). Just read the following synopsis of former tax cheat and current Secretary of the Treasury Geithner’s plan for “fixing” the private sector.

The Treasury has been rolling out its proposals piecemeal. It announced Wednesday a central plank of the U.S. effort: a call to give powers to the Treasury and Federal Deposit Insurance Corp. to seize any company whose collapse could put the broader economy at risk.

Read that again:

The Treasury has been rolling out its proposals piecemeal. It announced Wednesday a central plank of the U.S. effort: a call to give powers to the Treasury and Federal Deposit Insurance Corp. to seize any company whose collapse could put the broader economy at risk.

So if you are too successful and get really big, the government can seize you. Of course, the details are a bit sketchy…

It isn't clear which companies would be brought under this umbrella. Administration officials believe they could include banks' parent companies, insurance conglomerates and certain hedge funds, among others. They said it would depend on a company's size, leverage, reliance on short-term funding and role in the financial system.

So the plan is pretty vague in terms of what this all looks like. I can tell you what it looks like, it looks like another step toward socialism. Given this vague plan, what is to stop the gubmint from seizing companies on whatever pretense they like?

"Because we have learned from the current crisis that destabilizing dangers can come from financial institutions besides banks, our plan will give the government the tools to limit the risk-taking at firms that could set off cascading damage," Mr. Geithner told the Council on Foreign Relations on Wednesday, the same day the Treasury laid out how such a process might work.

Government officials believe the new authority might give policy makers a powerful club to demand strategic or management changes at companies.

We already have limits on risk. It is called the market. If you take a bad risk, you fail and someone else wins. That is capitalism. Business is predicated on taking calculated risks, and there has always been a trade-off for risk and return. Nothing good comes from this intervention, where the government can decide that company A is too big for its britches, steps in and seizes it. Never mind that the biggest skewing of the risk-reward system is the Federal government stepping in to prop up failed companies, thus rewarding and subsidizing failure. Let’s give them more power (and more of our money) to tinker around with the financial system and the private sector!

The proposal would allow the FDIC to sell the company's assets and renegotiate or reject existing contracts. This could give the government leverage to ban bonuses at struggling firms, but it could also raise questions among counterparties as to whether existing contracts might survive government seizure.

The FDIC would also be able to replace directors and senior executives and "none of these actions would be subject to the approval of the institution's creditors or other stakeholders," the Treasury said.

That throws a monkey wrench into the whole system. Businesses operate by being able to raise capital. They raise capital by borrowing from banks and by issuing debt (which is basically what a bond is). They also raise capital by issuing stock to shareholders who become the owners of the company. They do business by entering into contracts with suppliers, customers and employees. When you add into the equation that the government can arbitrarily grab a business and toss all of the contracts out of the window, that means that doing business with bigger businesses becomes extremely risky. If you are an executive, you will shy away from working at a company where your employment contract and bonus structure can be negated by an act of the government. If you are a supplier, you will negotiate higher prices to offset the risk that the government will come in and redo your contracts. If you are a customer and contract for goods or services with a business, you have to build in the uncertainty that your business arrangements can be done away with at the stroke of a pen, leaving you with no legal recourse. In essence, this makes private companies wards of the state because the relationship between debt holders (people who hold corporate bonds) and stakeholders (people who own the company through stock, the shareholders) is radically changed. No longer will they have the final say on the way companies are run, now that power lies in the hands of bureaucrats

I actually think that President Obama and Secretary Geithner are fully aware of this. For all of his flowery talk of how he believes in the private sector, I don’t believe it for a second because his policies don’t match his rhetoric. His walk doesn’t match his teleprompter talk. As it becomes harder and harder for the bigger companies to do business, eventually the case can be made to nationalize them. One of the hallmarks of communism is the state holding the means of production. In a post-industrial society, it is less important to hold factories and farms, and far more important to control information and capital. That is the path we are on, as finances, the auto industry, socialized health care, control of our children virtually from the moment of birth with the “Zero to Five” plan, universal preschool and universal college, all adds up to the Federal government holding all of the strings of the economy. Think about the real means of production today and then look at the moves proposed by the administration. It becomes really easy to see that the dreams of Marx, Lenin, Trotsky, Mao and Castro are seeing their fruition. Not in Cuba or China or Venezuela, but right here in America. As America goes, so the world goes. The Marxist radicals have always known this and they have their greatest opening in 100 years right now, right here.

Has the world forgotten? Have we?

As we march in a seemingly inexorable fashion towards socialism, I have to wonder if people remember what life under a truly socialistic society is like? Younger people don’t because for them the Soviet Union and Warsaw Pact are things of the past they probably have barely heard of (especially in a public school). I know I am going to sound really old here, but people under 30 really have never lived with the threat of totalitarianism. Sure we have terrorism, but blowing up buildings is not going to lead to a full scale war or conquest. Growing up as I did in the 80’s, the threat of the Soviets was a very real one. Movies like Red Dawn that depicted a Soviet invasion of America resonated with us. We know now that the Soviets were far less militarily adept than we gave them credit for, but they still had land based nuclear ICBMs, submarines with nuclear missiles and an enormous military that was facing our forces across Europe. It is in vogue now, especially among detractors of Ronald Reagan to pooh pooh the military capability of the Soviets, but I remember vividly the parades through Red Square, column after column of troops, tanks and trucks towing Soviet ICBMs. I went to an elementary school with nuclear fallout shelter signs on the wall, a daily reminder that there was a nation bent on world conquest with nuclear weapons. I still have a book from the 80’s on Soviet military power and overblown a bit or not, the Soviets were a formidable force and the last national power that really came close to rivaling the United States. So I remember all too well what rotten fruits come from the various branches of socialism /communism/ Marxism.

To hear people today, wearing their Che Guevara t-shirts and praising Cuban health care, socialism is the way to go. But outside of the comfy confines of Hollywood and universities full of overindulged college kids, lifelong “grad students” and professors who teach because they are unable to get real jobs, people realize that socialism doesn’t work and hasn’t worked. Ever. Americans do not flee from Miami and take rickety boats to Cuba, not even the slovenly Michael Moore who thinks that Cuba is some sort of paradise but still chooses to live in luxury in New York. Nobody got shot trying to climb the Berlin Wall going from west to east. Taiwan is not threatening to retake mainland Red China by force.

Socialism invariably leads to authoritarian government and history has demonstrated again and again that authoritarian government inevitably leads to totalitarianism. Look at the worst human rights violators of the past century and the present age: Nazi Germany. Stalinist Soviet Russia. Fascist Italy under Mussolini. The Khmer Rouge. Maoist China. Castro’s Cuba. These are not nations led by Jerry Falwell-esque conservative Christians. They are lead universally by totalitarian regimes, every one some version of socialism. Even Nazi Germany fits this bill. What was the full name of the Nazi Party? The National Socialist German Workers' Party. People label conservatives “Nazis” all the time, but Adolf Hitler has a lot more in common with socialists in this country than he does with Rush Limbaugh.

The more responsibility and freedom people abdicate to the government, the more it seeks. It feeds upon itself because it is an unsustainable system. As systems fail, more and more power is consolidated into the government. This causes more systems to fail as the inefficiencies of centralized governmental bureaucracies spawn more instability. Eventually the only thing holding it together is brute force and fear. For all of the talk about being a “Worker’s Paradise”, the only thing keeping Russians in the Soviet Union was the threat of the KGB, Siberian gulags and barbed wire.

The more power shifts away from the people and into the hands of the government, the less free those people become. We have apparently forgotten this in our headlong quest to abdicate as much personal freedom and responsibility as possible into the hands of our benevolent government in the hope that by doing so we can trade freedom for security. That is a false hope as those political prisoners languishing in Castro’s prisons and the women who stood for hours in bread lines in Soviet Russia can attest. Socialism doesn’t improve the financial security of all people, it drags everyone down into the same impoverished state except for the bureaucrats who run everything. Far from an egalitarian society, socialism merely replaces the middle class and the upper class with powerful bureaucrats at the top and a bunch of miserable workers at the bottom. The rich capitalist is replaced by the tin pot dictator government official.

So we find ourselves in America in 2009 facing a precarious situation: we are in a dangerous world with enemies all about seeking to overthrow our nation. We have virtually unimpeded illegal immigration at the same time that we have growing unemployment and instability in the financial markets. In our national commercial institutions, the two of the three main drivers of our economy are in serious trouble, i.e. the auto industry and our financial markets (the agricultural industry is the third). People are afraid, they are losing jobs, cars, houses. I expect a massive wave of bankruptcies, personal and business, in 2009 as job losses mount. There are far too many people looking for a quick fix and far too many power hungry politicians more than willing to give them just that. That is a recipe for protectionism and socialism and eventually totalitarianism.

Once in place, the shackles of totalitarianism are hard to throw off without bloodshed. America stands at a precipice and is in danger of falling. Don’t expect to hear voices of sanity coming out of Washington, D.C. because it is in the hands of people who have an ideology that at its intellectual core is hard to distinguish from Marxism. They may not advocate totalitarianism now but it is the inevitable end result of the policies they do advocate. At some point everyone comes to a point of resistance to authoritarianism and it is at that point that socialism enforces its ideology at the end of a gun barrel. If America falls to socialism, there is not a free nation out there to fight for us, there are no Ronald Reagan’s in China. We must make a stand, here and now, or lose the freedoms that so many men have died for forever.

Welcome to the U.S.S.A.

The United Socialist States of America

Here is a brilliant idea from our "conservative" leadership in response to the credit crisis.

WASHINGTON – The Bush administration is considering taking ownership stakes in certain U.S. banks as an option for dealing with a severe global credit crisis.

An administration official, who spoke on condition of anonymity because no decision has been made, said the $700 billion rescue package passed by Congress last week allows the Treasury Department to inject fresh capital into financial institutions and get ownership shares in return.

This official said all the new powers granted in the legislation were being considered as the administration seeks to deal with a serious credit crisis that has caused the biggest upheavals on Wall Street in seven decades and continues to roil global markets.

Supporters of this approach, such as Sen. Charles Schumer, D-N.Y., argue that injecting fresh capital into U.S. banks who want to participate in the program would be an effective way to bolster banks' balance sheets and get them to resume lending. Taxpayers would benefit because the government would receive an equity stake in the bank in return for providing the capital.

How exactly is that a reasonable response under our Constitution? It doesn't sound like something that jives with American political thought. It does sound like a different political document though:

Centralization of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.

Those words come from the Communist Manifesto, the fifth plank. The White House is now taking economic advice from Charles Schumer, part of which includes the state taking the means of production and credit as we buy up banks, increase regulation and potentially bailout auto makers. What next, buying General Motors and have Uncle Same getting into the auto business? Why not state commune farms? State oil companies? Call Hugo Chavez and Raul Castro, have them over to the White House! What communism failed to accomplish by military force will be finally accomplished by apathy and overwhelming self-interest. In our desire to protect our own self-interest, we are willing what we hold most dear. Of course most people have no idea what ideals we should cherish and what our country was founded on (hint, it wasn't the government holding your hand and correcting every mistake)

Heck, we might as well elect Barack Obama. Better the socialist who admits it than the socialist who pretends to believe in the free market and calls himself a conservative. We are experiencing a leadership gap in this country, no one is willing to stand up and tell people the hard truth because the soft lie is so much easier to pass. These seem like small measures, a little here and a little there but they all end up inexorably at the same place. Once the bureaucracy gets it's claws into something, it never lets go.

Dosvidaniya America

Chilling is right

Dr. Albert Mohler discussed a recent ruling in Canada, where a twelve year old girl sued her father because he grounded her from going on a school trip. Her infraction? Posting pictures of herself on a dating webpage. Leaving aside how obscene and incredibly dangerous that is, her father was at a minimum right to ground her. But the court sided on her side and forced her father to allow her to go, declaring this punishment "excessive".

Click here to listen to the show

Click here to read Dr. Mohler's commentary

I know I recommend Dr. Mohler's radio show a lot, but this is the one show you need to listen to and the one commentary you must read.

This is the mindset of the elitist establishment, that every child is a ward of the state and that for now the state tolerates children living in their parent's house. This wasn't a case of abuse, but a very mild discipline. Who knows what might have happened if he had taken harsher methods. Pay attention America. There are plenty of people in power in this country who want to see us go the same way, and pretty soon if we aren't careful we won't be able to even say "no" to a toddler without court sanction.

A dictator retires

The thug turned "President" of Cuba, Fidel Castro, announced that he was stepping down from power today.

Castro has been in power, controlling Cuba with an iron fist, for my entire life and then some, almost 50 years.

My wife asked an interesting question. Since communism is all about the worker, does that mean that Castro will retire to some communal retirement home? Will he have to squeak by on a government pension like every other retired person in communist Cuba? I am sure that is the case, after all in communism it would be unseemly for someone (even a hero of the revolution) to be given preferential treatment.

Do we want a President who cries all the time?

Hillary, on the eve of a big day on Super Tuesday, broke out her New Hampshire secret weapon and cried on stage today....

For the second time just before a big election, Clinton choked up before the cameras, this time being triggered by a former law professor at Yale University who introduced at an event in New Haven, Conn.

“I said I would not tear up,” she told a boisterous crowd. “Already we’re not exactly on that path. ”

This isn't a gender issue (ever seen Margaret Thatcher cry?). It is an issue of someone who shamelessly uses emotional displays to get votes. I don't much care for Obama, but at least he isn't sobbing at his campaign stops. How can even die-hard liberals stomach her? If you want to really see something that should make you cry, Hillary revealed a feature of her swell health insurance plan....

WASHINGTON — Democrat Hillary Rodham Clinton said Sunday she might be willing to garnish the wages of workers who refuse to buy health insurance to achieve coverage for all Americans.

The New York senator has criticized presidential rival Barack Obama for pushing a health plan that would not require universal coverage. Clinton has not always specified the enforcement measures she would embrace, but when pressed on ABC’s “This Week,” she said: “I think there are a number of mechanisms” that are possible, including “going after people’s wages, automatic enrollment.”

Clinton said such measures would apply only to workers who can afford health coverage but refuse to buy it, which puts undue pressure on hospitals and emergency rooms. With her proposals for subsidies, she said, “it will be affordable for everyone.”

That is Hillary-care, a huge government program that can lead to your wages being garnished if you choose not to enroll in a socialized "insurance" program. Perhaps they will send the police after you and drag you to the doctor, for your own good. That is the key to Hillary-care, and everything her administration would stand for: we know better than you what is good for you, so shut up and do as I say, or else. Go to the doctor now, because if Hillary gets in the White House you will be standing in line to see a doctor before you know it. At least you know Ann Coulter will be in line with you since she is such a big fan of Hillary all of a sudden.