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Geithner calls for creation of government protection racket

03/25/2009

In one of the most brazen, unconstitutional power grabs in American history, Secretary of the Treasury Tim Geithner went before Congress on Tuesday to ask for broad powers to seize non-bank financial firms (such as AIG), power which he could exercise “in consultation” with the Federal Reserve and the President (for whom the Treasury Secretary works.)

If you thought AIG’s political contributions to Democrats (who were the party most likely to be in power) were enormous and quasi-corrupt before, just wait until you see how panicked financial firm executives write large checks to whomever they’re most afraid of at the time. Right now, it’s Democrats. In a few years, it could be Republicans. It doesn’t matter which party it is. This is a plan that Mussolini would be proud of. It is as close to enforcing economic fascism on one of the most important parts of our nation’s (and the world’s) economy as one can have short of a government bureaucrat actually placed as the acting CEO of a company.

And by the way, wasn’t one of the major complaints about the original TARP plan that it gave one man (Hank Paulson at the time) too much power? Now, according to Obama’s Press Secretary and designated ankle-biter, Robert Gibbs, “We need resolution authority to go in and be able to change contracts, be able to change the business model, unwind what doesn’t work.” Are you kidding me? Is this the Unites States of America?

Do you think it was an accident that the Senator who received the most in campaign contributions from AIG in 2008, Chris Dodd, was the Senator who was selected to make sure their bonuses were protected?

Speaking of “protection", Geithner’s power grab would appeal not only to Mussolini, but to John Gotti as well. Whichever administration is in power, and whichever politicians seem most likely to gain power in the next election won’t have to send their bag men around to collect protection money from the firms covered by the powers Geithner is asking for. Instead, the companies will simply send their armies of lobbyists, checkbooks in hand, to well-appointed Class-A Washington, DC offices to offer tens of thousands of financial reasons that the new political mafia should please pick on somebody else. “Just let us know if our gift wasn’t quite big enough; I’m sure we can send more if we have to, Mr. Emanuel.” I suppose it’s not surprising that an Administration run by people with backgrounds in Chicago street politics would turn to Al Capone’s model of governance.

Our entire financial system will suffer, not least the millions of Americans who own shares in non-bank financial firms as those firms divert money and energy to keeping the new Treasury protection racket focused on others.

Barney Frank seems to think that Geithner’s request is OK because the FDIC has similar powers over banks. However, the FDIC is essentially an independent institution and mostly non-political. Giving someone who works for an elected politician the power to seize the assets of a private firm is so repugnant a suggestion that it’s a stretch even for a team with as little respect for private property and free markets as the Obama administration has.

The hero(ine) of the day: Michele Bachmann

A true highlight of the day…and maybe of the year…came when Congresswoman Michele Bachmann (R-MN) asked Tim Geithner the key question: “What provision in the Constitution could you point to to give authority for the actions that have been taken by the Treasury since March of ‘08?” Geithner, after looking truly confused, as if he were wondering how anybody could possibly believe the Constitution is relevant during “an emergency” answered that he was using powers given to him by Congress, to which Congresswoman Bachmann reiterated her question: “Sir, in the Constitution. What in the Constitution could you point to to give authority to the Treasury for the extraordinary actions which have been taken?” Geithner again said he’d been given by Congress, and Bachmann tried once more: “Under the Constitution, what can you point to?” Geithner responded “Under the laws of the land, of course.” Whatever that means.

Congresswoman Bachmann then asked similar questions of Ben Bernanke, who answered that Congress has given certain authorities to the Fed. She asked him whether there are limits to the Fed’s power and his answer was essentially that “there are practical limits", with an interesting implication that there are no theoretical limits.

That particular part of the exchange begins at 55 seconds into this video:

 

Bachmann tried to ask Geithner how much of the profit from the “public-private partnership” which the government will be financing will be returned to taxpayers. Bachmann’s time expired and Barney Frank refused to ask Geithner to answer the question.

It becomes clearer to me every day that we need the outbreak of “tea parties” around the country is the first step in a wider push-back against the Obama’s administration and their plans to destroy our nation’s economy, health care system, energy supplies, and to make our public education system even worse than it already is.

Obama’s plans are not just bad economics. They’re dangerous. They’re anti-American. They’re evil. And I don’t use that term lightly. We are living Atlas Shrugged, and the Looters are within weeks of their maximum power. I waver between hoping that public outrage will stop them and hoping that they actually get a few more parts of their agenda done, so that the devastating effects teach the public for a good long time that “progressivism", while it can have a pretty face, has the ugliest of consequences.

The brazenness of this attempted power grab is so incredible that I believe even Democrats will not support it in enough numbers for it to happen. Unfortunately, it won’t be because they oppose economic fascism but because they believe that power should be in their hands instead of Geithner’s.