NEOAVATARA

Those that have seen my Current Books page know I have been reading Ayn Rand’s Atlas Shrugged.  It is long, sometime boring tome regarding the ever increasing power of government, and how federal power can destroy capitalism.

It is scary how similar to reality it is.

Now, I am not saying that Barack Obama is the autocratic monster of Rand’s book.  But, the power he is trying to garner for the Federal Government?  For the first time in my life, I am really getting scared.  And I am not one of those ‘black helicopter’ or ‘new world order’ people.  In fact, I don’t think I have believed in any conspiracy theory in my life.

But I know that I love my country, and fear my government.  And I never felt that fear before.

The governmentpower to take over of banks, financial institutions, and car companies was bad enough.  At least you could see some short term benefit to these things.  Only problem?  Obama’s policy are almost certainly ensuring that these interventions will NOT be short term at all.

The administration’s proposal would give the government the power to take over and wind down a large financial company, a power that government officials lacked last year when the financial crisis was intensifying. It would also give the central bank more powers over the payments and settlements systems in U.S. financial markets to prevent a breakdown that officials fear could destabilize the economy.

But who would control that, and who would provide oversight?  The answer is, virtually no one.

Most of these powers would be entrusted to the Federal Reserve, who by design is required to speak to Congress but ultimately has total independence.  Therefor, the power to destroy large corporations and billions of dollars of value in a country lie in an unelected council with no checks and balances.  One new detail is that any large, interconnected company that the government wants to take over and break up could be pushed into government seizure by the Treasury Department, if certain conditions are met; those conditions, of course, defined by that same government. Once taken over, the companies would typically be run by the Federal Deposit Insurance Corp., but the proposal gives the government discretion to change the way this might work. The Treasury has said these powers were necessary, but the details of how they would work were unveiled for the first time in this proposal.

Sound like Ayn Rand’s world yet?

Here is my problem with all this.  First, there is a system to unwind corporations that have failed:  it is called bankruptcy.  Can anyone name me a corporation that went into bankruptcy that brought down a nation’s financial system?  Anyone?  It is a straw man.  Look, I am not saying that it would cause huge ripple effects, or that the government should not get involved at all.  But giving the government (an absolute power, as far as I can tell) to destroy and take over corporations based on their will is unconstitutional and unamerican.

Let us go back to last fall.  What effect would these regulations have had then?  Well, very likely the government would have stepped in and taken over Citibank, Bank of America, AIG (which they practically did anyway), Wells Fargo, and others.  Let me ask you:  which one of those companies caused the destruction of the U.S. economy?

In fact, all of those banks are on their way to solvency, or are already solvent right now.  So you are telling me, that after the once in a lifetime credit crisis of last fall, that the government needs even more power to handle a crisis that may not again occur in our lifetimes?  And additionally, despite how messsy and wasteful the bailouts and TARP were, didn’t it help us move past the immediate credit crisis?

I believe that we do need better regulations.  Better does not mean more. People without any intellectual drive just add regulation upon regulation.  In actuality, some of the regulations we had need to be thrown out, because they actually made things worsee.  More regulations by itself won’t solve the problem.  However, conservatives must understand that at the same time, the regulatory system is broken beyond repair, and needs to be built from the ground up.  Too many  interest groups have their paws on the regulatory system, which basically make it useless.

The pushback is starting, and starting from the most surprising of places:  Russia.  Vladamir Putin, autocrat extraordinaire, has warned Obama that he will fight any international regulatory system that covers corporations in his country.  Another shock?  Revolt from Blue Dog Conservative/Moderate Democrats. They are starting to feel the heat from their constituents, who are largely conservative and small government in belief.  These Democrats will have an increasingly tough time winning in these districts if they have to support such widening of federal powers.

I am deeply concerned about the federal power growing under this plan.  The power to tax is the power to destroy; but the power to destroy directly?  That is scary.  Oversight and limitations will be critical in this bill.  It must be highly limited, only to corporations about to declare bankruptcy.  If a corporation is profitable at all, the government should not be able to touch them, no matter what their opinion.  It should give the government the ability of oversight of large hedge funds, but should not stymie the investment dynamism of venture capitalists.  And most important, the government powers must have checks and balances.

Without those protections of individual rights, we should all be fearful of this bill.  I know Ayn Rand would.