Raping the Free Market Economy

or "Why I Want Obama to Fail" (Part Deux)

I try to not overreact and just scream "socialist" at every thing the Obama administration does that I don't like. The Democrat victories in 2008 do entitle them to make policy, and much of that, while I may loath it, will be the usual wranglings that will get turned back when the Republicans take over.

However, three stories crystallize exactly why I was referring to Obama as "The Marxist" back in the days leading up to the election. And for those of us who do not want anything approaching the old Soviet command economy (and that damn well should be every damned American), here's how we're going to get there.

First, there's this story about a speech by President Obama:

Obama: Wall Street Will Play Less Dominant Role

Obviously, I'm starting with the softest one here. His rationale for pushing the less dominant role of Wall Street?

"What I think will change, what I think was an aberration, was a situation where corporate profits in the financial sector were such a heavy part of our overall profitability over the last decade."

Okay, that's not completely wrong, because there were some bad dealings that were a part of the current financial mess. But he appears to want to regulate Wall Street down by force:

"That means that more talent, more resources will be going to other sectors of the economy," he said. "I actually think that's healthy. We don't want every single college grad with mathematical aptitude to become a derivatives trader. We want some of them to go into engineering, and we want some of them to be going into computer design."

Considering there doesn't seem to be a shortage of people taking up engineering and computers, what is his motivation here? Two words jump to mind: Command Economy. But this alone is not a pattern.

The second story is distinctly more insidious:

Obama Unveils Plan to Close Tax Loopholes

First of all, a definition: A loophole (in tax law) is a legal method by which an entity may avoid being taxed. They include every deduction and tax shelter on the books. So let's look at the loopholes Obama's after (and why):

"The way to make American businesses competitive is not to let some citizens and businesses dodge their responsibility, while ordinary Americans pick up the slack. Unfortunately, that's exactly what we're doing."

The reason they're doing it (LEGALLY) is because someone in government created a loophole. Those loopholes (in this context) are usually created to offset taxes to keep companies somewhat competitive.

"The current law says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York. "

That's because India doesn't tax the shit out of people. New York taxes people until they leave the fucking state! Or, to look at it rationally (according to the US Chamber of Commerce:

"The United States is the only major industrialized country which double taxes the overseas earnings of our companies. Since other countries don't subject their companies to double taxation, U.S. companies need deferral to stay competitive in the global marketplace. When you limit deferral, you limit the ability of U.S. companies to compete, you impede growth in the U.S. economy, and you cause the loss of jobs -- both at the companies directly impacted and companies in their supply chains."

Hell, even the Democrats in Congress want to study it before they kneecap our economy! But our Glorious Leader wasn't done yet. He hadn't threatened any companies:

"If financial institutions won't cooperate with us, we will assume that they are sheltering money in tax havens and act accordingly."

That's the strongest argument I've heard so far for moving your whole company to, say, Ireland (low corporate taxes) and opening the minimum necessary subsidiary here. At least this makes it easier for me to consider a move to New Zealand.

And now, the punchline:

"I want to make certain that our tax policies are fair and support the global competitiveness of U.S. businesses. "

In light of all your previous statements: Bullshit, Barry!

The third story though is a combination of the creep of an evolving command economy and the emergence of what I will kindly label as "The New Thugocracy."

In the rush to effectively nationalize the domestic automakers (except Ford, who had the damned sense not to take government money), GM has pretty much kowtowed to the administration's demands and will begin producing what Obama has proclaimed they will produce (the all new Yugo v2.0). But Chrysler has not been so successful at bending to Washington's will and has, after the administration tried and failed to get all the creditors to sign onto a deal where they'd settle for pennies on the dollar (23 cent, I think) while more favorable terms were offered to the United Auto Workers, finally gone into bankruptcy.

Obama chose to demonize those lenders that refused his offer.

The duty of any lender is to make a return on his investment. These particular investors (who remain anonymous due to confidentiality agreements (and hopefully will due to the attitude of the Obama administration)) state it this way:

“The government has risked overturning the rule of law and practices that have governed our world-leading bankruptcy code for decades.”

The practices they speak of deal with the priorities that occur in bankruptcy. In bankruptcy proceedings, debts are paid or discharged in a certain order. In this case, they're first in line and others (the UAW, for example) are not. And while the outlook isn't so good in bankruptcy, It comes back to following the rule of law.

Which brings us to Tom Lauria, bankruptcy attorney at White & Case, who represents a group of lenders that object to the Chrysler sale. Speaking on 760 WJR (Detroit), he was explaining why his clients are opposed to accepting the terms the Obama administration has laid out. However, one statement stood out above all others.

He said, "One of my clients was directly threatened by the White House" (1:54 on the clip in the link above).

The administration has denied this, of course, and Mr Lauria has backed away from (but not recanted) his statement. However, a clear pattern has emerged.

President Obama has stated that Wall Street will play less of a role in our economy in he future. He has put plans on the table to levy more taxes on companies who use legal methods to avoid our tax system (with some of the highest rates in the world). And he is using the full might of the government to make decisions for an industry. In essence, he is using the power of the bully pulpit, a willing Congress, and an apathetic and dependent people to shift the United States to a quasi-command economy.

And should he succeed fully, the last vestiges of the free market may soon follow:

When he came for the dirty, filthy, greedy Wall Street speculators, we cheered. When he took over the antiquated car companies and made them green, we lauded his caring for the environment. When he shut down the polluting power companies, we celebrated, especially when he sent us checks to cover the rising costs of the clean power. Then he came for our industry because it failed to meet his expectations. We cried out for help because it was our job, our company, and our livelihood. But as there were too few left, there was no one to speak for us.

The reason we have the rule of law is so that things can't quickly and easily changed at the whims of the majority. When this breaks down, especially for political advantage, we stand to lose fundamental freedoms and natural rights. What Obama moves toward now is control over the right to property. And with property rights evolving into a right granted by the state rather than secured by the state, how long can the others remain?