Rewarding failure is not just for Wall Street anymore. Treasury Secretary Tim Geithner has done such an uninspiring job over the past few weeks that many in Congress have called for his head. Much like Wall Street where Washington, D.C. is rewarding failure with big bonuses and massive multi-billion dollar bailouts, the Obama Administration is following the "rewarding failure" strategy by putting forth a proposal that would grant the Secretary of the Treasury the unprecedented power to nationalize private enterprise. And I bet you thought those types of ideas went out the door when the Iron Curtain fell. If you believed the era of big government was over then you have not been paying attention.
In addition to spending trillions, printing massive new amounts of cash and trying to tax every aspect of life, President Obama wants the Secretary of the Treasury to become CEO of the USA. According to the Washington Post today, "The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document." The federal government now has the authority to seize banks, but President Obama is asking for expanded powers for Secretary Geithner to be granted the power to nationalize any failing institutions that would damage the broader economy. This is a terrible idea.
So let me get this right, President Obama has the second half of the TARP money, a $787 billion dollar stimulus plan for his liberal friends, an Omnibus with 8,500 earmarks, a $3.6 trillion dollar budget that will raise taxes on energy, pay for socialized medicine......and now he wants Congress to give his Secretary of the Treasury the power to nationalize private enterprise when he, in consultation with the President and the Fed, decide that a company is "too big to fail." This is a bridge too far and grants Secretary Geithner too much power over private enterprise.
More from the Post:
The administration's proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed's other responsibilities, particularly its control over monetary policy. The government also would assume the authority to seize such firms if they totter toward failure.
Giving the federal government the power to seize industries that they feel would "damage the broader economy" is not something found in the Constitution and a power that should not be granted to a bureaucrat, let alone an elected official. The same left that yells about the mismanagement of the War in Iraq and the federal response to Hurricane Katrina wants the federal government to run Wall Street. Maybe they are salivating at the chance to reap huge bonuses for running companies into the ground, because the government is incapable of running a private company anywhere but down. If companies were run like the federal government, then they would end up 10.7 trillion in debt, out of controll spending, waste, fraud abuse and corporate decision makers who are answerable to no one.
Secretary Geithner said yesterday that "we're very late in doing this, but we've got to move quickly to try and do this because, again, it's a necessary thing for any government to have a broader range of tools for dealing with these kinds of things, so you can protect the economy from the kind of risks posed by institutions that get to the point where they're systemic." How are "we late" in doing this? Conservatives believe that "we", i.e. the federal government should not socialize losses and nationalize risk. Do "we" want to be like Europe? Do "we" want to have a top down economy like many authoritarian and socialist countries? How are we late? We have a strong economy in relation to other nations throughout the globe; maybe "we" are late in screwing things up.
Of course Giethner believes that "we've got to move quickly," because speed is the way you get these things through Congress with minimal debate and no time to review the intended and unintended consequences of action - See Obama Stimulus plan for an example. Geithner believes that "it's a necessary think for any government to have a broad range of tools for dealing with these kinds of things." No it is not necessary and proper for the government to have unimpeded and unprecedented powers so an unelected bureaucrat can take over private companies. Our Founders and the Constitution dictate limited powers for the federal government not limitless powers.
The federal government can't fix the economy. The federal government does not create anything. It taxes and regulates. Private enterprise creates and if you give the feds the power to run companies, you are putting on a road to European style socialism that no freedom loving American would like. If these new powers are granted to Geithner by Congress to "protect the economy," then Americans should not complain when the Nationalizer-In-Chief expands the program to cover non-financial companies and finds that Wal-Mart, McDonalds, Exxon Mobile, Microsoft, AT&T, Home Depot, Google, and Dell are "too big to fail."