Government Run Amok
18. May, 2009 
7 Comments
by Sheldon Richman, Foundation for Economic Education
The “federal” government, particularly the executive branch, can do almost anything it wants. The limits are few, and those that survive can often be gotten around through chicanery. Much of what government does is out of public view, thanks to off-budget accounting and other dubious methods that would get the rest of us prosecuted.
Even if the average person had the time to monitor what government is up to — a tall order for sure — much of it is so esoteric for a layman as to be nearly incomprehensible. He’d have to give up his job and master several disciplines in order to do a proper job. That puts a new light on the term “educated voter.”
On the other hand, trusting one’s representatives — “misrepresentatives” is a more precise term — to watch over things is pointless: They don’t read the bills they vote on; deal-cutting is a higher priority anyway.
In recent years they’ve voted to bail out Wall Street banks, “stimulate” the economy, invade countries, and inflate the power of government to violate civil liberties—all without reading the relevant materials. (Not that the executive always waited until Congress blindly passed the requested authorization.)
By what criterion are we entitled to call this “representative government”? Periodic elections are a necessary condition for that label to apply, but they are hardly a sufficient condition.
A government of self-defined powers is hardly new in the United States; nor is it the monopoly of any one party. But it has accelerated in the last decade through the exploitation of fear: fear of economic calamity, fear of terrorism, fear of the unfettered market.
From the beginning, fear has propelled the growth of the state. H. L. Mencken saw this more clearly than most –“The whole aim of practical politics is to keep the populace in a continual state of alarm (and hence clamorous to be led to safety) by menacing them with an endless series of hobgoblins, all of them imaginary.” — and Robert Higgs has spent a career explaining it.
Using powers the origins of which predate the New Deal, government has now extended its tentacles to encircle the entire economy. Bureaucrats exercise wide-ranging discretion with, at best, murky authority.
The unaccountable Federal Reserve System creates money in order to buy not only government securities, but also “troubled” assets from investment banks and other favored firms. The FDIC now insures all bank debt, not just deposits, and guarantees government loans to hedge funds that buy the kinds of securities Treasury Secretary Timothy Geithner prefers.
The Treasury last fall asked for $700 billion for one purpose (buying worthless mortgage-backed securities) but uses it for other things instead, such as buying stock in banks and bailing out insurance and auto companies that have earned the right to fail.
As George Will writes, “TARP’s $700 billion, like much of the supposed ‘stimulus’ money, is a slush fund the executive branch can use as it pleases.” This points to another unsettling practice: congressional blank-check authorizations to the executive branch: “Here’s some money; do something good with it.” (Of couse it is not only in domestic policy that blank checks are handed out.)
All told, such government-run-amok financial undertakings have the hapless taxpayers on the hook for an amount of money rivaling the gross domestic product. The Fed has created trillions in funny money—portending a horrendous price inflation—and the current deficit is nearly half the entire budget.
When Congress is asked to rubberstamp executive activities — as occasionally it is — most of our misrepresentatives faithfully comply. The news media call this being “responsible.” Dissenters, such as those in the House last fall who voted down the first TARP bill, are stigmatized as fringe characters unworthy of serious attention, and quite possibly nihilists.
The Chrysler Intervention
The latest example of government run amok is the Obama administration’s interference with the bankruptcy of Chrysler. Under the administration’s plan the UAW will get 43 cents on the dollar and a majority of the stock shares, while secured nonbank bondholders are offered about 30 cents and have their contractual rights nullified.
When they balked in an attempt to fulfill their legal responsibilities to their investor clients, Barack Obama denounced them as greedy speculators. Where does the White House occupant get this authority? Does he know or care that he is engaged in the destruction of wealth? Does the public even wonder about these questions?
It is taken for granted that government can do whatever it wants so long as those doing it seem to be acting in good faith and aren’t benefitting too overtly. This trusting attitude is a far cry from the “jealousy” toward government that Thomas Jefferson prescribed for a free people.
Government has been exercising such power so long that people are accustomed to it. It’s normal. They don’t expect modest government in either domestic or foreign matters. If we think government runs amok in the economy, look at what it’s doing in Central Asia and the Middle East.
Foreign policy not only gives government great scope for unmonitored mischief, it also efficiently drains the taxpayers. Like domestic intervention, foreign intervention is madly expensive—not to mention dangerous to innocents and those only suspected of crime but not yet proved guilty. Yet many people who are distrustful of carte-blanche power over domestic affairs apply a different standard to government’s powers in foreign matters.
It’s as though Foggy Bottom the Pentagon, and the CIA weren’t departments of the government — as though war, intervention, and the resource-eating military budget had no effect on the marketplace. Freedom’s greatest advocates, including Adam Smith, Richard Cobden, and Frederic Bastiat, knew better. There could be no laissez faire at home and continuous war-making abroad.
Thus Rep. Ron Paul wisely writes, “We need to rein in our overseas empire, as quickly as possible. We need to bring our troops home, and get our economy back into the business of production, not destruction. The smartest thing we could do is admit we don’t know all the answers to all the world’s problems. If the new administration can take a closer look at real free trade and no entangling alliances, we would be much better off for it…. But unfortunately, it is not likely to happen.”
So those who understand had better get to work.
Sheldon Richman is the editor of The Freeman and “In brief.” He is a contributor to The Concise Encyclopedia of Economics (”Fascism”).
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Consider this also.. GE Capital received sever billion dollars in TARP money. Um, they’re not a bank, but they got the money anyhow.
It’s way past time for a housecleaning in DC. The rats are running the kitchen.
No doubt about it, Trouble. Government and big business have been working to benefit each other – at our expense – for far too long. Why this outright, arrogant, theft continues without total outrage is beyond me.
No one alive today has ever lived under the Constitution and that is the problem. They have lost something they never had. Govt and Federal reserve diasters have brought us to this point and I hate to say it but it may very well take a disaster to wake the country up. People have become so engrossed in “po;itical party” they no longer see the big picture. Most of what we disagree on is not even Govt. business federal or state. But the politicans have convinced the voters that getting the right party in and the other party out is the key to all of our problems. It would actually be funny if it was not so tragic.
THIS JUST IN!!!
**======================= =======================
Well, folks, this should make your day. You have not heard this on
the mainstream media, but that doesnt mean anything. This bill was
referred to the House Committee on Judiciary on 1/6/09 and then
referred to the Subcommittee on Constitution, Civil Rights and Civil
Liberties on 2/9/09. (Check it out on the government websites listed
below.)
======================== ======================
*
*King Obama: House Considers Repealing 22nd Amendment
**Earlier this year, Rep. Jose Serrano, D-N.Y. introduced H. J. Res.
5, a bill that would repeal the Constitutions 22nd Amendment which
prohibits a president from being elected to more than two terms in
office, thus potentially paving the way to make Barack Obama
president for life. Not surprisingly, the corporate media currently
caught up in Obama-mania has not covered this story.
*
*”Will George W. Bush end up being the last true U.S. President?”
asked Sher Zieve, writing for the Canadian Free Press on January 14.
“As I warned you on multiple times prior to the 2008 General
Election, once Obama is elected, we wont be able to get rid of
him. Tragically, this warning is now being realized. Not only has
Obama established his election-fraud organization ACORN nationwide,
his adherents have now begun the process to repeal the U.S.
Constitutions 22nd Amendment.”
See the proof on any of these websites.
http://www.govtrack.us/congress/billtext.xpd?bill=hj111-5
http://www.opencongress.org/bill/111-hj5/show
http://www.washingtonwatch.com/bills/show/111_HJ_5.html
**
**Or go to Google and do your own search by typing in _H. J. Res. 5_.
*
*More:
http://bungalowbillscw.blogspot.com/2009/05/hj-resolution-5-rep ealing-xxii.html
There were people working to repeal the 22nd under Bush too – and I would be opposed to it no matter who’s in charge. I doubt it’ll go anywhere, but definitely something to keep an eye on.
My apologies. I shouldn’t have posted this. It is a legitimate resolution before Congress, but it is unlikely to go anywhere. I think the federal government has established such a pattern of flouting the law that it is hard to remain calm at all times.
Blessings,
PHL
PHL – I think it’s definitely worthy of you posting here! It’s yet another example of how there’s plenty of people in government that want to remove any remaining limits on federal power.