Obama threatens bankers: I’m the only thing standing between you and the pitchforks

the free market didn’t ensure that failure is not rewarded by bonuses. the government is trying to.

sesquipedalian on April 3, 2009 at 5:52 PM

So the free market likes to reward failure with bonuses? How’s that work, exactly? Where does that bonus money keep coming from if the business fails? Does the free market get to seize money from everyone else to support unsustainable business models that pay big bonuses for repeated failures? I don’t think even Microsoft can do that.

again, if your politicians cannot be held accountable, talk to the founding fathers. you can reelect your represetatives! or not! and if you don’t like barney frank, well, there’s a bunch of americans who apparently do for some reason. so as long as they prefer him to be their representative, he’ll be a senior member of congress.

Sorry, I can’t talk to the Founding Fathers. They’re dead. I don’t think I’d have much of an argument with them, anyway. They wouldn’t have anything good to say about politicians asserting total state control over private industry, and they certainly didn’t intend one senator from a small state to have the power to crash an unimaginably complex financial system. That “plenty of people who like Barney Frank” you referred to would be precisely 176,513 people who voted to re-elect him in 2006. Why do those people get to install someone who has so much power over the other 280 million of us? It sure doesn’t seem like a logical or efficient way to run a complex economy to me… to say nothing of being moral or fair. By the way, since Frank is a documented liar who provided false testimony before Congress concerning Fannie Mae on numerous occasions, do you think we’ll see him held “accountable” any time soon, and would a private executive who did something similar be held “accountable” faster?

unfortunately only in 2012. but what makes you think obama wouldn’t win if we had an election today? right now, he’s mr. 61%, and there’s nobody who could really challenge him.

Of course, that vote would not be held strictly on the basis of how well or poorly he ran GM, or AIG – not if it were held today, or four years from now. Which makes it rather foolish and inefficient to put him in direct control of corporations, doesn’t it? What would the stockholders of a major corporation say if they were told they couldn’t fire an incompetent executive because he had a tremendous singing voice, or because kids loved to play baseball with him?

you’re purple with rage if they take your tax money, i’m mad if they give my money as bonuses to major villains of the collapse. can we agree that we have the right to get upset if they’re mishandling our money?

You do know that the AIG employees who had to surrender their bonuses were not the same people involved in the crash, right? Is working for AIG some kind of hereditary evil that makes everyone who sits in a certain cubicle a “villain” automatically? If so, could we break the curse by throwing the AIG building into the fires of Mount Doom?

at this point, only if you’re paying for it. but you’d lose anyway

Why would the people who want to initiate such a vote be required to pay for it? That seems a bit tyrannical.

economists. not bloggers. listen, nobody knows what would’ve happened if we don’t bail out AIG. maybe nothing. but the risk is enormous, and i’m glad they didn’t take it. “too big to fail” companies do exist, thanks mainly to continued deregualation by both republican and demo presidents.

Do you seriously think “economists” have the power to declare companies “too big to fail?” You should probably study up on the difference between politicians, economists, and businessmen. You seem to have some of them confused with the others. If “too big to fail” companies exist because of “deregulation,” does that mean the purpose of regulation is keeping companies small? Who gets to decide how big a company should be allowed to become before it gets regulated down to the right size? It sure won’t be economists… as if they could ever come to a consensus on such a thing. Government regulation is certainly necessary to prevent monopolistic practices, but aside from that, it’s foolish to believe an all-knowing government would be able to fine-tune the size of corporations to assure financial stability. The health of a particular corporation would never be their top priority – political considerations would always come first.

Only government distortions of the market could set the stage for something like the subprime crisis – if the corporations involved were eager to start making unrecoverable loans to people who couldn’t repay them, why weren’t they doing so before the government forced them to? And why are we so glad AIG was saved with gigantic infusions of taxpayer money? The AIG tragedy isn’t over, and somehow I doubt the pitchforks-and-torches approach to seizing its employees’ compensation is likely to help it become a profitable investment for the taxpayers. It’s more likely to follow the GM glide path of bailout followed by delayed collapse anyway – the only difference being that the political class will work mightily to allow AIG to die quietly, now that they can gain nothing by using it to terrorize the voters.

Doctor Zero on April 3, 2009 at 6:27 PM

his might come as a shock to you, but i didn’t draw the district lines. i’m not in the mood for an argument over how we should rewrite the constitution.

because we can’t have referenda anytime you feel like it. i sure don’t want to pay for the logistics of it. four years seems like a rational time period to allow people to vote, and a strong argument could be made that longer periods would actually make politicians more responsible (since they don’t have to worry about reelection.

sesquipedalian on April 3, 2009 at 6:54 PM

If you’re still trying to argue the original point that government is more “accountable” than private industry, you’re doing a spectacularly poor job of it.

Doctor Zero on April 3, 2009 at 7:09 PM

ok. how about this: let’s privatize the military. let’s privatize police. let’s privatize the judicial system. my attention is sorta fractured now, so i’ll continue responding only if you address the question of why government is better suited to fulfill these functions.

sesquipedalian on April 3, 2009 at 7:23 PM

Perhaps it would focus your fractured attention to consider the difference between “the government” and “the private sector.” The absolute lack of a government is not libertarianism, it’s anarchy. Arguing the case for limited government is not the same as arguing for anarchy. Besides, if privatizing everything is the South Pole of politics, we’re currently sitting somewhere in Newfoundland and arguing about whether we should relocate to Rhode Island. We’ve got a long ways to go before we have to start debating the best way to deal with Antarctic ice floes.

Government of any kind, from primitive tribal leadership to the presidency of an advanced democracy, is a monopoly on the legitimate use of force. A government is defined entirely on the basis of its ability to exercise force, and prevent anyone who is not a duly authorized member of the government from doing so. A government is not merely a polite debating society that periodically issues suggestions and asks powerful members of society to do things for it, if they should feel so inclined. Every unit of society has some form of government, defined by its monopoly on the use of force – even a small traditional family has parents who control the family’s finances and compel the children to obey them.

Governments must exist, and must provide functions such as the judiciary, military, and police, because no other agency within a society can do those things. Perhaps some functions of the military or police could be addressed by private contractors, but even if this were attempted, it would still be government giving the orders and controlling their deployment – otherwise, the national government would cease to be relevant, and the private police and army units would become governments themselves: the earliest form of government, the warlord. Likewise, the judiciary can’t be “privatized” because then it wouldn’t be the judiciary – it must exist within the framework of law and have the power to enforce its decisions, or else it’s just a very solemn customer-service department wearing black robes. The military is properly a government agency because it explicitly not provided for the service of individual citizens, but provided for by all, and in a peaceful democracy it’s an expense, not a profit center. The military is noble precisely because it is defined by sacrifice. We all sacrifice to provide for the common defense, and the people providing that defense make sacrifices the rest of us can barely understand.

The question before us is not whether to privatize all these governmental functions, but rather, whether to allow the government to absorb the functions of the private sector. General Motors and AIG are entirely and directly controlled by the government now, and Obama sees nothing wrong with directly controlling “private” executives by compelling them to do things he wants them to do, through threats of force, including the obscene threats that prompted this threat. In a just society, the “only thing standing between bankers and the pitchforks” is the exact same thing standing between me and the pitchforks: the police and military, who are sworn to order the people with pitchforks to put them down and go home. Implying that this protection would be withdrawn from people who have not been accused or prosecuted for any crime is tyranny, pure and simple. It doesn’t matter if you think the tyrant is good man with his country’s best interests at heart.

The obliteration of the distinction between government and the private sector injures them both. If the free market, and the millions of producers and consumers who comprise it, wanted to create a socialist utopia, there would be no need to compel them with government force – the utopia would spring into existence all by itself, spontaneously. Of course, that’s not going to happen, so the government will use its power to compel the citizens to create it.

This is why the government should be strictly limited in its involvement with the free market economy: because all the government has to offer is force… the power to force taxpayers to provide funds, the power to force private companies to accept those funds (as occurred during the early days of the financial crisis), the power to force people out of their jobs, the power to force companies to act contrary to their established business practices. This force is crucial to a regulatory role – it is entirely appropriate to force companies to refrain from selling poisonous food, or to refrain from defrauding investors. But these applications of force enhance a private economy, by building confidence among consumers, producers, and investors.

A just government guarantees the legal value of contracts, but Obama has done the opposite by demonstrating they can be abrogated at will by the government. A just government does what it can to provide a stable currency, but Obama’s policies devalue existing dollars by creating new ones out of thin air. A just government is restrained by its own laws – the president is no more allowed to seize my property without due process than I am allowed to kill people who inconvenience me. A just government sees the law, and its enabling Constitution, as its reason for existing, not as an obstacle to be waved aside when the leader thinks there is important work to be done.

So, that’s why I’m not advocating we privatize the judiciary, the military, or the police forces, but that’s also a straw man argument. I’m here to argue in favor of privatizing the auto industry and the banks. That an American needs to make this argument to another American is a tragedy.

Doctor Zero on April 3, 2009 at 8:07 PM