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I have not written about the subject of the Chrysler bailout so far since, not being close to the action in the US, I did not feel I had much to say that was not already voiced by the US blogs. But it does occur to me that there is a general problem right now in the way that the US administration – and arguably the UK one as well – has been acting in respect of bailouts of certain industries, such as carmakers as well as banks. What do I mean? Well, this report (H/T: Instapundit) suggests there is real fear about the “Nixonian” tactics employed by Mr Obama’s administration against bond-holders who have been angered by the expropriation of their capital via the Chrysler bailout.
For those who have not been following this story, bond-holders have been pushed to the back of the queue, as far as potential recovery of capital is concerned, with the auto union membership getting preferential treatment. Maybe Mr Obama figures that investors can be rained on right now because it is more important to get the votes and support of traditionally Democrat-leaning car workers. With mid-term Congressional elections a couple of years away, he will have his sly, Chicago machine-politics mind working out how to garner important support in the event that the US economy is still sluggish by that time. But pissing off investors – such as, let it be noted, pension funds – is not smart. The US requires large amounts of capital for any economic recovery that may take place. Ask yourself one of the most basic questions any investor should ask: can I get my money back if I need to? If the answer is no or only maybe, and if there is the threat of governments robbing investors, then less investment occurs. The problems of such behaviour explain why, for example, Africa has been such a bad investment bet for so many years.
It is an ugly business. Part of the trouble with the automakers is that even if they had been put into a Chapter 11 bankruptcy process, with the banks and bondholders put on a more even footing for any recovery of assets, there is still the issue of what to do about the enormous unfunded pension obligations that these heavy industrial companies have. It is the same with airlines and steel. I have heard it said of British Airways – to take a UK example – that is is a pension scheme that happens to have a lot of aircraft. The pension tail can wag the corporate dog. And that is a hideous issue to deal with against the background of an ageing population. So in fairness to US policymakers, running down Chrysler involves dealing with a lot of tricky contractual issues.
Even so, it strikes me that the Obama administration is showing a level of political ruthlessness and “bugger-the-investor” attitude that is hardly going to endear people towards investing in that economy. My fear is that Mr Obama is making the cynical calculation that memories will fade; after all, how many investors in the UK remember how the Blair government, in the form of the charmless Stephen Byers, the-then industry minister, shafted investors in Railtrack?
Like I said, an ugly business.
As here, for instance. Via Liberty Alone, I learn of a remarkable new recruit to the ranks of those who are panicking about the pandemic. Yes, it is none other than the US Libertarian Party. They have just issued a press release reprimanding the US state for not being statist enough about this medically trivial event, which is in any case only being plugged up in order to divert attention away from other governmental blunders and to excuse further governmental usurpations, despite all the blunders. Why can’t they see that? Or don’t they care about such things any more? One can imagine a true “pandemic” that really did need measures like draconian border controls to defend against it (sickness is the health of the state), but if this trivial flu variant is it, then, to put it mildly, an explanation to that effect should have been added.
The UK Libertarian Party should treat this pandemic pandering as an awful warning of what happens to small parties – parties “of principle” – who become gripped by the desire to pile up lots of mere votes, and who forget what they were started to accomplish. First they pick a regular politician to lead them, and he then picks more regular politicians to help him, and before you know it, they are behaving like regular politicians.
But it is more fundamental than that, I fear. Start a political party, and before you know it, it is behaving like a political party. LPUK beware.
Obama’s speciality is shaping up to be particularly dangerous because it’s hard to dispute given the average American’s sensibilities. No call for liberty and constitutional principle seems convincing when Obama is arguing that those relying on government giveaways should have to follow government-set rules. That is, once you’ve allowed them to go ahead with the handouts, the political game is almost over. Under the guise of “managing the taxpayers’ money”, Obama and his crew are rewriting mortgages, deciding executive compensation, tossing out CEO’s. And note carefully that his plans for where taxpayers’ money should go continue to swell, from healthcare to the environment to energy policy to expanded “national service” programs. When taxpayers’ money is everywhere – and Obama is doing his best to make sure it is – then Obama’s control is everywhere. The Octo-potus is claiming his space and flexing his grip. As far as he’s concerned, it’s Barack Obama’s country. We’re just living in it.
– Brian Doherty
If all those ‘libertarians’ who dallied with The Community Organiser had been reading our own Paul Marks, who was onto Mr Obama’s agenda months ago, they would have saved themselves a lot of buyer’s remorse.
Welcome, Instapundit readers. Some rather grumpy folk out there wondered where there was a link to one of Paul Marks’ comments (the archives on the side of this blog, so please use them!). Anyway, here is one reference.
Mr Obama’s administration has released documents about details of “harsh interrogation techniques” that were used, or considered acceptable to be used, to deal with suspected terrorists. What is interesting is that Mr Obama does not intend to prosecute those responsible. I guess the difficulty here is that Mr Obama does not want to be drawn into moves to prosecute and go after senior officials in the previous Bush administration. But if there are to be no legal consequences – assuming that the use of such powers is clearly illegal as well as wicked – then it is hard to see what can be gained by all this non-action by Mr Obama. If there is insufficient evidence to launch a prosecution of those who sanctioned its use, then they are entitled to have that fact known, since a stain will attach to their name otherwise. On the other hand, if there was authorisation of torture, then the fact of there being no prosecutions will send out a message that such behaviour will not be punished and can happen again. Is that what “hope and change” meant?
(Update: or maybe Mr Obama and some of his supporters fear that punishment of torturers could be used against Democrats in the future if officials in Democrat-led administrations ever sanction such techniques, or are suspected of so doing. Mr Obama and his party are not consistent civil libertarians.)
Torture, and its use, is one of those “canary in the mineshaft” issues for me; it shows a government has no respect for law. Any attempts to try and domesticate it and limit it under strict guidelines are likely to fail. As we are finding here at home in the UK, if you give governments powers, then they will use them, sooner or later, against innocent people.
As a side-note, I would add that while some of the venom directed at the Bush administration was partisan grandstanding, there is no doubt that part of it was driven by a real worry about where the US and other Western governments were headed. It is not remotely comforting that Mr Obama has taken the course he has. We cannot be confident that torture is off-limits under his administration, and nor should we be. It is not as if he has, for instance, abolished indefinite detention of terror suspects, despite the much-touted plan to shut down Gitmo.
Some earlier thoughts by me on this issue.
The American Tea Parties were a huge success. Just go visit Glenn Reynolds for a great roundup with links, stills and videos.
Onwards to July 4th!
Diana Hsieh, amongst others, is justifiably outraged at the move in the US Congress to move towards an expansion of the Americorps programme, making it compulsory for all young people in the US to participate in it. It is a form of conscription, which while it may not involve an explicit military role, is nevertheless a form of draft.
Ideas, either good or very bad, have a habit of travelling across the Atlantic to the UK. I’d be willing to bet that if, say, David Cameron is the next prime minister, he will look favourably upon such ideas. It fits in well with his dreary, authortarian/paternalist version of conservatism. In fact, the worse the economic situation gets, the more likely that states will try such ideas out. And no doubt the social alarmists will latch on to such ideas as a way to address problems of violent youths and so forth.
Timothy Sandefur says the US legislation is clearly unconstitutional.
That Daniel Hannan video has been making all the news in my part of the blogosphere during the last day or two (and I wrote that before I had seen the previous posting right here), but here is some more video worth paying attention to. Yes, it’s our old friend Ezra Levant. Many of us have already, thanks to an earlier posting here by Perry de Havilland directing us toweards the relevant YouTubery, had the extreme pleasure of seeing Levant sticking it to someone he doesn’t like. In this latest performance, we see and hear him talking with a guy who is very clearly on his side, and who makes numerous admiring mentions of Levant’s new book.
The performance is divided into five bits, and I started up bit one to just hear a short sample, to just generally get a clearer idea of what kind of a guy Levant is. But so engaging and entertaining was Levant’s performance that I ended up watching all five bits, right through. Maybe you won’t find yourself wanting to do what I did, but maybe you will.
What I liked was that I was able to learn more not just about Levant’s character and presence, but also about the various cases he talks about, and has been blogging about, month after month. But the problem with reading these stories on Levant’s blog is that once you lose the thread of some particular yarn, you are liable never to pick it up again. In this latest video performance, Levant is telling his various stories about some of the cases he has investigated, or some of the nonsense that he has himself had to battle against, to an audience which, he has to assume, has not heard anything about them before. For me, that was a whole lot easier to follow.
This letter from a highly pissed-off AIG senior staffer is worth reading. My own take is that if an employee, under an agreed contract, gets paid a sum of money that later attracts the evil eye of the political class and that money is retrospectively seized, then the rule of law is crumbling. Admittedly, it has been crumbling for some time. I note that those who berated the former Bush administration for its high-handed treatment of legal principles are less noisy about Mr Obama’s own behaviour or that of his colleagues in Congress.
I have been reading Amity Shlaes’ interesting book about the Great Depression, and among the many themes of the book is how FDR, in order to whip up support for his measures, sent his legal attack dogs after various people associated, in his eyes, with the excesses of the preceding boom years. In particular, his victims included the likes of Andrew Mellon. History repeats itself: when politicians run out of money, the easiest option is to bash the rich, bleat about “tax havens”, and the like. We are seeing that now. And of course the politicians are getting away with it so far because they calculate, probably rightly, that the broad public cannot be interested or is not sympathetic.
To get the public interested, we have to figure out how this sort of looter behaviour by those in public office can be shown to be dangerous to the average Joe. That is not straightforward, but a bit of thinking is needed. Today, talking to a friend of mine who works in the City, he pointed out that as a result of the mass bailouts and the central bank’s printing of money, a spendthrift who had a 100 per cent mortgage is being subsidised by a careful, elderly saver who is now struggling, say, to pay for a nursing home. By drawing attention to these sort of regressive transfers from the careful to the spendthrift, and from the productive to the unproductive, we can get the message across. And yes, Mr Cameron, that means support for cutting spending and taxes.
Update: Alex Singleton, who also blogs here, points out that the vandalism to the house of Sir Fred Goodwin, the former CEO of Royal Bank of Scotland, can be indirectly blamed on the government for encouraging hatred of bankers. I am not sure that Gordon Brown can be directly blamed but in his usual, cowardly fashion, he has found it convenient to pin the blame for the crisis on private banks rather than accept that the crisis was in large part driven by recklessly cheap credit as set, ultimately, by central -state – banks.
This is becoming increasingly ugly. Demonstrations are planned in the City to coincide with the totally pointless G20 gabfest in early April. Someone might actually get killed or seriously hurt.
Update: Mark Steyn’s Orange County Register article about the AIG issue confirms what I now fear, that Mr Obama is, even at the most basic level, unfit to hold executive office. And Joe Biden is just down the corridor…..
This sounds horribly familiar:
Obama has never run anything other than his presidential campaign. He doesn’t know the difference between governing and campaigning and he’s sticking with what he knows.
Which sounds exactly like Britain’s Labour government from 1997 until now. The difference being that in 1997 the British economy was in fairly good shape, which meant that the then British government had a decade during which to learn how to govern. It never did, but it might have. Now the world economy is in a terrible state, and Obama has no time at all.
Does the USA as a whole already have a bad feeling about Obama? Or is it just the people in the USA who detest him already, telling each other that they have a bad feeling about him? From over here, it’s a bit hard to tell.
Bloomberg carries this article today about the willingness of China to go on holding Western debt that might deteriorate in value:
China, the U.S. government’s largest creditor, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said.
“We have lent a huge amount of money to the United States,” Wen said at a press briefing in Beijing today after the annual meeting of the legislature. “I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”
Good luck with that. As Brian Micklethwait noted the other day, the fact that the US, or indeed the UK, might be downgraded in credit terms as nations or even default on certain debts, is no longer unthinkable. Defaults are not just things that happen in Ecuador, Russia, or competelyfuckedupistan. They can happen in the supposedly rock-solid financial centres of the world.
As Glenn Reynolds says sarcastically of the new US government of Mr Obama, the country is in the best possible hands.
Unless American politicians and bureaucrats wise up, there will be a second war with Mexico within a generation.
This is not hyperbole. Drug lords are taking over the border areas between the two countries. Killings are spreading into American cities in the southwest. Firefights near the border are becoming common. There have been kidnappings within the United States in which some of the perpetrators are thought to have not only been using military equipment, but may have been moonlighting Mexican police or military men.
Before you begin to vent your rage on Mexico, I would like you to ponder the source of the problem. This is not an ideological battle where the world vision of the enemy is independent of what we think or do. That is what we face in the Middle East. Our actions there may affect Islamist strategy and tactics, but not their dream. We are not the creators of that problem.
The problem in Mexico is an entirely capitalist one. There are goods which are in great demand. Those goods are profitable and over nearly four decades we have caused a vast global giga-billion dollar industry to come into existence where once there were college students smuggling trunks of grass over the border at Spring Break. That is also not hyperbole. One of the floors of a dorm next to mine did exactly that and supplied the entire CMU campus back in the 1969-71 era. Then came Nixon and ‘Operation Intercept’. And what was the great accomplishment of this at the time great expenditure of taxpayer money? Why, by the time I left grad school prices had doubled, tripled or more and nearly all the smuggling was in the hands of organized crime instead of paying the tuition, room and board of a few engineering students. Even so, enforcement at the time was a still a joke, and much laughed at even as it transitioned from “Berkeley to Boston Forty Brick Lost Bag Blues” to Cheech and Chong’s “Up In Smoke”.
So what did the moralizing Statists do? Admit their failure? Apply tax payer money to something useful? Of course not… they did what governments always do with failures. They increased the budget. When that failed utterly they increased it again. And again. And again. Meanwhile, Libertarians correctly predicted disaster after disaster, decade after decade. Drugs are money and all that it buys. We put drug entrepreneurs outside of our then liberal legal framework… so they adapted and operated by the old fashioned rules of Feudalism.
Feudalism is the name we gave to violent gangs far enough in the past that we can romanticize them as Princes, Princesses, Knights and the like. The rules of the Feudal game are simple. You murder your way to the top then you pillage your competitors and steal their land and resources. If you are a mean enough SOB you get to live a life of sybaritic luxury… until someone nastier and smarter and more underhanded comes along and cuts your throat.
Fifteen hundred years ago it came about due to the post-Roman power vacuum. In our era the power vacuum is in a parallel world and economy. It is outside of our laws and nation states, by our own hands, and it exists side by side with us at every point.
Every time we drive up the cost of doing business, the feudal lords of this parallel universe counter predictably. The government of the United States succeeds only in adding to their cost of doing business. You might imagine that would be a big thing… but Statists have probably increased the cost of doing legal business even more over those decades. The more regulation, the more laws, the more taxes, the more individuals will find the ‘other side’ preferable.
Twenty-five years ago US military men stated they wanted nothing to do with the War on Drugs. Getting involved in it would put their institution at risk of bribary and corruption. The moralistic morons in government would have none of it. The military was called upon to run interdictions at sea and in the air to find potential smugglers. They have been countered by minisubs, UAV’s, counter-radar and a whole range of technological counter-measures. Every escalation provides the income necessary for the counter-escalation.
We have arrived at a predictable state of affairs. Feudal lords are now taking over portions of ‘our’ universe in which they hold the balance of power. Border provinces in Mexico are under their control. Military resources are appearing in their hands. Soon their private gangs will morph into real armies. They will bribe American military men and politicians. Where bribery does not work, they will kidnap and kill children and rape wives as object lessons in what happens when you dare to disobey the new royalty.
A time will come when the Mexican National government is absorbed. What do you think is going to happen then? When Mexican Special Forces are carrying out hits against any American who gets in the way of business, things are going to get very, very ugly. There will be calls to invade our southern neighbor and reasonable people will then have to agree there is no other choice. If and when it comes to that, we will have absolutely no one but our leaders to blame. It will be 100% their fault for getting us there.
You can not stop contraband. You can only make smugglers rich and powerful enough to buy you out or kill you.
It will of course not be the end of the Catholic Church, but the pattern of state regulatory encroachment here in what should simply be a criminal matter is unmistakable.
After a priest stole $1.4 million from a church in Darien, state legislators have proposed a law that would regulate how parishes are controlled and operated.
The state’s Catholic bishops rallied opposition from the pulpits at weekend Masses.
The law essentially would strip the dioceses of all financial control of parishes and leave bishops and priests to oversee “matters pertaining exclusively to religious tenets and practices.” A board of elected laypersons would handle parish finances.
Even if “lay control” (and what started with an “elected body of lay persons” would not end there – it is the principle that Church matters are governed by the government that they are after) was established the Roman Catholic Church would continue to operate in peaceful defiance of the government – as it did in France after the government take over (the “separation of Church and State” in the inverted language that is used by these evil people) of 1905.
This is the real reason that Obama and the other liberals are not popular with either conservative Protestants or Jews or with Roman Catholics – whereas FDR was. FDR, however far his economic radicalism went, was a social conservative – government control of churches would not have even occurred to him. The left think they can use scandals, both financial and sexual, to aid their objective of taking over (i.e. destroying) all institutions outside government.
They are mistaken. Even if there is no God – it is the independence of these institutions from government that gives them value in the minds of those who are involved in them. They will be deeply offended in ways the left do not understand.
(via Red State)
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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