Money Sage

Our title, we will readily admit, appears, at first glance, to be both bizarre and absurd. President Obama is, after all, the penultimate liberal. Indeed, while in the Senate, he was voted the MOST LIBERAL senator by the Americans for Democratic Action. He came up through the ostensibly egalitarian and proto-populistic -- Chicago Democratic party. His commitment to improving the economic and social condition of the have-nots and the have-littles of American society can hardly be doubted. At the same time, he is a man of compromise, conciliation, and reason. Despite his egalitarian social and economic objectives, he is a man with whom Wall Street, Detroit, and corporate America in general can do business. He has inherited a financial calamity unparalleled since the Great Depression, and an economy whose fundamentals are in many respects WORSE than those which existed in 1929 and afterward. He has, of necessity, been compelled to expand vastly the scope and power of government. Indeed, much of this has come at the prompting of the Wall Street - friendly advisors he has chosen to surround himself with, and to continue in office.

So, what is the problem?

As developments unfold,and as the Administration and the central bank develop and implement policies to stabilize and then improve the financial and economic situation, government GROWS. Indeed, it is growing by leaps and bounds, in a variety of directions simultaneously. The cooperation between the very liberal and egalitarian president, on the one hand, and the corporate and financial elites, on the other, in fact has blessed and facilitated this accelerating growth of government power and intrusiveness. The moguls from finance and business see narrow financial advantages for themselves, and are happy to seize them from an increasingly aggressive and bloated government. Other significant interest groups (organized labor, minorities) are thrown occasional bones when they become fractious or are perceived by the Administration and the Democratic Party as threatening to become so disgruntled as to cast the outcome of the forthcoming congressional and future presidential election into doubt.

It is difficult, initially, to determine who has coopted whom. Has Obama coopted finance and big business, or vice-versa? And how does organized labor and minority participation and benefiting from this grand co-option fit in?

The one thing that we do know for certain is that government power is growing and spreading like an incurable virus. It is hardly a profundity to note that once government expands its role in new or existing areas of activity, it is well-nigh impossible to achieve any but the most insignificant retrenchment under the ostensibly small government Republican Party.

The current situation -- which will likely protract and possibly intensify in the future -- gives off the distinct aroma of corporatism. The "corporate state" was, of course, fascism. All "cooperated" for the national purpose, under the aegis of an all-powerful dictator, supported by a ubiquitous secret police. The corporate state was a latter day illustration of the principal that since its inception and growth, the entrepreneurial class "exchanged the right to govern for the right to make money."

Now we are far from this state. And Obama's good intentions are beyond question. The problem, however, is, as the old saw has it:
"The road to hell is paved with good intentions."

No one can predict, or control, how the governmental power will unfold now that it has absorbed steroids and stimulii during the process of coming to dominate the banking system, major insurance companies, the auto industry, and God-knows-what next. The states and the entire federal system may be in jeopardy, since only Washington can print money, and since this is the lifeline near-bankrupt states, municipalities, corporations and others seek so desperately. As the old saying goes, he who pays the piper calls the tune.

We think it is very disturbing that the Constitution itself has been ignored or disregarded by both the Executive and Legislative branches of the national government, as well as by the Federal Reserve, itself a creation of Congress. The "temporary" arrogation of dubious powers by the central government during this emergency, this crisis, is cited as compelling such circuitous maneuvers despite their dubious constitutionality and legality. The Federal Reserve Act has been unmercifully abused by the central bank, with the eager and active support of both this and the previous Administration.

Of course, the Constitution itself is designed PRECISELY to LIMIT THE POWER of the federal government DURING CRISES. The framers were more than incidentally aware that it is in a crisis that the power of the center grows dangerously, and that the emergency both engenders and is used to justify and rationalize unconstitutional means. The framers went to great length to actualize Jefferson's axiom that "that government is best which governs least." The cleverly crafted system of checks and balances, and the reservation to the states or the people of all powers NOT ENUMERATED in the Constitution itself were designed by wise men all too aware of the tendency to accumulate and abuse power, destroying the liberties of others in the process. The framers, schooled in the classics, DID NOT copy the Roman constitution, which, permitted for an exception to constitutional limits on the powers of the executive: during emergencies, the Senate was empowered to appoint a Dictator with unlimited power for 6 months. The framers regarded this with horror.

It is during emergencies that the assault on constitutional guarantees and limitations on government power are most dangerous. At the same time is is during these periods that they are the most tempting, the most seemingly necessary, the most easily defensible, and the most popular.

It is interesting to note that a clear majority of Americans opposed, down the line, the Great Bailout of the Banks and investment firms. Yet they were ignored by their elected representatives, as well as the non-elected financial decision-makers and the Wall Street movers and shakers. The government knew better, the government knew best. The tsar takes care of his flock. We know from history where this may lead.

Moneysage- 2009