Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Government Fuels Mass Hysteria Against AIG Employees on Bonuses

Politics / Credit Crisis Bailouts Apr 06, 2009 - 08:02 PM GMT

By: Ayn_Rand

Politics Best Financial Markets Analysis ArticlePeter Schwartz writes: In dealing with AIG, why are people pussyfooting around? They believe that the bonus money was stolen from the public and must be retrieved by any means possible. So why not bypass the niceties and just send in some well-armed “enforcers” to confiscate the bonus recipients’ cars and houses and bank accounts?


If this raises fear about ushering in mob rule, it’s too late. AIG employees have been crudely vilified, they have been targets of death threats, a U.S. senator has urged them to kill themselves, protestors “tour” their homes, they have had to hire security guards and AIG has removed its name from the front of its Manhattan offices.

This mass hysteria is being fueled by the government, which is proceeding on the premise of: “Get the money back first, rationalize later.” The House passed an extraordinary piece of punitive--and unconstitutional--legislation to tax away almost all the bonus money. New York’s attorney general, abetted by the threat of making their names public, has gotten many of the recipients to “voluntarily” return their bonuses. Perversely, the rights of captured Islamic jihadists generate greater concern in Washington.

All these actions are tantamount to rule by mob action.

A mob is driven by rampant emotionalism, with no concern for facts--facts such as: Are these particular recipients guilty of anything? Are they competent individuals, necessary to keep the company operational? Would they have resigned without the inducement of the bonuses? Didn’t Washington consent to the bonuses at the time of the bailout? Aren’t the recipients entitled to the bonuses by contract?

The essence of mob rule is arbitrary and unchecked force, in disregard of all rights. If so, then when the government spends our money with virtually no limits--then trillions of dollars are gleefully disbursed through unrestrained horse-trading and arm-twisting among members of Congress--when trillions more are poured down the rat holes of failing companies at the uncontrolled discretion of bureaucrats--when government “czars” can select a company’s CEO and dictate its product line--then what we have is government by mob rule. That is, we have government with arbitrary, unchecked power to do as it wishes--which means: government unconstrained by the principle of individual freedom.

Like any mob, Washington desires a scapegoat. It blames capitalism for the mortgage and credit crisis, in order to divert attention from the real culprit: government intervention. Every housing-related measure taken by Washington has made the standards for homeownership looser than they would be in a free market. Government has stepped in to override private companies’ aversion to undue risk. Regulators criticized banks for turning down too many mortgage applications. FNMA and FHLMC were created to encourage the issuance of mortgages that would not be prudent in a free market. The FDIC anesthetizes depositors against risks taken with their funds. And the entire Federal Reserve exists to pump paper money into the economy, and to keep interest rates artificially low--often below the rate of inflation--so that more lending occurs. Yet when this house of cards collapsed, it is capitalism that was denounced, and more government power that was demanded.

The administration’s latest proposal, for a “systemic risk regulator,” should leave little doubt that it seeks carte blanche in ruling the economy. This is a plan for an economic dictator, an “enforcer” who will have the frightening authority to oversee every decision that, in his opinion, significantly influences the economy.

Of course, once the mob-rule mentality takes hold, everyone becomes a potential target. If you obtain a mortgage or a college loan, the government may subject you too to “risk regulation.” You may be told that you can’t buy a plasma TV or take a vacation or quit your job, because the risk to your finances is “unacceptable.” But isn’t that a purely private decision?--you will indignantly demand. If government power keeps expanding, however, there may no longer be any private decisions.

www.aynrand.org

Peter Schwartz is the author of The Foreign Policy of Self-Interest: A Moral Ideal for America. He is a distinguished fellow, and former chairman of the board, of the Ayn Rand Institute. The Ayn Rand Center is a division of the Ayn Rand Institute and promotes the philosophy of Ayn Rand, author of “Atlas Shrugged” and “The Fountainhead.”

Copyright © 2009 Ayn Rand® Center for Individual Rights. All rights reserved.

Alex Epstein Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in