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Wednesday, March 25, 2009

Geithner: Marxist Power Grab or Sensible Regulation?

You might hear some hyperventilation about President Obama and Secretary Geithner seeking to "tighten the ratchet of power" in their "unrelenting" drive toward a "Marxist takeover of America." (I struggle to remind myself these are actual neighbors saying these things... and believing them.)

The latest "unprecedented grab of power": Secretary Geithner's request that Congress grant the executive branch more control over failing financial institutions.

Is your autonomy at risk? Sure... if you're a giant insurance company or hedge fund who's screwed up so badly that you're going to collapse and take the economy down with you:

With such authority, the administration argued, rather than having to spend $170 billion to bailout the American International Group, the government could have put the insurance company into receivership or conservatorship and regulators would have been able to unwind it slowly.

Atop A.I.G. insurance companies “is an almost entirely unregulated business unit that took extraordinary risks to generate extraordinary profits,” Mr. Geithner said Wednesday. “And when this unit’s derivative contract losses pushed A.I.G. to the brink of failure last fall, the entire financial system was endangered" [Anahad O'Connor, "Geithner Campaigns for Broader Control of Financial Firms," New York Times, 2009.03.25].

Think of it this way: suppose you're on a bus and the driver drinking whiskey. You could sit back and let the driver crash—serves him right! The crowd of school kids the bus is about to plow into might feel otherwise. Geithner is suggesting it might be better for everybody if you let him push the driver aside, take the wheel, and guide the bus to a gentle stop so no one else gets hurt.

As O'Connor points out, the power Geithner is requesting is the same power the federal government has had over banks for years to try to prevent internal bank problems from turning into systemic financial meltdown. The bigger economic collapse Geithner seeks to avert is a much greater threat to our liberty than any of the oversight Geithner is seeking over the biggest (and potentially baddest) financial behemoths playing games with our money.


  1. Interesting bus driver analogy, but the argument is predicated on the fact that the person taking over the bus knows how to drive.

    Only thing our politicians know how to do is throw people under the bus.

  2. In theory, Geitner's plans make sense to me. And your comments, Cory, about the "greater threat to our liberty" are right on target. If we can't trust our banks and insurance companies, then I wonder whether if we have any real freedom at all.

    I looked at the link you've labeled "Marxist takeover of America." Have you watched The O'Reilly Factor lately? I watch it often but usually give up after the first few minutes. Last night, Mr. O'Reilly made some mighty serious allegations about John Podesta. This isn't the first time he's done it. O'Reilly makes sweeping statements about an intimidation campaign led by Podesta against people who disagree with the Obama administration -- even suggesting that his organization, American Progress, makes threats against dissidents' families.

    O'Reilly doesn't get into specifics when he makes these accusations, but the generalities are mighty powerful. Is anyone really spooking innocent women and children here (not that dissidents are guilty of anything other than exercising their right to free speech!)? That would be like Marxist/Leninist activism -- or the Mafia.

    I get the feeling that these reports are exaggerated (or fabricated in a sense by virtue of what is not said), but they're starting to scare me a bit anyway. Where does O'Reilly come up with this stuff? Can you put up a post defending John Podesta and his organization, American Progress?

    If you wonder why I usually turn off O'Reilly after the first few minutes, I'll confess: I'd rather read a good book. I'm into some short stories by Annie Proulx right now. They're less disturbing.

  3. Clever turn of phrase, Terry! But the AIG driver is clearly drunk, so somebody better take the wheel. Care to drive?

    Fortunately, Stan, we don't have cable. Unfortunately, we still hear plenty of exactly that sort of McCarthyism from the blogs and other right-wing sources. Particularly scary when coupled with the get-your-guns rhetoric that right-wingers are planting in public discourse.


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