Checks and Balances

http://www.futureofcapitalism.com/2009/06/checks-and-balances

One of the interesting phenomena to date about the Obama administration is how minimal the opposition has been to its policies of expanding government involvment in the auto industry, banking, and health care. Toward the end of this talk, law professor Richard Epstein speaks of what he calls a "surprising concordance of opinion," in favor of what he views as "disastrous policies on economic issues." With Democrats in control of both Congress and the White House, some of the usual checks and balances are missing. He speaks of what he calls an "implicit threat" to our "entire system of property rights" and urges, "people have to speak up against it."

Well, as Mr. Obama himself might say, change is on the way. Or at least the very early signs of it. The U.S. Chamber of Commerce yesterday announced what is reportedly a $100 million "Campaign for Free Enterprise:"

"Supporters and critics alike agree that capitalism is at a crossroads," said U.S. Chamber President and CEO Thomas J. Donohue...."We're launching this campaign because those who make or influence economic policy must understand that a productive, competitive private sector is not something they can take for granted," added Donohue. "It is built on a system of incentives that offers opportunity and rewards for those who work hard and take risks. Take away those incentives through an avalanche of new rules, restrictions, mandates, and taxes and you will seriously undermine the wealth and job-creating capacity of the nation."

"Dire economic circumstances have certainly justified some out-of-the-ordinary remedial actions by government," he explained. "But enough is enough. If we don't stop the rapidly growing influence of government over private sector activity, we will squander America's unmatched capacity to innovate and create a standard of living and free society that are the envy of the world."

Also yesterday, a bankruptcy judge sided with creditors who wanted to block a government-brokered sale of assets of auto-parts maker Delphi. Reports the Wall Street Journal:

"The rule of law and commercial rights of lenders cannot bend in the face of political forces," said Marc Abrams, a lawyer for a group of the hedge funds, in a standing-room-only courtroom in lower Manhattan Wednesday before Judge Robert Drain...."The Treasury is picking winners and losers in an effort to salvage the auto industry," said Mr. Abrams. "To achieve a common good for the auto industry, lenders are being asked to sacrifice too much."

If Congress won't provide much resistance to Mr. Obama's expansion of government involvement in the economy (an expansion that began under President Bush and Secretary Paulson), maybe interest groups, lawyers, and judges will rise to the task.

by Editor  |  Jun 11, 2009 at 9:00 am receive the latest by email: subscribe to the free futureofcapitalism.com mailing list