Update – The Rule of Law and the Economy

We and others often speak of the Obama administration’s assault on the rule of law, and the broader implications and ramifications of that assault. We wrote in “American Revolution 2.0 – The Rule of Law":

“If we have a rule of law that says secured lenders have priority over unsecured lenders, but then we have a power play by the government that says the rule of law doesn’t apply when the government says it doesn’t, there is one inescapable result: secured lenders will effectively stop lending to all but the very top tier of creditworthy businesses. Who then gets hurt? Everyone…”

And in "Path to Corruption" we wrote:

“…the destruction of the rule of law puts society on a path to abject corruption. A society characterized by massive cynicism and distrust, and an economy running on payola—this will lead to, and has always lead to, and can only lead to disaster—to a sapping of the human spirit, and a complete loss of confidence and hope in the future.”

Real life stories can drive home these ideas at a common sense, easy-to-understand level—which is why we recommend reading ‘GM Bondholders are People Like You and Me’, in today’s Wall Street Journal. Mr. Buchholtz, the author, is an American who is getting hurt and is losing confidence and hope in the future—as a direct result of the Obama administration’s assault on the rule of law.

The wake up calls are ringing all over America…

Posted May 27, 2009

Obama wants to increase spending to levels resulting in $4 trillion deficits (or as Rush prefers to state it, $4,000 billion deficits), and in an effort to appear fiscally responsible, announces that the Department of Homeland Security will be able to cut $52 million over five years by purchasing office supplies in bulk.

What a farce. What an incredible statement of just how stupid Obama believes the American people to be. What arrogance to believe the Pravda media can sell this idiocy and incompetency with a straight face.

The Pravda media can contort itself a thousand different ways to try and spin this as "well, at least he's trying" but it isn't going to fly. Americans are awake. They have called "BS". The only fools left in the country are working for the Pravda media--and they are going broke.

The silver lining in this farce is that Obama's big show of a Cabinet-level crackdown on fiscal wastefulness is due to one thing: the tea parties. It's obvious that Obama's team is receiving some focus group data and other internal polling information to the effect that 'this tea party thing' is bigger and broader and more powerful than they would ever want to admit. So the Axelrod PR instinct is to put on a show about budget cuts, spin like hell to the obedient Pravda media, and hope the spin will carry the day for at least another few cycles of Presidential approval polls.

This is so transparent it's embarassing. The arrogance is breathtaking. Toying with and mocking truth is a big mistake. Banking on the existence of such a thing as 'ignorant masses' is a sure loser. The people are on to the Obama fraud in its increasingly broad dimensions. His administration is a house of cards, and truth is catching up to the lies much faster than the headlines would suggest. Repeal and resign are words you will start hearing soon.

Reality is closing in. Truth is going to bring the hammer.

Here’s what isn’t getting enough attention in all of this: the power of free people. The political elite, and the union elite, and the media elite—every one of them believe they can manipulate the ignorant masses; that they can lecture about new plans and partnerships and agreements and warranties, and the people will follow along. But the people actually hold the whip hand. And here’s what’s going to happen: they are going to stop buying GM and Chrysler cars. Period. They detest the government’s arrogant meddling; they can see right through the union-pandering and payback; they do not want cars produced in submission to the left-wing agenda; and they will stop buying. Not even a Chapter 11 bankruptcy will work to fix the people’s refusal to buy. The only thing that will work is when the government is out of the business, and since that isn’t likely for some time, these businesses are finished.

The government will of course fume and fuss and move next through the tax code or tariffs or some other punitive measure to force people to buy GM and Chrysler cars, or stop buying Fords, Toyotas or other foreign cars. But it’s all going to collapse.

[Update! Just a day after this post, the strategy of this tyrannical government became clearer. First, the GM takeover includes plans to shutdown 11 of GM's 20 profit-making cars because they are the evil SUV's and trucks. Next, legislation now cruising through the Congress places another 2 million acres of energy rich land 'off-limits' for energy development--ergo, restrict the development of fossil fuels and limit supply; ergo, force the price of gasoline above $4 per gallon; ergo, force the people to buy cars the government decides to have GM build. And with gas above the believed 'tipping point', people won't continue to buy SUV's and trucks from the auto companies the government doesn't already own. Undergirding it all is homage to the global warming religion, which has decreed that auto emissions are harming the planet.

Looks like the perfect scheme, as hypnotized Americans seem to march in lockstep to the messiah.

Sorry, we're still not buying. The spirit of freedom breaks mesmerism and hypnotism. It's at work now. And...]

The ignorant masses don’t actually exist. “We” are not ignorant, and we are individuals, not masses. And we will not be coerced by this kind of manipulation and deception, and destruction of our freedom.

As for Obama, we thought it would take about six months for him to breakdown physically and mentally, and he may be a little ahead of schedule. He may appear to be putting on a strong front, and the teleprompter may continue to help him deliver the words he thinks can maneuver around the forces that are rising against him. He may even get a few more corrupt pollsters to produce something that makes it seem that the people support him. But the radical leftist agenda he is pursuing is utterly and completely godless. There’s not a shred of moral authority behind anything he is saying or doing. It will collapse of its own emptiness. We urge Obama to resign NOW; he has no idea how deeply he is harming the country, his own family, and himself.

What does collapse mean? Does it mean anarchy in the streets, militias, and mob rule? It could mean that, but it doesn’t have to. Truth still exists, and every principle and virtue humanity needs to protect itself and foster its progress remains unchanged and accessible. Truth is another name for God, and Jesus taught humanity how to access Truth. We need a little more humility, and a lot more prayer. And then things will change for the better.

If you want to see an honest look at the origins of the economic crisis, take a look at this September 2008 TV report. We don't know how long it will be before the video is pulled down, but learn while you can.

We’re starting to run out of words to describe the outrageous fraud that is Obama and the Democrat-led Senate and House of Representatives. It is so brazen, so monstrous—it is on a scale never seen by living Americans. But it is all dependent on one thing, and that is that truth can be made impotent. That’s why the collapse is coming, and probably much sooner than almost anyone expects. Truth can’t be made impotent, and truth will ultimately crush those who try to make it impotent. God has a role in all this, and that’s what liberals will never understand, but we’ll leave that for another discussion.

The focus of outrage today is the utterly contrived scandal involving the payment of contractual retention bonuses to AIG employees. We’ve already written an AIG-inspired basic free market economics essay by way of background. But as more and more facts come out, we see the contemptible deceit and moral vacuity exemplified in this government.

Fact one is that these contracts at AIG were entered into in 2008, before the first authorization of government bailout funds.

Fact two is that the contracts were expressly for the purpose of encouraging key employees to stay with AIG as the difficult times loomed on the horizon. That’s what is meant by ‘retention’ bonuses--i.e., they are bonuses intended to inncentivize the key employee recipients to stay with the company through the hard times.

Fact three is that AIG was the largest single contributor to the 2008 political campaign of Senator Chris Dodd, Democrat, of Connecticut.

Fact four is that Senator Chris Dodd, Democrat, authored a specific amendment to the initial TARP bailout fund to exempt from any legal limitation the payment of compensation, including retention bonuses, on contracts entered into before passage of the TARP bill.

Put these facts together, and it’s obvious that the Democrat-controlled Congress knew all about the AIG contracts before passing the TARP bill, and with that knowledge specifically gave AIG a legislative loophole to be able to honor the contracts. In other words, they knew the AIG bonuses were going to be paid, and specifically waved them through without limitation. But now it looks bad, and so now the Democrat-led government is orchestrating a completely phony, fraudulent, outrageous “I’m shocked, shocked!” act in order to fan the populist flames and distract people from the real outrage that is this government. This behavior of Democrat politicians is beneath contempt. It is part of an ongoing assault on American ideals of freedom, the rule of law, and respect for private property, not to mention the very simplest ideal of honesty. We can’t imagine how Chris Dodd can look at himself in a mirror.

The Democrats cling to PR ‘genius’ David Axelrod in the belief that with full cooperation of the mainstream Pravda media, no one will notice what’s really going on. They think if they just repeat ‘$165M’ and ‘taxpayer money’ enough times, no one will see the larger picture of utter corruption, deceit, and incompetence represented by this government’s actions and involvement in the economy.

It’s not going to work. The people are inflamed, because they can see the way they are being played for fools. This government is assuming they can continue this charade, and the people will join hands and insist that their wonderful government take over everything and make it all right. Their assumption is dead wrong. Truth is spreading, truth cannot be stopped. The people are smarter and more discerning than leftists believe. Fury may follow, but it’s going to be directed squarely at this government and this President. They will have earned it.

It’s past time to call for Obama’s resignation.

No government action would help the confidence of the nation and the world more than the repeal of the stimulus bill. The aftermath of that egregious abuse of the democratic process—slamming through the largest spending bill in the history of the country with no time for anyone to read it, much less understand it (especially in light of what it has later been revealed to contain)—has raised cynicism, anger and disillusionment with government to unprecedented levels. And it is apparent to every serious person that the bill has had and will have NO effect in reinvigorating the economy for the very reason that it has raised cynicism, anger and disillusionment with government. People know instinctively that nothing good can come out of such a dishonest process. Their confidence and outlook for the future has been weakened, not strengthened, by this entire episode. Throwing money at anything has never inspired anyone.

The politicians are feeling the heat, but arrogance, power, and triumphalism preclude them from seeing humility as just the right tonic for at least the first step of restoring confidence. Imagine Obama stepping forward to say, “You know, we did not do this right; we moved too fast; we didn’t live by our promises of transparency and bipartisanship, and in doing so immediately after an election campaign in which we made these promises—we destroyed our credibility. So I’m calling for forgiveness and a ‘do-over’. I call on Congress to repeal the stimulus because it is out of step with the way Americans are feeling about financial responsibility in this environment. We thought it was urgent, but we found out that what was urgent was a display of promises kept, and what was extraordinarily harmful was the hyperpartisan, authoritarian display of power that produced nothing more than a piece of political payback legislation.”

Obama would emerge as a real leader, instead of a puppet of George Soros, David Axelrod, and who knows who else. The Dow would rally a thousand points in a week. And Obama would find himself in possession of real political capital instead of the façade of capital that the left-wing media is striving so hard to pretend exists.

Tell your Congressman. Show some humility. Connect with Main Street. Repeal the stimulus!

The title of his recent column, "Obama Lied; the Economy Died" is encouraging to those of us who have seen through this fraud from the beginning. But we hope that catchy titles don't trivialize what's at stake. This is not a game, and it's not a harmless four year experiment. If the 'shining city on a hill' goes dark, the entire world will go dark, and it won't be a place where anyone wants to live.

Keep the Brushfires burning in your circle of friends and fellow Americans--and change will come!

Get a load of this quote from FDR’s Treasury Secretary, Henry Morganthau, seven years into the New Deal:

We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong . . . somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. . . . I say after eight years of this Administration we have just as much unemployment as when we started. . . . And an enormous debt to boot.

How many times do we have to learn the same lesson? As Ronald Reagan said, ‘we are a people with a government, not the other way around’. Government control of the economy never has worked and never will work. Individual freedom and responsibility under God works, so long as the government stays the hell out of the way. It’s not complicated.

Credit: Burton Folsom, Jr., in “New Deal or Raw Deal”; quoted in Mona Charen’s column, here.

Brushfires-of-freedom hereby grants permission to Michael Steele, Chairman of the Republican Party, to issue the following statement:

"We are not merely disappointed in the Obama administration. We are embarrassed and ashamed of their actions and talking points, which are treating responsible, hard-working Americans as if they have no more than a 3rd grade education and even less common sense.

The White House ‘summit’ on the economy, a ridiculously simplistic exercise complete with ‘break out’ groups to discuss the nation’s problems in three hours, appoint someone at the break out table to take notes, and raise their hand and report back to the President with ideas, is infantile—and sentient people know it is infantile. Words fail to capture just how much arrogance lies behind the belief that staging something like this represents confidence-building leadership. Sarah Palin’s first elected experience with the local Wasilla PTA was undoubtedly more serious and productive.

Even more important, to use the occasion to lecture the participants and the American people on the importance of returning to an era of ‘fiscal responsibility’ one week after signing the single most fiscally irresponsible legislation in the history of the United States has George Orwell turning over in his grave.

Mr. President, the American people are not as stupid as you and your media friends take them to be. They see right through this nonsense. And they are getting angry at being played for fools.

You need to get serious, soon."

Michael Steele, Chairman, Republican National Committee

Check this out in American Thinker—from a 1999 article in the New York Times, a clear identification of the disastrous changes of policy implemented by the Clinton administration to the lending/underwriting standards of Fannie Mae and Freddie Mac. We’re now reaping what was sowed—as we’ve said, here. There is no excuse for politicians not knowing what triggered this mess, and no excuse for believing this can be cleaned up on any basis other than rescinding the government meddling that caused it.

The liberal bubble media want to believe all people of the nation and the world remain enthralled by Obama, and it's only a matter of time before his messianic powers lift us from our economic woes and every other woe. What complete nonsense.

The truth is Americans are waking up, and waking up fast. And sometimes the bubble media gets slapped in the face with this fact when they least expect it and aren't able to 'stop the tape' and pretend it didn't happen.

That's our take on UConn basketball coach Jim Calhoun's recent colorful Q&A, captured and rebroadcast on ESPN. We wouldn't be surprised if it's quickly taken down by the liberals that run ESPN, but a lot of people will see it anyway. We've set the table, and provided a link, here.

"Credit is not a civil right."

Check this for the full text of Michelle's latest column. But think for a moment of the actual depth that lies behind her statement. Credit is another word for character, for trustworthiness. It is earned by individual conduct measured against timeless moral standards of honesty, integrity, discipline and the willingness to work hard. It is not and cannot be conferred by third parties called 'government'. So it will ever be. Human legislators don't have the capacity to overrule these higher laws; the belief that they can leads to disaster.

We wrote in this essay about the moral confusion that characterizes 'government-as-god' liberalism. Scott Powell hits the nail on the head again in this column in Barron's.

The Foundation of Economics

"In his farewell address, George Washington said that religion and morality are essential to sustain democracy in America. He might well have added that virtue is just as indispensable to its economy. When the captains of banking and finance and their congressional overseers fail in moral judgment, the results are disastrous for everyone. As we are now witnessing in the real-estate, stock- and bond-market dislocations, once trust is lost, markets freeze and long-standing relationships break down, resulting in illiquidity, irrational pricing and severe losses."

Our friends at The Patriot Post passed along this nugget:

"[P]eople do not ask for socialism because they know that socialism will improve their conditions, and they do not reject capitalism because they know that it is a system prejudicial to their interests. They are socialists because they believe that socialism will improve their conditions, and they hate capitalism because they believe that it harms them. They are socialists because they are blinded by envy and ignorance." --economist Ludwig von Mises (1881-1973)

Brushfires would cut it to this:

Socialists are blinded by envy and ignorance.

Somebody has more than me, I don't like it and I want the 'government' to take it from them and give it to me--because they only have it because they [lied, cheated, stole, inherited, take your pick] but not because they worked harder, had more persistence, and endured more adversity than me. This is envy and ignorance at work, and it is terribly harmful to humanity's progress, because it denies the value of freedom to everyone.

Don't support it; defeat it. Don't embrace envy, work harder. Don't dwell in ignorance, inform yourself of the great ideas of human history, like those comprising the American Heritage.

Our friends at the Patriot Post consistently remind us of the inspired wisdom of America's greatest leaders. Ronald Reagan was clearly one of them, and his reminder of the relationship betweeen freedom and the economy are worth repeating:

"We who live in free market societies believe that growth, prosperity and ultimately human fulfillment, are created from the bottom up, not the government down. Only when the human spirit is allowed to invent and create, only when individuals are given a personal stake in deciding economic policies and benefitting from their success -- only then can societies remain economically alive, dynamic, progressive, and free."

Obama has claimed to be ready to listen to any idea that would work, but has also told Congressional representatives that they can’t listen to Limbaugh and get anything done.

Acting on his almost always infallible instincts, Rush turned the tables on Obama and proposed a simple yet serious economic plan. Calling the election results 54% to 46% in favor of Obama, Limbaugh took the ‘trillion dollar fix’ mantra, and devised a truly bipartisan idea: allot 54% of the trillion dollars to be used in the government spending policy approach favored by Obama, and allot 46% to be used in the cut taxes approach favored by conservatives—and then see what stimulates the economy fastest.

The simplicity is inspiring, and the results would be a no-brainer win for the tax-cut side (even proponents of government spending acknowledge that very few of the allotted dollars have any immediate, so-called ‘shovel-ready’ impact).

Brushfires supports every policy that honors and promotes individual freedom. Cutting taxes is a boost to individual freedom—freedom to spend or save more of your money as you see fit, and, when capital gains and corporate income tax rates are cut, freedom to pursue a new business idea with less government ‘tolls’ slowing you down.

The elites will frown on such simplicity; and the left’s definition of bipartisanship has always meant Republicans going along with the left (Obama’s rejection of Eric Cantor’s tax-cut idea was: “I won the election”). So Limbaugh’s idea is up against the elitists and the lockstep media—why not join in and take them on. Call your reps—Democrat and Republican—and support this idea. Why not?