American Revolution 2.0 - The Rule of Law

The upside-down, Orwellian world that the Political Class and Pravda seek to impose on Americans is self-destructive to everyone because, ultimately, it represents an abandonment of the idea of truth. Words are distorted and perverted until they have no meaning—e.g., a 'fiscal responsibility' summit coincident with the most wildly irresponsible fiscal behavior in the nation’s history; Iraq war veterans as dangerous 'extremists'. The list goes on and on, and is added to almost every day.

We can’t live without truth; or if you prefer a more practical formulation, we’ll have nothing but chaos and anarchy in a world without truth. That’s why Americans are growing restless, angry and frustrated with their government; that’s among the reasons why there have been tea parties and will be more; that’s why a second American Revolution is brewing, and our essays are chronicling the various dimensions of it.

One of the latest attacks on truth is the attack on the rule of law, most recently illustrated in the government’s ‘cramdown’ executed on Chrysler’s secured creditors. The Political Class and Pravda can huff and puff all they want about fairness and taking care of the UAW and protecting the taxpayer, but the real damage is being done to the rule of law. The rule of law is one of the pillars of a free society—it is built on the existence of truth—and when damage is done to it, every member of the society is harmed. They may not know it at the time (like now), and they may deny that it will ever affect them, but it is horrendously damaging to everyone.

Take it from Warren Buffett, a seemingly relentless Obama acolyte, but a man who knows something about wealth creation in a free society governed by the rule of law. Here’s an excerpt from his recent interview on CNBC:

“If I have a first mortgage on my house here, and the first mortgage is for half of what the house is worth, and somebody says I want you to take a big haircut because I’ve got credit card debt someplace else, that’s got problems. It has problems in terms of future lending. I mean, if priorities don’t mean anything that’s going to disrupt lending practices in the future. On the other hand, to have a few people standing in the way of something that has, ah, so much importance to the whole country, I can see why people on the other side are very upset. But giving up priorities in lending, abandoning that principle, would have a whole lot of consequences. (Brushfires-added bold italics)

… If we want to encourage lending in this country, we don’t want to say to somebody who lends and gets a secured position that that secured position doesn’t mean anything. ….”

Buffett is apparently so handcuffed by his earlier endorsement of Obama and so afraid of the left-wing attack machine that he would never consider publicly revoking that endorsement. So he waxes even-handedly about this being a ‘tough problem both ways’ but the substance of his comments point to the underlying truth. 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 most especially the entrepreneur trying to get a new business going, or the small business owner trying to keep a business going, and needing to borrow without any collateral but his home.

It’s worth repeating this point: the inevitable result of the Obama administration’s assault on the rule of law is that secured lenders will effectively stop lending. This is what gets lost in Pravda’s coverage of issues like these. The Pravda pundits will argue at the theoretical level of the rightness of taking this action in this specific Chrysler (or soon, GM) situation, will satisfy themselves that they’ve tidied up all concern over broader consequences throughout the economy, and then move on to the next issue-of-the-week to comment on. But the pundits don’t sit in the seat of the lender (or the borrower); they aren’t faced with accountability over the decision to extend or not extend credit; they simply don’t have to deal with the practicalities of trying to do business in the absence of the rule of law. And so even if they universally proclaim that there will be no adverse consequences from the Obama administration’s actions, saying so will not make it so.

This is of a piece with the recent blowup over the Air Force One fly-by of Manhattan. As we commented here, Axelrod & Co. think they’ve tidied up the mess by ordering an investigation and getting it off the front page of Pravda, but the fumes within the portions of government still staffed by serious people have not gone away.

All across this country, and on issue after issue, there are free people fuming about what is being done to their country. They did not vote for the radical left agenda that is being implemented; it was not presented to them before the November election. “Not the Obama We Knew; Not the Government We Chose”. Americans know what is going on via the alternative media, and they are not buying the Pravda-orchestrated management of news and spin about all-things-wonderful-Obama. Pravda thinks it is working because they slavishly prop up popularity polls (usually fabricated to some degree by them). But another measure of popularity is Pravda’s circulation, which is plummeting everywhere.

Truth is always under assault, but it can never be defeated. Freedom is always under assault, but it is the God-ordained path of mankind. King George found this out in 1776; the Political Class and Pravda are finding this out today. The second American Revolution is brewing.

Paul Gable

Posted May 5, 2009