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Title: Property Rights Take a Hit
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URL Source: http://www.lewrockwell.com/schiff/schiff26.1.html
Published: Jun 13, 2009
Author: Peter Schiff
Post Date: 2009-06-13 09:40:12 by Ada
Keywords: None
Views: 407
Comments: 35
“Crony capitalism” is a term often applied to foreign nations where government interference circumvents market forces. The practice is widely associated with tin-pot dictators and second-rate economies. In such a system, support for the ruling regime is the best and only path to economic success. Who you know supersedes what you know, and favoritism trumps the rule of law. Unfortunately, this week’s events demonstrate that the phrase now more aptly describes our own country. On Monday, the Supreme Court refused to hear an appeal from Chrysler’s secured creditors based on the government’s argument that the needs of other stakeholders outweighed those of a few creditors. In this case, the Administration concluded the interests of the United Auto Workers outweighed the interests of the Indiana teachers and firemen whose pension fund sued to block the restructuring. Given the enormous financial support that the UAW poured into the Obama campaign, such partiality is hardly surprising. When making their investment in Chrysler just a few months ago, the Indiana pension fund agreed to commit capital because of the specific assurances received from the company. In allowing this sham bankruptcy to be crammed through the courts, we have shredded the vital principal of the rule of law, and have become a nation of men, rather than one of laws. The risk that legal contracts can now be arbitrarily set aside will make investors think twice before committing capital to distressed corporations. Oftentimes enforcing contracts imposes hardships. That’s precisely why we have contracts. Without absolute faith that deals will be honored, it will be extremely difficult for U.S. companies to borrow money. This will be particularly true for those companies already struggling with too much debt. Without the ability to issue secured debt, how will such companies access the necessary capital to turn around? If secured creditors cannot count on the courts to enforce their claims, they will not put their capital at risk. What good is being a secured creditor if courts can allow the assets securing your claim to be sold for the benefit of others? Another problem with the government imposing losses on secured Chrysler creditors is that in its bailouts of financial companies (like Citigroup and AIG), the government took steps to specifically pay back creditors, even when those creditors should have been wiped out. This inconsistency and lack of equal protection further undermines faith in our economy. The message here is clear: loan money to financial entities with friends in Washington and no matter how risky the loan, taxpayers will bail you out if it goes bad. However, loan money to a unionized manufacturer, even if prudently secured by real assets, and you have as much chance of getting your money back as finding Jimmy Hoffa’s body. As if this wasn’t bad enough, testimony on Thursday from former Bank of America CEO Ken Lewis revealed a concerted effort on the part of Fed Chairman Ben Bernanke and former Treasury Secretary Henry Paulson to pressure Lewis into hiding relevant financial information regarding Merrill Lynch losses from B of A shareholders. Recently released e-mails make it clear that the government threatened to remove corporate leaders if they failed to go through with the merger and keep quiet about the losses. Again, the justification for the interference seemed to be the “greater economic good” the merger would serve. The right of B of A shareholders to be informed that their company was about to buy a financial black hole was clearly considered to be an acceptable sacrifice. More importantly, the fact that two of the highest-ranking government officials can conspire to violate both securities laws and private property rights is abhorrent to everything America supposedly stands for. If they get away with it, which I believe they will, the precedent and the message will be chilling. As a broker who specializes in foreign investments, I am always wary of political risk. I must consider how the threat of arbitrary government action could undermine the value of my investments. However, recent events show that political risk is now greater here than abroad, and U.S. assets, which have historically traded at premium valuations based on faith in our legal system, will soon trade at discounts to reflect this new threat. The fear of having contracts abrogated or property rights violated when doing so serves some contrived greater good will substantially raise our cost of capital and further reduce our competitiveness.
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#1. To: Ada (#0)
========================== When one president or one USSC justice can redirect the destiny of large industry and go unchallenged like they have tells us pretty much we have arrived.
we've been ruled by the King du jour and his henchman for a very long time...
The smooth criminal transition from Bush/Cheney to Obama
I disagree in that WE haven't allowed any such thing. The judges, mostly selected by politicians, have allowed this. And reading this *shouldn't* make a normal American angry? I'd argue anger is the appropriate reaction.
The judges, mostly selected by politicians, have allowed this. =======================================
Are you sure you want to quote Churchhill on issues of freedom?
When did Churchill throw Britons in prison without formulating any charge known to the law?
On 23 May 1940 Mosley, who had continued his peace campaign, was interned under Defence Regulation 18B, along with most active fascists in Britain, and the BUF was later proscribed. His wife Diana Mitford was also interned, shortly after the birth of their son Max; they lived together for most of the war in a house in the grounds of Holloway prison. Mosley used the time to read extensively on classical civilisations. The couple were released in November 1943, when Mosley was suffering with phlebitis, and spent the rest of the war under house arrest. On his release from prison he stayed with his sister-in-law Pamela Mitford followed shortly by a stay at the Shaven Crown Hotel in Shipton-under-Wychwood. He then purchased Crux Easton, near Newbury, with Diana. He and his wife were the subject of much media attention.[8] The war ended what remained of his political reputation. Pages on British Union of Fascists and Oswald Mosley at Wikipedia.
=========================== Fascists do tend to pose a problem. Obama might find himself in prison under those conditions.
In a western "democratic state," you accept jailing political opposition on the basis of them "tending to pose a problem?"
Firstly, war is a racket. It is always motivated by money, greed, and the lust for power. There are the haves, and the have-nots. Those holding on to power, and those wanting to take that power. Fascism is as vile a form of government as communism is, and there has never been a pure form of democratic government yet devised by man.
Let's stick to the topic, shall we? Would you care to praise Churchill, who was in office at that time, for standing up for Mosley's civil rights?
============================== Under the circumstances of facing fascism and Nazism, yes.
Thank you for being so honest, although to me it's been clear without such a confession.
The system is based on values, economy, and prejudice, and the interpretation of the sum of these. And it always will.
I've shown that you scarcely know what your quotes mean, or the context within which they were given, so it would not surprise me at all if you have no clue as to what you are trying to say in that latest post. I can't read it or understand it, and I'm not even going to try.
Please don't then. I know exactly what I say. It is no mystery to me.
With your line of logic, the Patriot Acts are acceptable. I don't think you realize that.
Another cliche? Of course. That's how you communicate. But this interview (taken from an article on Salon by Glenn Greenwald, who posts it) with Law Professor Jonathan Turley might interest you. The subject is preventive detention. The proponent of such is Obama himself, with whom you appear to agree. I doubt you intended to agree so vociferously with Obama, but in supporting Churchill's jailing of Mosley, you have.
================================== I do. In the sense that tyranny occurs when innocents are imprisoned under the guise of public good. In your examples, IMO they weren't. In current terms, those innocents about to be jailed will be those forced to defend themselves against what I just spoke about. Namely tyranny acting in the guise of protecting the public.
============================ Exactly. What this country is suffering from now is fifty years worth of greedy expansion in the name of "Liberty." Even the detainees at Gitmos are direct victims of this. As are you. As am I. The real criminals are those that orchestrated the invasion of Iraq and duped an entire nation into a frenzy of war by using 9/11 as their tool. Even if 9/11 was a legitimate attack by Islamic terrorists, the ensuing invasion of Iraq was at least as horrendous a crime as it was. All this country had to do after 9/11 was to STOP after taking out the Taliban in Afghanistan and made it a regional example. The rest is history.
If you're willing to jail Oswald Mosley preemptively, how are you any better than the Gitmo jailers? Or better put, how are you better than Obama? You just can't have it both ways. You can't be both against a police state, and for it.
A test case was that of John Merryman, who was arrested on the charge of treason, May 25, 1861. Chief Justice Taney of the United States Supreme Court issued a writ of habeas corpus to which General Cadwalader refused to respond. As no posse could execute the writ by force, Justice Taney ordered a copy sent to the President [Lincoln], who was advised by the attorney general that he had the power to suspend the writ whenever be deemed it necessary, and that this was a part of the war powers granted by the Constitution. So much excitement was caused by some of these arrests that the House of Representatives in special session, July 12, 1861, asked for information regarding them, and for a copy of the opinion of the attorney-general sustaining the right of the President or his subordinates to order such arrests. No action was taken, however, at this time. From the frequency with which these arrests were made on the order of the State Department grew the alleged statement of Secretary Seward to Lord Lyons, the British minister: "My Lord, I can touch a bell on my right hand and order the arrest of a citizen of Ohio. I can touch a bell again and order the imprisonment of a citizen in New York. And no power on earth except that of the President can release them. Can the Queen of England do so much?"
A trillion here, a trillion there, soon you're not talking real money
================================ That same power has once again been reincarnated itself into modern royal decree. Irrefutable, if need be. Always at the ready. Lord it over the people. Make them know thy power. EVERYTHING WILL BE UNDER CONTROL - TOTAL CONTROL That's called an Oligarchy, and it encompasses both democrats and republicans. KJMill posted on 2007-09-17 22:24:23 ET
You worry about these laws because they might affect your interests. But when similar abuses are carried out against people whom you despise, suddenly you don't care so much. Why should you expect sympathy from others who might not agree with you?
Uh huh.
Do you read what you post?
Quite frequently. What would you like to know?
I think I get it. Thanks.
"The risk that legal contracts can now be arbitrarily set aside will make investors think twice before committing capital to distressed corporations." The purpose of the state is to set aside free market contracts in order to serve the state (ie. the political elite). That's why legislation is robbery. Get the picture?
"Anybody can rat. It takes real genius to re-rat."
The holy shall kill thy therapist, for it IS a sin.
============================== It is much nobler just to simply tell the truth. “War is just a racket. A racket is best described, I believe,
It's a nice thought anyway. The best any man can do is to not deliberately tell a lie, or deliberately mislead by omission. That is not quite the same thing as telling the truth, which depends on the listener. First-order honesty: not telling a lie. Second-order honesty: not omitting things important to you. Third-order honesty: not omitting things important to the other guy. In a homogeneous society, first-order suffices, for values are largely shared. Under Diversity, second and third become both more important and more problematic. As much as we might like it to be, honesty is not a free good, and complete honesty has drawbacks. I am virtually certain that no leader of men has always told the truth. Every institution is a racket. Get over it. :/
The holy shall kill thy therapist, for it IS a sin.
======================== This Third-Order Honesty was never planted in this current, incredibly selfish and self-centered generation. I, ME, MY Third-Order Honesty is the foundation of any civilization surviving the ravages of barbarianism. America is a land of barbarians equipped with computers and cell phones.
========================= Emphasis on leader of "men - mankind."
More importantly, the fact that two of the highest-ranking government officials can conspire to violate both securities laws and private property rights is abhorrent to everything America supposedly stands for. If they get away with it, which I believe they will, the precedent and the message will be chilling.
#2. To: Ada, HAPPY2BME-4UM (#1)
In allowing this sham bankruptcy to be crammed through the courts, we have shredded the vital principal of the rule of law, and have become a nation of men, rather than one of laws.
#3. To: HAPPY2BME-4UM (#1)
(Edited)
In allowing this sham bankruptcy to be crammed through the courts, we have shredded the vital principal of the rule of law, and have become a nation of men, rather than one of laws.
#4. To: Jethro Tull, christine (#3)
I disagree in that WE haven't allowed any such thing.
Rule by Fear or Rule by Law? "The power of the Executive to cast a man into prison without formulating any charge known to the law, and particularly to deny him the judgment of his peers, is in the highest degree odious and is the foundation of all totalitarian government whether Nazi or Communist."-- Winston Churchill, Nov. 21, 1943
#5. To: HAPPY2BME-4UM (#4)
#6. To: Deasy (#5)
#7. To: HAPPY2BME-4UM (#6)
In May of 1940, the BUF was banned outright by the government, and [Sir Oswald] Mosley, along with 740 other fascists, was interned for much of World War II. After the war, Mosley made several unsuccessful attempts of reviving his brand of fascism, notably in the Union Movement.
Internment
#8. To: Deasy (#7)
Mosley modelled himself on Benito Mussolini and the BUF on Mussolini's National Fascist Party in Italy. Mussolini and, later, Mosley instituted black uniforms for members, earning them the nickname "Blackshirts." The BUF was anti-communist and protectionist, and proposed replacing parliamentary democracy with elected executives having jurisdiction over specific industries – a system similar to the corporatism of the Italian fascists. Unlike the Italian system, British fascist corporatism planned a democracy that would replace the House of Lords with elected executives drawn from major industries, the clergy, and colonies. The House of Commons was to be reduced to allow for a faster, "less factionist" democracy. [2]
#9. To: HAPPY2BME-4UM (#8)
#10. To: Deasy (#9)
#11. To: HAPPY2BME-4UM (#10)
#12. To: Deasy (#11)
Would you care to praise Churchill, who was in office at that time, for standing up for Mosley's civil rights?
#13. To: HAPPY2BME-4UM (#12)
#14. To: Deasy (#13)
#15. To: HAPPY2BME-4UM (#14)
#16. To: Deasy (#15)
#17. To: HAPPY2BME-4UM (#16)
#18. To: HAPPY2BME-4UM, *Obama Reality Check* (#8)
(Edited)
Obama might find himself in prison under those conditions.
#19. To: Deasy (#17)
With your line of logic, the Patriot Acts are acceptable. I don't think you realize that.
#20. To: Deasy (#18)
"You cannot make a silk purse out of a sow's ear."
#21. To: HAPPY2BME-4UM (#20)
#22. To: HAPPY2BME-4UM (#4)
Rule by Fear or Rule by Law? "The power of the Executive to cast a man into prison without formulating any charge known to the law, and particularly to deny him the judgment of his peers, is in the highest degree odious and is the foundation of all totalitarian government whether Nazi or Communist."-- Winston Churchill, Nov. 21, 1943
#23. To: DeaconBenjamin, deasy, christine, Itistoolate, Original_Intent, farmfriend (#22)
#22: From the frequency with which these arrests were made on the order of the State Department grew the alleged statement of Secretary Seward to Lord Lyons, the British minister: "My Lord, I can touch a bell on my right hand and order the arrest of a citizen of Ohio. I can touch a bell again and order the imprisonment of a citizen in New York. And no power on earth except that of the President can release them. Can the Queen of England do so much?"
They simply legislate themselves more power as the traffic will bear (and citizens will overlook without revolting against it).
The Signing of the John Warner National Defense Authorization Act (NDAA) of 2007
#24. To: HAPPY2BME-4UM (#23)
#25. To: Deasy (#24)
#26. To: HAPPY2BME-4UM (#25)
#27. To: Deasy (#26)
#28. To: HAPPY2BME-4UM (#27)
#29. To: Deasy (#28)
#30. To: Ada (#0)
Property Rights Take a Hit
#31. To: Deasy, HAPPY2BME-4UM (#5)
Are you sure you want to quote Churchhill on issues of freedom?
#32. To: Prefrontal Vortex, deasy (#31)
"Anybody can rat. It takes real genius to re-rat."
as something that is not what it seems to the majority of people.
Only a small inside group knows what it is about. It is conducted
for the benefit of the very few at the expense of the masses."
-- Major General Smedley Darling Butler
Major General USMC, "Old Gimlet Eye'' and "Hell Devil Darling", most highly decorated military men from the pre-World War II era.
Source: from a speech in 1933
http://quotes.liberty-tree.ca/quote_blog/Smedley..Butler.Quote.C29D
“I believe in adequate defense at the coastline and nothing else.
If a nation comes over here to fight, then we'll fight.
The trouble with America is that when the dollar only earns 6 percent
over here, then it gets restless and goes overseas to get 100 percent.
Then the flag follows the dollar and the soldiers follow the flag."
-- Major General Smedley Darling Butler
Major General USMC, "Old Gimlet Eye'' and "Hell Devil Darling", most highly decorated military men from the pre-World War II era.
Source: from a speech in 1933
http://quotes.liberty-tree.ca/quote_blog/Smedley..Butler.Quote.5390
“I wouldn't go to war again as I have done to protect some lousy
investment of the bankers. There are only two things we should fight for.
One is the defense of our homes and the other is the Bill of Rights.
War for any other reason is simply a racket."
-- Major General Smedley Darling Butler
Major General USMC, "Old Gimlet Eye'' and "Hell Devil Darling", most highly decorated military men from the pre-World War II era.
Source: from a speech in 1933
http://quotes.liberty-tree.ca/quote_blog/Smedley..Butler.Quote.5403
#33. To: HAPPY2BME-4UM, Deasy (#32)
It is much nobler just to simply tell the truth.
#34. To: Prefrontal Vortex (#33)
Third-order honesty: not omitting things important to the other guy.
#35. To: Prefrontal Vortex (#33)
I am virtually certain that no leader of men has always told the truth.
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