How much socialism is acceptable to you?

There has been a long delay in my blog because I felt temporarily discouraged. It appeared last week that so many people I spoke with were just not concerned about what is happening to our economic system. Some are willing to give up their personal freedom in exchange for a nanny state: socialism, fascism, statism? You can argue over which of those the USA is adopting, but it’s hard to argue “none of the above.”

After the enactment of TARP followed by massive government spending, I became concerned about out tilt toward socialism. Several moderate friends of mine said “Don’t worry. The government doesn’t actually own the businesses. If they do, then I’ll get mad.”

The last couple of weeks, our government has taken steps for more control of business. Attempting to convert more of the government share of banks (obtained from TARP loans) to common stock will give the government large voting share of the banks. I asked my “moderate” friends about this and they just shrugged and said “oh well.”

However, last week, I think the Obama administration has finally went too far. In trying to engineer the restructuring of Chrysler and GM in direct violation of US bankruptcy laws, more citizens took note.

Not only did Obama propose the government own over 50% of General Motors, he also stood up and spoke against bondholders of both groups. Bondholders are now evil “speculators.” Do you have any corporate bonds in your retirement funds?
If so, you might be an evil speculator. Obama doesn’t think you even deserve your legal share in a bankruptcy court. He feels you should settle for 5 cents on the dollar while the unions get more than their share of the company. Really makes you want to invest in America, doesn’t it?

The administration is trying to take over for both the judicial and legislative departments. Our bankruptcy laws were written by legislators and the judiciary knows that bondholders have a high-priority stake in a bankrupt company. Obama used his podium to try to force a restructuring different than what the courts would likely decide.

The good news about all this: a few people woke up. I started hearing from friends again the last few days who are concerned about the government control. Once again, it is evident that more of us are going to have to get involved in the political process. It is our obligation to preserve what is left of our freedom, if the next generation is to have a chance for prosperity.