- The Washington Times - Wednesday, December 23, 2009

ANALYSIS/OPINION:

President Obama knows how to stage a show. On Dec. 14, he trotted out 10 CEOs of America’s largest financial institutions and watched the executives disown the actions of their lobbyists who had been working to defeat the president’s massive regulatory takeover of the financial industry. The scene smelled fishier than research at last week’s climate change conference in Denmark.

One business leader after another indicated that he always meant to support Mr. Obama’s regulatory takeover. The common glitch was that they all simply miscommunicated their desires to their lobbyists. No explanation was offered for the implausibility that all of these CEOs similarly miscommunicated such instructions.

With the titans in tow, Mr. Obama announced, “My interest isn’t in vilifying any one person or institution or industry; it’s not to dictate to them or micromanage their compensation practices. …” By bringing up these possible measures, the threat was clear: America’s financial institutions should stop lobbying against his policies or the president will use the powers of his office to attack these companies and their leaders.

Over the last year, government used similar strong-arm tactics when CEOs of financial companies met with Treasury officials. What the media initially reported as “arm-twisting” involved regulators threatening to destroy banks unless they accepted government bailout cash, whether they wanted it or not. Government officials claimed it would be unfair and stigmatizing to banks that took the money if only a few financial institutions were seen to accept it, thus all would be forced to take it.

Once banks received the money, all sorts of strings were attached. Many were forced to convert those loans into stock making the government the owner of the financial institutions. Banks were forced to relinquish their preferred creditor status for bonds they held in General Motors Corp. and Chrysler so that unions could get a massive wealth transfer. On top of all this, banks were not allowed to simply repay money when they wanted.

Government is too powerful when it can coerce firms to stop lobbying on behalf of their interests in the face of excessive regulatory threats. Freedom in this nation is eroding faster than we ever thought possible.

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