"Fascism should more properly be called corporatism because it is the merger of state and corporate power."
-- Benito Mussolini (from Encyclopedia Italiana, Giovanni Gentile, editor).
It is time to think about where we as a nation are headed. What kind of world do we live in when men like Hugo Chavez begin calling President Bush “Comrade”? Chavez is absolutely correct in insinuating our Government has taken a decidedly socialist turn. More than that, it has taken a turn towards fascism.
Fascism. Yes, I said it. No one wants to look at it that way, but that's what it is.
I'm not talking about the Fascismo of Italy, or the NAZI fascism of Germany that are oh so famous examples of this particular form of socialism. It's a different kind of fascism. It's the kind of fascism that the early 20th century American progressives admired. The so called “3rd way” half way between laissez faire capitalism and Soviet style communism. Something more closely aligned with Fabian fascism.
Let's examine the actions of our government these past few weeks. Our President, along with Secretary Paulson devised a 700 billion dollar bailout plan for the financial industry based on buying bad loans and sitting on them until they became viable again. We were told that if it did not pass, capitalism as we know it would crumble in America. In fact, we were told it had to pass immediately or there would be no time to prevent the New Depression. It didn't pass. Then we were informed that some were told that a second vote on it must pass or the consequences would be dire, and that quite possibly, martial law would be needed to stop the panic and the riots in the street. “Sweeteners” were injected into the bill and seeing a decline in the stock market that congress was told was a result of the bill not passing, the bill passed. Both of our presidential hopefuls supported this atrocity, as well as the Speaker of the House, the senate minority and majority leaders, and everyone else of power and influence. This bill has become the path towards fascism, and it is happening before our very eyes, in broad daylight without any apology. It has been noted in several places that $700 billion was enough money to buy all of the banks involved, and a good portion of the largest bank in the US as well. I filed that thought and haven't forgotten it.
The government has gone against the will of the people in order to bring this bill into law, and now they thumb their noses at us even more by not even administrating it the way we were told it would be administrated. Instead of buying up bad mortgages, as we were told, they have devised a “new” strategy for using this 700 billion dollars. They have decided all of a sudden that the best course of action to take is not buying bad mortgages as we were told. I agree with that by the way. That was a horrible idea. What I don't agree with is what Paulson has decided to actually do with the money entrusted to his care. An amount of money that has made Secretary Paulson effectively the most powerful figure in the world. An unelected manager with the power of the federal Government and all of the police power needed to back his moves. Mr Paulson has decided that we should invest this money directly into the banks. He is buying a share in the corporations of the financial industry. The US Government is now buying stock in private companies. That's not all. They are buying up these pieces of these institution whether the banks want them to or not! The banks have no say so. The banks are not given a choice for all practical purposes. The government's preferred stock will pay a 5% dividend for the first five years and then convert to 9%. Firms will not be able to increase their dividends for three years while the Treasury is an investor and cannot get rid of the investment for three years unless they raise high-quality private capital. Firms must also get Treasury's consent to buy back their own stock. In other words, as long as the Treasury feels inclined to remain an investor, the bank has no way of buying back their own stack. Stock that the government is forcing them to sell to the Treasury in the first place.
There are actually banks out there that do not want any part of this deal. Thousands of them. Especially the smaller banks. Many of them have no problems financially at all, and are upset with the Government because of the bail out of the banks that operated more recklessly.
Peter Fitzgerald, chairman of Chain Bridge Bank in McLean, was quoted in a Washington Post story saying that they are "much chagrined that we will be punished for behaving prudently by now having to face reckless competitors who all of a sudden are subsidized by the federal government."
Secretary Paulson is forcing banks to take his offer, whether they want it or not. That is absolutely unforgivable. And the way fascism works, the way it REALLY works, is that Government does not take over a corporation. They take a share of it, then they put their “guy” inside to oversee the operation. This is exactly what the TARP (Troubled Asset Relief Program) laws being used by Paulson is allowing to happen. When you begin to combine that with socialist trend affecting our nation you have fascism.
Harry Truman's steel mill seizure was struck down by the Supreme Court in 1952. Is there any chance this one will too? Is there any chance that the Supreme court might get an opportunity to review what is happening to our financial industry, and will it use the same judgment and wisdom to tell Secretary Paulson( or his replacement) and whomever is President "No more."?
EDIT: After I wrote this, I came across this article from 1997 by Joseph Farah that explains what I mean by Fascism. He was spot on and ahead of his time.