How should House and Senate Republicans react to the Trojan horse stimulus package proposed by the Obama administration?
In the name of economic stimulus, it not only has every item any liberal ever asked of Santa Claus on Christmas eve, it also contains the seeds of a permanent shift toward a European-style socialist democracy. Its dramatic exemption of more than half of Americans from paying federal income taxes (it is now about one-third who don't pay them) and its generosity in awarding this voting majority a welfare check -- called a refundable tax credit -- moves the politics of taxation sharply to the left. The federal government's acquisition of preferred stock in virtually all our major banks sets the stage for full nationalization. After all, if the feds are using their "preferred" status to hog all the dividends, why should any private person buy bank stock?
By demanding that Citibank cancel its plans to buy a private jet, the Obama administration is tapping into a justified populist anger against the greed, privilege, stupidity and sense of entitlement of the Wall Street biggies. But he is also setting the precedent for government control over the actions of private banks. If Obama extends his power to the selection of management and policies regarding the lending of money, nationalization will become a de facto reality. And once the government controls the banks, it controls the economy. At best, we will have a Japanese system where winks and nods from bureaucrats turn industrial policy upside-down; at worst, we will have outright federal control, with government-appointed latter-day Blagojeviches determining who gets loans and who doesn't.
With only 41 votes in the Senate and a distant minority in the House, what should Republicans do in the face of this onslaught against the basic free-market, private-enterprise system?
The answer is for the Republicans to caucus and come up with a Free Enterprise Amendment to add to the stimulus package. The amendment should spell out what the government may not do in influencing the policy of private banks. It should, for example, make it illegal for the feds to urge certain lending policies on banks or to suggest specific loans that might be granted. It should enjoin the feds from intervening in decisions on who should manage various aspects of bank operations. The idea would be to cordon off large parts of the private sector, even in subsidized institutions, to bar public federal government influence.