By now it is inarguable that the “regime” in Washington is seeking to expand government to scale and reach that would make Karl Marx’s heart thump with pride. This is being accomplished not just through “tangible” expansion, e.g., hiring more government employees, but also through “regulatory takings” of entire industries – healthcare, autos, financial and if “Cap & Tax” is enacted, energy production and use.
If doctrinaire Communism called for state takeover “of the means of production” (i.e., taking title, such as “Government Motors”; “Fannie” and “Freddie” in fact if not on paper), the “regulatory takings” also being employed by the current regime more closely resemble the “corporatism” of Fascists doctrine (in particular, as practiced in Mussolini’s Italy) – ostensibly title and control remains in the private sector, but a combination of governmental “persuasion” and crony capitalism means that in actual operation “private” corporations are actually appendages of the state.
A couple of quotes from Benito Mussolini are instructive:
“Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power.”
“The keystone of the Fascist doctrine is its conception of the State, of its essence, its functions, and its aims. For Fascism the State is absolute, individuals and groups relative.”
So in sense we could say that our ecologically-minded statists are driving a “hybrid” of Communism / Socialism and Fascism (this writer would argue that in any case, in the end, they’re all just variations of the same theme). Taking title when a “crisis” affords the opportunity, and “regulatory takings” of other targeted industries.
To achieve the desired ends, as with the proverbial boiling frog, it is better to not announce intentions and to as stealthily construct the trap until there is no escape, it is a fait accompli. Thus we have several thousand-page bills that in spite of their size are masterpieces of vagueness, serving merely as vehicles to spawn hundreds of new agencies and commissions, which will, mostly away from public scrutiny, draft regulations (with the force of law).
To help mask the cost of the new “corporatist” state its architects are not only increasing the debt to Greek-like levels, but also seeking to “hide” tax increases by using private sector entities as middlemen to “pass through” and thus launder what are in fact tax increases.
For example, in the “ObamaCare” bill we have mandates to increase “dependent” coverage to age 26 – the cost of which will of course increase insurance premiums – and for which the evil health insurance companies will be blamed (and excoriated) by the very politicians who created the mess (much like Subprime Barney Frank blaming the “Community Reinvestment Act” inspired and Fannie-Freddie housing collapse on “the banks”).
A similar dynamic underlies the “Cap & Tax” agenda being pushed by the Obama administration (first through Congress, then if it can’t find satisfaction there, through regulatory fiat courtesy of the EPA). And down the road, reputedly after the mid-term elections, come proposals for a VAT tax (“we’ll have no choice, due to the federal debt that we intentionally ran up as part of our fait accompli agenda”).
Which brings us to the General / Government Motors bailout and pending IPO. This was really a “crony capitalism” bailout of the UAW than the corporation General Motors, for GM could have gone through a genuine Chapter 11 reorganization that would have left it in a far more competitive position than its current state (contrary to the spin it wasn’t an “if / or” choice of either a government bailout / takeover or dissolution of GM — if necessary the federal government could have guaranteed “debtor in possession” financing or bridge loans. What the Obama administration did was use extra-legal pressure to strong-arm the bondholders (and effectively seize their assets) and give the proceeds to the UAW while simultaneously insulating the UAW from the sort of concessions that a non-politicized bankruptcy proceeding would have imposed.
In other words, the bailout has actually placed GM in a worse long-term position than it would have been with a legitimate Chapter 11 reorganization.
Having witnessed what the Obama regime did to GM and Chrysler bondholders, and having witnessed the UAW, having critically contribute to the demise of those former industrial powerhouses now being “protected” by the Obama regime and having a new Boss (King) under that Obama wing feeling emboldened to publicly announce his intention to “get back” the (minor) “concessions” that were given, in other words determined to go back to business as usual, what sane investor would purchase GM stock, IPO or later? NONE!
Knowing this, why would GM be pushing an IPO now? Numerous reasons. Market share wise and financial performance wise, this may be the best it gets for UAW-saddled GM. Moreover, by announcing now, the Obama administration (and Democrat fellow travelers) can, before the mid-term elections, spin the prospect of recouping the costs of the hugely unpopular taxpayer bailout of the UAW.
Additionally, Obama has to realize that his power will decline after the midterms elections. So now is his window of opportunity to still strong-arm TARP-recipient financial institutions (and others due to the new financial regulation bill) he can “persuade” those institutional investors (or their CEO’s) of the “wisdom” of making huge purchases of an inflated-priced GM IPO. The later (presumably inevitable losses) on the stock will be borne by the retail investors in mutual funds and such. So on paper the “taxpayer loss” on the GM bailout will be shrunken, and the losses “laundered” through to individuals’ 401k mutual fund holdings and the like.
The final party in a transaction always pays all of the taxes. Just as “corporate taxes” and VAT taxes are ultimately paid by the end-consumer (albeit hidden within the purchase price), so too will 100% of the losses on the GM bailout be paid by us – even if first laundered through a politically-motivated and engineered IPO.
