Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at thinking, intelligent individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

11 June 2009

Government Thugs Extort Bank of America

Today, Judge Andrew Napolitano announced on Fox News that several government agency officials threatened to remove Bank of America members from the Board of Directors if they did not continue with the government demanded purchase of Merrill Lynch for $50 billion. Bank of America auditors had discovered that Merrill Lynch was only worth $35 billion and Bank of America had a clause in their agreement to purchase Merrill Lynch that allowed them to back out of the deal if ML was worth less than $50 billion. They consequently told the government that they were going to back out of the deal, but a number of government officials from the Treasury Department and other agencies with power over the bank refused to let them exercise their escape option. Later, Bank of America found that ML was worth not more than $34 billion due to bonuses paid.

The government forced Bank of America to take TARP bailout money, which they may have needed due to the very bad deal in acquiring ML that they were forced into. A $16 billion loss will cause most any company some considerable pain! But, the federal government does not own any voting stock in Bank of America and should have no say in who serves on the Board of Directors. It can threaten the bank with audits and many very costly and time-prohibitive requirements as part of its massive regulatory control over banks and the financial industry. So, this is what it did and the executives of the Bank of America did not have the courage to then announce to the public that the executive branch of the federal government was using extortion to force the bank to throw away $16 billion of stockholder's investment, while making depositor's risk escalate.

Similar instances of federal government extortion are becoming commonplace under the despotic regime of Obama. His government is simply an extortion ring on a massive scale. In addition to the threats against individual companies to confiscate and destroy their property and wealth, Obama has used extortion to gain unprecedented control of the financial industry and the auto industry.

He is threatening to takeover the health services industry, which is already being squeezed by the various Medicare, Medicaid, and new prescription drug benefit programs. These government programs have long driven up the costs of private insurance, since the privately insured have long subsidized the government insured. The government is now moving to increase the number of people insured by government insurance massively. This will massively drive up the cost of private insurance until no one can afford private insurance and all private insurers are driven out of the market. The government will be left in control of all payments and in complete control therefore of the entire health care industry. There will no longer be any control on costs, except the limiting of services and the rationing of care. Medical equipment will become obsolete as it has in the United Kingdom and in Canada. Fewer able people will choose to enter the field as doctors, pharmacists, nurses, and administrators. Bureaucrats will tell doctors what medical procedures to follow. Our medical system quality will collapse and the wait for low-quality care will become life-threateningly long, as it has been in Canada and the U.K. Efforts to make innovative improvements and new developments in medical care will decrease, both due to shortsighted government efforts to cut costs and because the personal motivation of researchers and doctors will decrease.

The Capitalist system of free markets allows individuals to choose the goods and services they want and also makes huge quantities of decision-making information available to them. This system requires that the laws be known and stable. It requires protections of property rights and the roles of investors and employers. These are very much among our individual rights whether as investors and employers or as consumers and employees. When our government forsakes its responsibility to provide these protections and instead becomes an organized gangster mob shaking down businesses, whole industries, and their customers, the Capitalist system of free choices collapses. Tyranny is all that remains. Obama is the head tyrant and he has a strong following of thugs in the upper echelons of the Democrat Party and among his appointments to powerful positions in the executive agencies who also lust for unbridled power. There are still further long-term government employees who also too much enjoy power when the President and high-level appointees do not set a higher-minded standard for good, limited government. The damage to our society is massive.

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