1. The late-breaking news from today is the impending retirement of Supreme Court Justice David Souter. But since Souter was already part of the left-leaning bloc on the Court, this will not substantially change the balance of power on that court. So I don't plan to begin covering the story in earnest until we see some indications about the Obama administration's nominee to replace Souter.
Instead, the big new of the week is the further intensification of the Obama administration's quasi-nationalization of two of the big three Detroit automakers. There was already a joke circulating about how GM now stands for "Government Motors," but now Chrysler is also applying to become a ward of the state.
The Chrysler bankruptcy proposal put together by President Obama's "auto czar" is designed to favor union ownership of Chrysler, which is to be achieved by sacrificing the company's "secured" creditors—the ones whose interests are supposed to come first in any bankruptcy. The goal of the restructuring, including the merger with Fiat, is to push Chrysler to make tiny, Italian-style "green" cars, instead of the larger cars, trucks, and SUVs that are actually more profitable.
According to the Washington Times.
Chrysler will gain the small-car technology from Fiat, which will gain a 20 percent share of the company that eventually could increase to 35 percent once government loans are repaid. Union health care funds will control 55 percent of the reorganized company, and US and Canadian governments will acquire 10 percent of the company in exchange for loans….
Mr. Obama vilified the handful of hedge funds and other lenders who declined to take 30 cents on the dollar for their loans, forcing the company into bankruptcy. Mr. Obama called them "speculators" and said he was determined to defeat them in court.
The White House pressured four major bank lenders that hold 70 percent of the company's $6.9 billion in loans to agree to the deal, using the leverage it gained by providing them with more than $100 billion in bank bailout funds.
It will be up to Judge Arthur Gonzalez, whose bankruptcy court this case will pass through, to step up and prevent the illegal expropriation of the secured creditors. Note, by the way, the role of the TARP bailout as the main instrument for the Obama administration's fascist economic program. It provides the pretext for the administration to force nominally private companies to operate under direct orders from the president.
Power Line blogger John Hinderaker rightly calls this "banana republic capitalism at its worst."
Political influence, rather than the law, dictates the rights of the parties. When some of the secured creditors refused to be intimidated, Obama libeled them in the press, saying, outrageously, "I don't stand with those who held out when everyone else is making sacrifices." Actually, under Obama's plan the politically favored parties, principally the UAW, will benefit—will steal money, to put it crudely—from the parties who held out.
Michael Barone concurs:
[T]he small bondholders were willing to settle for only 60% of what they were owed. But, they complain, the government wouldn't negotiate directly with them, but only through JPMorganChase, which (unwillingly) took TARP money on October 13 and thus is under pressure to do what the government wants. Translation into politispeak: The government squeezed the small bondholders too hard in order to protect the United Auto Workers, which of course has over the years been a bounteous source of money (and manpower) for the Democratic party.
Meanwhile, a similar restructuring plan for GM is also turning into a nationalize-and-subsidize plan aimed at buying the votes of union workers. The article below details how GM's status as "Government Motors" is leading to an attempt to "micromanage" GM's business policies, not to achieve the firm's swift recovery, but to serve Washington's political agenda.
"Will GM Become 'Government Motors'," Stephen Manning, AP via RealClearMarkets, April 30 Under a restructuring plan put forth this week by GM, the ailing automaker would give majority ownership to the federal government to stave off bankruptcy…..
The Obama administration has said it isn't interested in running an auto company, but with that big of a stake, some analysts say the government would probably be tempted to push its own policies on such issues as alternative fuel vehicles and unions….
GM's proposal would give the government more than 50 percent of the automaker's stock in exchange for forgiving $10 billion in government loans. The United Auto Workers union would end up with a 39 percent stake….
GM, which spent recent years selling SUVs and other gas-guzzlers, is already making a push into hybrid and electric vehicle technology and is spinning off the behemoth Hummer. But its best-selling vehicle is still the Chevy Silverado, a full-size pickup truck.
In another possible conflict of interest, the White House could find itself in the odd position of being a partner with the UAW while simultaneously sitting on the board as it negotiates contracts with the union….
Meyers said the British auto industry, which went through a period of nationalization during the 1970s, holds some clues to government ownership. In that case, he said, pressure groups like unions held powerful sway through their allies in the government.
2. The Anti-American President While our attention is drawn to spectacular domestic news—the government takeover of whole industries—a great deal has been happening overseas, almost all of it bad. Jack Wakeland has been providing me with some updates, which I will draw on extensively below.
The big news is that Turkey—a militantly secular and pro-Western republic since its reform by Mustafa Kemal Ataturk in the early 20th century—is being flipped to the side of the Islamists. A nation that once served as Israel's only real ally in the Muslim world is now planning joint military exercises with Syria, Iran's main client state.
Here are Jack's comments:
"Barack Obama's recent trip to Turkey did nothing to stop that Muslim-majority nation from entering the Arab alliance against Israel. Saying nothing against Ankara's plan to sell weapons to the Syrian-manipulated zombie government of Lebanon did not cause the alliance, but it surely triggered it.
"Turkey's elected Islamic Party has converted Muslim sympathy with anti-Zionist Muslim fanatics in the Arab World into a military cooperation pact with Syria. Turkey's political culture has deteriorated to the point that the elected government is no longer shy about the peculiar position they're putting their country in: a NATO member that wants to join the EU, making an alliance with a state sponsor of terrorism that tried—last year—to build a plutonium production reactor; a state sponsor of terrorism that is allied with Iran and North Korea and shares missile and nuclear technology with those dictatorships.
"Turkey's elected Islamic Party has just served notice to the world that they intend to use, as a part of their foreign policy, the Koranic passages directing true believers to murder and pillage. This is bad news for the liberals of Lebanon; bad news for Israel; bad news for NATO; bad news for the United States; bad news for Georgia and Ukraine and even Poland. This is a big, bad, ugly development for the Middle East.
"If Mustafa Kemal Ataturk were alive today, Turkey's president, Abdullah Gul, wouldn't be.
"The US government suspended all normal contacts with Syria in response to that government's assassination [in 2005] of liberal Lebanese Prime Minister Rafik Hariri. Now that the trial of four Syrian leaders for the murder has collapsed, the Obama administration is looking into a restoration of full diplomatic relations with Syria."
On the issue of Lebanon, Jack provided me with another link to an article describing how the UN's quashing of its own investigation into Hariri's assassination led to the release of the pro-Syrian conspirators, and how that is likely to cause the Lebanese government to come under Hezbollah control.
The generals were arrested after the first UN investigator, Detlev Mehlis, said the complexity of the assassination plot suggested a role by Syrian intelligence services and its pro-Syria Lebanese counterpart. An early draft of a report he issued in 2005 linked Syrian President Bashar Assad's inner circle, but the two investigators who succeeded him did not repeat the accusations and said Syria was cooperating.
Now back to Jack:
"Speaking of diplomacy, The Obama administration is pursuing a surreal agreement with Iran for free passage of troops, war material, and supplies through Iran to Afghanistan—as if an Iranian route would be more secure than the present Pakistani routes that are currently under attack by Pashtun Taliban militias.
"How is one's mind to integrate the cacophony of all these disjointed, free-wheeling, foreign policy shifts in areas of the world as delicate, convoluted, and war-torn as the Middle East and Central Asia? Only one way: the Obama administration is rapidly, purposely, and substantially reducing US influence throughout the Muslim world.
"Short of immediately scuttling the US military missions in Iraq and Afghanistan, Obama is retreating throughout the Muslim World in the most precipitous possible way. Any country that was an enemy of George Bush's Global War on Terrorism is now being treated as a friend (Iran and Syria); any country that was a friend of George Bush's Global War on Terrorism is now being treated as an enemy (Pakistan and Israel).
"In Obama's new foreign policy regional security will apparently be left up to the worst, most criminally aggressive local governments. The policy has no place for Israel, no place for the United States, and no place for any other Western influence."
As Jack indicates, all of this was set off by Obama's speech in Turkey earlier this month, which sent a message of weakness that our enemies are now rapidly exploiting. Below, I link to and excerpt from an overview of that speech and its appeasing message.
"Obama Speech in Turkey Heralds End of 'Axis of Evil' Era," Zvi Bar'el, Haaretz, April 7 Obama, in contrast to declarations he made before he was elected, has chosen to follow the policy of his predecessors by picking a conciliatory strategy toward Turkey rather than one involving ethical complexities. As the US shifts its focus from Iraq to winning the war in Afghanistan, the alliance with Turkey and dialogue with Iran are essential components in implementing this program….
Iran, meanwhile, received an additional invitation from Obama on Monday to "play its rightful role in the community of nations," in other words telling it to become an equal among equals. But Obama refrained from stipulating in his speech that Iran should stop its uranium enrichment program, referring explicitly only to nuclear weapons. "No one is served by the spread of nuclear weapons," Obama said, hinting also at Israel's potential nuclear capabilities….
It appears that the era of dividing states along "moderate and "extreme" lines and between good Islam and "the axis of evil" is over….
Obama, who was on his first visit as president to a Muslim state, also sent a sharp and clear message to Israel and the Palestinians. He said that the roadmap peace plan, the Annapolis process, and especially the principle of two states for two people are still valid, even if the new Israeli government does not see itself as bound by Annapolis.
3. Bible Belt Atheism Unfortunately, some very prominent Objectivist intellectuals have to share some of the blame for the current political disaster. I say that with reluctance, because they have been doing a much better job recently with their response to the financial crisis, the bailouts, and even the tea parties, which they have generally applauded. Yet many of them advocated letting the Democrats take power, which has helped to produce the very domestic and foreign policy disasters they are now fighting.
Their argument, stated most strongly during the elections in 2006, was that it was necessary to vote the Democrats into power in order to prevent the Republicans from imposing a "theocracy." According to this theory, the left was weak and had run out of power, so that "the only real threat to the country now, the only political evil comparable to or even greater than the threat once posed by Soviet Communism, is religion."
Such statements look even more foolish in retrospect than they did at the time. Socialism has certainly shown itself to be more dangerous than it may have seemed, and we have only begun to see the disastrous consequences of the left's foreign policy. As for religion, the article below—about an upsurge in openly identified atheism in the Bible Belt—is another example of its declining power, which is the continuation of an established, long-term trend.
Fighting off the phantom threat of religion was definitely not worth ending up with the Obama administration and a Democratic leadership with nearly unstoppable power in both Houses in Congress.
"More Atheists Shout It from the Rooftops," Laurie Goodstein, New York Times, April 26 Two months after the local atheist organization here put up a billboard saying "Don't Believe in God? You Are Not Alone," the group's 13 board members met in Laura and Alex Kasman's living room to grapple with the fallout.
The problem was not that the group, the Secular Humanists of the Lowcountry, had attracted an outpouring of hostility. It was the opposite. An overflow audience of more than 100 had showed up for their most recent public symposium, and the board members discussed whether it was time to find a larger place….
More than ever, America's atheists are linking up and speaking out—even here in South Carolina, home to Bob Jones University, blue laws and a legislature that last year unanimously approved a Christian license plate embossed with a cross, a stained glass window and the words "I Believe" (a move blocked by a judge and now headed for trial)….
Polls show that the ranks of atheists are growing. The American Religious Identification Survey, a major study released last month, found that those who claimed "no religion" were the only demographic group that grew in all 50 states in the last 18 years.
Nationally, the "nones" in the population nearly doubled, to 15 percent in 2008 from 8 percent in 1990. In South Carolina, they more than tripled, to 10 percent from 3 percent.
4. "A Somali Pirate-Style Raid on Wealth Creators" The Wall Street Journal recently published a good article arguing that the question of big government versus small government should be presented as a moral issue.
There is a major cultural schism developing in America. But it's not over abortion, same-sex marriage or home schooling, as important as these issues are. The new divide centers on free enterprise—the principle at the core of American culture.
Despite President Barack Obama's early personal popularity, we can see the beginnings of this schism in the "tea parties" that have sprung up around the country. In these grass-roots protests, hundreds of thousands of ordinary Americans have joined together to make public their opposition to government deficits, unaccountable bureaucratic power, and a sense that the government is too willing to prop up those who engaged in corporate malfeasance and mortgage fraud….
Advocates of free enterprise must learn from the growing grass-roots protests, and make the moral case for freedom and entrepreneurship. They have to declare that it is a moral issue to confiscate more income from the minority simply because the government can. It's also a moral issue to lower the rewards for entrepreneurial success, and to spend what we don't have without regard for our children's future.
This article does not do an especially good job of defining or arguing for the deeper moral issues at stake, but I do quite like its title, "The Real Culture War Is Over Capitalism," since this carries the additional implication that the right should set aside its religious agenda to focus on a secular moral crusade for the free market.
This is in line with an idea that I have been working on, which is that the "tea party" movement should look on itself, not as a mere political movement, but as a moral reform movement. Think of it as a sort of Temperance Movement seeking to sober up politicians who have become drunk on government power and taxpayer money.
But that is a topic for a future article. In the meantime, I thought I would save the main link in this item for an expression of opposition to statism that is notable for three reasons.
First, it comes from a figure not previously known for taking political stands, which indicates the extent to which the current crisis is mobilizing people who are new to political activism. Second, it comes from Britain, indicating that the rebellion against statism is not just an American phenomenon. (Michelle Malkin describes it as "going Galt in Britain.") Third, it is stated in forceful terms—comparing Gordon Brown's proposed tax increase to a Somali pirate raid—which reveal the moral fire on this issue that needs to be encouraged and given ammunition and direction.
"The Last Thing This Country Needs Is a Pirate Raid on the Wealth Creators Who Still Dare Navigate Our Stormy Waters," Andrew Lloyd Webber, London Daily Mail, April 27 The proposed top rate of income tax is not 50 per cent. It is 50 per cent plus 1.5 per cent national insurance paid by employees plus 13.3 per cent paid by employers. That's not 50 per cent. Two years from now, Britain will have the highest tax rate on earned income of any developed country.
I write this article because I fear the inevitable exodus of the talent that can dig us out of the hole we find ourselves in….
The extraordinary thing is that, back in 1974, even Denis "squeeze the rich until the pips squeak" Healey realized that you can't crush these talented people—who work much of the year abroad and away from their families—like specimen butterflies….
More than ever before we need to keep high-flying professionals in the UK. We can't, as we have done in the past, dump on them through penal personal taxation….
The next few years are going to be horrendous in the UK. The last thing we need is a Somali pirate-style raid on the few wealth creators who still dare to navigate Britain's gale-force waters.
5. "This Is a Civilization That Deserves Admiration" The item above provides a glimmer of good news on the economic battle against a government takeover of the economy. On foreign policy, an unexpected glimmer of good news comes from the Middle East Media Research Institute's translation of remarks by a Saudi intellectual, Ibrahim Al-Buleihi, in praise of Western Civilization and its roots in pro-reason Greek philosophy.
In the heart of a theocratic Muslim kingdom, it is possible to grasp the nature and value of the West's unique achievement, and to want to emulate it. That is a reminder that the cause of reason and liberty will not be lost, whatever the degree of turmoil we are about to go through.
"Saudi Intellectual: Western Civilization Has Liberated Mankind," Middle East Media Research Institute, April 29 Just look around…and you will notice that everything beautiful in our life has been produced by Western civilization: even the pen that you are holding in your hand, the recording instrument in front of you, the light in this room, and the journal in which you work, and many innumerable amenities, which are like miracles for the ancient civilizations.… If it were not for the accomplishments of the West, our lives would have been barren. I only look objectively and value justly what I see and express it honestly. Whoever does not admire great beauty is a person who lacks sensitivity, taste, and observation. Western civilization has reached the summit of science and technology. It has achieved knowledge, skills, and new discoveries, as no previous civilization before it. The accomplishments of Western civilization cover all areas of life: methods of organization, politics, ethics, economics, and human rights. It is our obligation to acknowledge its amazing excellence. Indeed, this is a civilization that deserves admiration.… The horrible backwardness in which some nations live is the inevitable result of their refusal to accept this [abundance of Western ideas and visions] while taking refuge in denial and arrogance….
There is no one reason, there are a thousand reasons, which all induce me to admire the West and emphasize its absolute excellence in all matters of life. Western civilization is the only civilization that liberated man from his illusions and shackles; it recognized his individuality and provided him with capabilities and opportunities to cultivate himself and realize his aspirations. [Western civilization] humanized political authority and established mechanisms to guarantee relative equality and relative justice and to prevent injustice and to alleviate aggression. This does not mean that this is a flawless civilization; indeed, it is full of deficiencies. Yet it is the greatest which man has achieved throughout history. [Before the advent of Western civilization,] humanity was in the shackles of tyranny, impotence, poverty, injustice, disease, and wretchedness….
Western civilization is its own product and it is not indebted to any previous civilization except for the Greek one.… It has revived the Greek achievements in the fields of philosophy, science, literature, politics, society, human dignity, and veneration of reason, while recognizing its shortcomings and illusions and stressing its continuous need for criticism, review and correction….
When we review the names of Muslim philosophers and scholars whose contribution to the West is pointed out by Western writers, such as Ibn Rushd, Ibn Al-Haitham, Ibn Sina, Al-Farbi, Al-Razi, Al-Khwarizmi, and their likes, we find that all of them were disciples of the Greek culture and they were individuals who were outside the [Islamic] mainstream. They were and continue to be unrecognized in our culture. We even burned their books, harassed them, [and] warned against them, and we continue to look at them with suspicion and aversion. How can we then take pride in people from whom we kept our distance and whose thought we rejected?
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