Crimes Against Liberty (26 page)

Federal Reserve chairman Ben Bernanke proposed less severe but broader cuts for all banker salaries—even in banks that didn’t receive bailout money—and for U.S. subsidiaries of foreign companies. The Fed, in its beneficence, would allow banks to set their own pay but would reserve veto power over the compensation if it determined the soundness of the bank was threatened. This rule would cover tens of thousands of bank employees. Obama, commenting on the move, said, “I’ve always believed that our system of free enterprise works best when it rewards hard work. But it does offend our values when executives of big financial firms—firms that are struggling—pay themselves huge bonuses even as they continue to rely on taxpayer assistance to stay afloat.”
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How convenient for him to be referring only to firms relying on taxpayer assistance. Did anyone actually believe it didn’t offend his values when
any
private sector executives (other than his friends) received large bonuses? And how about those whose values are offended by the government dictating salaries for private employees?

The White House had earlier indicated it would seek new powers for the Securities and Exchange Commission to force public companies to allow their shareholders to vote on executive pay. It said it would name a “special master” to monitor compensation plans for firms that receive “exceptional assistance.”
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It appears Senator Christopher Dodd’s financial overhaul bill, if adopted, would partly achieve Obama’s goal. It would require an annual nonbinding vote from shareholders of public companies to approve executive compensation—a so-called “say on pay” vote. The bill would also require companies to disclose the relationship between executive compensation and financial performance.
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An amendment was attached to Dodd’s proposed bill in March 2010 that included, among other provisions, “internal pay equity” disclosure rules for publicly traded companies. Now the companies would be required to disclose the median annual total compensation of all employees other than the CEO; the annual total compensation of the CEO, and the ratio of the median employee annual total compensation to that of the CEO.
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It is no secret that the class-warfare statists intend these provisions to affect actual compensation of employees of these firms.

The administration, apparently hedging its bets in case Dodd’s bill failed, went the regulatory route. In December 2009 the SEC approved rules to require all publicly held companies—not just financial firms—to reveal more information about their executive compensation practices,
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perhaps to get the government’s foot in the door toward ultimately assuming control over public company compensation. SEC chairman Mary L. Schapiro said, “By adopting these rules, we will improve the disclosure around risk, compensation, and corporate governance, thereby increasing accountability and directly benefiting investors.” “Accountability,” she said, “is impossible without transparency.”
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The
New York Times’
Floyd Norris hinted that the disclosure rule might actually affect compensation levels. Requiring companies to disclose compensation policies that increase the risk of companies having to take large losses, according to Norris, could cause firms to think twice about the compensation and “being forced to think about it could produce needed changes in policies.”
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The SEC also approved a rule to require companies to disclose whether the company considers diversity in its board nomination process.

Obama also engaged in serious talks about changing compensation practices across the financial services industry, including at companies that did not receive TARP funds. The administration’s rationale was that as long as the government is regulating these firms, it should have the right to “regulate” their employees’ compensation. After all, they can always argue—and have argued—that financial firms’ compensation structure could threaten the “safety and soundness” of the institution.

Of course, the administration denied its statist intentions for the proposal. One official said, “This is not going to be about capping compensation or micro-management. It will be about understanding what is the best way to align compensation with sound risk management and long-term creation.”
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But given an administration that regards profits as immoral, what would stop it from micromanaging and capping compensation once invested with the regulatory power to do so? And the Dodd financial overhaul bill did employ the very rationale of “safety and soundness” to include a compensation provision that applies only to financial firms. The bill would make it an unsafe and unsound practice for the holding companies of depository institutions to provide excessive compensation that could lead to material financial loss, and directs bank regulators to prohibit such unsafe and unsound practices. It would also give bank regulators the authority to impose higher capital charges if an institution’s compensation practices “pose risk of harm.”
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The Cato Institute’s Daniel J. Mitchell expressed concern that the administration’s imposition of limits on executive pay could indeed lead to a slippery slope whereby the government might attempt to assert control over private salaries as well. Mitchell said, “I fear as politicians get a taste for interfering with executive pay for one little subset of companies where you actually could have sympathy for the approach, what’s going to stop them from saying, ‘Hey, this was popular. Let’s do a little demagoguery before the next election and go after all the CEOs.’”
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Obama claims to be a constitutional scholar, but his actions as president show a marked indifference toward legal niceties. Once ensconced in the Oval Office, he no longer seemed interested in concepts like separation of powers and checks and balances. Although he campaigned heavily on promises to roll back the alleged expansion of executive power under President Bush, Obama has exploited his position to steamroll over Congress’s authority, bully ostensibly independent bodies to bend to his will, and to preside over a massive assault on the private sector. This is definitely “change,” but it’s not at all the change many Americans anticipated when they cast their ballots for Obama.

Chapter Seven

THE DICTATOR

CRIMES AGAINST THE CONSTITUTION, RULE OF LAW, AND CIVIL SOCIETY, PART 2

I
n March 2009, top government representatives from the United States and Europe met at the G-20 summit in London to discuss the global financial crisis. The conference produced a joint commitment to boost International Monetary Fund resources by $750 billion to a total of $1 trillion, with the United States contributing $140 billion.

Not only did Obama summarily agree to this plan without consulting Congress, he flouted the express will of Congress. The IMF was originally established as a lender of last resort to protect nations against balance of trade deficits, but since the world monetary system moved away from the gold standard, the IMF has increasingly focused on redistributing wealth to poorer nations. Along these lines, the London agreement will increase the IMF’s foreign aid role and America’s participation in it—even though for twelve years Congress had been resisting IMF pressure to do so. As the
Wall Street Journal
editorialized, this additional $140 billion will “amount to a massive expansion in U.S. foreign aid. We can see why the G-20 applauded. But this is the opposite of the ‘transparency’ this Administration has promised, and someone on Capitol Hill should blow the whistle.”
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Obama quickly began fulfilling his unauthorized foreign aid commitment via executive signing statements—ironically, a practice for which the Left had fiercely denounced President Bush. However, while Bush used signing statements simply to express objections to bills or parts of bills he was signing, Obama intended his signing statements to have more teeth. In June 2009 Obama declared he didn’t intend to comply with provisions in a war spending bill that impose conditions on aid given to the World Bank and IMF. Employing Orwellian logic, Obama argued, in effect, that foreign aid fell under the rubric of foreign policy, over which, he implied, he had near-plenary authority.

He insisted he wasn’t “skirting the law,” but defending his executive powers, and he wouldn’t permit the bill to interfere with his authority to conduct foreign policy and negotiate with other governments—as if he had carte blanche authority and the power of the purse to hand out any amount of U.S. money to any nation.
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Even four senior House Democrats—David Obey, Barney Frank, Nita Lowey, and Gregory Meeks—wrote a protest letter to Obama stating they were “surprised” and “chagrined” by his action.

Obama also used signing statements to place his administration above the law with frivolous executive privilege claims. After Obama signed a bill designed to curb financial fraud and created an independent panel (the “Pecora Commission”) with subpoena power to investigate the “root causes” of the financial collapse, he immediately issued a signing statement reserving the right to assert executive privilege over any subpoenaed documents.
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That is, his passion for uncovering the truth stopped short of disclosing any information that might embarrass his administration.

A TRANSFORMATIONAL ADMINISTRATION

Obama liberals are intent not just on remaking government, but on reordering many aspects of our society and culture, from the type of transportation and energy we use, to the food we eat and the condiments with which we season it, to how much time we spend outdoors. They almost always use an environmental excuse to justify these power grabs.

Transportation secretary Ray LaHood is a prime example. As the
Daily Telegraph
reported in 2010, “In March, Mr Obama’s transportation secretary, Ray LaHood, announced a policy ‘sea change’ that gives biking and walking projects the same importance as automobiles in transportation planning and the selection of projects for federal money.” And LaHood had already put your tax money where his mouth is, more than doubling federal spending on biking and walking initiatives to $1.2 billion.
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What’s more, LaHood, who once bragged that he had joined a “transformational administration,” clearly intends to strictly enforce this risible policy, having announced his explicit intention to “coerce people out of their cars.”
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When asked how he would respond to conservative criticism that this is another example of government intrusion in people’s lives, LaHood flippantly replied, “About everything we do around here is government intrusion in people’s lives. So have at it.”
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LaHood’s unbridled arrogance, including his declaration that “I think we can change people’s behavior,” caught the attention of columnist George Will, who fittingly dubbed him the “Secretary of Behavior Modification.”
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LaHood’s bizarre jihad against traditional modes of transportation extended beyond cars. The airline industry was outraged that $8 billion of federal stimulus money was allocated for high-speed rail projects while air traffic control modernization got a goose egg. Making matters worse, these rail projects were hardly “shovel ready” and may not be in operation for decades, but the next-generation air-traffic control system could reduce flight delays and increase air-travel capacity almost immediately. When airline industry members asked LaHood about the rail projects at an FAA conference, he responded, “Let me give you a little bit of political advice: Don’t be against the high-speed rail. It’s coming to America. This is the president’s vision, this is the vice president’s vision, this is America’s vision. . . . We’re going to get into the high-speed rail business. People want alternatives.... So get with the program.”
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The Great and Powerful Oz had spoken.

Obama himself clearly aims to insert government into the most minute areas of our personal lives, having once declared, “We can’t drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all times . . . and then just expect that other countries are going to say OK. . . . That’s not leadership. That’s not going to happen.”
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In line with his own enthusiasm for behavior modification, in April 2010, Obama launched the “America’s Great Outdoors” program to conserve land and encourage more Americans to spend time outside. Obama laughably argued the program was an integral part of economic growth because it would allegedly create jobs.
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But in truth, it was just another one of Obama’s intrusive, pie-in-the-sky green schemes. Those tempted to dismiss the initiative as a harmless presidential pet project should consider this question: if it is a proper function of government to put people back in touch with nature, is there anything beyond government’s reach?