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Privatizing Police And Fire Departments, Part II

August 10, 2010 By: Phred Category: Uncategorized

I wanted to take some time and point out several of the things that I left out of yesterday’s article.

One important aspect of the model that I presented yesterday is the idea that insurance companies would likely bundle privately provided police and fire protection with homeowners insurance.  This would allow them to provide a basic level of a “public good” to the populace while charging paying customers extra for premium services.

A free market for the provision of police and fire protection could achieve many of the benefits of collectivization which exist in the current environment.  The main difference is that this collectivization would be voluntary, as opposed to the forced collectivization which is the main feature in the current model.  Furthermore, voluntary collectivization would likely occur within much smaller geographical areas than is currently the case, allowing neighborhoods and small communities to take advantage of economies of scale.

We can apply the homeowners insurance model presented yesterday to small collective units, such as neighborhoods.  Currently, there are a growing number of homeowners’ associations throughout the country which provide many of the same services which are currently provided by municipal governments.  These associations are able to provide residents with services like garbage collection, water, gyms, zoning regulations, and even fire protection and security services.  Members pay monthly or annual fees to their homeowner’s associations and are given such services in return.  In contrast to governments, homeowners’ association has every incentive to purchase services from the most cost effective provider.

Thus, it is not difficult to see that homeowners associations would be a great vehicle for expanding the number of people served by privatized police and fire departments.  In fact, forming homeowners’ associations within existing neighborhoods and apartment complexes is an excellent way for poorer people to pool resources in order to provide security and fire protection.

A great resource for those interested in the history of the provision of “public goods” by non-governmental entities is “The Voluntary City,” a book put out by the Independent Institute. This book is fascinating and leaves the reader wondering why we were never taught any of this in school (until the reader realizes that he went to a government school that had no reason to teach students that non-governmental entities can do good things).  The book deals somewhat with private law enforcement, but it also goes into great detail about the history of homeowners’ associations and the types and scopes of services that they have provided (and continue to provide).

The other major aspect that I neglected yesterday was the fact that municipally funded police and fire departments are relatively new phenomena.  The first government run municipal police force in the world was founded in London in the mid-1700′s.  This first police force was founded in a city which had managed to exist without a government police force–and without decaying into chaos for over 1500 years.

The oldest government run police force in the United States was founded in Boston in 1838–208 years after the founding of the city.  Boston has had a government police force for much less time than it went without one. Before the creation of the city run police force, Bostonians organized night watch groups, volunteer police departments, and even relied on the work of private detectives.

Surely, there are many major differences between the time before the 1830′s and today.  Thus, it would be unlikely that eliminating governmental support for and control of Boston’s (or any other city’s) police force would result in policing being undertaken in a manner similar to how is was done 200 years ago.

But, technological advances and a long and unbroken history of effective private security companies must provide us with optimism.  There are currently more private police officers than there are governmental police officers. Some of these police work as security officers, while many others work as private detectives.  The point is that they exist and they would continue to exist in a world where police provision was completely privatized.

Georgetown Law professor John Hasnas has done some interesting work on this subject.  His main point: look around at what goes on in the real world before saying that these ideas are not possible. To quote Hasnas:

“The proper response to the claim that government must provide police services is: look around. I work at a University that supplies its own campus police force. On my drive in, I pass a privately operated armored car that transports currency and other valuable items for banks and businesses. When I go downtown, I enter buildings that are serviced by private security companies that require me to sign in before entering. I shop at malls and department stores patrolled by their own private guards. While in the mall, I occasionally browse in the Security Zone store that sells personal and home protection equipment. I converse with attorneys and, once in a while with a disgruntled spouse or worried parent, who employ private detective agencies to perform investigations for them. I write books about how the United States Federal government coerces private corporations into performing criminal investigations for it.24 When I was younger, I frequented nightclubs and bars that employed “bouncers.” Although it has never happened to me personally, I know people who have been contacted by private debt collection agencies or have been visited by repo men. Once in a while, I meet people who are almost as important as rock stars and travel with their own bodyguards. At the end of the day, I return home to my community that has its own neighborhood watch. I may be missing something, but I haven’t noticed any of these agencies engaging in acts of violent aggression to eliminate their
competitors.

Ah, but that is because the government police force is in the background making sure that none of these private agencies step out of line, the supporters of government contend. Really? How does that explain London before the Bow Street Runners? The New York City police force was not created until 1845. The Boston Police Department, which describes itself as “the first paid, professional public safety department in the country”25 traces its history back only to 1838. What kept the non-political police services in line before these dates?”"

We can take Hasnas’ advice and “look around” to see the same thing with regards to private fire departments.  There are many volunteer fire departments in the United States.  New York City did not have a government run and funded municipal fire department until 1865–again, they have survived longer without a government run and funded than they have with one.  The volunteer fire department in Pasadena, Texas serves a population of 150,000 residents (a number that swells to over 1 million in the daytime).  In fact, this volunteer fire department is so well run that the Federal government even trusts them to provide fire protection to NASA’s Johnson Space Center.

While we may be years away from a political atmosphere that will allow serious discussion of privatizing police and fire departments, this is a very realistic idea with centuries of history to back it up.  Furthermore, given the dismal performance of our current police forces, this idea is certainly worth taking into account.

To quote Professor Hasnas once more:

“If a visitor from Mars were asked to identify the least effective method for securing individuals’ persons and property, he might well respond that it would be to select one group of people, give them guns, require all members of society to pay them regardless of the quality of service they render, and invest them with the discretion to employ resources and determine law enforcement priorities however they see fit subject only to the whims of their political paymasters. If asked why he thought that, he might simply point to the Los Angeles or New Orleans or any other big city police department. Are government police really necessary for a peaceful, secure society? Look around. Could a non-political, non-monopolistic system of supplying police services really do worse than its government-supplied counterpart?”

Americanly Yours,

Phred Barnet

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Constitution, Shmonstitution!

August 02, 2010 By: Phred Category: Uncategorized

I have often used the Constitution as one way of justifying my opposition to “laws” passed or proposed by Congress and the President. After all, the US Constitution is touted by many people as the “supreme law of the land.”

But, very few people ever ask why it is the supreme law of the land, or why it even has any power at all, and almost no one asks if it is the supreme law of the land, or if it has any power at all.

In fact, it is the Constitution that calls itself the “supreme Law of the Land.”  So if you ask someone why the Constitution is the supreme law of the land, they are likely to respond by telling you that it says so right there in the Constitution.  If you were to then respond to that by asking what gives the Constitution the right to declare that it is the supreme law of the land, they are likely to respond by saying that it is the supreme law of the land (or something to that same effect). This is what philosophers call a tautological argument, and what everyone else calls a circular argument.

Is the Constitution the supreme law of the land?

Well, the Constitution was a contract.  It was signed by 39 men at the Constitutional Convention (out of the 55 delatates).  Following this, the States held their own votes on ratification in which 1071 men voted in favor of adopting the new Constitution. But, all this tells us is that 1,100 men agreed to the Constitutional Contract.  What of the 16 delegates who refused to sign the Constitution?  What of the hundreds of men who voted against the ratification of the Constitution in their State legislatures.  And most importantly, what of the people who were not given the opportunity to vote for or against the Constitution?

Would it be right to assume that the people who explicitly refused to sign a contract should be forced to abide by it?

But, the vast majority of Americans were not allowed to vote at the time of the Constitution.  This included children, slaves, women, indentured servants, and (in many States) those who did not own property.  They had no say in their local or State governments, and thus no representation in the Constitutional Convention (which—by the way—was authorized by the Congress to amend the Articles of Confederation, not to replace it). The Revolutionary War, which ended less than 5 years before the Constitutional Convention, was fought over the issue of “taxation without representation.”   We must ask ourselves if being governed without one’s consent is substantively different than being taxed without one’s consent/representation.  And no, these arent just the musings of a lone libertarian.  According to recent polling, only 23% of America voters believe that the United States government has the “consent of the governed,” while 62% say that it does not.

Imagine if Verizon offered to provide you with wireless service in exchange for a fee, but for whatever reason, you EXPLICITLY DECLINED to sign the contract (even though most of your neighbors agreed).  Could anyone rightfully assume that Verizon would have the right to declare itself your provider? Of course not.

Lysander Spooner brilliantly pointed out that those who support the Constitution often use the right to vote as a method of justifying the legitimacy of the government. A simple examination of these arguments reveals that this argument falls into a severe tautological trap as well. For eaxmple:

  • If I vote for the winning candidate, I have given my consent to his actions because I have sanctioned his platform. Furthermore, I have given sanction to the Constitution by participating in its institutions.
  • If I vote against the winning candidate, I have still given my consent to the Constitution because the act of voting implies that I agree to the process outlined in the Constitution and that I would expect the losers of the vote to abide by the results of the vote had my candidate of choice won.
  • If I choose not to vote, then I have no right to complain about the government because I have declined to participate in a “valid” process which could have yielded different results had I participated.

Thus, whether or not I vote, and whether or not I vote for the winner, I am giving sanction to the Constitution and to the actions of the government. We can easily see how this is a circular argument, akin to the expression “damned if you dont, damned if you do.” You dont have to be a trained philosopher to realize that this argument isnt a sound one.

Lysander Spooner argued that the Constitution actually bound no one. I agree with his logic, but have reached different conclusions.  I will argue that the Constitution does not bind very many people, but it does bind those (and only those) who have expliticly agreed to the Contract.

The President, Vice President, and members of Congress all take an oath upon entering office.  In doing so, they are explicitly giving their consent to the Constitution and agree to act in accordance to this Constitution.

Thus, the President, Vice President, and Congress are required by law to uphold the Constitution and its provisions, whether or not they like what it says. Failure to do so is a violation of their oath and a violation of the laws of the government that they have explicitly agreed to serve. The President’s oath reads

“I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States.”

Notice the final clause which demands that the President “preserve, protect and defend the Constitution of the United States.” Thus, the President must use his veto power whenever Congress passes a law that violates the terms of the Constitutional Contract. Failure to do so would be an explicit violation of the President’s oath and grounds for removal from office.

Similarly, the oath of Congressmen reads:

“I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.”

This oath differs in that it requires members of Congress to ” support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same. [Emphasis added]” This is an important difference, as it not requires Congressmen to defend the Constitution against domestic enemies as well. Thus, every member of Congress has a duty to defend the Constitutional Contract from those who wish to undermine it. This must not only include other members of Congress who are bent on undermining the Constitution, but also must include protecting the Constitution against Presidents who rountiely violate the Constitution and their oath to the Constitution.

But if most members of Congress, as well as the President, Vice President, Cabinet, and most of the executive bureaucracy—the people who have taken an oath to the Constitution and who are thus bound by it—refuse to adhere to the Constitution or to their oath, then why should we, the American people have to abide by the Constitution?

Generations of Congresses and Presidents have routinely violated the Constitution and have trampled on the protections afforded in the 1st, 2nd, 4th, 5th, 8th, 9th, 10th, 14th, 15th, and 21st amendments. Their actions have rendered many of the above amendments nothing more than “dead letters.” The trampling of the Constitution by the very people who have sworn to protect it is not limited to the Constitutional amendments themselves, but also includes the routine violation of many of the protections contained in the body of the Constitution itself.

I have pointed out that members of Congress and the President have taken oaths requiring adherence to the Constitution. We The People, on the other hand have not. This fact alone leads to the logical conclusion that the Constitution does not apply to those of us who have not declared allegiance to it. And yet, many of those who ahve taken official oaths to the Constitution routinely violate it. Thus, the question must again be asked: if most members of Congress, as well as the President, Vice President, Cabinet, and most of the executive bureaucracy—the people who have taken an oath to the Constitution and who are thus bound by it—refuse to adhere to the Constitution or to their oath, then why should we, the American people have to abide by the Constitution?

In addition to Presidents and the Congress, members of the military take oaths of loyalty to protect and defend the Constitution as well:

“I, [name], do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic [emphasis added]; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.”

The military oath not only requires that members of the armed services protect America against foreign invasion, but also requires that these members protect the Constitution from domestic enemies (those who have sworn allegiance to the Constitution but violate it) as well.

But, instead of taking their oaths seriously and defending the Constitution which they have sowrn to protect, Presidents, members of Congress, and members of the military have been much more willing to use their authority to force the American people to live under an unconstitutional (and nonconsensual) government.

I ask again: If the government refuses to abide by the Constitution, why should we?

The answer is that we shouldnt.

How long will we continue to allow Congress to rule over us using a “do as we say, not as we do” logic? The truth is that this has gone on long enough.

But, even if Congress, the President, and everyone else within the goverment followed their oaths perfectly, this would not be reason enough to follow their laws. The above statement stems fromt he simple fact that the vast majority of the American people have never sworn an oath of allegiance to the Constitution. A simple example can be used to understand why we are not bound to the Constitution—even if it is perfectly followed. Imagine that someone declares himself to be the new owner of your car without your permission. This man has no legal or rightful claim to your car, but that doesnt stop him from claiming ownership. However, this man is “nice enough” to allow you to use the car whenever you want. Thus, his “ownership” of your car doesnt interefere with your right to use the car in any way. But, does this mean that you should allow him to get away with the crime of claiming false ownership over your car? Of course not. It is true that while he still “allowed” you to drive your car whenever and wherever you wanted you probably wouldnt rebel against him, but that surely wouldnt meant hat you have accepted his claim of ownership over your car.

The vast majority of the readers of this article have taken no oath of allegiance to the Constitution or the the US Government (which itself is guilty of repeatedly violating the Constitution).  I have never read the words of the oath aloud, I have never signed an oath of loyalty to the United States or to the Constitution.  How then can anyone argue that this document binds those of us who have not taken a loyalty oath?

The Constitution itself was nothing more than a well orchastrated coup, designed to centralize the powers of the government into the hands of an elite few. The vast majority of citizens (and all of the slaves held) never had a proper say in the approval of the Constitution. And, as Lysander Spooner pointed out, one cannot sign a contract that binds future generations (wouldnt that be the greatest form of taxation without representation that is possible?). Thus, even if the Constitution somehow did bind all those living under it upon its ratification, it binds no one today but those who have explicitly agreed to it.

The Constitution does not bind those of us who have made no such explicit agreement. Thus, we have no legal or moral obligation to follow the “laws” put forth by Congress, the regulations created by Congress or executive agencies, or the executive orders and decrees made by the president.

I am not advising you to break the law—just because the law doesnt bind us does not mean that the government will not employ the use of men with guns to force you to comply with its laws and regultations. Just as an unarmed person would probably be better off (ie, would have a much better chance of survival) turning his wallet over to an armed robber who demanded the wallet, most people will find it easier to comply with the “laws” of the United States government rather than risk their own death or imprisonment.

But, even as we continue to hand the robber our wallet, this does not mean that we should recognize the legitimacy of the robber who demands tribute and restricts the liberty of so many millions of people.  It certainly does not mean that we should be happy to hand the robber our hard earned wealth.

Recognizing the illegitimacy of the Constitution and the United States government is a very important step. The more that people recognize this fact and speak about it, the more obvious it will become to the populace.

A critical mass of Americans is needed to recognize that we do not owe our allegiance to the Constitution.  Furthermore, this critical mass needs to realize that the United States government is illegitimate and that it has no moral right to tax, rule, or restrict the liberty of anyone who has not consented to be ruled.  Only when the people wake up and realize these facts will we be able to restore our lost liberties.

Americanly Yours,

Phred Barnet

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Taxation Is Theft

June 09, 2010 By: Phred Category: Uncategorized

Even most children know that taking things without permission is known as stealing.

There are three methods of acquiring property: homesteading, voluntary exchange, and theft.   The first two methods are just, while theft is inherently unjust.  Taxation involves taking things without permission and must be classified as theft.

However, before deciding on whether or not taxation should be considered theft, the term “taxation” must be defined. I will define taxation as “a government mandated extraction of resources from individuals and/or groups, paid to support the aims of the government.”

The phrase, “mandatory extraction” is the key to understanding why taxation is theft. A mandatory extraction, by nature, is taken through the use of force or coercion, and not paid voluntarily.

Theft is always theft, regardless of who does the theft, how the theft occurs, and what excuses the thief makes to “justify” the theft.  The ONLY exception to this statement is when things are taken as restitution for a prior wrong (for example, if you stole $100 from a person, a court would be justified in taking $100 from you without your permission to repay the victim).

Before I go on, I must address a question that I will surely be asked by many readers: arent taxes special because they are taken by the government in order to provide people with their basic needs?

The answer to this question is a flat NO!

People have certain inalienable rights which should never be violated. It would be wrong of me to kill you, rob you, or physically harm you. Governments are made up of people, and are often created by people to secure their rights. Because governments are made up only of people, governments cannot have any rights that people themselves do not have. It simply does not make sense for this to be untrue. Rights are rights, people are people. Any claims that the government has more rights than anyone else is arguing that some people (the populace) should be considered inferior and subordinate to others (the government).

Taxation involves taking property from people without their consent; taxation is theft.

To quote myself: “If a man with a gun were to demand that unless you pay him 1/3 of your income he would lock you in a cage, he would be guilty of initiating the use of force with the intent of committing theft. It would not matter if the man promised to use this money to pay for a school for your children, for a new highway, or for a missile defense program. Taking things from a person without their permission is, by definition, theft.  Silver-tongued rhetoric may be employed to obscure this fact, but it cannot change it.

Taking something from another person without their permission is always theft and should be condemned as theft. It does not matter what the “reason” or “justification” for this action is.  It does not matter who committed this theft, what was stolen, or how many people told the aggressor to act.”

Examples of taxation as theft

Some of the taxes described below are not traditionally thought of as taxes, but they are taxes—they all meet the above definition of being a government mandated extractions for the purposess of supporting the aims of the government.

A government imposed minimum wage law prevents a person (a sovereign owner of him or herself) from selling their labor to a potential buyer at a mutually agreed upon price. This is theft of a laborer’s future earnings.

A government imposed ban on the sale of alcohol on Sunday prevents a person from selling their justly acquired resources to an individual willing to purchase them. This is theft of profits.

A government imposed business regulation prevents a business from using its justly acquired resources in the manner that it sees fit.  This is theft as well.

A mandatory income tax, imposed under penalty of imprisonment, enforced by men with guns is theft of the fruits of one’s labor. Stealing one’s labor is called slavery. A mandatory income tax makes the government a middle man in all labor transactions, and allows them to claim ownership of property that they did not justly acquire.

A mandatory property tax, imposed under penalty of imprisonment, enforced by men with guns is, by definition, a violation of property rights, and therefore is theft—no explanation should be necessary to prove this. But… property taxes are fees on products that have already been paid for. They are levied on the owner of a property. A mandatory fee on residents for the continued use of their own house is no different than the government charging a person rent to stay on their own property. Remember, a person who justly acquires property becomes the owner of that property, but if a person has to pay the government rent to occupy their own property, who is the real owner of the property, the homeowner, or the government?

A mandatory sales tax, imposed under penalty of imprisonment, enforced by men with guns is theft as well. A mandatory sales tax makes the government a middle man in all retail transactions, and allows them to claim ownership of property that they did not justly acquire. Sure, they can argue that sales taxes are imposed in order to pay for police, but this does not change the fact that this money was acquired through theft, and not through voluntary means. The mafia also forces businesses to pay a protection fee.

I would love to hear your comments on this article, but please dont post a comment or send me an email that says “taxes are necessary because without them, the government could not provide services.” I have addressed this above: taking money from someone without their persmission and then using that money to buy they something that they may or may not want is still taking something without permission [theft].

Please do not send me a message or post a comment telling me that taxation is “voluntary” and not theft because if I disagree with the taxes, I can move somewhere else. When it comes to taxes, we have three choices: paying a tax, or refusing to pay the tax and being arrested by men with guns and then locked in a cage, or leaving one’s family, friends, and property behind to search for a society that does not employ mandatory taxation. This fact should make it clear that taxation is not voluntary. A person who uses coercion to force another person to give up some of their property under threat of violence is guilty of extortion. Governments can have no rights that people do not have, and are therefore just as guilty of extortion as would be a person who acted in this manner.

Furthermore, the argument that if a person does not want to pay taxes, they can renounce their citizenship and leave the US to avoid taxes is false.  The US government does levy a tax on people who give up citizenship:

Expatriation on or after June 17, 2008, may cause an expatriate to be subject to IRC § 877A, which was enacted as part of the Heroes Earnings Assistance and Relief Tax Act (HEART) Act of 2008. Generally, IRC § 877A imposes income tax on the net unrealized gain on property held by certain U.S. citizens or green card holders who terminate their US residency as if their worldwide property had been sold for its fair market value on the day before the expatriation or residency termination (mark-to-market tax). The Treasury Department and IRS have authority to issue regulations under IRC § 877A so further guidance is expected soon, though it has not been released yet.”

Finally, please do not send me a message or post a comment asking how things like schools, roads, or even national defense could be paid for without mandatory taxation. There exists a long history of voluntary provision of all these goods and services (check out this book for more information).

Furthermore, these items could be provided for through taxation in a purely voluntary manner if people were allowed to exercise their natural right to free association and choose their own government. Under voluntary government, taxation could no longer be considered theft, as those who did not wish to pay a tax could simply drop out of one government and sign a contract with another government.

Economist Walter Block argues that under voluntary government, one would have “the right to stay put, on one’s own property, and either to shift alliance to another political entity, or to set up shop as a sovereign on one’s own account.”

Governmental services can be provided on the free market as can any other service; a government would agree to provide certain services (possibly protection, roads, health care, or whatever) in exchange for a fee from a citizen. Thus, the citizen would be paying a purely voluntary tax.

In contrast to voluntary, contractual government, our government does not allow citizens to withdraw their support from the State.  It levies taxes on people without their consent.  These non-consensual taxes must be recognized and exposed for what they are: THEFT.

Americanly Yours,

Phred Barnet

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Withdraw Your Money On April 15th

April 09, 2009 By: Phred Category: Uncategorized

I have already mentioned that on April 15th, there will be “Tea Parties” across the country to protest things like the bailouts and so-called stimulus packages.  Other people will be protesting federal income taxes and the federal governments intrusion of States rights.

I will be attending the protest at the Georgia State Capitol Building.  There are hundreds of such protests across the country.  As I said earlier, organizers are expecting to have at least 5,000-10,000 people at the Atlanta protest meaning that there could be hundreds of thousands–if not more people attending these protests nationwide.

Some people may not be able to attend the protests for whatever reason.  I have come up with an idea that will still allow you to participate.  My idea is simple:  I urge everyone who banks at a government owned bank to remove your money from that bank–ask for cash–on or slightly before April 15th.  The banks owned by our government are listed here.

Withdrawing money from these banks, at least temporarily, will show the government how powerful the anti-socialism movement is.  No, this wont collapse the banking system, but it will send a strong message.  For each dollar taken out of banks, roughly 12 dollars is removed from the system.  According to FDIC guidelines, a bank is considered to be “adequately capitalized” if it has only 8% of its deposits on hand.  A massive withdrawal of money from government owned banks could cause many of these government owned banks to fall below this 8% threshold, causing great embarrassment to the administration, while demonstrating our power to those in charge.

Its just an idea, but I hope that you’ll pass it on.

It is time that we stand up and take our country back.

Americanly Yours,

Phred Barnet

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Car Stuff

March 30, 2009 By: Phred Category: Uncategorized

Today was an interesting day for automaker news.

First, President Obama took an unprecedented step of basically firing a private sector CEO, by requesting that GM CEO Rick Wagoner step down:  “On Friday I was in Washington for a meeting with administration officials.  In the course of that meeting, they requested that I ‘step aside’ as CEO of GM, and so I have.”

GM’s shareholders should have probably fired Wagoner at least 5 years ago.  They didnt.  Who ran the company should have been of no importance to the government.  However, rather than allow GM to go bankrupt, the US government (in its infinite wisdom) gave GM and Chrysler $17,400,000,000 [$17.4 billion] in loans and took an ownership stake in the two companies, effectively nationalizing 2 of the 3 American automakers.

My “favorite” part of this was that the government gave GM their $13,400,000,000 [$13.4 billion] knowing that GM planned on cutting 47,000 American jobs.  That means that we paid GM $285,000 for each job that they cut.  Just wonderful.

But, back to the issue at hand.  My opinion is that President Obama took a dangerous and shameful step by demanding the resignation of a private sector CEO.  One of my main problems with the bailouts besides the economic aspect is that they are impossible to handle objectively.  For example, Bank of America has received $45,000,000,000 [$45 billion] from the government–over 3 times the amount received by GM, yet Bank of America’s CEO Ken Lewis has kept his job.  The same is true at Citigroup and many other government owned banks including JPMorgan Chase and Wells Fargo.

And of course there is Chrysler.  Chrysler was bailed out the same day as GM, and yet their CEO, Bob Nardelli has retained his job and has not been “asked to resign” by President Obama.

The law and our government needs to be objective and treat everyone the same way.  If the government feels that it is necessary to bailout and take over the operations of private companies, then it needs to treat all companies which receive government aid in the same manner.  It is the only fair way.

But the news doesnt end there.  President Obama also made some interesting statements today.  While he did grant Chrysler an additional month’s worth of aid and gave GM an additional two months worth of aid (by the way another example of the government active subjectively, rather than objectively), he signaled that the two companies might be forced to file for bankruptcy.  A government review board went over the restructuring plans submitted by the two companies and decided that they were not viable plans, thus allowing President Obama to take a much needed hard line on the companies.

I tenatively applaud this step.  We just have to see how this works out.

I hope that President Obama is serious when he says that GM and Chrysler will be allowed to fail if they do not take the necessary steps.  Those steps include negotiating further concessions from the labor unions and bondholders.  My guess is that the companies will be able to gain the necessary concessions and then will receive more aid from the government, allowing President Obama to gain credit for taking the hardline approach, but clearing the way for the government to send more taxpayer [or freshly printed] money to these companies.

Americanly Yours,

Phred Barnet

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