Obama’s Largesse Comes at a Very Steep Price

In Creedence Clearwater Revival’s classic 1970 song “Who’ll Stop the Rain,” lead singer John Fogerty laments the seductive but empty nature of government largesse with the lyric, “five-year plans and New Deals, wrapped in golden chains, and I wonder, still I wonder, who’ll stop the rain.” 

Fogerty’s line poignantly illustrates the chimerical nature of government aid to eager citizens.  The golden luster mesmerizes prospective beneficiaries, but that luster inevitably fades, exposing the entrapping tangle of dependency, bureaucracy and inefficiency.  The very golden chains in which the five-year plans and New Deals are wrapped ultimately serve to imprison recipients. 

Ronald Reagan cogently expressed this same concept another way when he observed, “the nine most terrifying words in the English language are, ‘I’m from the government, and I’m here to help.’” 

Redistributionist five-year plans in the Soviet Union only ended up imprisoning the Russian people in a seventy-year nightmare of shortages, forced labor and oppression. 

The New Deal commenced an onslaught of unsustainable government entitlements that are slowly bankrupting America.  As but one illustration, the currently maligned stock market has never witnessed a cumulative loss over any twenty-year period, whereas Social Security will soon collapse under its own demographic weight. 

And now, Barack Obama is bringing Creedence Clearwater Revival’s lyric to life as never before in American history. 

As Exhibit A, consider Obama’s slow-motion bank takeover scheme. 

Initially portrayed as a rescue to financial firms, federal bailout funds are suddenly being used as golden chains to nationalize that sector of the economy.  In an interview this week, Obama Treasury Secretary Timothy Geithner finally confirmed that he may not allow financial firms to voluntarily return government bailout funds – funds that they were forced to accept in the first place. 

In what bizarre world does a democratic government feel entitled to force-feed taxpayer dollars to unwilling banks, then turn around and refuse repayment of those dollars? 

Making matters worse, the Obama Administration this week leaked that it may insist on converting the shares of stock that it holds in several major national banks from preferred stock to common stock.  This may sound like “Inside Baseball” minutiae to those outside the financial world, but it essentially means that Obama seeks to convert stock shares from non-ownership stocks to ownership stocks.  Preferred stock is first in line for dividend payments, but it doesn’t provide voting rights.  In contrast, common stock allows shareholders to actually vote on company policy and management. 

The fact that financial stocks plummeted almost 10% in one day, and the Dow fell 3.5% overall, says all one needs to know about the poisonous nature of Obama’s latest plan to appoint himself, Harry Reid, Nancy Pelosi and Barney Frank as kommissars of the financial sector. 

As Exhibit B, consider the battle over federal bailout funds to states. 

As part of their massive $787 billion “stimulus” bill, Obama and the Pelosi-Reid Congress offered seemingly benevolent funds to individual states.  Within the fine print, however, the legislation created new entitlements that the individual states would be required to maintain even after federal bailout dollars ran out. 

In other words, it’s a perfect example of “five-year plans and New Deals wrapped in golden chains.”  Much like the banks became unwilling participants once they accepted federal dollars, the states would also remain unwilling participants on a permanent basis. 

Fortunately, some state governors such as Texas’s Rick Perry objected to this forced servitude and pledged to oppose expansion of unsustainable entitlement programs created by these finite federal funds.  Predictably, those governors were greeted with scorn from the mainstream media and Obama’s other minions, rather than by the accolades they more rightfully deserved.  Nevertheless, they may serve as a beacon for a growing opposition to these schemes. 

And as Exhibit C, consider the auto bailout. 

Last year, we at the Center for Individual Freedom warned that an auto bailout would not only fail in its stated purpose of setting the Detroit automakers on a correct course, but would merely be the first installment in an endless new corporate welfare abyss.  In addition, we now see that it is also a mechanism by which Obama in his infinite economic prowess could control the American automobile industry.  As a result, Obama has now seen himself fit to terminate GM Chairman and CEO Rick Wagoner and dictate which cars GM will produce, profits be damned. 

These five-year plans and New Deals wrapped in golden chains will once again only result in greater servitude for the productive sectors of American society. 

That is, unless we rise from our stupor and stop the rain.