Posts tagged Rahm Emanuel

Column on Justice & BP

Justice and BP

Tibor R. Machan

It is very probable that BP and its associated firms will be found guilty of malpractice and assessed major fines and punishment. However, this hasn’t yet happened so it’s premature to punish BP at this point. Nor is it the role of the President of the U.S. to act as prosecutor, judge and jury in this case or any other. Where is due process in all of what he and Congress have been doing lately? Or has an anti-British or anti-business attitude wiped out the need for justice? Urging or imploring–even attempting to persuade–BP to set up the $20 billion fund could be a good idea but treating this as demanded by justice is utterly misguided. There should be no compromise of principle even in the heat of anger and the grips of outrage and sorrow. It is imperative to wait until the verdict is in.

Many moons ago President Richard Nixon lashed out at Charles Manson after he learned of the carnage but before the law could get at the mass murderer. The president told reporters that Manson was “guilty, directly or indirectly of eight murders.” Manson’s defense team then went on to argue in court that such a statement by the president undermined the possibility of a fair trial. The defense motioned for a mistrial, insisting that the charges against Manson be dropped but the judge, Older, denied it.
Interestingly the following day in court Manson displayed a paper, headlined “Manson Guilty, Nixon Declares,” presumably in the hopes of producing a mistrial but instead the judge questioned jurors concerning their reactions and determined that they could remain impartial. He did sentence one of the attorneys to three nights in jail as punishment for leaving the paper in Manson’s reach.

Why mention all this? A case like the oil spill will generate a long and intricate legal process and many of those who have suffered from the explosion and the spill will need to have it heard and decided expeditiously and President Obama’s and Congress’ treatment of BP could very well pose obstacles to a speedy resolution and due compensation. It is doubtful that this would be welcome, especially by those most effected by the catastrophe.

It seems, however, that politicians cannot resist capitalizing on events like this one. Just as White House Chief of Staff Rahm Emanuel suggested, do not let a disaster go unexploited. However, there can be serious downside to this attitude, since rushing to judgment can backfire and BP’s attorneys, who would naturally want to lessen any losses this disaster will cost the company, could exploit it in the course of the trials sure to follow. Nor need one view this cynically–it is, first of all, the job of those attorney’s to see to it that BP gets what amounts to a legal fair shake; second, objectively speaking, it is still to be determined what and who is responsible for what happened.

Yes, one would wish to be able to point a finger with no complications but that could turn out to be a pipe dream here. However painful this is, especially to the families of those 11 who perished in the initial explosion and to all those who are suffering from the impact of the spill throughout the Gulf region, justice cannot be achieved without examining the situation in full. And that could take time.

Sadly, many, including most of the mainstream media, are more interested in a show of strong feelings from President Obama instead of warning him about muddying the legal waters of this case. In the long run, however, it will be far more important that true justice be done instead of publicly parading sincere yet very possibly badly targeted emotions.

One may suppose that those who have suffered from all this will be impervious to all such niceties as due process of law but even in the most extreme circumstances, as after a plane crash and a building or bridge collapse, the human thing to do is to remain as civilized as bearable. Emotions are perfectly appropriate, of course, but they are no substitute for what justice demands.

Column on It wasn’t Capitalism, Stupid

It wasn’t Capitalism, Stupid

Tibor R. Machan

The Sunday, April 25, 2010, issue of The NYT Magazine carried a very clearly written essay by Roger Lowenstein, titled “Cracked Foundation, Fannie and Freddie are Broken. What would fixing them mean?” It further substantiates the point I have been making in numerous columns, essays and scholarly papers over the last several months, namely, that capitalism had nothing to do with the recent financial fiasco. Indeed, it was nearly all due to government meddling, especially with the policy exemplified best by the establishment and operation of Fannie Mae and Freddie Mac, the mortgage giants established by the federal government and recently bailed out by taxpayers at a cost of “upward of $125 billion.”

As Lowenstein put it, “government support of the mortgage twins was among the original sins of the financial crisis. It stemmed from the country’s affection for homeownership–a legacy of a frontier nation that subsidized homesteading for pioneers and encouraged later generations to homestead in the suburbs via the mortgage-interest deduction….”

Now whatever one may think of the sentiments that drove all this, one matter should be crystal clear: laissez-faire capitalism is entirely incompatible with such public policy. Accordingly, all the blather about how market fundamentalism (Paul Krugman’s favorite term) led to the fiasco should by now be admitted to be utterly false.

There is a lot more and anyone who insist that laissez-faire capitalism is the source of our wows would need to come to terms with what the essay makes evident, namely, that government meddling, overt and covert, was the culprit. And it is useful to note that this article is published in The New York Times, a paper that has backed the Krugman explanation all along. Admittedly, the Sunday magazine has, on a few occasions, published essays and notices that put forth a dissenting account, akin to what we get from Lowenstein. The first of those I noticed was published about a year ago, by Professor Niall Ferguson of Harvard University back on May 17, 2009, titled “Diminished Returns,” and made the point up front, namely, “The biggest blunder of all [behind the financial meltdown] had nothing to do with deregulation.”

As I see it, the best objection to government regulations and other type of interference with people’s economic activities rests on the fact that free men and women tend, in the main, to be far more competent at managing their own professional affairs than do government bureaucrats and, even more importantly, have every right to do so without others’ intrusive meddling. Call it interference, call it paternalism, or call it nudging, as I understand human community affairs no one has the proper authority to manage the affairs of other people who haven’t invited them to do so and have done nothing to violate anyone’s rights. That this may now and then result in what some folks consider unwelcome–high risks, high or low prices, lack of full employment or complete financial security–is no excuse for the violation of anyone’s rights. It is, in fact, part and parcel of a regime of individual rights that personal errors, even by large groups, will probably be made now and then. But it is far less damaging than the damage caused by governmental intrusions in the free market place.

Now this line of reasoning is out of fashion in our time because it rests on principles that are defended as true. That’s because in our day pragmatism is very popular. As Rahm Emanuel, Mr. Obama’s Chief of Staff put it in an interview in Bloomberg Businessweek (4/26-5/2, 2010, page 41), “Well, he [Obama] is a pragmatist….He is not wedded to a philosophy or ideology.” (But, quite oddly, Mr. Emenuel adds: “[Obama] sees government mainly for setting rules and then letting the private sector operate within those rules.” Oh yes? Utterly dishonest, this remark.)

Anyway, despite being a principled opponent of government interference in people’s lives, economic or otherwise, I do keep my eyes on the arguments made by more empirical minded thinkers and so I welcome Mr. Lowenstein’s contribution in The Times, indicating that my principled stance has the backing of the more research-minded folks.