George Soros Wants to Abrogate the Constitution
In a speech last week at MIT, hedge-fund manager George Soros openly advocated abrogating the U.S. Constitution to pursue his recommended remedies for the worldwide financial crisis.
FDR used similar arguments to arrogate unprecedented power, bursting all constitutional constraints in the process. This power was then wielded to turn a difficult recession and stock-market crash into a fifteen-year depression as world trade was devastated by protectionist tariffs, tailors were put on trial for charging too little for pressing a pair of pants, crops were forcibly plowed under in vain attempts to raise farm prices as millions went hungry, and the vitiated free market was rendered helpless to correct its own errors. Despite all evidence to the contrary, many historians and most educators since have promulgated the myth that FDR saved the country from the depredations of unfettered capitalism.
History is repeating itself with accelerating fury.
Mounting a broad assault on the free market legacies of Ronald Reagan and Margaret Thatcher, Mr. Soros summarized his historical arguments in terms ready-made for any public school educated voter. "Markets left to their own devices created one crisis after another. Each time the regulators intervened and solved the problem. Periodic financial crises served as successful tests of the misconception of market fundamentalism.”
Laying the blame for the current meltdown squarely on the loose monetary policies of Alan Greenspan, abetted by the securitization of mortgages and various synthetic instruments that didn't take into account their own influence on housing prices, Mr. Soros managed to opine for over an hour without once mentioning the role played by Government Sponsored Entities (GSEs) like Fannie Mae and Freddie Mac. How massive injections of fiat currency feeding an insatiable demand for mountains of risky mortgages by politically-driven and taxpayer guaranteed GSEs qualifies as “markets left to their own devices” was left as a mystery for the listener. Ditto for role the FDIC played with its ill-conceived and poorly implemented bank deposit insurance program that unleashed the Savings and Loan debacle, another supposed example of the failure of capitalism.
Calling for “forcefully changing the terms of contracts ex post facto” by resetting the principal value of mortgages to 80% of a home’s current market value, Mr. Soros noted that “there is one small problem.” No, it’s not the challenge of determining what the “fair” value of a particular home might be when negotiating with a counterparty wielding a gun. The small problem, Mr. Soros laments, is that “this is actually unconstitutional.” He went on to conclude with unconcealed glee that “it needs to be done and it can be done, but it’s going to be very difficult.”
Surmounting constitutional constraints may be easier than Mr. Soros thinks. The process has already started with nary a whimper from either political party as the questionable bailout programs recently rushed through Congress metastasize beyond recognition. Banks that have been recapitalized with taxpayer money to cover up bad loans are now being strong armed to give out – more bad loans. A bubble fueled by runaway money creation is going to be fixed with – more runaway money creation. The same foxes in Congress who were guarding the Fannie and Freddie henhouse are being touted by their media enablers as the saviors of our economy. Get ready for a series of hearings and show trials designed to cow the innocent along with the guilty across corporate America, sure to be a ratings hit. This runaway train can only accelerate once the entire apparatus of government gets turned over to unchecked single party control a few months from now.
It is perhaps not remarkable that every major crisis throughout our nation’s history, whether financial or military, has been met with calls to trample the Constitution. And in large measure this is exactly what has happened as each generation forgets that the prior constraints ever existed.
If our democracy ultimately dies by its own hand leaving us yearning for a strong man to save us from the howling mob - the fate of every democracy in history – the deathblow can only come from one source. No external enemy can possibly match the destruction unleashed by the erosion of the checks and balances our founders wisely gave us to protect us from ourselves.