Extortion

ex·tor·tion: “the crime of obtaining money by the abuse of one’s office or authority.”

If you have ever watched movies such as “The Godfather” or “Goodfellas,” or seen “The Sopranos,” you get a feel for what it’s like to deal with organized crime. Once someone receives a favor or accepts money from the crime family, they can never get away. The Mob keeps extracting their pound of flesh whenever and however they please; once you get in bed with them, you can never get out.

In 2008, the financial system of the United States was in turmoil. Many of our banks and financial institutions were in trouble with too many bad loans on their books. The government felt compelled to intervene into the private sector by actually loaning money through the Troubled Asset Relief Program (TARP) to many of the banks in an effort to rescue them. The mob is there to lend you a hand when you are down and out and always come to you in a friendly, helpful manner: “We are from the government and we are here to help.”

Not all financial institutions needed the help. Some had managed their risks better than others; however, virtually all of the large banks were encouraged (pressured) to take the money anyway, whether they needed it or not. Why? The government believed that it would be dangerous to single out which banks were stronger or weaker than others and felt it was important to assure the American people that the government was not going to let the banking system fail — that indeed the banks were “too big to fail.” To protect the taxpayer, TARP was structured so that the money would be paid back later, with interest, when the financial institutions were stronger and able to pay it back. Just take the money; we are reasonable people and are only here to help you, Mr. Financial Institution.

Fast forward to just over a year later. You are now “mixed up with the family” and can’t get out. The strongest institutions have paid the money back, with interest. Many never took any money in the first place. But that’s too bad because, now the family runs the neighborhood. The government made an unwise move and extended the “rescue” money to some of the large automobile makers. The automobile companies will not be able to pay the money back. They are poorly run businesses that have been in decline for years. They are not a vital part of the American financial system, and were never a part of the original intent of the TARP program. But since they are family members, and affiliated with big labor, they get free money. Allowing the government to give taxpayer money to these companies and then allowing the government to take over majority ownership in them was basically like watching taxpayer money being poured down the drain. My nephew is inept, but he’s family, so we take care of him.

By paying the money back, the best run and most successful financial companies have done what good businesses do. They have trimmed their staff levels, gotten more efficient, reduced their risk, become more productive and are returning to strong profitability. The employees have worked tirelessly to bring their companies back. But this just means the government can take even more flesh from them.

Here is an excerpt from The Wall Street Journal, with my comments parenthetically inserted (you can find these comments online here and here). As you read these quotes, it is critical to bear in mind that the institutions being referred to have either fulfilled their legal obligations of returning all the money given to them, plus interest, and/or that they have never received any money in the first place:

President Obama: “We want our money back and we’re going to get it.” (The money has already been returned except from the automobile makers and others who can’t pay it back.)

The [proposed] tax, which officials are calling a “financial crisis responsibility fee,” (we make these extortion fees up as we go along; and we have many more good names in the hopper) would apply only to financial companies with assets of more than $50 billion. Those firms—estimated to amount to about 50 institutions—would have to pay the fee even though many did not accept any taxpayer assistance (that’s right, we are going to take money from you even though you never received any) and most others already paid back their government infusions. (We are only punishing those who paid us back or never needed our help.)

The bank levy would generate an estimated $90 billion over 10 years. It could remain in place longer, however, if needed to eliminate the shortfall. (We will extend it over the 10 year period to make sure we get the money we want). The official said that if the shortfall was eliminated within a decade, the tax would still remain in place for the full 10-year minimum. (That’s right. If you pay off this extortion early, we will just keep on taking more after that).

The message from our government is clear: Let’s punish success and let’s reward failure. We want to take the money from the best and give it to the worst. We want to penalize our best and brightest producers for being successful. We want to make an example of those whose businesses make a lot of profit and make sure individuals don’t get paid a lot of money.

In this writer’s opinion, the line has officially been crossed. If you weren’t sure before, your eyes should be wide open at this point. We have now officially entered the new era of your government arbitrarily taking whatever they want, whenever they want, by whatever means they want. It is a new era of the government deciding how successful you can or can’t be, and how much you should or should not earn.

Here’s what we can expect to hear from our government in the future: “We don’t want you driving that big of a car, so we are going to charge you a ‘big car fee.’ We don’t like you living in such a nice house, so we are going to extract a ‘big house fee’ from you. You don’t need that much money and others are hurting, so we are going to extract a ‘recession relief fee’ from you. You run your company better than others do and make more profit, plus you pay your employees obscene bonuses, so we are going to charge you an ‘unreasonable profit and bonus fee.’”

While there may be many who buy into the hype of being angry at “Wall Street” or the “Big Bankers,” we are watching our liberties get stripped away as we allow a central government to arbitrarily take money from successful private enterprises and govern how much their employees get paid. Where are the real leaders and where is the courage to fight this Mafia-style power grab by the government? If they can do this, then what is to prevent them from arbitrarily looking at any other industry and doing the same thing?

The CJS Forum seeks to promote an open exchange of ideas about the relationship between faith, culture, law and public policy. While all the articles are original and written especially for the CJS Forum, they do not necessarily reflect the views of the Center for a Just Society.

Picture above from Flickr user albertopveiga licensed under Creative Commons Attribution ShareAlike 2.0 License.