By Dick Morris
April 14, 2010 - If the financial regulation bill that passed the House last year becomes law, illegitimate President Obama and his Treasury Secretary will acquire the right to take over any financial institution they wish to, provided that, in their sole opinion, it is both "too big to fail" and on the brink of insolvency. The House bill provides for no judicial review and does not require any objective evidence of imminent failure to trigger the takeover provisions.
Once the government takes over such a company, it will acquire the right to replace the entire board of directors, fire the management of the company, wipe out stockholder equity, and even sell off divisions of the company.
Essentially, this bill permits the government to launch an unfriendly takeover of any financial institution it wishes without risk and with no poison pill or other counter-measures possible.
This legislation, essentially, confers on the federal government police powers that, under our system, are the exclusive preserve of state and local government. The blank check the bill gives the feds to take over any financial institution is really more of an exercise of eminent domain than it is an extension of traditional federal regulatory power.
This grant of power to the executive branch is unprecedented and potentially totalitarian.
While the focus on the regulatory bill has been on the consumer protection provisions, which I tend to support, there has been far less scrutiny on these horrific expansions of federal power.
Fidel Castro and Hugo Chavez could only dream of this power.
