Slouching towards Fascism

President Obama tries to project the impression that he is guided by Lincoln, but the more he works his domestic agenda the more I am reminded of FDR.

Back in 1933, FDR, with the help of Congress, created the National Recovery Administration, which for some reason was referred to as the NRA.

As part of the "First New Deal", the NRA was based on the idea that the Great Depression was caused by market instability and that government intervention was necessary to balance the interests of farmers, business and labor. The NIRA, which created the NRA, declared that codes of fair competition should be developed through public hearings, and gave the Administration the power to develop voluntary agreements with industries regarding work hours, pay rates, and price fixing.^[2]

The NRA was put into operation by an executive order after the passage of the NIRA.

Last week, Treasury Secretary Tim Geithner addressed Congress with these words:

“Our system failed in fundamental ways,” Mr. Geithner told the House Financial Services Committee. “To address this will require comprehensive reform. Not modest repairs at the margin, but new rules of the game.”

The comprehensive reform Mr Geithner refers to would allow the government to monitor various industries that pose a "systemic" danger to the economy and step in if it deemed that the (private) company was about to fail.

What the criteria is for designating a (private) company "systemic" is unknown. So it could be anyone. What the criteria is for determining if said (private) company is in trouble, is unknown. It could be anything.

Yesterday, the CEO of General Motors was fired by the Obama Administration.

The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said.

And today, the Obama Administration, by way of its Auto Industry Task Force, has begun dictating specific measures the companies must take in order to gain access to more Federal funds

Chrysler, which the administration believes cannot survive as a stand-alone company, must reach an agreement to partner with the Italian automaker, Fiat, in the next 30 days to become eligible for as much as $6 billion in additional federal loans.

GM, which has shed thousands of workers since the downturn began, must devise a leaner business plan that likely will cut the company workforce and product lines even more than officials had contemplated. It has 60 days to come up with a new approach.

The White House's insistence that Wagoner step down is an extraordinary intervention of the federal government into the management of a private company.

FDRs NRA was ultimately declared unconstitutional "because it attempted to regulate commerce that was not interstate in character, and that the codes represented a unacceptable delegation of power from the legislature to the executive."

But while it operated

The NRA negotiated specific sets of codes with leaders of the nation's major industries; the most important provisions were anti-deflationary floors below which no company would lower prices or wages, and agreements on maintaining employment and production. In a remarkably short time, the NRA won agreements from almost every major industry in the nation. Six months after the NRA went into effect, industrial production dropped twenty-five percent. According to some economists, the NRA increased the cost of doing business by forty percent.^[6]

While the Supreme Court objected to the NRA, Italy's Mussolini praised it because it was the embodiment of the Fascist Corporatism he had set up in his own country.

I've pointed out before that the definition of fascism is much more in line with the domestic agenda of the Obama Administration than is socialism.

Mussolini praised FDR and I suspect he is smiling on President Obama as well.