Under President Obama's proposed financial reforms, the government can have permanent bailout authority.
The Treasury, with the Federal Reserve’s and other regulators’ consent, could take over any financial institution that it deems a systemic risk. (The treasury secretary, is appointed by the president.)
With such seizure, the government could break contracts any company has with lenders, customers, and employees. Shareholders would have nothing to say to stop the takeover.
Yes, it’s an unconstitutional taking of property without due process or fair compensation.
Such so-called reforms are not really necessary to our way of economic life, but they will increase the power of politicians to make arbitrary economic decisions.
Politicos love power wherever and however they can get it. Unfortunately, this has become a habit in Washington these days.
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