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Predatory Lobbying and Legislating Caused the Economic Crisis

By Michael Phelan

I am a big fan of the philosophy of objectivism, which promotes rational self-interest, individual liberty,and the capitalist system. Followers of this philosophy know that one of the biggest enemies of our free-market capitalist system is government sponsored cronyism. In a free market, both the borrower and lender would suffer from the decision to make a bad loan. In a system dominated by special interests with powerful lobbyists and an activist Bush Administration which has raised cronyism to a new level, the powerful go unpunished and the tax payers, small businesses, shareholders, and retirement plan participants get screwed.

Sadly, the U.S. Chamber, which has become basically a powerful lobbying firm, has played a major role in lobbying to protect corporate wrong doers from the punishment they should have received in the free market. A couple of the U.S. Chamber's major lobbying clients have been Enron and AIG. At the same time the Chamber is fighting to protect the cheaters, it is also fighting to take from individual Americans their Seventh Amendment right to trial by jury. The right of a shareholder to hold accountable his or her company in a court of law may be the best free market check on the abuses that got us into this mess. The Chamber opposes the individual's constitutional right to trial by jury. That is the basis of its tort reform agenda. If the Chamber had its way, only businesses would have access to our courtrooms and the rest of us would be forced into binding arbitration by a panel of arbiters who are friendly to Wall Street.

For more facts on the Chambers role in creating this mess, see AAJ's brief, "Behind the Bailout: How the U.S. Chamber Created the 2008 Financial Crisis." This brief tells one side of the story only. The federal government and the borrowers deserve their share of the blame. The Bush Administration promoted the concept of home ownership at all costs, and many borrowers were stupid to borrow more than they could afford to pay. My point is that only the borrowers, shareholders, and taxpayers are being saddled with the bailout. The government is pointing fingers and, with the blessing of the Chamber, the CEO's who made some of these disasterous decisions are walking away with golden parachutes. I'll wager that buried deep in the fine print of whatever bailout bill ultimately passes will be a provision holding the corporate bad guys immune from civil liability. If the Chamber was truly pro-capitalism, why is it so in favor of the Administration's attempt to socialize Wall Street? Perhaps because its lobbying clients need it to be.

Originally posted at InjuryBoard by Michael Phelan

Full post as published by Richmond Virginia Personal Injury Lawyer on October 01, 2008 (boomark / email).