No ordinary scandals: Why Obama is in worse trouble than Clinton, Reagan or Nixon

This time, it’s different.

We’ve seen presidential scandals in the past, and it’s easy to dismiss calls for investigations and impeachment as the usual political posturing by any president’s opponents.

Don’t be lulled, stay awake for this one.

The Obama White House is dealing with three simultaneous scandals:

The Internal Revenue Service has admitted targeting conservatives for special scrutiny.

The White House will not say where the president was or to whom he spoke during the seven-hour terrorist attack on the U.S. diplomatic post in Benghazi, and no one will say who ordered the “stand-down” of U.S. military forces that could have been sent to rescue American diplomatic personnel.

The Justice Department secretly obtained a broad range of telephone records of Associated Press reporters in order to find the source of administration leaks about a foiled terror attack.

Compare these to other presidential scandals:

President Clinton was impeached for lying to a federal grand jury and obstructing justice for a woman who was suing him for sexual harassment.

President Reagan was investigated for using a back-channel to provide arms to the Nicaraguan Contras in defiance of Congress’ decision not to arm the rebels.

President Nixon was forced to resign when it was revealed that the break-in at the Democratic party headquarters was ordered by the White House.

These presidential scandals involved violations of the law, but they did not touch the lives of ordinary Americans. Most people will never sue a president for sexual harassment, seek arms to overthrow a communist regime or work in a political party’s national headquarters. These scandals all fall neatly into the category of “somebody else’s problem.”

In contrast, consider the prospect that the Internal Revenue Service may target you for special scrutiny based on your membership in certain political groups.

That’s not simply a scary threat, that decimates the First Amendment protection of freedom of speech and freedom of assembly. The prospect of becoming a target of an IRS investigation has more than a chilling effect, it throws political freedom into a sub-zero freezer and locks the door.

Now consider the Benghazi scandal. The administration has admitted that it reduced security at the U.S. diplomatic facilities there. It has admitted that it told a false story about a demonstration protesting a YouTube video, when in fact there was no demonstration and the attack was known to have been carried out by terrorists with links to al-Qaeda. It has admitted that special forces could have been sent during the attack but were not.

Imagine, if you can, President Franklin Roosevelt responding to the attack on Pearl Harbor by saying, “We will bring the perpetrators to justice.” Imagine him telling the families of the men who lost their lives in that attack, “They knew the job was dangerous, and we thank them for their sacrifice.”

You see the problem.

Either we are in a war on terror, or we are not. If we are, we have to fight it. We can’t just sit around and take casualties.

If we are not in a war, then the extraordinary power the government has given itself to snoop on phone records without warrants is an unconstitutional intrusion on the rights and freedom of the American people.

Which brings us to the third scandal, the broad and unprecedented seizure, in secret, of Associated Press phone records.

No administration likes leaks, and all administrations complain about them. But the Fourth Amendment prohibits the government from conducting secret fishing expeditions through the papers and effects of Americans, including journalists.

The Patriot Act carved out some space in the Fourth Amendment for the government to make warrantless seizures of phone records in the name of national security. (The argument can be made that the Patriot Act is unconstitutional, but for now, the law stands.)

The Obama Justice Department used the Patriot Act to obtain unlimited access to journalists’ phone records, which will have the same kind of chilling effect on sources that the IRS investigations will have on political activity.

Ordinary political scandals involve violations of the law, but the Obama scandals transcend the ordinary. These are scandals that threaten the freedom and security of the United States. Chilling political activity, chilling political reporting, refusing to defend a U.S. diplomatic facility against a terrorist attack, these are violations of the president’s oath of office. These are high crimes.

Will it mean impeachment?

It certainly could.

Impeachment is a political, not a law-enforcement, decision. The House of Representatives is not required to impeach the president, no matter how much evidence accumulates against him. But if House Republicans come to believe the American people will tolerate an impeachment, they will stop “requesting” documents and they will issue subpoenas.

Once they do that, the train cannot be stopped. The White House may try to claim executive privilege in order to withhold documents and testimony, but in fact there is no such thing as executive privilege against a subpoena from the U.S. Congress. The Constitution gives Congress the power to impeach the president, the vice president and all civil officers of the United States. Implicit in the power to impeach is the power to investigate. There cannot be an unwritten constitutional privilege to block the exercise of an explicit constitutional power. That’s why the executive privilege claims of President Nixon and President Clinton were rejected by the courts.

When the U.S. Congress receives all the documents and all the testimony, we’ll find out who ordered the IRS targeting of conservative groups, who ordered the stand-down of U.S. military forces during the terrorist attack against the U.S. in Benghazi, and who ordered the broad, sweeping collection of reporters’ phone records.

Bob Bennett, call your office.

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Author Susan Shelley is a Republican candidate for the California Assembly in District 45, the west San Fernando Valley.

A federal judge stands up for liberty

America Wants To Know salutes U.S. District Court Judge William Alsup, who refused the Justice Department’s request to use secret evidence and secret arguments to defeat a lawsuit over the government’s no-fly list.

Former Stanford student Rahinah Ibrahim is suing several federal agencies over her inclusion on the secret no-fly list and also on some other list that causes her to be detained for hours at airports. The government wanted Judge Alsup to dismiss the lawsuit. Lawyers for the Justice Department offered to show him confidential, partially redacted, “allegedly privileged” information that they would not show to Ms. Ibrahim or her attorneys.

“The government has not justified its sweeping proposal,” Judge Alsup wrote.

In a free country, the government’s powers are limited. That’s what makes it a free country.

Thanks, Judge Alsup, for enforcing the protections of the U.S. Constitution and keeping America free.

How Sacramento hides money

If you vote in California, vote NO on 30 this Tuesday.

This is California’s budget (it’s here on the Department of Finance website: http://www.ebudget.ca.gov/Enacted/agencies.html).

California's budget

Do you see that column labeled “Special Funds” with almost $40 billion in it? In 1988 the voters
of California passed Proposition 98, which required that about half of the General Fund must be spent on public education. The legislature weaseled around the requirement by creating “Special Funds” and taking money out of the General Fund so they wouldn’t have to spend it on schools.

Since 2008, $20 billion has been cut from education in California. That’s exactly how much the schools would have received if the $40 billion in the “Special Funds” had been left in the General Fund.

The voters want to fund education. The politicians in Sacramento refuse to do it. They’d rather use scare tactics to get tax increases. Vote NO on 30. If Governor Jerry Brown tries to enact those “trigger cuts” to education, call him at (916) 445-2841 and tell him to cut something else.

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Taxpayer rights advocate Susan Shelley ran for Congress in the June 2012 primary with the endorsement of the Howard Jarvis Taxpayers Association and the Los Angeles Daily News.

Liberty Republicans announce support for Mitt Romney

As the Woodland Hills City Chair for the Romney campaign, I am so pleased that my friends in the Republican Liberty Caucus have joined me in supporting Governor Mitt Romney for president.

http://libertyrepublicanscalifornia.wordpress.com/2012/11/01/mittromney/

CALIFORNIA LIBERTY REPUBLICANS SUPPORT MITT ROMNEY

*****PRESS RELEASE*****

November 1, 2012

CALIFORNIA LIBERTY REPUBLICANS SUPPORT MITT ROMNEY

A prominent group of California “Liberty Republicans” has issued a statement supporting Mitt Romney for President of the United States.

The group represents a significant body of the support in California for Texas Congressman Ron Paul’s campaigns for the Presidency in 2008 and 2012. Most are also members or former or current officers in the Republican Liberty Caucus and Campaign for Liberty, organizations which seeks to restore the Republican Party to its foundational principles of limited government, personal liberty, sound fiscal and monetary policy, Constitutional rule of law and a sensible, non-interventionist foreign policy. Many are also former or current Republican Party officers or central committee members at the county level. The statement follows:

“We, the undersigned individuals, encourage all voters who value Liberty to vote for, donate to and volunteer time in support of Mitt Romney for President. While Governor Romney’s views diverge from the conservative positions of our preferred candidate, we think it is important for all Republicans to come together at this time. The party’s candidate represents a distinct alternative to President Obama, who stands in clear opposition to our core beliefs and the basic principles of our Constitutional Republic.”

NOTE: Affiliations of the signatories are for IDENTIFICATION PURPOSES ONLY and do not necessarily reflect the official positions of any organization listed.

Robert W. Vaughn
California Co-Chair, Ron Paul 2012 Campaign
Former Chair, Republican Liberty Caucus of Los Angeles County
Member, Central Committee, Republican Party of Los Angeles County

Allan Bartlett
Central Committee Member, Republican Party of Orange County
Republican Liberty Caucus of Orange County
Named by OC Weekly as “OC Republican of the Year”

Rick Williams
2012 Republican Candidate for US Senate

Rick Jacobs
2nd Vice Chairman, San Bernardino County Republican Party

Sarah Jacobs
1st District Chair, San Bernardino County Republican Party

Susan Kennedy
Asst. Secretary, Republican Party of Los Angeles County
Member, Republican Liberty Caucus of Los Angeles County

Dan Hughes
Former Republican U.S. Senate Candidate (Tea Party Endorsed)
California Small Business Owner

Connie Ruffley
Member, Central Committee, Republican Party of Los Angeles County

Steven Vincent
Los Angeles County Coordinator, Ron Paul 2012 Campaign
Member Elect, Central Committee, Republican Party of Los Angeles County
Former Secretary, Republican Liberty Caucus of Los Angeles County
Founder, End the Fed

Chris Kolski
Candidate for California State Assembly (AD 46)
Member, Republican Liberty Caucus
Chair, AD 40 Republican Party Central Committee

Frank Alonzo
Candidate for Orange County Water District
Chair, Campaign for Liberty, Orange County
Republican Liberty Caucus of Orange County

Kristine Alonzo
Treasurer, California Republican Assembly of Orange County
Former Member, Central Committee, Republican Party of Orange County

Pat Dixon
Member, Central Committee, Republican Party of Los Angeles County

Steve Redlich
Server Administrator, Republican Liberty Caucus (National)

Albert Gersh
Member Elect, Central Committee, Republican Party of Los Angeles County
Member, Republican Liberty Caucus of Los Angeles County
Los Angeles Director, California Youth for Reagan, 1984

Eric “Nick” Pierson
Alternate, Central Committee, Republican Party of Los Angeles County
Member, Republican Liberty Caucus of Los Angeles County

MEDIA CONTACTS:

Robert W. Vaughn, RobertWVaughn@aol.com

Steven Vincent, StevenVincentLA@me.com
=================================================

Vote NO on Prop 30: the ‘trigger cuts’ are not mandatory

Proposition 30 is a shell game and here’s the proof.

The proponents of the income tax and sales tax increase say it will help California meet its Proposition 98 funding obligation, thereby “freeing up resources” in the General Fund.

What does that mean? It means the money that was already budgeted for education can be removed from the education budget and “freed up” for other purposes. In other words, this tax increase for education does not provide any new funds at all for education.

In order to scare voters into approving a tax increase, Governor Jerry Brown’s budget spends the money from Prop 30 (as if it were guaranteed to pass) and promises “trigger cuts” of $6 billion, mostly to education, if the measure fails.

Gov. Gray Davis was recalled for less.

The first thing to know about the “trigger cuts” is that they do not have to happen. There is nothing in the language of Proposition 30 that requires or mandates $6 billion in cuts to education. Those cuts are the choice of the governor, who would like you to believe there is not a single thing in the budget to cut except education and public safety.

That is nonsense.

Just to take one obvious and enormous example, the first segment of the bullet train, priced at $6 billion, will cost us $400 million a year in interest on the bonds California will issue to borrow the cash to build it. That’s a lot of money just to speed up the trip from Merced to Bakersfield.

We could buy Southwest Airlines for less.

California’s budget, which can be viewed online at the website of California’s Department of Finance, includes many boards and commissions and bureaucracies that could be threatened with budget cuts, but nobody would vote for a tax increase to prevent that.

So Governor Brown drew up a budget that demands a tax increase, or else education “gets it.” He is holding our students hostage, terrifying them with threats of devastating cuts, higher tuition and fees, closed schools that are unavailable to give AP exams, teacher layoffs, overcrowding, and the dire warning that out-of-state universities will reject California high school graduates because their school year was only 160 days.

None of that has to happen. On October 28, I debated Assembly Budget Chair Bob Blumenfield and challenged him to admit that the “trigger cuts” were not mandatory and could be changed if Proposition 30 goes down to defeat.

He said he had discussed this with the governor and had asked if they could “rejigger the triggers.” Blumenfield said Governor Brown has vowed to veto anything the legislature does to change the trigger cuts.

You can see the video for yourself, right here: http://www.youtube.com/watch?v=2IqR9YpxsvM

As Bob Blumenfield indicated, the legislature has the power to change the trigger cuts. If lawmakers pass a bill to call off the cuts to education and Governor Jerry Brown vetoes it, he should be recalled.

California’s budget is a shell game:

The people of California, the greatest state in the union, deserve better.

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Taxpayer rights advocate Susan Shelley ran for Congress in the June primary with the endorsement of the Howard Jarvis Taxpayers Association and the Los Angeles Daily News.

Full video of the Berman-Sherman fight incident

Yes, I was there when Rep. Howard Berman called Rep. Brad Sherman a liar, and Sherman protested what he called a “personal attack,” and Berman said Sherman was “delusional,” and Sherman screamed that Berman should not dare to come to the West San Fernando Valley and get in his face, and Berman got in his face, and Sherman lost it, grabbing Berman around the shoulders and making one of those bar-fight kind of threatening statements synonymous with “Shall we go outside and settle this?”

The deputy sheriff who was there to protect the congressmen from potential troublemakers walked onto the stage and politely tapped Sherman on the back to break up the fight. “He was the one who was kinda talking loudly,” Deputy Bill Dunkin said later.

Here you can see a video of the debate, which was posted by the newspaper at Pierce College. The “He lies!” and “Personal attack!” sequence is about 35:50 into the recording, and the screaming and threats start at 39 minutes.

Watch live streaming video from rounduplive at livestream.com

I happened to be there because I was invited to argue the “No on Prop 34″ side in a debate from 2:30 to 4:00 p.m. The congressmen were up next, and I stuck around to watch the final debate of their campaign. I was a Republican candidate in the 30th congressional district primary and we did many debates together.

Look at that! I’m lucky to be alive!

What to do now in the Middle East

“Check your premises,” author Ayn Rand often said, “because when you are on the wrong premise, you will always achieve the opposite of what you intend.”

In the Middle East, a policy of toppling dictators and replacing them with elected governments has given us a blazing wave of anti-American violence across the region. U.S. taxpayers have poured billions of dollars into faraway places to help build schools and infrastructure. U.S. troops have given their lives to provide security and support.

Instead of a region free from tyranny, we see a region soaked in blood, some of it our own.

We have achieved the opposite of what we intended. Where did we go wrong? And what should we do now?

This is the mistake we made: we confused democracy with freedom. Democracy is majority rule. Freedom is a condition that exists under a government of limited power.

When the U.S. invaded Iraq and toppled Saddam Hussein, we did not insist that the new Iraqi government protect individual rights and private property. We didn’t require the privatization of Saddam’s government-owned enterprises. We took pictures of the Iraqis dipping their fingers in purple ink at the polls, and we congratulated ourselves that we had freed Iraq from tyranny.

But we didn’t.

The Iraqi government still owns all the major enterprises in the country, so it controls everyone’s job and economic future. The government in Iraq is all-powerful. This is why it has been so difficult to withdraw U.S. troops. Our men and women have kept the various Iraqi factions from fighting to the death for control of the government and all the revenue from the government-owned enterprises.

In Afghanistan, where geologists say there is substantial mineral wealth, we have not insisted that the Afghan people establish a government that protects individual rights and private property. We have not told the various warlords that the regions they control must be divided into private parcels and given to individual Afghan homesteaders. We have sent our troops into hideously dangerous situations with orders to win the hearts and minds of the Afghan people, who continue to live under the oppression of warlords and Taliban leaders.

In Gaza, where the Bush administration pushed for free elections, the Palestinians elected a government dominated by Hamas terrorists who campaigned on a promise to destroy Israel. We didn’t tell the new Gaza government that U.S. support was dependent on the protection of individual freedom. We never considered how many Palestinians may have voted for Hamas terrorists because they had a well-founded fear of violent retribution if they didn’t.

In Egypt, we watched as the Muslim Brotherhood was elected to run the post-Mubarak government, and we didn’t tell the new government that U.S. aid would be withdrawn unless the freedom of the Egyptian people was guaranteed by a constitution that protected individual rights.

Democracy alone is not freedom. Limits on the power of government, expressed as protections for the fundamental rights of individuals, are what make a country free, and also prosperous. It’s only with the protection of individual rights — life, liberty and property — that people are able to study and farm and invent and build and invest. These are things that take time, and no one will undertake a multi-year commitment to that level of effort without the security of knowing that their rights and property will be protected, their contracts will be enforced by independent courts of law, and they will not be subject to arbitrary action that takes everything they’ve worked for.

That’s how freedom creates prosperity, and that’s why governments that don’t protect individual rights and private property always fail to deliver on their promise of plenty for everybody.

Without limits on the power of government, elections are just one more fight in a well-armed mob war.

People who live in mob-ruled societies have no choice but to stick with their group and do what they’re told. They don’t have individual rights that a police force and a court will protect. They may not want to burn the U.S. embassy, but it would be extremely unwise for them to say that out loud.

Those people deserve our protection. The mob-ruling governments do not.

So what do we do now? How do we untangle this horrible mess which we’ve helped to make?

Our model should be President Reagan’s outreach to Soviet dissidents. He understood that the people who lived under that bloody dictatorship had not freely chosen their oppression. He knew that all human beings want to live in peace and freedom. President Reagan met with Soviet dissidents. He called the Soviet Union an evil empire. He demanded that the Berlin Wall be torn down. He spoke to the people whose voices could not be heard.

The task before us is easier than the job of bringing down Soviet communism. We have to identify the people in each of these “Arab Spring” countries who are most likely to be assassinated by the mob rulers and their ambitious thug followers, and we have to protect them until the next election. We have to withhold foreign aid from countries that refuse to have another election, as well as from countries that fail to protect our embassies and those of our allies. We have to speak clearly in favor of freedom, and never apologize for it.

Most importantly, we ourselves have to understand what makes a country free. That’s where we went wrong in the first place.

Copyright 2012

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Susan Shelley was a Republican candidate for Congress in California’s June primary.

Ayn Rand’s fans in high places

No doubt you’ve already read or heard that Republican Vice Presidential nominee Paul Ryan is an admirer of Ayn Rand, a fact that has liberals foolishly exultant.

But you may not know that the chief judge of the Ninth U.S. Circuit Court of Appeals, the honorable Alex Kozinski, is likewise an admirer of the author of the monumental novel, “Atlas Shrugged.”

He even makes a cameo appearance in Part 2 of the Atlas motion picture trilogy (fifth from left):

Liberals are fond of caricaturing Ayn Rand’s philosophy to make her sound like a heartless groupie of billionaire businessmen. One reason they’re able to do this is that Rand titled one of her brilliant books, “The Virtue of Selfishness.”

Ayn Rand’s original title for “Atlas Shrugged” was “The Strike,” until her husband Frank told her that the title gave away too much of the plot. If Frank had suggested that she retitle “The Virtue of Selfishness” as “The Virtue of Freedom,” the world would have an easier time understanding why so many people share a passionate commitment to Ayn Rand’s ideas.

Rand wrote that people have a moral right to their own lives and happiness. She rejected what she called the “altruist-collectivist premise” of our modern civilization, which holds that only sacrifice for others is moral, while the actions we take to preserve our own lives and happiness are regarded as guilty little secrets.

In fiction and non-fiction, in scholarly works and in elegant newspaper columns, Ayn Rand made the case that all human progress is the result of independent minds working in freedom in pursuit of their own interests, not shackled workers toiling for the collective good.

“I swear by my life and by my love of it,” her heroes vow in “Atlas Shrugged,” “that I will never live for the sake of another man, nor ask another man to live for mine.”

But what about the poor, the weak, the vulnerable, the fragile, the aged and everyone else who can’t build a business and create wealth where nothing but subsistence was there before?

“From the beginning of history, two antagonists have stood face to face, two opposite types of men: the Active and the Passive,” Rand wrote in a Reader’s Digest article in 1944. “The Active Man is the producer, the creator, the originator, the individualist. His basic need is independence — in order to think and work. He neither needs nor seeks power over other men — nor can he be made to work under any form of compulsion. Every type of good work — from laying bricks to writing a symphony — is done by the Active Man. Degrees of human ability vary, but the basic principle remains the same: the degree of a man’s independence and initiative determines his talent as a worker and his worth as a man.

“The Passive Man is found on every level of society, in mansions and in slums, and his identification mark is his dread of independence. He is a parasite who expects to be taken care of by others, who wishes to be given directives, to obey, to submit, to be regulated, to be told. He welcomes collectivism, which eliminates any chance that he might have to think or act on his own initiative.

“When a society is based on the needs of the Passive Man it destroys the Active; but when the Active is destroyed, the Passive can no longer be cared for. When a society is based on the needs of the Active Man, he carries the Passive ones along on his energy and raises them as he rises, as the whole society rises. This has been the pattern of all human progress.”

Note that the distinguishing characteristic of the Passive Man is not vulnerability, but dread of independence. Into that category we can put all the CEOs who spend their time lobbying the government for subsidies, loan guarantees and regulations that force unwilling customers to do business with them. People who criticize Ayn Rand for defending business executives usually miss that distinction — many of the business executive characters in “Atlas Shrugged” are villains, as are the government officials who assist them.

Ayn Rand died in 1982, yet her books continue to sell at a pace that exasperates liberals. They take malicious delight in smearing the late author, mischaracterizing her words, ridiculing her admirers, and marginalizing her ideas.

Read her for yourself. Like millions of others who have done that, you might conclude, independently, that she was right about everything.

Atlas Shrugged (novel)
The Fountainhead (novel)
The Ayn Rand Column
The Virtue of Selfishness
The Voice of Reason

“Legitimate rape” and the GOP

The difference between genius and stupidity, somebody once observed, is that genius has its limits.

On Sunday, U.S. Rep. Todd Akin of Missouri, a Republican congressman who is challenging incumbent Democrat Claire McCaskill for a U.S. Senate seat, told a local TV interviewer that it’s “really rare” for a woman to become pregnant following a rape.

“If it’s a legitimate rape, the female body has ways to try to shut that whole thing down,” the congressman explained.

Wait, it gets worse. Rep. Akin sits on the House Committee on Science, Space and Technology.

As a female Republican candidate in the June primary here in Los Angeles, I cannot begin to count the number of people who asked me, “Why are you a Republican?” They couldn’t understand why a woman would vote Republican, let alone run for office as one.

We can talk all day long about economic growth, affordable energy and jobs, and then some Neanderthal jackass stands under the GOP banner and says the female body has a mechanical ability to check the credentials of sperm against an official invitation list.

America Wants to Know calls on House Speaker John Boehner, Majority Leader Eric Cantor, Governor Mitt Romney and Rep. Paul Ryan to denounce Rep. Akin’s comments and make clear that his views on “legitimate rape” do not represent the views of the Republican Party. Then they should ask Rep. Akin to apologize for comments that were breathtakingly insensitive to rape victims and offensive to all women.

Thanks for the buggy ride

America Wants to Know welcomes Sanford “Sandy” Weill to the ranks of Americans who think it was not so hot an idea to repeal the Glass-Steagall Act. (Here’s our 9/20/08 write-up about it, “Train Wrecks.”)

Sandy Weill is the guy responsible for the fabulous glittering mega-merger of Travelers Group Inc. and Citicorp in 1998, a deal which required the assistance of Treasury Secretary Robert Rubin and President Bill Clinton, because somebody had to persuade Congress to throw the Depression-era safeguards of Glass-Steagall overboard and somebody in the Oval Office had to sign that reckless risk into law.

Reckless risk was kind of a theme around the White House that year.

So the dusty, musty law that required the separation of investment banking and commercial banking was repealed, and now, standing amid the wreckage of the international financial system, with ordinary Americans putting their savings into gold and daily reports out of Europe that sound like they’re written by Edgar Allen Poe, Sandy Weill surveys the damage and concludes, “What we should probably do is go and split up investment banking from banking.”

Ya THINK????

The problem with the repeal of Glass-Steagall was both too much government and not enough government. It was too much government because the U.S. government provides deposit insurance to all banks, regardless of whether the bank executives invest in staid, safe, liquid investments or whether they take wild and crazy risks; it was too much government because Uncle Sam provides implicit taxpayer-backing for loans that don’t meet what would otherwise be the banks’ underwriting standards.

If the taxpayers are going to provide deposit insurance and loan guarantees, it is definitely not-enough-government to free the banks from regulatory restrictions on their investments.

Imagine, if you can, what the financial markets might be like without federal deposit insurance and loan guarantees. Some banks would obtain private deposit insurance and would advertise their safety to potential customers. Other banks would offer higher interest without insurance. You would decide the level of risk you were willing to accept. Banks that lost their depositors’ money would go out of business, and the taxpayers would not be writing checks to cover the executives’ bonuses.

If the federal government didn’t guarantee loans, people who wanted to borrow money would have to pay the interest rate charged by someone who was willing to lend it to them.

That would be a free market.

But that’s not going to happen, so we’ll be better off with the protections of Glass-Steagall than without them.

One thing that isn’t helpful is the government’s latest idea of separating financial institutions into those that pose a “systemic risk” and those that don’t, and writing separate regulations for each group.

Why not just hand the big banks the first-born son of the Treasury Secretary and let them raise him as a wolf?

Like anybody else, the banks are going to evaluate the rules and the playing field, and they’re going to do the best they can to win big before time runs out. As long as there are government handouts to be had, the difference between the CEO of Citigroup and a guy who calculates the federal benefits he’d lose if he went out and got a job is one of degree, not of kind.

The best solution is to set competing interests against each other in the marketplace. Government regulators will never be as fast, as smart or as hungry as market participants. They’re the only ones who can keep each other honest.

© 2012

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Susan Shelley was a Republican candidate for Congress in California’s 30th District in June and is the author of “How the First Amendment Came to Protect Topless Dancing,” a history of the Bill of Rights. Follow her on Twitter @Susan_Shelley and on Facebook.