Reno Hayek Symposium

Hubris is excessive pride or self-confidence, arrogance. It came from the ancient Greeks who prized and praised arête, meaning excellence, excellence in competition, in the arts, in statesmanship, in trade and indeed in battle. But with arête came the temptation to excessive pride, arrogance, outrage and “presumption toward the gods.” Hubris was that unforgiveable sin that brought condemnation in Athens. Old expressions like, “too big for his own pants,” and newer ones like, “a legend in his own mind,” come to mind as the beginning of hubris.

But perfect, spot-on examples are larger than life in Washington, DC where our ruling liberals reign supreme:

·      Last week we had Obama firing the CEO of General Motors, this after telling GM what kind of cars to build and demanding a tougher restructure. Note he did not fire the head of the UAW. Note also that, instead of putting the company in bankruptcy where those with money at risk who are legally entitled to control the salvageable remnants of that albatross could install competent management, he poured billions of taxpayer money into the carcass.

·      Today following Obama’s heady example we have the nations chief tax collector, who by the way intentionally didn’t pay his own taxes, saying that he was going to fire bank executives and directors at banks that require “exceptional” government assistance. Of course the government will determine what banks are forced to take “exceptional” assistance. It is important to remember that major banks are now restricted from giving back the “assistance” they were forced to take. Tiny Tim Geithner who can’t even staff his own Treasury department is going to take on the task of installing competent management at major banks!

·      Then we have the show last week of the government leaning on secured Chrysler lenders to pressure them to agree to a equity for debt swap and give up the security they would be entitled to in bankruptcy. All this to get a deal done for the benefit of a foreign auto manufacturer, Fiat S.A. Apparently, there is no thought of a conflict of interest here much less of the health of the Chrysler secured lenders that they say they’re trying to protect.

·      Not to be outdone by the executive branch the Democratic Congress has pressured the Financial Standards Accounting Board (FASB) to loosen the profession’s mark to market rules. If the Chris Dodds and Barney Franks of that world think they are competent enough to establish accounting rules, investors had better beware.  Anyway we will magically solve many of the banks bad asset problems by changing the rules, changing the definition of what is bad. In truth though, the bad asset that is no longer a bad asset hasn’t changed one iota! Japan tried something akin to this and suffered ten years of stagnation.

It gets boring to retell the earlier aspects of Obama’s rush to Big Brotherhood, the non-stimulus plan, the deficit tripling budget, the 8000 earmarks, the tax increases for the benefit of the non taxpayers, the cap and trade stealth tax. Suffice it to say that the ruling liberals know with metaphysical certitude what is best for each and every one of us and each and every one of our grandchildren not yet born! This is hubris at its best.

Tom Motherway, tom@renohayek.com