How to Win Payoffs and Intimidate Enemies in Obama's America

Some recent stories instruct us anew on the cardinal tenets of Obamanomics, a.k.a, pay for play the Chicago way. 

Consider first the story reviewing the rush of organizations to get exemptions from Obamacare.  So far, nearly 1,400 different entities (businesses, unions, insurers, and state and local governments), covering over three million people, have been given exemptions from the bill by Obama's HHS Secretary Sebelius, and those waivers have a disturbing pattern.

The Obama regime clearly played the crony capitalist card in granting these waivers.  While unions represent only a small portion of the workforce (12% overall, and a trivial 7% of all private industry employees), they gave over $400 million in the 2008 election cycle to elect Democrats (especially Obama), and they have been rewarded with over half of all the waivers given out so far.  Put another way, if you are a member of a union that puts cash into Obama's campaign coffers, you are four times more likely than the average citizen to get an exemption from the very law your corrupt, rent-seeking organization helped inflict upon an unwilling public in the first place.

Moreover, last month alone saw the Obama regime grant nearly forty exemptions to various tony nightclubs, restaurants, and hotels in Nancy Pelosi's district.  How ironic can you get: Pelosi was the loopy leftist shrew who jammed the law through the House of Representatives, cackling that we had to pass the damn thing in order to find out what was in it.  Apparently even she didn't know what was in it, or maybe just her constituents didn't know.

Turning to Obamanomics and taxation, it has often been observed that the jokes a person makes are always an indication of what that person deeply believes.  If that's the case, Obama's recent remarks in his commencement speech at Arizona State University (ASU) -- when he joked about ASU's basketball team defeating his pick in the NCAA tournament -- is revealing.  He "joked" that ASU's president and Board of Regents "will soon learn all about being audited by the IRS."

Now, as Glenn Harlan Reynolds noted in his discussion of this incident, this is a repellent and ominous joke.  Reynolds notes that the history of some recent presidents (Kennedy, Johnson, and Nixon come to mind here) who used the IRS to harass opponents makes this sort of joke worse than tasteless -- it threatens the already limited trust the public has in the IRS.  But it is worse than that: the joke indicates that the Chicago Way punish-our-enemies-and-reward-our-friends attitude is never far from Obama's mind.  And the IRS has indeed been more menacing under the Obama regime's stewardship.

Consider the recent report that the IRS is increasing its demands on small businesses. Now, small businesses are Obama's least favorite form of business -- they aren't unionized, their principals have an annoying degree of independence, and they don't tend to contribute much to his campaign coffers.  Well, the IRS is now demanding of small companies being audited that they turn over the entirety of their QuickBooks or other accounting software files.  In other words, the IRS is demanding that audited companies turn over not just the documents pertaining to the issues in the audit, but all files.  These would include customer lists, confidential client information, sales records, and personnel records.

Not unnaturally, small businesses are worried about the IRS being able to conduct "fishing expeditions," trawling the data for evidence of something that might bring the IRS more money in fines and penalties.  Even worse, clients could then be targeted for investigation, which could be devastating for the viability of those small businesses.

Again, there is the authoritarian rage the Obama regime has shown after last year's Citizen United ruling by the U.S. Supreme Court which -- quelle horreur! -- held that businesses have the same rights as other groups in America to spend their money to plead their cases.  Obama obviously feels that only leftist special interest groups such as unions and environmentalist organizations have this right.

The Congress, with Obama's support, tried to overturn the ruling legislatively with the Orwellian-named DISCLOSE Act, but that failed.  So Obama has repeatedly promised to issue an executive order to the effect that all businesses bidding for government contracts must reveal the recipients of all their campaign donations -- a clear effort to intimidate businesses into contributing only to "politically correct" causes, such as the Obama reelection campaign.

Moreover, as a recent piece reveals, the IRS is now involved in the attempt by the regime to suppress the free speech of opponents.  The IRS has just announced that it plans to retroactively require that political donations to certain 501(c)(4) non-profit political organizations be subject to gift taxes.  As the piece rightly notes, the gift tax has hitherto been used to stop wealthy people from escaping the estate tax by giving their assets away to relatives.  So the sudden, selective, and ex post facto use of this tool to target and intimidate donors to conservative organizations (such as Americans for Prosperity and Crossroads GPS) seems clearly political.

Also testifying to the political nature of this IRS program is the fact that the idea was first proposed by leftist advocacy groups such as Democracy 21 and liberal politicians such as Sen. Max Baucus (D-MT).

Finally, we should note a sad coda to the whole crony car capitalism that was the Obama's takeover of GM and Chrysler.  I won't repeat the story about how the original secured creditors were stiffed in favor of the UAW, a big supporter of Obama.  But this new story discusses another group of people who got the shaft so that the UAW would score big: namely, unsecured creditors.

Overlooked in the auto company bailouts were those people who had received court judgments for harms they suffered from GM and Chrysler vehicles.  The article recounts a number of the thousands of such sad cases.  These debts were largely expunged by the bankruptcy.

To be precise, Motors Liquidation Company, the name of the bankruptcy estate for the old GM, which has as assets only 10% of the stock in the new GM, faces $3.3 billion in liabilities from 2,500 claimants, and those victims often are forced to take only 30% of what they were awarded in the form of shares in the trust.  That trust also faces other unsecured creditors (such as those who suffered from asbestos ailments, and owners of defunct dealerships).  Worse, Chrysler claimants have no recourse, because no assets were set aside for unsecured creditors.

As Professor Skeel, a bankruptcy law specialist at the University of Pennsylvania, put it, "[t]his was not a normal case. The government was deciding who was going to be taken care of and who was not. ... It would have been easy to put something aside for [the victims of product liability]."  But the good professor overlooks the fact that the people harmed by the defective products made by GM and Chrysler weren't organized into a rent-seeking block that gave tens of millions of dollars to Obama's campaign.  The UAW -- which went to great lengths to protect the drunken, incompetent, and negligent workers who produced many cars that maimed consumers -- was so organized and had given the millions, so the UAW got the spoils.

Obama's approach is clear: he employs economic policy to advance his leftist political agenda.  This is crony capitalism in its rankest, most corrupt form.  It is not worthy of even a corrupt machine-run cesspool such as Chicago, much less a nation governed by the rule of law.

What is amazing is that the various Republican candidates aren't hammering this issue.

Gary Jason is a contributing editor to LibertyUnbound.

If you experience technical problems, please write to