The venerable conservative magazine National Review is under-fire for its support of Obama’s plan to give the goverment “the authority to take control of the operations of the firm or to sell or transfer all or any part of the assets of the firm.” And the attack is coming from The American Spectator, long an ally of the National Review both in the broader political scene and in the intramural wars of the American Right.
In an article that mocks NR as “Nationalization Review,” the Spectator points out that the “resolution regime” would give the executive branch unprecedented power to seize private companies, with little recourse and almost none of the traditional checks and balances that have traditionally characterise the constitutional exercise of government power. The Spectator points out that NR opposed nationalization in foreign lands but seems to have climbed in bed with Obama now.
For it’s part, NR argues that the ‘resolution regime’ would be more orderly than the ad-hoc bailout system we’ve almost accidentally adopted without much public consideration or deliberation. It might also act to reduce moral hazard created by bailouts, where the managers and bond holders have often been left in place while companies received government funds.
The Spectator responds by saying that the threat of ‘resolution’ could give the government unwarranted power over private companies, who will have to operate under the fear that they could be seized by the government if they defy politicians. And it is unlikely that the ‘resolution regime’ would apply only to financial firms, unlike the FDIC’s power over banks. After all, the TARP was quickly expanded to incude non-financial firms such as automakers.
There’s nothing new about infighting on the Right. Paleocons and neocons have long been at each other’s throats. National Review itself began in kind of schism, breaking from many of the libertarian and anti-communist groups that had characterised the right-wing of American politics. But the split with the American Spectator is something new–a split between two magazines right at the centre of the conservative movement.
Politics makes strange bedfellows. But it also makes for even stranger break-ups.