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Adams, Obama, and Asness on The Rule of Law

Posted by Larry Doyle on June 14, 2011 8:34 AM |

“We are a nation of laws and not of men.”

The above quote is widely credited to the second President of our great land, John Adams.

The life story of Adams is captured in a best selling book, “John Adams” written by David McCullough. The book garnered rave reviews and has served as a written historical monument to one of our nation’s founding fathers.

Adams may have been overshadowed by many of the other giants of his era, including Washington and Jefferson, but his measure has certainly stood the test of time.

In addition to the above referenced quote, McCullough highlights early in his book a statement Adams made to his bride Abigail.

“We live, my dear soul, in an age of trial. What will be the consequence, I know not.” (1774) 

In a very similar fashion, who amongst us truly knows the consequences of the travails we have experienced over the last few years. We too are living in an age of trial and turbulence. Are our political leaders displaying the real courage and fortitude needed to right our ship and move our nation forward? Are they sacrificing their own agendas for the good of our nation? Are we a nation of laws or merely men?

What would John Adams think about those who occupy seats on both sides of the political aisle and our current President Barack Obama?

I ask these questions given a statement put forth this morning by the not shy hedge fund manager Clifford Asness in a Wall Street Journal editorial, Uncertainty Is Not The Problem,

I would definitely say that the disregard for law during the auto-company “bankruptcies” has long-lasting negative effects.

WOW!! Asness is not bashful and pulls no punches in highlighting the manner in which creditors of auto companies were run over by the administration during those hectic days. Asness may not get invited to selected cocktail parties but I commend him for standing up and telling it like it is.

President Obama would have us believe that the auto bailouts have had no truly meaningful costs. Asness knows differently. Regular readers may have already read and listened to what Asness knows and what I highlighted in my writing, Is Barack Obama Going Tony Soprano? May 2, 2009. I believe it is worth highlighting again,

Companies, consumers, and investors will be forced to adapt to a regular presence of Uncle Sam. He is not a good business partner.

Our economic landscape just entered a whole new realm. I strongly recommend that you listen to the audio recording of Frank Beckmann’s interview with Tom Lauria.

What are the long lasting negative effects which Asness references?

Capital is the lifeblood of an economy. When the rule of law is subverted and private capital is not protected by regulators, legislators, the courts, and the executive branch, then that capital will be more expensive to source in the future. More expensive and subsequently less available capital will inhibit an economic recovery.

The expediency we practiced in bailing out the auto companies in the manner we witnessed in 2008 will merely serve as another factor in the lackluster recovery we currently have. I believe this lesson will not soon be lost on future sources of capital as well.

What would John Adams think of Barack Obama?

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

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