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Financial Unification Act

I found this link on Mankiw’s blog.  The key concept here is “discretion.”  Discretion = rule of men.  It means that some guy will decide what is fair in any given situation.  This is fundamentally different from the rule of law where parties can see the rules and know (or at least predict) what will happen in any given situation based on the law.  It means that people will fail or succeed based on how well they are connected in Washington.  For instance:

Moreover, the discretion given to the government in the Senate proposal opens the door to undesirable actions such as allowing the administration to write checks to favored parties. This concern is not theoretical: such mischief took place in the bankruptcies of Chrysler and General Motors, as the two auto companies were used as conduits to transfer billions of dollars from TARP to the president’s political supporters.

This is how property rights die.

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