This morning the Washington Post reported that Treasury Secretary Geithner “told Congress that the  administration will seek unprecedented power to seize non-bank financial companies.”

Holy shit.

Geithner cited as evidence of the need for such sweeping powers the disastrous bailout of AIG (which was given $180 billion of taxpayer dollars from the government). If anything such an example only underscores what happens when government intervenes in the economy — that it only exacerbates the problems due to the distortion of market signals. Problems that many (including myself) believed were caused by policies of the federal government coupled with the erronous monetary policies of the Fed (most notable, its ability to print fiat currency out of thin air).

What does Geithner’s power-grab imply? That a handful of people — politicians and bureaucrats — have the knowledge to oversee a complex economy. That their ability to direct scarce resources and discern hundreds of millions of subjective values and time preferences is more accurate than that of individuals themselves.

Make no bones about it: This is a clear cut example of socialism, for which the definition on Wikitionary includes:

collective decision-making, and public control of productive capital and natural resources . . . a strategy whereby the State has control of all key resource-producing industries and manages most aspects of the market, in contrast to laissez faire capitalism.

Anyone recall how bad the centralization of decision-making authority was for Soviet Russia or any other “planned economy”?

The solution is not more government intervention, but less. Much less.

For more on this check out the End The Fed and Stop the Government “Bailouts” groups and the Enjoy Capitalism and Stop Rentseeking overviews on Bureaucrash Social. And while you’re there, connect with other freedom fighters and figure out the best way to help roll back this latest iteration of Statism. And check out F.A. Hayek’s classic The Fatal Conceit.