Sean Hannity and Newt Gingrich spewed falsehoods concerning Democratic economic proposals and policies to bolster Gingrich's claim that Democrats are moving the country “towards a political dictatorship.”
During the March 25 edition of Fox News' Hannity, host Sean Hannity and Fox News contributor Newt Gingrich put forth several falsehoods in support of Gingrich's claim that Democratic economic policies are moving the country “towards a political dictatorship.” During the segment, Gingrich also declared that the description in National Review contributing editor Jonah Goldberg's book, Liberal Fascism: The Secret History of the American Left, From Mussolini to the Politics of Meaning, of “what a liberal fascist's economics would be like” is “frighteningly prescient” and could serve as “sort of an introductory guide to how the left is thinking this year.”
Hannity and Gingrich spewed the following falsehoods concerning Democratic economic proposals and policies:
- Discussing what he claimed was evidence of “the biggest power grab,” Hannity falsely asserted, “They have asked for, in just the last week, the Obama administration, the right to limit executive pay even for companies that are not getting a bailout.” In fact, in his March 24 written testimony before the House Financial Services Committee, Treasury Secretary Timothy Geithner made clear that in referring to restrictions on employee compensation, he was talking only about “financial institutions that are receiving government assistance.” Indeed, during the March 24 edition of Fox News' Fox & Friends, White House press secretary Robert Gibbs explicitly rejected the claim that the administration sought to “put a cap” on executive salaries at firms not receiving bailout funds, stating: "[T]here are not plans to do something broad like that."
- Gingrich went on to claim, "We are seeing the biggest power grab by politicians in American history. The idea that they would propose that the Treasury could intervene and take over non-bank, non-financial system assets gives them the potential to basically create the equivalent of a dictatorship." In fact, in his March 24 written testimony, Geithner addressed authorizing the government to manage troubled non-bank financial institutions, but not “non-financial system assets.” Geithner stated, “The U.S. government does not have the legal means today to manage the orderly restructuring of a large, complex, non-bank financial institution that poses a threat to the stability of our financial system.” He further stated:
As we have seen with AIG, distress at large, interconnected, non-depository financial institutions can pose systemic risks just as distress at banks can. The Administration proposes legislation to give the U.S. government the same basic set of tools for addressing financial distress at non-banks as it has in the bank context.
The proposed resolution authority would allow the government to provide financial assistance to make loans to an institution, purchase its obligations or assets, assume or guarantee its liabilities, and purchase an equity interest.
The U.S. government as a conservator or receiver would have additional powers to sell or transfer the assets or liabilities of the institution in question, renegotiate or repudiate the institution's contracts (including with its employees), and prevent certain financial contracts with the institution from being terminated on account of the conservatorship or receivership.
This proposed legislation would fill a significant void in the current financial services regulatory structure with respect to non-bank financial institutions. Implementation would be modeled on the resolution authority that the FDIC has under current law with respect to banks.
- Gingrich subsequently asserted that “Congress had passed the authorization in the stimulus bill for AIG to pay those bonuses” and that “the money that was being paid to AIG employees” was “under a provision which the Congress itself had passed a month ago.” But as Media Matters for America has repeatedly documented, the American Recovery and Reinvestment Act did not create the right for AIG -- or any company -- to pay bonuses. Rather, AIG reportedly disclosed that it had entered into agreements to pay those bonuses more than a year ago, the Bush Treasury Department approved the AIG bailout with this agreement in place, and the relevant provision in the recovery act actually restricted the ability of companies receiving money from the Troubled Asset Relief Program to award bonuses in the future.
From the March 25 edition of Fox News' Hannity:
HANNITY: I want to get into, and I think all of the media is ignoring this, and the fact that he got a pass last night during this press conference is very, very troubling to me, and very specifically, I think this moves America down the road to socialism, the biggest power grab.
They have asked for, in just the last week, the Obama administration, the right to limit executive pay even for companies that are not getting a bailout. They saw it yesterday. We saw in the -- I believe it was The Washington Post -- they're actually seeking the right to seize firms. They want to use the reconciliation process to pass their health care bill, and cap and trade, which would eliminate the need for Republican votes in the historical sense, and even some Democrats are opposing.
Can you explain to our audience how dangerous this power grab is?
GINGRICH: Sure. Look, I think if you read Jonah Goldberg's book on Liberal Fascism and you read the chapter on what a liberal fascist's economics would be like, it's frighteningly prescient. I think he ought to, you know, re-issue it as sort of an introductory guide to how the left is thinking this year.
We are seeing the biggest power grab by politicians in American history. The idea that they would propose that the Treasury could intervene and take over non-bank, non-financial system assets gives them the potential to basically create the equivalent of a dictatorship. You don't want to do what they want, they take over your company.
You do what they want, Congress retroactively -- and this is what made last week's lynch mob like a third-world government, when the Congress literally got out of control, panicked, panicked because people were mad at it and it turned out that the Congress had passed the authorization in the stimulus bill for AIG to pay those bonuses. The Congress had approved it. The people at AIG were acting what they thought was the rules set by the government. Suddenly, they're being attacked. They are retroactively losing their money.
Why would anybody want to invest in a country --
HANNITY: Now, wait a minute.
GINGRICH: -- where [Rep.] Barney Frank [D-MA] and [Sen.] Chris Dodd [D-CT] can go back and retroactively take money away from you?
HANNITY: So if we put all these things together -- that they control executive pay, that they can take over firms, retroactively tax people or target individuals as they did -- you used the term dictatorship. That moves America towards a dictatorship?
GINGRICH: Sure. Look, it absolutely moves you towards a political dictatorship. The Constitution specifically prohibits the kind of bill that they passed in the House last week, to go back retroactively and confiscate 90 percent of the money that was being paid to AIG employees, under a provision which the Congress itself had passed a month ago. I mean, I think people need to look carefully at what despicable behavior this is.