Cheney Sounds Off on Obama's Economic Programs

Last Wednesday, former Vice President Dick Cheney took aim at President Obama on national security.

Today, Cheney turned his ire to the new administration's economic programs, denouncing the government's increased involvement in the private sector, from bankrupt automakers to bailed-out banks.

"I think the recession we've been through is being used by the administration in ways that fundamentally change the relationship between government and the private sector," Cheney told CNBC's Larry Kudlow in an interview airing Wednesday night on "The Kudlow Report." "That's what worries me most."

So, is Obama a socialist, as some Republicans have alleged in recent weeks?

"I agree with the criticism without using the labels," Cheney noted. "I don't want to get into trying to label President Obama.

"We're seeing a vast expansion -- not only the power of the federal government over the private sector, but also in terms of spending," he continued. "Massive, massive amounts of new spending and presumably new taxes to pay for it that I think will do fundamental, long-term damage to the country."

Cheney said the Bush administration never even anticipated the present extent of government control, such as the influence Congress now wields over the nation's banks after the implementation of the $700 billion bailout program implemented by former Bush Treasury Secretary Hank Paulson.

"I don't recall any debate within the administration," Cheney said. "There may have been some over at Treasury or someplace that focused on the extent of which government would try to control these institutions once they provided financing for them."

The government involvement that the Troubled Asset Relief Program has caused, he added, brings back bad memories.

"I've got experiences going back to the wage price controls in the Nixon administration," he said, "where, in effect, we had what I think was a terrible mistake -- in that case, [under] a Republican administration -- where [government] moved in and tried to control the wages, prices and profits of every enterprise in America. It was a huge mistake. We finally got out of it, but it took a long time to do it, and it does a lot of damage.

Cheney Advocated Early On to Allow GM Bankruptcy

"One of the things we see now ... is the fact that government, in some cases Congress, in some cases the Obama administration, [is] telling General Motors they've got to fire Rick Wagoner, making decisions that traditionally and historically have been made by the private sector."

GM is currently staring down a Monday deadline to successfully restructure or else face bankruptcy. Before the Bush administration made the initial loan to GM last December, Cheney said he pushed internally for the struggling automaker to declare bankruptcy.

"Some of us, at the time, wanted GM to go bankrupt, go to Chapter 11," Cheney recalled, noting that he was ultimately overruled.

"The decision was made that, in the final analysis, since our administration was almost over and a brand new team was about to take over, that the president wanted, in effect, not to take a step that wasn't necessarily going to be followed by his successor, but rather to set up a situation which the new guys could address that issue and make a decision about what the long-term policy was going to be," Cheney said. "And we came up with a short-term package, in effect, that got us through the inauguration."

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