Sunday, April 05, 2009

Joker Obama Tightens Grip on Bankers

The Obama administration is refusing to accept monies some banks want to return to the Federal treasury. The banks and bankers are under threat of something untoward happening.

Stuart Varney of the Wall Street Journal wrote on Saturday,
... Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.

Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He's been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics.

Think about it: If Rick Wagoner can be fired and compact cars can be mandated, why can't a bank with a vault full of TARP money be told where to lend? And since politics drives this administration, why can't special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of credit -- until now.

Which brings me to the Pay for Performance Act, just passed by the House. This is an outstanding example of class warfare. I'm an Englishman. We invented class warfare, and I know it when I see it. This legislation allows the administration to dictate pay for anyone working in any company that takes a dime of TARP money. This is a whip with which to thrash the unpopular bankers, a tool to advance the Obama administration's goal of controlling the financial system.
Obama is clearly taking far more control of the country than is needed. Historically, there are two things a ruler must control in order to establish absolute control (1) the language, and (2) the economy. Obama has proved himself a master of language control by renaming terrorist acts as "man-made disasters"; toxic assets are now "legacy loans." Now, people and institutions are not allowed to repay loans with interest to the Federal treasury thereby keeping them in thrall to the creditors. By any name , this is tyranny.

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.


Anonymous said...

Is the bank in question Wells Fargo? Don

Indigo Red said...

Wells Fargo is one of the banks, Don. After The One took control, Federal bialout money was sent to hundreds of banks shogun style which ignorred the problem and the truth.

The problem was that the largest banks were involved in the majority of toxic loans. Those banks actully number the fewest. The vast majority of banks are small banks, are run very conservatively, and are complettely solvent.

The small, successful banks were also sent federal money which the banks didn't ask for and do not want because of the strings attached. Mostly, the bankers just don't want that kind of cash laying around with no purpose.

Obama is taking over.

Anonymous said...

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Enjoy !

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Joan Stepsen
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