The Washington Times has this editorial on the complete mess that the federal government is making
of the banking industry.
Banks that were forced to take bailout money are running into political obstacles that prevent them from repaying it. The White House is unwilling to give up the additional control over the banks - the ability to make operational decisions, fire executives and dictate pay scales - that the bailout funds allow. All this has happened as the Congressional Budget Office has raised the estimated cost of the Troubled Asset Relief Program to taxpayers by almost $200 billion to a total bill of $356 billion.
In many cases, this government dependency is not the fault of the banks because many were being run responsibly. According to Fox News judicial analyst and New Jersey Superior Court Judge Andrew P. Napolitano, banks with no financial problems were forced to sell stock to the government or face the threat of costly and harassing public audits. This happened to banks that had "no bad debt, no credit default swaps, no liquidity problems, and no subprime loans" and didn't want or need any government funds. Judge Napolitano called the government actions what they are: "classic extortion."
On March 27, in a meeting at the White House, President Obama claimed a little rough stuff is necessary because his administration "is the only thing between [the bankers] and the pitchforks," Politico reported. In other words, if the president hadn't quasi-nationalized the banks, mobs would be stringing up financiers from lampposts. Bankers had gone to the president to make their case that regulations on salaries would prevent them from retaining and hiring the best workers. In the meeting, one bank chief executive officer (who has remained anonymous) attempted to explain the obvious: "These are complicated companies. We're competing for talent on an international market." Mr. Obama told the bankers to get over it and then made his quip about pitchforks. . . .
Labels: bailout, Regulation, Washingtontimes