Executive Branch Power Grab, Part 3: Government Refuses Repayment of TARP Money from Banks April 7, 2009, Matthew Cochrane
Treasury Secretary Timothy Geithner signaled the Obama administration is ready to take more control of companies that need government assistance.Already forcing GM CEO Rick Wagoner to resign, the executive branch warned the government might intrude upon the private sector more in the coming weeks.From Bloomberg:
Treasury Secretary Timothy Geithner said he’s prepared to oust executives and directors at banks that require “exceptional” assistance from the U.S. government.
“If in the future, banks need exceptional assistance in order to get through this, then we will make sure that assistance comes,” while ensuring taxpayers are protected, Geithner said yesterday in an interview on the CBS “Face the Nation” program. “Where that requires a change in management and the board, then we will do that.”
This comes on the heels of President Obama’s statement from the G20 meeting in London that the government would “keep acting as forcefully as we can” to pull the nation out of a recession. If Obama simply favored a proactive approach to propping the economy the merits could be debated.Unfortunately, the goal of this administration seems to be more far reaching.CNBC’s Larry Kudlow continues to question Obama’s actions over his handling of the GM bailout:
Already in control of the auto industry in Detroit, the government is now eyeing unprecedented control in the financial and banking industry.
Wary of government control, several banks now are trying to return the government’s TARP money.Amazingly, the Obama administration is refusing to accept TARP money back from banks wishing to repay the money.In a Wall Street Journalcolumn Stuart Varney writes:
I must be naive. I really thought the administration would welcome the return of bank bailout money. Some $340 million in TARP cash flowed back this week from four small banks in Louisiana, New York, Indiana and California. This isn't much when we routinely talk in trillions, but clearly that money has not been wasted or otherwise sunk down Wall Street's black hole. So why no cheering as the cash comes back?
My answer: The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control.
What are the possible consequences such an action? Varney explains:
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.
The column automatically sounds too alarmist for a respectable newspaper like the Wall Street Journal, but it’s hard to take the news any other way. The one common thread in all of President Obama’s policy proposals and bills so far has been to increase centralized power in the United States’ government. Power, once gained, is hard to give back. All Americans should be concerned about the amount of power President Obama has secured in such a short amount of time since taking office.
You're absolutely right, it is terrifying and all the more so because we are watching it play out in real time on the daily news. . .
My quote of the day from Thomas Sowell:
"Socialists believe in government ownership of the means of production. Fascists believed in government control of privately owned businesses, which is much more the style of this government. That way, politicians can intervene whenever they feel like it and then, when their interventions turn out badly, summon executives from the private sector before Congress and denounce them on nationwide television. "
- Verbatim
Wow, things are progressing far quicker than I ever imagined.
Doesn't it just feel great knowing that the messiah is in office and taking control over every sector of society, business, and government. I mean, its going to be like heaven on earth when they revise the constitution to allow him to stay in office until his death, which will probably never come! Because as I said, he's the messiah!
...that was sarcasm if you didn't catch it....
Socialism doesn't scare me so much, but I agree with Verbatim, this is far more far-reaching than socialism, this is the workings of a very large, very powerful, and very scary movement with our "fearless leader" at the head. It scares me even more to realize how many devoted followers he has. I jest about him being the messiah, but I can't count how many times I have heard people talk about him like the savior of the USA.
Atlas, you said Socialism doesn't scare you. Well it sure scares the hell out of me.
Capitalism is a big part of what has made this nation the great nation that it is. Without capitalism, the american dream is dead.
- Jamie Cochrane
I agree, captalism is the best method of economy. The truth is that, as Adam Smith said, the invisible hand that guides capitalism is self-interest (which boils down to the basic human instinct of self preservation and greed). Humans naturally seek their own betterment, if I see that doing X will turn out for my interests and what I want to accomplish economically, that is what I will naturally pursue. And the theory (and I think truth) is that when we all seek our own personal self-interests economically, it will tend to fulfill the needs of the entire society. The problem is that this also requires as free of a market as is possible, which at least the current government is so determined to destroy. So yes, I completely agree that capitalism and free market are the most logical choices for human beings, and I personally think that if we just let the economy play out with as little government intervention as possible (obviously some simple regulations are necessary) it will fix itself.
But what I meant is that basic socialism scares me LESS than the fascist and quasi-communist style policies the current government are pursuing. In a perfect world, what I like to call "Christian-Socialism" would be great. If everyone was perfectly moral and cared more about everyone else than themselves, then yes we could all share our profits and regulate the economy... but since we do not live in a perfect world, its a ridiculous presumption that true socialism could work.
- Atlas
On a planet with finite resources, Capitalism, like all other systems has its limits. World history clearly shows a pendulum effect between the greedy abuses of the rich and the bloody revolutions of the poor. American Democracy created a strong middle class from the tempering of Capitalism with bits of Socialism. The rhetoric of the rich puts out that Capitalism alone created our country's wealth and the scare tactics used against any hint of Socialism are just not well founded. Everybody just take a big deep breath and not be motivated by fear. Go back and look up the history of the FDR era and stop listening to fear-mongering pundits rewriting of that history.
- Dianne
"American Democracy created a strong middle class from the tempering of Capitalism with bits of Socialism." - Diane
I'm sort of curious as to what these tempering "bits of socialism" were that helped create the strong American middle class. Could you please explain this a bit more? Many thanks.
- Bigelow
I am baffled as well. I have never heard anyone claim before that the U.S. Constitution contained "bits of socialism."
- Matthew Cochrane
Dianne,
I understand what you're saying, and I agree somewhat, but I think you're watering down your own views here because you realize quite simply, the magnitude of the problems we're facing right now. Capitalism IS what made this country great. The bits of socialism you speak of didn't exist early on in our country's history. These "bits of socialism" were formed after the fact, and after the country started to grow.
Now, I DO agree with these "bits of socialism" you speak of. What you're referring to (I assume), are programs like... the Public School System.
That HAS certainly helped build this country because it has provided an education to our children that has allowed them to break free from the confines of their own socio-economic class (take Colin Powell as a perfect example). However, is your statement "all encompassing"? I ask that because many of the social programs we have now are hindering the growth of this country. For example, welfare in many respects. Many mothers chose to have as many children as they possibly can to get that income check from the government. Then they have a man live with them who brings in income as well, but as long as they aren't married, they can continue to receive those checks. These types of abuses aren't the exception, they're the norm.
Socialism has taken a serious turn for the worse in the United States, and it's time for the pendulum to swing back the other way (to use your phrase).
I understand and appreciate your views towards the Democrat party... but the challenges we face today, RIGHT NOW, far exceed that of the party lines. Dianne, we are now 4.3 trillion dollars in debt. Three months ago, we were 1.2 trillion dollars in debt. We have more than tripled the amount of debt in our country's history. Let me rephrase that for you with more impact. Since the beginning of this country's history.... the George Washington presidency... all the way to the last DAY of the Bush Administration... Barack Obama has tripled that amount of debt.
Let me say this again in case you didn't realize it.
Washington - Bush Jr. = 1.2 Trillion in Debt.
Obama = 4.3 Trillion in Debt.
Dianne, this isn't fuzzy math, this isn't Republican spin, these aren't temporary numbers, or exaggerated figures that don't yet exist. That is RIGHT now.
So Dianne, I ask you... You clearly support Obama unconditionally... are you ready to do your "patriotic duty" and help pay that off?
