Stuart Varney’s WSJ op-ed is must reading. Mr. Varney’s op-ed prominently includes Judge Napolitano’s story which I posted about here. Here’s what Mr. Varney wrote:

Here’s a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). 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.

King Banaian notes here that TARP monies didn’t exclusively go to troubled banks:

“TCF has always been well-capitalized with adequate liquidity to facilitate lending through our strong retail deposit franchise. By participating in this program, we can expand lending beyond our previous growth plans,” said William A. Cooper, TCF Chairman and Chief Executive Officer.

Here’s a transcript of Greta van Susteren’s interview of TCF CEO Bill Cooper:

VAN SUSTEREN: Bill, I was hard on another bank, Northern Trust, because it took some money and then had a big, fancy party. And they said we never meant to take the money. We didn’t need it. It was forced on us.

Talking to you, was money almost forced on the banks? Explain that to me.

COOPER: In the banking business, when a regulator makes a suggestion, they say “jump” and you say, “How high?” And it was put to us that only the strong banks were going to get this money and it was going to be for the good of the economy so that you would be able to lever that money and make loans to customers and so forth.

This gets back to what I said in my previous post about the oxymoron of “I’m with the federal government and I’m here to help you.” The Obama administration apparently has modified that to say ” I’m with the federal government and I’m here to make you an offer you can’t refuse.”

The Obama administration’s actions, whether it’s Tim Geithner asking Congress for the authority to take over any firm that he deems critical to the economy or whether it’s Barney Frank submitting legislation that would allow Treasury to regulate the wages and salaries of all employeess at banks that accepted TARP funding, it’s apparent that this administration isn’t interested in simply regulating the banking industry.

This administration’s ultimate goal is to centralize power in the federal government.

Rest assured that the Obama administration’s lust for power will start a political backlash. CEOs that contributed before won’t contribute now. They see the vigor with which the Obama administration is pursuing control through overregulation and legislation.

Given their brief history, CEOs contributing to the Democrats or President Obama’s presidential campaign can’t be certain that they aren’t contributing to their being turned into President Obama’s puppets. These CEOs can’t be certain that these aren’t just the first steps of the Obama administration.

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.

If you’re thinking that this is only about control, though, you’re missing a key element, which is the Obama administration’s financial gains through TARP, which is explained nicely in this article:

Lawrence Summers, a top economic adviser to President Barack Obama, pulled in more than $2.7 million in speaking fees paid by firms at the heart of the financial crisis, including Citigroup, Goldman Sachs, JPMorgan, Merrill Lynch, Bank of America Corp. and the now-defunct Lehman Brothers. He pulled in another $5.2 million from D.E. Shaw, a hedge fund for which he served as managing director from October 2006 until joining the administration.

Thomas E. Donilon, Obama’s deputy national security adviser, was paid $3.9 million by the power law firm O’Melveny & Myers to represent clients including two firms that receieved federal bailout funds: Citigroup and Goldman Sachs. He also disclosed that he’s a member of the Trilateral Commission and sits on the steering committee of the supersecret Bilderberg group. Both groups are favorite targets of conspiracy theorists.

And White House Counsel Greg Craig earned $1.7 million in private practice representing an exiled Bolivian president, a Panamanian lawmaker wanted by the U.S. government for allegedly murdering a U.S. soldier and a tech billionaire accused of securities fraud and various sensational drug and sex crimes.

That’s before taking into account what President Obama recently told bankers during a White House meeting:

But inside the meeting, which was held in the state dining room, it was clear the CEOs took different approaches. The bluntest was from Ken Lewis, the chief executive of Bank of America.

“Mr. President, I am not going to suck up to Larry and Tim like the rest of these guys,” Lewis said, according to sources in the meeting. Lewis was referring to Treasury Secretary Tim Geithner, and Lawrence Summers, the head of the National Economic Council, who also attended.

Obama laughed along with the rest of the CEOs, before listening to Lewis get to his point: he wants to pay back Troubled Asset Relief Program funds.

And he was not the only one.

Jamie Dimon, the CEO of JPMorgan Chase, arrived with check in hand to give to Geithner before the meeting started, according to the participant. Geithner took the check briefly to examine it before handing it back. (The check was fake).

Dimon tried again later during the meeting, telling the president he would like to give back his $25 billion in TARP money.

The overall tone of the meeting was cordial, participants said, with no raised voices or significant tension. Obama’s message was essentially one of mutual dependence: we need you, and you need us.

“My administration is the only thing between you and the pitchforks,” Obama said.

Let’s summarize things. We have firsthand proof that:

  • President Obama is using stress tests to prevent properly capitalized banks from repaying the TARP monies;
  • President Obama made a not-so-veiled threat to bank CEOs;
  • Barney Frank’s Pay for Performance Act, which “just passed the House”, is an attempt to control every aspect of banks who’ve accepted TARP funds;
  • and Tim Geithner has asked for legislation that allows him to seize control of any corporation deemed important to the US’s financial system.

That’s as complete a picture that this administration, and its allies in Congress, want to totally control our financial system. That’s scary enough on its own. What makes it scarier is the fact that it’s being requested by one of the most inept administrations in recent history.

I hope more CEOs join in Ken Lewis’s fight against this corruption machine. Additionally, I hope people on Main Street realize the extent to which this administration wants to control their lives through this nation’s financial institutions.

It’s time everyone joined in and said “NO MORE!!!”

Technorati: , , , , , , , , , , ,

Cross-posted at California Conservative

2 Responses to “Control Freak Update, Part II”

Leave a Reply