This is all about the lack of jobs being created fast enough to save Barack Obama’s bacon. The first time Barry did this, the money quote was “My administration is the only thing between you and the pitchforks.” Now he has them doing the huddle again to twist arms about small business loans and residential mortgages.
Let’s see if we have this right. Congress changes the Community Reinvestment Act back during the Clinton years putting pressure on the banks to make quotas on loans to people who could not afford them. ACORN steps in and starts protesting outside banks to make sure that happens. Hundreds of thousands of loans are made that will end up in foreclosure when the adjustable rates reset causing the banks to have trillions of dollars of bad assets on their books leading to the credit freeze, the financial collapse and the bank bailouts we saw a year ago. This really is the beginning of the Tea Party Patriots who, as a larger percentage of the population than one would think, were calling and writing their representatives to let these big banks fail and get the pain over with.
Now look at the title of the Washington Post story below. Barack Obama wants the banks to lend more while straight-jacketing them six ways from Sunday with financial regulatory “reform” and executive pay caps. Anybody seen the WSJ article today about how the BofA CEO search has slowed because of the executive pay cap issues? I wonder how this meeting is going to work out for him (and us) when most of these banks are no longer financially controlled by the White House and Congress. What was Barry expecting to trade on, his messiah complex, and does he really expect them to lend when, in my opinion, they are holding on to their cash waiting for the commercial real estate and the asset bubbles to implode?
It appears that the Barry, Harry, and Nancy show thinks that the lack of job creation is the banks’ fault. It has absolutely nothing to do with everything the Dems are doing to scare the crap out of small and large businesses alike; health care, cap and trade, increased taxes, etc.
Democrats increasingly are frustrated that renewed economic growth is not yet producing new jobs, and they have focused on the fact that banks are making less money available to businesses. The amount of money on loan from banks fell by almost $600 billion, or 7.2 percent, from September 2008 to September 2009, according to the Federal Deposit Insurance Corp. Lending to businesses, excluding construction loans, fell 15 percent.
President Obama, who lashed out Sunday at “fat cat bankers” who “still don’t get it,” plans to gather the heads of major banks at the White House on Monday to urge them to make more loans and to accept the necessity of greater regulation.
Obama convened a similar meeting with bank executives in March, and the need for a replay highlights the lack of progress in the interim. The banking industry has reduced lending for five consecutive quarters, even as it has regained profitability thanks to vast public aid.
The administration’s success in rescuing banks stands in starker contrast every day with the financial problems of many Americans, most of all the lack of new jobs, and Democrats made restless by the disparity are mounting pressure on the White House.
Meanwhile, the prospects for financial reform legislation have been clouded by industry groups that convinced moderate and conservative Senate Democrats that some proposals would unduly suppress financial innovation and limit economic growth.
The president and his advisers have responded in recent days with a burst of heated rhetoric, arguing that the government rescued the banking industry and that banks now are failing to show proper gratitude.
“What’s really frustrating me right now is that you’ve got these same banks who benefited from taxpayer assistance who are fighting tooth and nail with their lobbyists . . . up on Capitol Hill, fighting against financial regulatory control,” Obama said in an interview with the CBS show “60 Minutes” on Sunday.
The need for moderation in executive pay also is on the agenda, officials said. The guest list includes the chief executives of 12 of the nation’s largest banks, among them Bank of America’s Kenneth D. Lewis, J.P. Morgan Chase’s Jamie Dimon and Goldman Sachs’s Lloyd C. Blankfein.
So given the democrats track record, the banks will start lending, and then, only to people who cannot pay back the loans. Lovely, I can’t wait.
I am happy to hear that US Bancorp’s CEO Richard Davis is still above ground and breathing. It is a sad day in Amerikka when I have to write words like that because I believe that people being taken out by “the system” actually happens here, AND people keep asking me about helicopters over my house.
On February 18, I wrote “Tarp 1 Was to Ease The Credit Crunch, Not So Much…” about US Bancorp’s CEO, who had come out of the shadows and explained that no matter if a bank needed the TARP funds or not, they were going to take them. Here is an excerpt:
But Davis was critical of the U.S. Treasury’s Troubled Asset Relief Program introduced last fall, saying that while the program was well intended, it has turned out to be “lousy.”
Created to encourage lending to small businesses and consumers, TARP started by shoveling tens of billions of dollars at the country’s biggest banks but soon was expanded to include banks of all sizes. Minneapolis-based U.S. Bancorp got $6.6 billion.
“I will say this very bluntly: We were told to take it. Not asked, told. ‘You will take it,’ ” Davis said. “It doesn’t matter if you were there on the first night and you were told to sign on the dotted line before you walked out of the office, or whether in the days that followed, you were told to take it.”
But by Tuesday afternoon, a U.S. Bancorp spokesman said Davis had misspoke, and meant that because the largest banks in the country took TARP money, U.S. Bancorp and others were forced to do so as well, for competitive reasons.
Last week Judge Napolitano spoke about the “exhortion” factor involved with the banks and the TARP Money.
By Judge Andrew Napolitano FOX News Senior Judicial Analyst
The Federal government committed extortion and they’re not being held accountable. What’s next? Listen to this: I recently met with the Chair and CEO of one of the country’s top 10 bank holding companies. His bank is worth in excess of $250 billion, has no bad debt, no credit default swaps, no liquidity problems, and no subprime loans. He told me that he and others were forced by Treasury and FDIC threats to take TARP funds, even though he did not want or need them.
“There is simply no authority in the U.S. Constitution for Congress to exercise the level of control it now seeks over private industry.”
The FDIC — with Treasury backing — threatened to conduct public audits of his bank unless his board created and issued a class of stock for the Feds to buy. The audit, which he is confident his bank would survive, would cost it millions in employee time, bad press, and consequent lost business.
He pleaded with the Feds to leave his successful bank alone. He begged his board to let him tell the Feds to take a hike. But they gave in. The Feds are now just a tiny shareholder, but want to begin asserting more and more control. This is a classic extortion: Controlling someone’s free will by threatening to perform a lawful act. (Blackmail is the threat is to perform an unlawful act in order to control someone else’s free will.) There are no exceptions in the statutes prohibiting extortion for government persons
This happened in September 2008, but the demands for more control are more recent. It sounds to me like Paulson, Geithner, Bernanke, and Sheila Blair have all read a biography of Benito Mussolini. I guess they skipped the last chapter.
There is simply no authority in the U.S. Constitution for Congress to exercise the level of control it now seeks over private industry. In fact, this level of control will wind up costing the businesses that took TARP (voluntarily or involuntarily) money since they will lose key employees who will go to work elsewhere and because the reporting requirements will take time and time is money. The Constitution basically says that if the government wants to take time or freedom or money from someone or something, it must sue for it. It cannot just give itself the authority to do so via legislation.
Everbody has read the Stuart Varney piece in the Wall Street Journal, but here is the actual event that editorial was based on:
From the White House, there were five principal attendees: chief of staff Rahm Emanuel, who arrived a few minutes late, Treasury Secretary Timothy Geithner, Council of Economic Advisers chairwoman Christina Romer, senior adviser Valerie Jarrett and director of the National Economic Council Larry Summers. Uncharacteristically, Summers said almost nothing, and it appeared to one participant as if he had been told to remain silent.
To break the ice, JPMorgan Chase CEO Jamie Dimon offered Geithner a fake check for $25 billion, the amount of Troubled Asset Relief Program money that the company has accepted. Although many of those in the room laughed, Geithner didn’t keep the check.
JPMorgan’s Dimon spoke first. He began by complimenting the president on the economic team he’d assembled. And he said his industry needs to explain more directly to the American people that the economic recovery plans are already working. Dimon also insisted that he’d like to give the government’s TARP money back as soon as practical, and asked the president to “streamline” that process.
But Obama didn’t like that idea — arguing that the system still needs government capital. The president offered an analogy: “This is like a patient who’s on antibiotics,” he said. “Maybe the patient starts feeling better after a couple of days, but you don’t stop taking the medicine until you’ve finished the bottle.” Returning the money too early, the president argued could send a bad signal.
Several CEOs disagreed, arguing instead that returning TARP money was their patriotic duty, that they didn’t need it anymore, and that publicity surrounding the return would send a positive signal of confidence to the markets.
Bank of America CEO Ken Lewis cracked a joke at the expense of his peers who’d lavished praise on the administration: “Mr. President,” he said, “I’m not going to suck up to Geithner and Summers like the other CEOs here have.” Lewis also urged the president not to paint all the banks with the same broad brush.
The president argued that’s not what the White House was doing. Indeed, earlier the same week, Obama said at a nationally televised news conference, “The rest of us can’t afford to demonize every investor or entrepreneur who seeks to make a profit.”
As the meeting wound down after nearly an hour and a half, the CEOs hustled out to live television positions on the White House grounds, where many gave interviews to CNBC.
It had been a landmark day in the history of American capitalism. Unbeknownst to the financial executives, General Motors CEO Rick Wagoner was also on Pennsylvania Avenue that day, meeting with Obama’s auto bailout task force. Although the finance CEOs got a meeting with the president, Wagoner saw only Obama’s senior advisor Steven Rattner at the Treasury Department. During the meeting, Rattner demanded Wagoner’s resignation.
It had been a tough day for CEOs in the nation’s capital.
It is the common consensus among us little people that Rick Wagoner was made an example of to other bailed out executives to tow the line or else. It is also not that hard a jump to say it was two birds with one stone considering Frederick Henderson’s background; “Meet The New CEO Of GM“.
Is there a congressperson or senator out there that is willing to bring even thinking about bringing impeachment proceedings against this usurper-in-charge for any number of bad judgement calls starting with not “allowing” banks to repay TARP money as was promised to us, the taxpayers, way back when?