Friday, April 3

Obama Refuses Return of TARP Money: "the system still needs government capital."

As the news has been reporting, a number of banks and financial institutions are desperate to return the Government TARP money to get out from under the Government restrictions that are coming about to impact their businesses, restrictions that have come out months after the money has come out in wake of the fake AIG furor. Some banks have already returned the money but other banks are being told by the Government to keep the money for now, apparently on direction of President Obama:
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. - Politico
This is complete B.S. Maybe it serves these banks well to be trapped into a now forced relationship with the President. And maybe the President is enjoying that the anger with TARP is partly being directed at bank executives. Still, this is not the way Government is supposed to work.

If the Government really thinks that the 'system' still needs Government capital, then they should go and open up bank accounts in these banks. The banks will then be able to loan out a portion of that money or have the money on hand for whatever their business requirements may need it for. On top of that, the Government can earn interest on those deposits.

Better yet, give me some of that money. I will do my best to stimulate the economy!

UPDATE - 4 April 09:
The Wall Street Journal is on the story:
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. - WSJ
First the banks. Then the health care professionals because you know the Democrats can't stand to see doctors make money for saving lives. And once the Government starts paying for the care, they sure as hell are going to dictate compensation for doctors and nurses just like they plan to do for bankers. And just like it is the bankers fault that you're poor, it will be the doctor's fault that you're sick! (See: Government Health Care - Government Dictated Salaries!)
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