Banks are not Being Allowed to Pay Back Bailouts

[archangel689]

Write your House and Senate reps!!!


http://online.wsj.com/article/SB123879833094588163.html
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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. And for this intensely political president, mere influence is not enough. The White House wants to tell 'em what to do. Control. Direct. Command.

It is not for nothing that rage has been turned on those wicked financiers. The banks are at the core of the administration's thrust: By managing the money, government can steer the whole economy even more firmly down the left fork in the road.

If the banks are forced to keep TARP cash -- which was often forced on them in the first place -- the Obama team can work its will on the financial system to unprecedented degree. That's what's happening right now.

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.

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.

After 35 years in America, I never thought I would see this. I still can't quite believe we will sit by as this crisis is used to hand control of our economy over to government. But here we are, on the brink. Clearly, I have been naive.

Mr. Varney is a host on the Fox Business Network.

[Guns4Fun]

That is very true. There are several banks that want to return the money. Hell, some of them didn't even want it in the first place--but they were forced to take it.

The .gov claims they want them to hold on to the money so they can remain solvent and loan more money out to people. Really, the .gov wants them to keep the money so the .gov can still control them.

[Morel42]

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.

Give. Me. A FRIGGIN BREAK.

When Bush did it = Gooood
When Obama Done do it = Baaaad.

Also, what bank is BEGGING to give it back and not being allowed to? Links? Articles? Quotes?! Oh right names have been changed to protect blah blah.

I've seen alot of BS from Fox.. But Jesus Tap Dancing Christ...

[Decholder]

I have to agree with Morel42 on this one. There is really no way to know if Bush implemented that policy for purely economic reasons....perhaps he wanted control (seems to be the governments favorite game of late). Whatever the case may be, I would like to see some hard facts backing up this rumor. If it's true, then we go after the administration, and if not, then we know of one more reporter who interjects his opinion over fact and should be ignored.

Though sadly, I wouldn't be surprised....

P.S. Who's with me on the idea that we should implement a "Pay for Performance Act" on congress?

[Coops]

First of all, I don't agree that what Bush did with the first bailout was good. Fiscal conservatives never liked any bailouts. In fact, the first vote on the bailout in the House failed to get the votes.

Secondly, how can you assert that Bush just wanted to control the banks when he was about to become a lame duck at the time of the bailout? What did he have to gain power-wise when the presidency and both houses of congress had already shifted to Democrat domination? I remember him meeting with president elect Obama to talk about how to distribute the money.