Sunday, April 5, 2009

Is the Government Taking Our Banks?

What follows is an excellent article from Newsmax concerning the government takeover of U.S. banks. Sound far-fetched? Then why, when a bank wants to pay back monies borrowed from the government, won't the government allow it (and then threaten the bank when it insists)? It's because when the banks are holding public funds, the government can tell the bank what to do.

Is this the kind of change we can believe in? Read on:

The Obama administration is seeking to control the nation’s banks just as it has now near-total control over two of the Big Three auto companies, says Wall Street Journal columnist Stuart Varney. In a piece that appeared Saturday in the Journal, Varney noted how administration officials didn’t seem too happy that banks had return money to them from the TARP (Trouble Assets Relief Program.)

“So why no cheering as the cash comes back?” Varney wrote. “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.”

By managing the banks, Varney reasons, one of the most liberal adminstrations in the nation’s history can ‘steer the whole economy even more firmly down the left fork in the road.” As long as banks keep public money, the Obama administration can direct their policies with an eye on the larger agenda. It’s also the reason that the Obama administration is moving toward having control over CEO salaries.

Varney recounts a story, reported on Fox News, of one unnamed bank that had accepted TARP funds under the Bush administration. The bank is now “begging” the Obama administration to take the money back because bank directors now feel they are safely recapitalized.

“But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent,” Varney reports. “The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics.”

“After 35 years in America, I never thought I would see this,” writes Varney, who is British. “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.”

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