If you were mad over AIG this isn’t going to make you any happier.
The economy is a mess. Everyone agrees that something needs to be done. But what and to what extent does the government have a right to evoke its power at will. I personally believe that the government has gone too far and now it has gotten a taste of that power and doesn’t want to release it but instead expand it. I believe the wrong person is in charge of the Treasury. How in the hell can you put someone in charge of the Treasury that had trouble paying his taxes and now wanting power to set salaries and force CEO’s to resign. Mark my words Timothy Geithner will go down as the biggest power seeking fool the Treasury has ever seen.
Point in case – Let’s talk about TARP
Banks are eager to pay back the TARP (Troubled Asset Relief Program) money they were loaned by the federal government. Many that have taken government money are dismayed by changing rules and public outrage.
For relatively strong banks, doing business with the government may be more trouble than it's worth. Banks are publicly declaring their intent to pay back loans from TARP, as quickly as they can. The banks complain about the rules that the U.S. Treasury keeps imposing on them retroactively, sometimes in ways that seem arbitrary or driven by constituents' anger.
Some say they never needed the money but were forced into taking it by the Treasury, which wanted a show of industry support for its program.
Others say they're dismayed by the public's outrage toward banks that participate in TARP, which was originally touted as a reward of sorts for healthy banks.
To be sure, the government has always had regulatory power over the banks. But at the companies where it's now a major shareholder, its grip is getting significantly tighter as it gets involved in decisions about everything from corporate jets to mortgage modifications.
Since then, legislators and regulators – fueled by popular backing – have imposed more regulations on the TARP banks, such as caps on executive pay and increased disclosure for how the loans are being spent. They also hauled the CEOs of the biggest banks to Capitol Hill for questioning.
I would suggest that banks repay their TARP loans as quickly as possible, and never, ever sign an agreement with the U.S. government again.
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 - Geithner can work his will on the financial system to unprecedented degree. That's what's happening right now.
Today, banks are begging to give the money back. A 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 Geithner 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.
And guess what people….the Auto Industry is next and they’ve already started by forcing the CEO of GM to resign.
Where does this stop and when does it end?
This is not “change you can believe in”.
Since when did it become a bad thing to be successful in this country? You are now demonized for making too much money and the government needs to put a cap on your salary because “it’s not fair”.
Stay tuned for my next blog on how Iran and North Korea push forward with their nuclear ambitions, meanwhile we are cutting defense spending and spending the money on welfare programs.
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