More Bank BS from Obama

Okay, now I really AM finished with the news for tonight. A couple of the stronger New York banks--J. P. Morgan Chase and Goldman Sachs--are looking to pay back their TARP money. This should be good news, right? That would mean that the banks are strengthening, and the government gets out of the business of running them. Less hassle for the American taxpayer. Not so fast. The Financial Times is reporting that it's not so easy:

Strong banks will be allowed to repay bail-out funds they received from the US government but only if such a move passes a test to determine whether it is in the national economic interest, a senior administration official has told the Financial Times. [Emphasis mine.]

“Our general objective is going to be what is good for the system,” the senior official said. “We want the system to have enough capital.”

So one must ask: does anyone still believe that once the government gets an ownership stake in any business, they will really let it go so easily? If you do believe that, the statement from the Obama administration should give you pause. If a bank pays back the money it got from Uncle Sam, then the debt is closed, and Uncle can't boss around the bank as easily because it will no longer have the bank in a vise.

So who is Barack Obama or anyone else in his administration to say that a bank paying back the TARP money is not "in the national interest?" Shouldn't the goal be to get the economy moving again? And if a bank has enough money to pay back a government loan, it also should have enough money to start loaning to private borrowers again. They won't be able to get the whole system running again, as the administration official suggests they should do--but they can at least get their primary customers going again. And wouldn't that be the start of something--dare we say it--a rally?

I Want Capitalism Back

This article on the Obama Administration's follow-up to TARP is worth reading, particularly this:

But wait, it is now not just the recipients of Troubled Asset Relief Program (TARP) money and other taxpayer funds who are to be regulated. According to "sources," the White House is considering salary controls for "all financial institutions" and "publicly traded companies," not just those receiving "federal bailout money."
What's more, the feds intend to impose this by fiat, meaning regulations not legislation. When the government controls your salary, control over your financial compensation is not far behind.

Workers at GM think they're being treated worse under the Obama administration than they were under straightforward GM management.

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I wrote this in response to a reader, but apparently it needs to be repeated. Those of you who hate the "power of big business" need to remember that said power, however financially impressive, is nothing compared to the power of the government. Businesses are nothing if they don't provide goods and services that customers want. On the flip side of this, government had more direct control over people because they control the laws, and those laws are enforced by regulations, police, courts, taxes, and when all else fails, the point of a gun. Businesses cannot do any of these things legally.

Occasionally I get retorts like, "Big business runs the government because they've got money and lobbyists and they 'own' senators." This requires re-explaining as well. Yes, businesses have lobbyists. Yes, those lobbyists make contributions to various members of Congress and Senators' campaign funds. But they cannot enforce their wishes. A member of Congress can accept a donation one day, and then turn around and vote for a bill that harms the donor's interests the next. And if the government really was so beholden to big businesses, then why are those businesses subject to the highest corporate taxes in the Western world? Why must they spend money for things like ADA, OSHA, EPA, FICA, benefits, etc.? All of those are huge expenses that interfere with profits. If businesses' lobbyists "control" the government, then they should be fired, because they're doing a poor job of it.

And then there's this angle: up until the 1930s, business lobbyists weren't really necessary because Washington didn't control that much of the economy. There was no need to have high-powered lawyers and professional persuaders in $1,000 suits walking the halls of Congress to protect their interests. Government power has since centralized in Washington, and that's why the lobbyists were necessary--as protection.

A liberal friend just posted on Facebook,

[X] thinks that firing Wagoner was just the start. In every revolution, heads gotta roll ...

To which I responded, "Revolutions are great until it's your ox being gored." Obviously I didn't vote for Obama. But I'm willing to bet that even people who voted him did not vote for a revolution, just a change in policies. And to follow on to my response, revolutions can consume their own. It's always cool to "get even" with whoever the revolutionaries think is the bad guy until suddenly YOU'RE the one labeled as the bad guy. For examples of this sort of behavior, see the history of the French Revolution and Russian Revolution.