If you have enjoyed owning a car company, you’re going to love getting voting representation in several banks nationwide. Barack Obama’s Treasury Department is already “monitoring” 19 banks and may appoint new board members. The trouble? They took TARP money and have fallen behind on their payments. Almost as troubling, the mainstream press is presenting things as though they had never been better. Zachary A. Goldfarb at The Washington Post writes:
The Obama administration has begun monitoring the high-level board meetings of nearly 20 banks that received emergency taxpayer assistance but repeatedly failed to pay the required dividends, according to Treasury Department officials and documents. And it may soon install new directors on some of their boards.
The moves come as the number of banks that failed to make at least one dividend payment to the government rose to 132 in the last quarter. These “deadbeats,” as they are sometimes called, are virtually all community lenders and collectively received billions of dollars in taxpayer assistance.
In addition to those firms, seven others have failed, resulting in the total loss of the government’s investment.
The number of banks that have missed six or more dividend payments has reached 19, up from seven during the previous quarter. Under the government’s agreement with those firms, the Treasury now has the right to monitor their boards and appoint new members.
So much for the Barack Obama who said last April, “I don’t want to run auto companies, and I don’t want to run banks.” (To properly understand Obama, you must replace “don’t” with “desperately.”) He may insist he does not want to engage in this behavior — and he repeats it again, and again, and again.
The story goes on to reveal “a fifth of banks in the program, almost all of them small community lenders, are not paying the government dividends on time,” meaning they too are en route to an Obama-appointed bank board. The Wall Street Journal reported Sunday that as many as 98 bailed-out banks, which received $4.2 billion in TARP funds, are in danger of failing based on an analysis of their third quarter earnings results.
Will the new appointees in the banks that keep their doors open displace Republican board members, as it seems Obama’s Chrysler dealership closures did? Will they be based on reverse discrimination the way his auto dealership closures admittedly were? A report by Troubled Asset Relief Program Special Inspector General Neal M. Barofsky revealed “dealerships were retained because they were recently appointed, were key wholesale parts dealers, or were minority- or woman-owned dealerships.” (Emphasis added.)
For lenders and business owners, this should prove the adage that those who accept Caesar’s nickel must inevitably wear Caesar’s noose. They wanted federal dollars; they received them; and now they have lost control of their businesses’ future to the most anti-business administration in memory.
For the rest of us, it should remind us why the Founding Fathers did not give the federal government authorization for these kinds of bailouts in the first place.