Saturday, October 25, 2008
Carpetbagging On The Public Dime
I just spotted this in The New York Times and decided it needed to be posted. It concerns the hundreds of billions of dollars the US government has chosen to inject into the nation's banks to improve their liquidity in order to get credit flowing again to American business.
Guess what? The banks are happy to take it but they have a different idea of what to do with their Washington windfall. One executive at one of the surviving megabanks was careless enough to let a Times reporter eavesdrop on an internal discussion:
"In point of fact, the dirty little secret of the banking industry is that it has no intention of using the money to make new loans. But this executive was the first insider who’s been indiscreet enough to say it within earshot of a journalist.
(He didn’t mean to, of course, but I obtained the call-in number and listened to a recording.)
“Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase,” he began. “What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop.”
So, to summarize, those hundreds of billions of dollars of wage-earning taxpayers' money the banks are getting to free up America's credit markets are to be used, instead, as a mergers and acquisition windfall.
That kids is fraud, plain and simple, old-fashioned fraud. And it's fraud on the very taxpayers whose own financial future already has been put in jeopardy by the greed of these same banksters.
I think it's time that Washington simply seized these banks and threw their scheming managers out on the street.
This is truly mind-boggling.