How would you like it if all of a sudden, the government stepped in and decided to give your competition a few billion dollars- and make everyone else think your company is failing?
That’s exactly what Hank Paulson and the Treasury department are doing to National City Bank- and Congress can’t get a straight answer.
Angry and demanding answers, several Congress members from Ohio seethed last month when they learned that the Treasury Department provided financing to help a Pennsylvania bank take over National City Bank, a Cleveland institution since 1845.
They’re still demanding answers, saying that the department is picking winners and losers unfairly as it helps Pittsburgh-based PNC Financial Services Group acquire National City. But with Congress about to wrap up its work for the year, it’s going to be hard for lawmakers to unwind the $5.6 billion deal, which is scheduled to be completed Dec. 31.
Remember a few weeks ago when Paulson and Bernanke were telling Congress they were going to buy up the “troubled assets” to solve the crisis- turns out, it wasn’t mortgage backed securities that were the troubled assets, it was the banks themselves.
Why else would the Fed be bankrolling the buying spree? Is the idea to make them all “too big to fail”- or just make sure their friends capitalize (no pun intended) on the “crisis” which was brought on by the deregulation of banks. You do notice the highly regulated credit union system isn’t failing right now- don’t you?
Bernanke and Paulson asked for, and for the most part- have received a blank check from Congress. Billions of your tax dollars have been spent in record time to solve a crisis of the wealthy, brought on by the wealthy to be paid for by us- the suckers.
It’s time for a bold move by Congress to put an end to this insanity once and for all.
Stop the market from being a casino– and we won’t have to keep bankrolling the betters who are losing their shirt. Place a deadline one week out- that all stock purchases must be held for one year if purchased in amounts exceeding $50,000 by any one investor. This will force investors to stop the wild swings in value- of companies that were and are- financially sound- and give others time to prove their value. With GM having a market cap of 2 billion this week- while having cash reserves and assets that vastly exceed that amount- the disconnect between value and market price would quickly be restored.
End all short selling. Betting against a company is antithetical to why companies sell stock in the first place. If going public is just about cashing in- we’ve lost the primary tool of a capitalist society for both growing the business and sharing the wealth.
Put stockholders in front of the management. If you want to take huge sums out of the company, you have to do it with your money- not shareholders. Any public company should have limits on executive compensation that require shareholders be paid first, and that large institutional investors be ruled out of the process for voting compensation packages. This eliminates any chance of collusion between the board, the management and the largest owners.
End the practice of corporate welfare at all levels. Not just the feds bailing out banks and insurance companies, but the use of tax dollars that benefit any for profit organization or not-for-profit that directly competes with private businesses. No more funding of sports stadiums, new retail development, hospitals or any other business in the name of “economic development.”
If we don’t do something drastic right now- we may as well just let Chairman Hank run everything. Sounds like socialism to me.