Capitalism, I hardly knew ye...

This is stuff from last week, but I thought it was interesting nonetheless.

These articles, linked here, here, and here.detail a meeting that President Obama held two weeks ago with some of the major CEOs from the companies that received the lion's share of the TARP money. The quick and dirty of the two articles is that the CEOs gathered in the White House, and President Obama and a group of his cabinet members, including Geithner, sat down and discussed salaries of executives as well as CEO compensation. As the CEOs took turns relating how they all have very complicated companies that require very specialized skills, and how they couldn't just cut paychecks because there aren't very many people qualified to replace them that would accept lower pay, the President cut them off, and said, “Be careful how you make those statements, gentlemen. The public isn’t buying that.”

I can't speak for the public, but it would seem to make sense, plus I don't like the idea of the Government limiting the paychecks and all of that.

Apparently the President then told the CEOs that his administration was the only thing between them and the pitchforks. Interesting.

The CEO of JP MorganChase asked the President to work with the banks in streamlining the process of paying back the funds received as soon as possible. The President answered by saying "This is like a patient who’s on antibiotics...maybe the patient starts feeling better after a couple of days, but you don’t stop taking the medicine until you’ve finished the bottle.” His main point was that returning the money too early could send a bad signal.

This isn't good. He's telling the banks they can't pay the money back yet? What is this?

Here's a quote from the WSJ article linked above:

Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.

Fast forward to today, and that same bank is begging to give the money back. The 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 Obama team 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.

So, there you have it. Read the articles, they're really interesting. This sort of reminds me of anything but America.

I guess the only bright spot could be that if this really goes on, this seizure of power, then perhaps it will be a disaster, and we can get someone in to clean up the mess in four years.

That's sort of not comforting though.