"Dangerous"?

Bloomberg reports:

"Dec. 9 (Bloomberg) -- Illinois Governor Rod Blagojevich’s threat to halt the state’s dealings with Bank of America Corp. over a shut-down factory in Chicago extends a “dangerous” trend of politicians meddling with commerce, a former general counsel of the Federal Deposit Insurance Corp. said.

....

 “This is a very dangerous thing,” said Douglas, who was at the FDIC from 1987 to 1989 and has since represented financial institutions including Bank of America. “There becomes an expectation that these government officials have some say over what the institution does,” he said in an interview.

My response? 

Go perform an obscene act on yourself with a coke bottle Mr. Douglas.

He who has the money calls the shots.  Or did you conveniently forget that Bank America raided the public treasury just a few short weeks ago?

Guess what? 

We the people are the ones with the money - that's our funds your client(s) are jacking around with, not theirs, and we have every right to direct how those funds are spent.

I am not passing judgment on the company, which, it appears, has plenty to answer for.

There are rumors in the media that the firm was in fact intending to screw the employees for some time, moving their facility and abrogating their responsibilities under the law.  If this is true then management needs to be strung up by their toenails.

I ran a company in Chicago for more than a decade and am very familiar with the legal requirements under Illinois Law as an employer.  Vacation time is earned and must be paid at termination, among other things - trying to screw people out of accrued vacation time is an outrage and if that's part of what is going on here management needs to be held to account.

But, Mr. Douglas, it is trivially simple to argue (and I bet that argument would be a winner) that Bank America, along with the rest of America's "Big Banks", knowingly and willfully made loans to people it knew could not possibly pay as agreed on the original terms.

Further, taxpayer funds were clearly given to these banks with the clear expectation and legislative intent that they be used to increase and maintain lending.  Instead these banks have used the funds to raid one another in a transparent game of cannibalism, not to mention paying out millions of dollars in bonuses, and they could have, but did not, refuse those funds if they were unwilling to use them as intended and directed.

Now I am not here to argue that Bank America is required to make loans to firms that are insolvent - but if this is in fact the case, why are we here in the first place?

See, Bank America, including its Countrywide subsidiary (which it bought in yet another raid) in fact made lots of loans to people who were insolvent into the face of warnings both in Congress and privately for years prior to this crisis erupting into the national media.

Now, suddenly, this bursts onto the scene and occupies the hearts and minds of Americans, along with politicians.

Where was the politicians' outrage when Bank America, via their proxies Ben Bernanke and Hank Paulson, cornered them in a little room in the Capital and threatened the nation with Martial Law and Depression unless Congress forked over $700 billion that was then immediately spent in a fashion directly contrary to the intent and plain language of the legislation that was passed?

It is about damn time that the citizens stood up and said in a loud, clear voice:

"This far, no further.  Not one more damn step shall you take!"

Now, will the American People do the right thing and demand the immediate de-funding of these "bailouts" in the financial space?

It is not necessary to bail out the existing banks to guarantee that the system survives.  Instead of transferring billions to banker's bonuses and enabling corporate raids, Congress can and should charter ten new banks, put in their Tier Capital, IPO 'em all and force the withdrawal of all of the "lifelines" extended to existing institutions, including the cancellation of all of the so-called "commitments" made thus far. 

Congress has the power to do this TODAY and we the people must demand they exercise it.

The Bank Americas and Citibanks who have imprudently levered up and made bad loans should all go bankrupt, along with those who imprudently borrowed.  That is the only way that the system can be cleansed of insoluble debt and economic activity can return to a normal and sustainable level.

This act does not need to destroy the banking system.  Indeed, with the chartering of new, clean-balance-sheet banks and ordinary banking leverage of 12:1, no such failure of the system would take place. 

ALL of those who did imprudent things, however, would go bust - as they should.

Sound community banks and credit unions (there are a lot of them!) are being severely damaged by institutions like Washington Mutual that were paying far-above-market CD rates, siphoning off deposits from these sound institutions while relying on the public tit to continue to operate.

Now, with The Federal Reserve and Treasury intentionally tampering with the bond market by depressing the long end of the curve the profitability of these sound and safe institutions is being further damaged - on purpose - so that those who operated imprudently do not have to suffer the just consequences of their actions.

It is time for America to stand up as is occurring with Republic Windows across the nation and refuse to sit still for this obscene act being performed daily on American business and households.

This "credit crunch", along with the housing bubble and bust, was not and is not an accident.  Neither is the present recession and, if we don't cut this crap out, the Depression that we are staring into the maw of right here and now.

All of this occurred as a direct and foreseeable consequence of imprudently making loans that the lender had no reasonable expectation of being fulfilled on the original terms.

These actions took place with not only the blessing of but at the behest of government officials including Ben Bernanke, who was present as a member of the Federal Reserve Board during Alan Greenspan's tenure, Henry Paulson who personally lobbied for removal of safeguards as CEO of Goldman Sachs, along with Congress who intentionally and willfully withdrew essentially all of the Depression-era safeguards that were put in place for the specific purpose of preventing this crap from happening!

America must demand that the institutions and individuals responsible for this outrage, including Ben Bernanke and Hank Paulson, are not allowed to continue looting the public treasury so as to prop up these failed institutions and executives.

Period.

All I want for Christmas is for the example of Republic Windows to spread from sea to shining sea.

If The Federal Government will not do the right thing then it is time for "we the people", along with State Governments, to do so in their stead and starve these institutions of the business and capital they require to survive.

WE, the people and states of this nation, have the power, as this example amply demonstrates.

It is time for us to exercise it.