Tuesday, April 7, 2009

From now on, youse guys and us is partners, get it?

Organized crime has a long history of "buying into" legitimate businesses, whether the original owners are interested in acquiring partners or not. Those businesses are then redirected to ends favored by the mob, often at the expense of their long-term viability. The actual owners are pushed aside, of course, with little or no hope of winning back control of their companies.

So, is it too much to compare recent actions by the government to those of organized crime? You tell me. From Stuart Varney, writing at the Wall Street Journal:

Here's a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). 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.

In the end, an offer you can't refuse is an offer you can't refuse.



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