Chuck Schumer: The New Chairman of the Board

Yesterday the WSJ had an opinion entry by Senator Charles Schumer that just isn’t getting enough attention.  Effectively, it was a declaration of war on boards of directors all across the country (or at least at every financial institution.)

Never one to admit wrongdoing or involvement in the worst financial crisis to hit the free market since the Great Depression, Sen. Schumer writes about how he and the other Fannie and Freddie champions devised the liquidity plan “days before” Paulson.  So as not to misquote his hysteria, he writes,

“I pointed this out on the Senate floor a few days before Mr. Paulson came to Congress to ask for authority to spend as much as $700 billion to buy up troubled assets. Later, Democratic leaders Sen. Chris Dodd, Rep. Barney Frank and I made explicit our desire to make direct infusions of capital a part of the approach to solving the crisis during our negotiations with the Treasury.”

So where is the war you say?  And what’s with the title of Schumer as the new chairman of the board?  That comes a little further down in his editorial, buried in a quick blurb, like most of his earmarks in the bills he drives through the Senate.

Schumer states that under any federally sponsored “rescue” plan, the government must ensure that no federal funds end up in the hands of investors or executives.  Seems reasonable? Right?  He states,

“This means that under any capital injection plan that Treasury pursues, dividends must be eliminated, executive compensation must be constrained, and normal banking activities must be emphasized.”

Let’s be absolutely clear.  The “rescue” is not optional.  Banks are being told that they will participate.  The federal government is not asking, “hey, do you need a little scratch?” to these banks.  They are telling them that they will participate.  That means that even if the firm doesn’t need the capital, they are now effectively under the control of the Treasury, and potentially (if current polling is any indication of the election outcome) President Obama and the Democrat-controlled Congress.

So what will that potentially mean?  It means that Schumer and his other financial experts (cough, cough) can effectively suspend the board’s power at every banking institution.  Can you effectively imagine what the suspension of dividends from bank stocks would do to these companies?  Talk about a financial crisis.  Their stocks will collapse, thus driving their need for further capital infusions, and then it’s back to the Treasury for more funds.

Vicious cycle socialism is.

• The New Chairman of the Board… Senator Schumer

Comments

[User 232593:]

all the lying ceo's & the selfserving boards brought this mess on themselves.they deserve dodd,frank,shumer & the rest of congress.the sheeples are being fleeced & tey deserve it also.

2008 Oct 16 11:29 AM

[rogerk2:]

No real change in management, just replacing one bunch of crooks with another. As usual, shareholders get the shaft.

2008 Oct 16 02:56 PM

[hpski:]

It appears that you are using your Ockham "pulpit" to attack someone who's politics you don't like. Your charge that Schumer et. al. can "suspend" a bank's B.O.D's power is strident at best, a misrepresentation at worst. Since you are a an investment "pro", you know that corporation's boards declare dividends based upon predetermined levels of profitability. Please let us know if there are any corporations writing off huge losses that manage to distribute dividends. When they get healthy again, perhaps dividends will be forthcoming. And, I agree with "User 232593" - the lying thieving CEO's and their enablers should be perp-walked out of the industry - let 'em sell used cars...

2008 Oct 16 03:12 PM

[doubleguns:]

I would have nightmares having to listen to schumers winny voice for more that 1 minute. The bankers deserve to spend hours while schumer struts around in his arogant pompus style lecturing them on the proper way to run a bank. You know maybe I could listen to that a bit longer than a minute since the entertainment value might offset the distaste for schumer and his voice. Any way you look at it the bankers should be punished is some sick way.

2008 Oct 16 03:40 PM

[RealResearch:]

Stalin would love this. Under the guise of the democratic party banner, the socialists will soon take control. This is from the textbook. Set the stage by regulating unqualified mortgages for everybody (that sounds fair), the democratically controlled regulators (lifetime government employees) that became Fanny Mae and Freddie Mac with the street army called Acorn use a popular grass roots operation (go get your mortgage) from the local banks who are told to sell the discounted obligation and risk, up the food chain, (sure to collapse) and take control by nationlizing one industry at a time. C'mon ya'll get this, ya just don't want to admit that our comfortable Wall Street game is closing down because we don't have the courage to stand up to Obama et al. Just look at who is supporting Obama, look at the circus, the democratically controlled congress, Pelosi, Reid, Todd, Frank, Kennedy and Kerry. We are losing our free press also controlled by liberal democrats, so the selling information used by voters to decide is no longer relevent, or objective (like Aljazeera). Yep, Stalin would love this. No courage to stand up to this. A bunch of cry babies, a collective of special interests have villified Wall Street and the fabric of American business. Classic communism.

2008 Oct 16 04:28 PM

[Harvybing:]

The Fist Installment Of Obama's Vision Of Spreading The Wealth.

The Fannie Mae Five: Their Campaign Contributions Spoke Louder Than Their Conscience:

www.sundaypaper.com/Mo...


Will The Fannie Mae Five Ever Face justice For Their Actions?

One Of The Crooks Who Fleeced Fannie Mae Of Millions Is Rumored To Be Our Next Attorney General. Of Course If That Were To Happen, None Of The Real Crooks Would Ever See The Inside Of A Prison Cell.

Chris Dodd Knows That if Obama Is Elected, that No Democrats Will Ever be placed Under Oath And Even Questioned, Much less Face Any Type Of Legal Repercussions For His Foul Deeds.

digitalartpress.wordpr.../

Of Course This Shocking Expose may Explain Why The media Refuses To Discuss The Real Sources Of our Economic Meltdown: www.mrc.org/BozellColu...
It Turns Out That Some Very Well Heeled Television News People Are MARRIED to some of the guilty ones who helped drive Fannie Mae Into The Ground.


This Is Just The First Of Obama, Schumer, And Their Fellow Democrats' Means Of Spreading The Wealth. How Do You Like It So Far?
Change is Coming!

2008 Oct 17 08:50 AM