Obama Administration: Watch Your Moves

Some people are worried that President Obama is going to try and run the banks and credit card issuers but how about this little tidbit from the Wall Street Journal:

Then-U.S. Treasury Secretary Henry Paulson threatened to remove Bank of America Corp. Chief Executive Kenneth Lewis and the bank’s board of directors if the bank backed out of its merger with Merrill Lynch & Co. last year, New York Attorney General Andrew Cuomo said.

Mr. Lewis had informed Mr. Paulson on Dec. 17, 2008, that Bank of America was planning to invoke a material adverse event clause in the merger agreement that would allow it to call off the deal, Mr. Cuomo said. Three days before, Mr. Lewis had learned that Merrill Lynch’s financial condition “had seriously deteriorated at an alarming rate” since Dec. 8, 2008, Mr. Cuomo said.

The difference between this news and the ouster of GM CEO Rick Wagoner, of course, is that the government is a creditor of GM and without having lent them money, GM would have filed bankruptcy a long time ago.

Forcing shareholder-owned companies to merge simply to prevent possible instability in the financial system is questionable at best and completely inappropriate at worst. I hope the Obama administration doesn’t repeat these types of things. Fortunately, pushing for a credit cardholder bill of rights, as discussed today in Washington, does not fall into such a category. Let’s cross our fingers it stays that way in the future.

Comments

[Alan Young:]

"Inappropriate at worst"? I don't think so. Forcing a CEO to make a deal that adversely affects the shareholders of his company, without the knowledge or consent of the shareholders, is illegal (which is usually considered a little worse than "inappropriate") at best; Fascist, at worst.
Paulson's defense? "Bernanke made me say it." Oh, sure, that will fly.

Apr 24 01:59 AM

[Jasper M:]

"Let’s cross our fingers it stays that way in the future."
Hope is not a strategy. Bernanke & Paulson must be held accountable, if only in the court of public opinion, to discourage repeat performances.

Apr 24 02:29 AM

[henarl:]

Geithner still has a ways to go on the corruption scale before he catches up with Paulson. Of course Paulson should be indicted but it will never happen. He is just too connected.

Apr 24 12:02 PM

[fireball:]

obamamama will never waste an opportunity for more statist controls.

Apr 24 12:14 PM

[Howard_T:]

Obama's book: "The Audacity of Hope"

I guess I am audacious to hope that in the congressional elections of 2010 we can begin to take our country back from the precipice of a collectivist, state-run "social" democracy. I am also audacious to hope that in 2012 we can elect a true leader and not an eloquent but hollow orator to the White House.

Apr 24 12:40 PM

[woodsey:]

Yeah, time for a Progressive to follow the one term union buster.

Apr 24 12:48 PM