Now, maybe we can finally have a reprieve from all the puts on Wall Street..
President Obama and his Treasury secretary will acquire the right to take over any financial institution they wish to, provided that, in their sole opinion, it is both "too big to fail" and on the brink of insolvency. The House bill provides for no judicial review and does not require any objective evidence of imminent failure to trigger the takeover provisions. (There is also no definition of too big to fail and or why the gov't would take over a company - basically they can do for any reason they want)
Once the government takes over such a company, it will acquire the right to replace the entire board of directors, fire the management of the company, wipe out stockholder equity, and even sell off divisions of the company.
Essentially, this bill permits the government to launch an unfriendly takeover of any financial institution it wishes without risk and with no poison pill or other counter-measures possible.
This legislation, essentially, confers on the federal government police powers that, under our system, are the exclusive preserve of state and local government. The blank check the bill gives the feds to take over any financial institution is really more of an exercise of eminent domain than it is an extension of traditional federal regulatory power.
This grant of power to the executive branch is unprecedented and potentially totalitarian. Consider:
Will Obama, or any future president, target companies that are particularly vocal in their opposition to his policies or generous in funding his political opponents? Will the fact that Obama would have this power force companies, investors, CEOs and managers to self-censor their opinions and political involvement because they fear the wrath of a vengeful president?
Will this grant of authority force companies to hesitate before they grow and expand? Will it function the same way the antitrust powers of the Justice Department do in making companies re-examine mergers and acquisitions with a view toward what Justice will think of their resulting market share? In antitrust situations, where a specific action brings companies under scrutiny — like a merger — such concern is not unreasonable. But when the simple act of making money, showing a profit and expanding in size puts a company in federal crosshairs, does this not have the potential to attenuate the capitalist focus on growth?
In an environment where the feds are looking over the shoulder of every financial institution to see if they should take it over and shut it down, will this not force financial companies to follow the most risk-averse lending policies possible? Doesn't this mean that it only makes sense to buy government paper, since consumer loans, mortgages and business lending could be considered risky and lead to a federal takeover? Isn't this policy precisely the opposite of what we need to catalyze economic growth?
In a political world where contributions from financial institutions are sought and widely given, doesn't this power give the president and his party unlimited fundraising ability, simply by baring its teeth and showing the power it has to take anybody over and fire anybody?
Given the fact that Goldman-Sachs was the second-largest donor to Obama's campaign, giving $954,795, doesn't this new power raise the specter that the federal government could take over financial institutions so as to make the competition lighter for its donors?
While the focus on the regulatory bill has been on the consumer protection provisions, which I tend to support, there has been far less scrutiny on these horrific expansions of federal power.
Fidel Castro and Hugo Chavez could only dream of this power.
You Sound more like a paranoid Millionaire to me...No offense, but Obama only got involved with Equities that were already in a bad financial position.They couldn't even wipe their own #$%$They were already burnt right down to the ground!Obama is a Numbers cruncher..Some of our past presidents played the numbers with their bookie..
Only a twit is going to stand up for financial reform that doesn't include freddie and fannie. Written maily by the same two DOPES, Frank and Dodd, largley responsible for the sub-prime which facilitated the financial collapse.
Please keep politics off our fine message board, dipsheit. Have a nice day
Do you realize that with my tax deferred IRA, I could just about put everything I had in high yield dividend stocks, and even with the 10% early withdrawl penalty for early withdrawl, take my dividends out for income every year and still be 5+ % ahead of the average shmuck paying 39.6%
Actually pretty good dialogue for the internet!!Almost civil and even though drifting OTS its insightful.
I also produced goods overseas in Bali for 12 years.The average wage probably $2 a day BUT the mgr of the Hilton was paid $250..REALLY.The REALITY was it was a more than fair adequate wage.My shipping costs doubled the price and customs doubled again but i still could mark up 8X and net 200% on goods that couldn't be produced here.
Just wait until this hits the fan on December 31st -less than 6 mos from now: huge tax increases that will not only crush our frail economy, but go-against hours of hopenchangey hogwash and unambiguous prior Obama pledges to not increase taxes "one dime" on the middle-class (some would call them "lies"). In reality, the working-poor, families, and investors in our economy will actually be getting soaked the worst:
-Obama Tax Increases-
Personal Income Taxes:
10% bracket goes to 15% Increase: +50%
25% bracket goes to 28% Increase: +12%
28% bracket goes to 31% Increase: +11%
33% bracket goes to 36% Increase: +10%
36% bracket goes to 39.6 Increase: +10%
Capital Gains Tax:
Now: 15% Dec. 31st: 20% Increase: +33%
The marriage penalty returns... as does the Inheritance Tax... at a wealth-redistributing 55% for estates over $1M
Now taxed at 15% jump to 39.6%... a +164% increase
And that's not all: there's two more waves of tax hikes coming down the pike already to pay for the largely-unwanted ObamaCare power-grab, along with all the rest of these power-mad fiends' pedal-to-the-metal spending, legislative bribes, and political-backer payoffs... which tripled the annual deficit for 2010.
So limousine liberals, you had your fun... and probably almost broke your arm patting yourself on the back after you went out and cast your vote for Obama. Now you self-righteous posers are getting what you deserve.... Dear obama is going to tax the crap out of you.
Anybody else still voting Democrat this fall -seriously- ought to have their head examined... or just move to Cuba already, the rest of us want our country back-