December 22, 2008
None of your business!
Associated Press asked 21 banks how they spent the bailout-billions. You will never guess how they spent the money! Oops! I meant to say you will have to guess, because all 21 told AP nothing. Here is the position of the banks in brief, brought to you by JP Morgan Chase: "We have not disclosed it to the public [nor the Congress]. We're declining to do so."
OK, I oppose torture...isolation...water-boarding, stress positions...but we should at least consider solitary confinement at Supermax for bankers who refuse to tell us how they spent a couple hundred billion of our money! C'mon.
I look at the standard form banks require a borrower to fill out and ask, "What the hell is going on?"
Schedule A--all cash on hand; schedule B--all securities; F--any notes and loans receivable; Schedule E--notes payable...and on and on and on. The ending is perfect: "We may report information about your account to credit bureaus. Lender may share information...capacity, character, reputation, mode of living..." I am not kidding! And they won't tell us how they have used our tax dollars? Whoa Nelly!
If you put in bad information you might face "a fine not more than $5,000 or imprisonment for not more than two years." What is the old saying about the goose and the gander?
Judge Crabb ordered the state to keep seriously mentally ill (SMI) inmates out of Supermax. If we don't demand an accounting fron the banks then we are SMI.
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An awful lot of important things change in 25 years, but it appears many others stay the same.
When Governor Tony Earl appointed me Wisconsin Commissioner of Banking in 1983 I bore responsibility for regulating Wisconsin banks to insure their "safety and soundness" and to insure that they were properly serving the needs of their communities, two requirements that were spelled out in their State charters which authorized them to conduct banking business in Wisconsin
It was a diffiult times for banking across the nation due to the country's falling economy in virtually all sectors, but particularly in agriculture. Bank failure were very high in 1983, a total of 48, and this number increased 73 percent to a post-Depression high of 78 in 1984.But with the assisntance of the small and dedicated group of professional bank examiners in my office we were successful in meeting our goal of not having a single Wisconsin bank fail (even though it got very close with at least a dozen of our community banks). We knew how disastrous it was for a community when a bank failed. Even with FDIC insurance on most accouts, a failed bank led to loans being called due, increased home forclosures, denial of seasonal crop loans, and other traumatic financial disruption for families and businesses in the community, and we were determined to avoid those problems in Wisconsin.
A key regulatory tool we frequently used to pressure banks to run their affairs prudently and promote their soundness was to review both their loans and the amount of salary and benefits the officers were paying themselves. At least a dozen times each year we formally demanded that a bank either cease and desist from unsound practices or we would force the board of directors to get a new bank president if they wanted to stay in business. And we did the same when we saw a bank that was paying outrageously high salaries to its President at times when the bank was losing money or not being run safely.
Fast forward to today, when the banks who accepted the hundreds of billions under the TARP program, and say they will not account to Congress
for how they are spending(or hoarding) this money. Whoa Nellie--as Ed Garvey would say!
This is a sure sign of improper behavior, at best.Banks could never have gotten away with this 25 years ago, and there is no defensible reason why they should now.The entire legacy of the Bush administration and the Paulson giveaway(abetted by the Congress)has led to this point where the banks get are money and refuse to say what they do with it!
The new Administration, 29 days away, cannot come soon enough! Let's all hope they put an end to this scam immediately and force the banks to meet their reponsibilities in a transparent manner.
-Bill Dixon | Monona, WI | December 22, 2008