Posted by AzBlueMeanie:
"Senator Obstruction," Jon Kyl, issued a warning to the Obama administration on Bloomberg Television's "Political Capital with Al Hunt," warning not to remove the chief executive officers at banks that have received U.S. assistance, saying "the great fear" would be government management of companies. Kyl: Removing bank CEOs is a bad idea
"If you think that Washington can run car companies and banks and so on, well, then you've not been paying attention to how we've been doing back here," Kyl said of the Treasury's threat of management changes at banks getting "exceptional" aid.
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While a financial review showed most banks don't require new assistance from the Treasury, "the government appears to still have control over the major banks to the extent of saying they've got to raise capital."
This continued government leverage over companies such as Bank of America Corp. and Citigroup Inc. "does raise some questions," Kyl said. "Hopefully they can all get out of that relatively quickly."
Let's review: bank CEO's, through their own incompetence, mismanagement and greed drove their companies into the ground and insolvency. Their failure required a government bailout to keep our entire financial system from collapsing. These are the bank CEO's that Senator Kyl believes should be rewarded for their incompetence, mismanagement and greed by keeping their jobs.
Kyl raises the specter of government management of the banks, which in Kyl's ideological Galt world view is always worse than private sector management. See the previous paragraph.
When a bank is insolvent, i.e., undercapitalized, the proper procedure to deal with this problem is known as "receivership." The FDIC has successfully managed failed depository banks through receivership since 1933. The FDIC seizes the bank assets, fires the failed management, recapitalizes the bank, brings in new management, then sells the bank out of "receivership" to another privately held bank or investors. The government has never had an interest in permanently managing "government banks," as Senator Kyl falsely suggests.
The ten banks recently identifed by the Treasury Department's "stress test" Stress Test Results, Bank by Bank as being undercapitalized by some $74 billion should be dealt with in the same manner as FDIC receivership. Senator Kyl's bank CEO buddies should not be rewarded with yet another government bailout. His bank CEO buddies should be fired and replaced with competent bank management.
It is not surprising that Jon Kyl would defend the incompetence of his bank CEO buddies. He consistently defended the abject incompetence of George W. Bush. Let's just agree that Kyl is an extremely poor judge of character.
It is the money of his banker CEO buddies that Kyl really cares about. This speaks to Jon Kyl's lack of character. Here is a partial list of campaign contributions to his 2006 senate campaign, several of whom have since received TARP funds.
Aetna Financial PAC $7,000
Countrywide Financial Corporation PAC $1,000
Bank of America Federal PAC $ 4,000
Bank of America formerly MBNA PAC $ 13,000
Bank of America State and Federal PAC $ 9,500
Wells Fargo PAC $25,000
Metlife PAC $13,000
Allianz/Firemans Fund Insurance PAC $1,000
Allstate Insurance PAC $1,000
AMERICAN BANKERS ASSOCIATION PAC $19,500
Arizona Bankers Association PAC $33
American Family Mutual Insurance PAC $2,000
American Insurance Association PAC $6,000