The chairman of JPMorgan Chase, Jamie Dimon, was receptive, saying he thought the deal looked pretty good once he ran the numbers through his head. The chairman of Wells Fargo, Richard Kovacevich, protested strongly that, unlike his New York rivals, his bank was not in trouble because of investments in exotic mortgages, and did not need a bailout, according to people briefed on the meeting.
To give you an idea of the size, setting aside for a moment the immorality, of this coercion, consider:
All told, the potential cost to the government of the latest bailout package comes to $2.25 trillion, triple the size of the original $700 billion rescue package, which centered on buying distressed assets from banks.Why, you might reasonably ask, would the government twist executive arms when they know that several around the table had no need of the money? For the simple reason that the dictators are concerned that if the stable banks didn't accept the money, the weak banks would be revealed for what they are: weak. That, they fear, would upset their plans.
There is a scene in Atlas Shrugged in which the hero, John Galt, is being forced to appear in front of a TV audience to create the illusion he is going along with the Fascist government's unworkable plans.
In a scene nearly as dramatic, but much more frightening for being real,
The chief executives of the nine largest banks in the United States trooped into a gilded conference room at the Treasury Department at 3 p.m. Monday. To their astonishment, they were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry Paulson Jr. said they must sign it before they left.
In a brilliant dramatic choice, Rand has her hero merely step aside a few inches at the right moment, revealing the gun in his back for all the world to see. By doing so, the author eloquently conveys the idea that reality can not be faked and that to overthrow evil all that is necessary is to expose it.
By contrast, the Chairman of the Bank of America said,
"I don't think we need to be talking about this a whole lot more," Lewis said, according to a person briefed on the meeting. "We all know that we are going to sign."
A pity the bankers around the table with Paulson and Bernanke lacked Galt's understanding and so displayed none of his courage.
At base, there are two basic moral failings represented by this latest assault on freedom.
Paulson and Bernanke, and the Supreme Court who are silently allowing them to get away with this blatantly unconstitutional act, are substituting force for choice. Any plan they conceive, the economic czars believe, is justified on the grounds that the government has to "do something" even if that something involves — surpassing irony and moving at light speed to ludicrous — forcing money on men who don't want it.
No plan not involving severe government control — many of which that have been suggested by such well-credential economists as Jeffrey Miron of Harvard — is even being considered. It's my way or the highway, according to Paulson and Bernanke, and on that highway lies the hangman's gallows.
The other failing is a hidebound pragmatism that considers all economic principles, not to mention moral ones, as dispensable in an 'emergency'.
"I've always said to everyone that ever worked for me, if you get too dug in on a position, the facts change, and you don't change to adapt to the facts, you will never be successful," [Paulson] said in the interview.To such a man, reality is infinitely flexible because it consists only of what he can force other men to do. There are no iron-clad causal relations in economic affairs to a mind like this. There is only an endless Heraclitean flux of facts, constantly streaming past his unfocused eyes. It is this pragmatist philosophy, this rejection of reason and substitution of force that is the terra not-so-firma at the base of all the tottering foundation stones of the current crisis.
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