On February 11, we were treated to the spectacle of bankers forced to grovel before a select House committee chaired by the execrable Barney Frank. The hearings were a direct political projection of Rep. Frank’s character defects and deficits. It’s a sad day when low people like Barney Frank and Maxine Waters can villify others for a financial collapse they did so much to create. These two perpetrators should be answering questions, not asking them.
The wonder for me is that none of the bankers told the perps where they could shove their committee. Particularly the Chairman of Wells Fargo, a well-run bank that was the unwilling recipient of federal bailout money. According to the Wall Street Journal, Wells Fargo chairman Richard Kovacevich, together with other bank chairmen, responded to the summons of Paulson and Bernanke to a special meeting last October where they were treated to an ‘offer they couldn’t refuse.’
Mr. Paulson said the public had lost confidence in the banking system. “The system needs more money, and all of you will be better off if there’s more capital in the system,” Mr. Paulson told the bankers. After Mr. Kovacevich voiced his concerns, Mr. Paulson described the deal starkly. He told the Wells Fargo chairman he could accept the government’s money or risk going without the infusion.
If the company found it needed capital later and Mr. Kovacevich couldn’t raise money privately, Mr. Paulson promised the government wouldn’t be so generous the second time around.
And under the headline, ‘Lawmakers Line Up Bankers, Unleash Anger of the Masses”, this is how the Washington Post reported the proceedings last week:
The titans of Wall Street, already humbled by the financial meltdown, were hauled before Congress for the first time yesterday to face the rage of a nation.
Lined up in a row at a nationally-televised hearing, the chieftains of eight banks that received $165 billion in federal bailout funds were pounded with ferocious questions from lawmakers demanding to know whether the firms were misusing taxpayer dollars.
Rage of a nation? At whom? Barney Frank and Maxine Waters are doubtless worried, which explains their attempts to deflect blame to the bankers. And they should be worried. Here are the corrupt pair running interference for Freddie, Fannie and Franklin Raines in 2004. Note Maxine Water’s comments about ‘advances in affordable housing’ and praise of ‘desktop underwriting’ and ’100 per cent loans’. And the bankers are to blame?
The Congress is not the Committee for Public Safety - and I wouldn’t advise Reps. Frank and Waters to play the part of Robespierre. He didn’t end up very well, as I recall.
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