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Doug:

This sort of politicization is to be expected, isn't it? With government money comes government influence. Looks like we will have companies run by people that are acceptable to the likes of Barney Frank, Chris Dodd and the treasury secretary instead of those chosen by shareholders who own the company. A comforting thought given the wonderful oversight they gave Fannie Mae and Freddy Mac.

Isn't huge, intrusive nanny state government wonderful?

Paul

"More troubling is the possibility that special-interest groups like SEIU would try to take advantage of a company's vulnerability to press for political advantage.

Obviously the administration is in a position to call the shots at firms it's invested billions of taxpayer dollars in. I hope it won't do so for the purpose of paying off political favors or punishing recipients for their political views."
-Doug

Well if this wouldn't be the nail in the coffin for those who label Barack Obama a socialist...

To me, it would be shameful to impose such a change on BofA, who has started repeatedly requesting to pay back the TARP funds they received. It would essentially be the government stating, "No, we won't accept repayment right now because we want to manage you and dictate your actions."

If that wouldn't be Socialism, I don't know what is...

so⋅cial⋅ism
   /ˈsoʊʃəˌlɪzəm/ [soh-shuh-liz-uhm]
–noun
1. a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.
2. procedure or practice in accordance with this theory.
3. (in Marxist theory) the stage following capitalism in the transition of a society to communism, characterized by the imperfect implementation of collectivist principles.

...sounds about right.

"Obviously the administration is in a position to call the shots at firms it's invested billions of taxpayer dollars in."

Wow. You accept that as "obvious"? And you think the administration has this ability because the administration has invested money? Good grief.

Sorry if my terminology is imprecise. I would not have thought it was obvious until seeing the administration's recent handling of GM. Perhap, Anonymous, you have some other explanation.

Very scary stuff, comrades. Atlas is Shrugging, and shrugging and shrugging...

Once you open this can of worms Pandora's Box, you can't close it again. You're just going to have to let these companies fail.

SEIU is the same group of thugs that partnered with ACORN to atage the "spontaneous" demonstration at the homes of AIG execs in Connecticut. They also raised more than $30 million for Chairman,Dear Leader, Comrade,Herr O'Bummer, renowned auto industry expert.

GM makes 20 vehicles that are profitable, with 11 being trucks, and SUVs. Naturally, renowned auto industry expert....O'Bummer wants to eliminate those 11!

This buffoon would be comical if he wasn't so dangerous to our market based system. A system that made us the most prosperous, envied nation in the world, thanks to OIL, the life blood of Western Civilization. He now also wants to rid us of "evil" oil. Most of know what our society was like prior to the discovery. That's where this fool wants to take us again.

Step by step - every day that passes brings us closer to becoming the nation many feared just 6 months ago.

Barack Obama is well on his way to exerting his agenda for the US, not ours.

TonyMo. A market-based system is when a company fails, it goes out of business, end of story.

I think incompetent, short-sighted, well-bonused greedy execs are dangerous to the market based system.

The White House should not mix bailout funds with politics or let a union dictate its actions toward Bank of America.* Doug

I agree! Today I try out my new ATM Obama Bank card and try to withdraw 20 bucks for a pack of Cigs since the new Tobacco Obama Tax went to effect today and the ATM machine pop a reciept back that said

" Welcome to the Wonderful World of the Obama Government Banking Paradise Center. Deposit hard cash 60 dollars in new 20 dollars bills from out amazing Federal Reserve Money paper currency machine and you will recieve your 20 brand new dollar bill. Should you contest this transaction, you may be put in one of our newest Money Detention System Centers."

Sorry, the anonymous above is me. No, I don't think it's obvious that the executive branch has that capacity. If the government has this power--and it shouldn't--then Congress should wield it.

If the president has the ability to dictate policy to any company receiving federal funds, then we are, in a strict and narrow sense, living in a socialist country. The GM situation does not demonstrate this, since it looks like a quid pro quo (federal funds traded for a resignation) in which the CEO chooses to fall on his sword. But if the administration tries to dictate policy against the wishes of a corporation, its shareholders, and it elected representatives--that is, the situation as it appears to exist at BOA--then we're in huge trouble.

Assuming that the administration has the power "to call the shots at firms it's invested billions of taxpayer dollars in" and then HOPING that it won't call the shots in a "politicized" way is to make two errors. More or less, it's like assuming that a psychopathic killer has the right to hack someone to death with a dull knife, but hoping that he will do so painlessly.

Dear Mr Savage: You are 100% correct. That's what we conservatives wanted to happen. The unfortunate timing of this crisis happening during a presidential campaign changed everything.

Politicians believe that they can alter normal economic cycles, and save us, their children, from any pain. These same people began causing this when they went after lenders who refused to extend loans to people they knew could not repay those loans. It was termed, "red lining."

Red lining was effectively outlawed by the liberal politicians who believe that everyone shoud own a home, whether or not they can afford one. These politicians forced these loans to be made.

That was when the free market did work. It has been government interference (CAFE stanards,Sarbanes-Oxley,Mark to Market, etc) that has severely damaged Capitalism. Do you have any idea how many automobile makers have disappeared since the invention of the automobile? Look it up. If they had had the kinds of useless elected officials at the end of the 19th, and beginning of the 20th century, they would have bailed out the horse drawn carriage industry, and we'd still see a few of them clogging up our roads.

Why is that now they are talking about Chapter 11 for GM, but it was unthinkable last year? We have incompetent idiots running this country.

So Tony, you're saying Obama should let GM go down the pooper? And let companies like AIG go down the pooper too.

The only problem is; if these huge investent/pension-managing co's (like AIG) go down the pooper you are going to have millions of 401K's / pension plan/ bond-fund managers too etc. go down the pooper, which means you're going to have lots of of retirement-aged people living in squalor and the gov't is going to end up paying for them anyway

It seems it's just a pay me now, or pay me later scenario.

Mr Savage, those companies are in the "pooper" waiting to be flushed. It is only a few hundred billion of our dollars keeping them afloat. Most of us have already lost 30-60% of our retirement savings through NO fault of our own, but we have to bail out corrupt, and incompetent companies. It's senseless, and almost criminal. Why do you think that these tea parties are springing up all across the country, and why do think gun sales, and amunition sales are skyrocketing. A friend of minmine occassioanlly goes shooting at a range with a friend. He told me just today how hard it was to find ammunition!

Mr Savage, those companies are in the "pooper" waiting to be flushed. It is only a few hundred billion of our dollars keeping them afloat. Most of us have already lost 30-60% of our retirement savings through NO fault of our own, but we have to bail out corrupt, and incompetent companies. It's senseless, and almost criminal. Why do you think that these tea parties are springing up all across the country, and why do think gun sales, and amunition sales are skyrocketing. A friend of minmine occassioanlly goes shooting at a range with a friend. He told me just today how hard it was to find ammunition!

I think the SEIU seems out of line here, but then again so is BOA. It seems inappropriate to use bailout funds for things like lobbying.

However:

"The Employee Free Choice Act -- more accurately known as the Card Check Bill ..."

That is a ridiculous thing to say since card check is only small portion of the bill and despite it being the big argument no one in labor or business thinks it's the most important part. Besides, card check is already legal, with EFCA it would just be binding for the company, though employees could overturn it at any time with a secret ballot.

The only rebuttal I want to bother with is Tony saying the government can't alter "normal business cycles." Even the most libertarian of economists like Milton Friedman don't think that's true. And empirical evidence clearly bears that out. Boom and bust cycles were much more extreme and longer lasting in the 19th century when there was much less government interference in the economy. Now the relevant argument isn't if the government can alter business cycles, it most certainly can, but if they should.

Besides, all those commenting here should have noticed by now that Obama's more likely to cut off his arm than do anything the banks don't like.

It's interesting that BOA didn't want these bailout monies yet Bernanke and Paulson in an Oct 2008 meeting with the big banks said yes you will.

In addition, after it's due diligence review BOA wanted to back out of the Merrill Lynch acquisition but again Bernanke told Lewis no way, it's yours now, and the shareholders take a very big hit.

As a result of govt meddling, it now can be referred to as the People's Republic of the Bank of America.

Actually, I always read BOA's threat to back out of the Merrill Lynch deal as a way to leverage better terms from the government. It worked. They basically got it for free.

Andrew, perhaps I should have said shouldn't, rather than can't. Government actions, similar to the ones we now unfortunately see, draged the depression on for an additional 5-7 years. That's not from me, but from two UCLA economists who studied the event.

The housing boom, then bust was fueled by vastly, artificaly low interest rates set by the Fed, not the market. In January of 2007 interest rates stood at 7.75%, inflation stood at 3.9 percent, unemployment was 4.6 percent and GDP for the last quarter of 2006 was a decent 3.6 percent. The deficit in relation to GDP, the only accurate barometer of deficits, was 2.3 percent (6.9 percent is projected for 2009). The Dow was at 12,621.

The Fed, in order to "save" the economy as it began to falter, began lowering rates, all the way down to 1%. Wow, let's borrow some money, it's almost "free." Almost all of the present crisis, here and abroad, was fueled by government actions.