More madman management: Feds to pressure TARP CEOs to resign?

posted at 12:55 pm on May 7, 2009 by Ed Morrissey

The march of corporatism continues today as the Obama administration’s “stress tests” for TARP-funded financial institutions await release.  Now the Obama administration has heavily hinted that it will expect these institutions to change management if they don’t do well on these mid-term exams, apparently aiming for the decapitation of CEOs at companies like Citi and BofA just as Obama did with GM (h/t Geoff A):

As has been leaked (of course) the banks will have 30 days to come up with a plan once the results are made public.

One very interesting note, which David Zaring picked up on, is that in this 30 day period “…firms will need to review their existing management and Board in order to assure that the leadership of the firm has sufficient expertise and ability to manage the risks presented by the current economic environment.”

In other words, if you’re on the least-favored CEO list — we’re looking at you Citigroup CEO Vikram Pandit and Bank of America (BAC) CEO Ken Lewis — it’s time to start talking about succession, planning for the future and resignation.

Once again, the Obama administration sticks its fingers into the boardrooms, through the facility of TARP funding.  Under normal conditions, of course, the US government would have absolutely no say in the hiring decisions and compensation practices in the private sector, leaving those policies to stockholders.  This White House has shown itself adept at using TARP as a lever to force companies to bend to their will and dance to their tune.  With Obama, that tune will undoubtedly sound populist and biased; think “Look for the Union Label” instead of Pink Floyd’s “Money”.

These CEOs should have known better to let the government into their boardrooms in the first place.  Most of them took the TARP money willingly (although a few got pressured into it).  In that sense, perhaps another tune seems appropriate today.  The great Al Green sang “The Snake” 40 years ago and in another context entirely, but it’s hard to argue that the CEOs shouldn’t have known darned well that they would get bit in the end:


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And Wall Street reacts…

ladyingray on May 7, 2009 at 2:34 PM

One of the CEO’s should go on live TV and tell B. Hussien Obama to go fark himself!

TrickyDick on May 7, 2009 at 1:32 PM

You can bet that Jamie Dimon will. He has been a good CEO at Chase and has nothing to apologize or resign for. And don’t forget Obama will be taking on the Rockefellers there. They crap guys like Obama.

rockmom on May 7, 2009 at 2:37 PM

I love this.

Most of us knew from last November that TARP was awful and that the cure was worse than the disease.

And now its own Special Investigator General opines that TARP will need $2.5 – 3.0 trillion, and not the $700 to which GWB, the House and the Senate (including over 20 GOP Senators, I believe) committed to the handout 6 months ago.

See what making nice with Obama and his investment makers gets you.

molonlabe28 on May 7, 2009 at 2:38 PM

I debated about leaving community organizer or ACORN on my resume but guess what, i got the interview to be a bank CEO.

As soon as I brush up some previous tax returns, i should be able to set a start date.

seven on May 7, 2009 at 2:40 PM

Everyday brings new indications of how this country is moving toward socialism at the least. We now see a president with dictatorial powers and a congress that supports it. Many if not all of these intrusions into the private sector are/should be against the constitution we all say we cherish. WHY does no one challenge any of them. By the time the next election comes, this country as we knew it will no longer exist.

hillbilly on May 7, 2009 at 2:40 PM

nice:

So, does that mean that if you are on social security or getting medicare that the government should be able to tell you what kind of house you can live in?…………
Terrye on May 7, 2009 at 1:12 PM

It’s coming. Oh, and they’ll want to tell you what you can eat, drink, how much excercise you must get, and what you can watch on TV. And when you can watch it. Soon personal decisions will be a thing of the past, and we can all rest comfortably in our 0bamian utopia. Like a big hammock, only pricklier.

iurockhead on May 7, 2009 at 2:06 PM

On the Obama campaign website, plans were laid out for the “volunteerism.” Seniors, it said, would get special perks, in health insurance and housing, if they “volunteered” for service.

Course, you’d have to be pretty healthy in the first place to do the service they had in mind. Those who aren’t, well, they can just do with less health insurance and housing and die sooner – problem solved. Everybody remaining would be serving the Obama government.

Alana on May 7, 2009 at 2:41 PM

Lemerick:

I am not so sure this guy will get elected again. I heard that ACORN is getting into trouble in more and more states for bogus registrations. Take away the idiot elites who got hung out to dry and the drug addicts and Obama might not have enough to votes to win again.

Terrye on May 7, 2009 at 1:20 PM

I pray that he will not get elected again but with the number of mindless libs in this country plus a clearly in the tank msm, it will be an up hill battle. Oh, and add to that no clear republican leader.

txag92 on May 7, 2009 at 1:25 PM

The only way Obama loses in 2012 is if things are really, really bad. Great depression-level unemployment plus hyperinflation bad -not the recessionary discomfort we are dealing with today. The overwhelming bulk of the MSM has an addiction to issues of racial eqality and “justice,” plus an unending hatred of anything politically conservative, and Obama is everything they have hoped for and dreamed of in a politician -a powerful, charismatic, black liberal activist who will show America once and for all that conservative, limited government sucks and liberal progressive activist big government rocks, is totally cool, and is the only option for America’s future. They will not let him be labeled a failure. They will not let him lose re-election. Throw in help from a likewise enthused Hollywood and other cultural elites, and the task of defeating him becomes almost impossible.

The only way he loses is if economic conditions here are so bad, that no ammount of cheerleading from the MSM and Hollywood can shield him from the blame.

djm1992 on May 7, 2009 at 2:42 PM

Glenn Beck made a statement on his show last night that Scmuckie Shumer made a statement about controlling what kind of syrup IHOP could provide to use on your pancakes!

mwdiver on May 7, 2009 at 2:29 PM

I looked that up. Vermont IHOP’s only use Vermont syrup, so Schumer suggested that New York IHOP’s only use NY syrup.

So not that big a deal to me.

Alana on May 7, 2009 at 2:43 PM

I don’t know if E.M. wants this here, but this gentleman has a an interesting perspective today on history…

dailynews@omegaletter.com

oldleprechaun on May 7, 2009 at 2:44 PM

The only way Obama loses in 2012 is if things are really, really bad. Great depression-level unemployment plus hyperinflation bad…

You can take that to the bank count on it.

Rae on May 7, 2009 at 2:46 PM

When are these CEO’s going to grow themselves a pair and start saying “no”? Like any bully, 0’s crowd will back down if all of these banks (and auto companies, hedge funds, etc) decide they’ve had enough and stand up for a change.

iurockhead on May 7, 2009 at 2:14 PM

I’ve wondered this too, and now I wonder….how many threats have gone out, and how many are not speaking out, because of threats? Fear mongering publicly, is the going thing. It wouldn’t be so far out, to believe that this fear mongering goes on, in a vast way…privately!

capejasmine on May 7, 2009 at 3:02 PM

Obama’s acting more and more like the average pimp every day; He’s pimping cars and banks and threatening everybody that doesn’t come across for him.
Yea, You go, Obama; You da biggest pimp on da planet.

Cybergeezer on May 7, 2009 at 3:02 PM

So not that big a deal to me.

Alana on May 7, 2009 at 2:43 PM

Unless you’re the syrup company who would be prohibited from commerce in those states should the suggestion become legislation. As long as it is a corporate decision, there’s no issue.

Fortunately, there is this thing called the Commerce Clause, and then there’s the ICC.

BobMbx on May 7, 2009 at 3:04 PM

Anyone who takes the tax payers money should not complain when the government wants some changes in the company. If it wasn’t for the government majority of these company’s would have gone under

nice343 on May 7, 2009 at 1:02 PM

So we’re agreed: Obama’s a socialist.

gwelf on May 7, 2009 at 3:05 PM

It’s ironic that whatever minor affect the TARP money and ‘stimulus’ bill would have on our economy will be dwarfed by the damage done by Obama being a socialist to some companies and a fascist to others.

I think the greatest possible good that will come out of this is IF corporations realize that the government is not a revenue stream and that if you take their money they will bend you over. It’s unfortunate that some companies were forced to take TARP funds but hopefully this will also build up resolve in the market to be as separate from government as possible.

gwelf on May 7, 2009 at 3:09 PM

The only way Obama loses in 2012 is if things are really, really bad. Great depression-level unemployment plus hyperinflation bad -not the recessionary discomfort we are dealing with today.

djm1992 on May 7, 2009 at 2:42 PM

FDR never managed to fix “depression-level unemployment” and got himself reelected three times. He was very good at taking money from a few people and giving it to specific voting blocs.

29Victor on May 7, 2009 at 3:14 PM

So we’re agreed: Obama’s a socialist.

gwelf on May 7, 2009 at 3:05 PM

No. Obama can reach across the isle and bring different ideologies together to work in harmony for a greater good that surpasses…uh..um…ideology. He’s a socialist/fascist.

29Victor on May 7, 2009 at 3:17 PM

FDR never managed to fix “depression-level unemployment” and got himself reelected three times. He was very good at taking money from a few people and giving it to specific voting blocs.

29Victor on May 7, 2009 at 3:14 PM

There are many differences between this Depression and the last (inflationary rather than deflationary, little manufacturing, far less savings, far more debt, and a massive welfare state already in place) just as there are differences in how information is delivered to the people. If Obama is successful in shutting the down the internet to his liking, then we might have some trouble.

Rae on May 7, 2009 at 3:23 PM

You’d think it was the goal or something.

lorien1973 on May 7, 2009 at 1:24 PM

It is.

Me thinks it’s time for Conservatives to withdraw all money from their bank accounts.

Make a run on your bank and see what Barry does then.

omnipotent on May 7, 2009 at 1:32 PM

That’s what he’s trying to cause.

baldilocks on May 7, 2009 at 3:23 PM

I’m beginning to think this was all planned. All of it. And it wasn’t hard. Heck, I’ve read Clancy books that are more complicated in their “end of the USA as we know it” scenarios than this government created “credit meltdown” that Obama and his team of handlers are using to usher in a socialist state.

Rod on May 7, 2009 at 3:28 PM

By the time the next election comes, this country as we knew it will no longer exist.

hillbilly on May 7, 2009 at 2:40 PM

I believe that is the plan, and it is well into its execution.

If ObamaCare and sanctions against carbon dioxide emission get through Congress, we are well and truly f#cked. (Well, the intercourse will be complete, as we are already getting the shaft.)

hillbillyjim on May 7, 2009 at 3:34 PM

is there a bank Teller’s Union that can take over Citi and BofA?

Stephen Macklin on May 7, 2009 at 3:55 PM

Anyone who takes the tax payers money should not complain when the government wants some changes in the company. If it wasn’t for the government majority of these company’s would have gone under

nice343 on May 7, 2009 at 1:02 PM

So we’re agreed: Obama’s a socialist corporatist.

gwelf on May 7, 2009 at 3:05 PM

FIFY. Corporatist is the term Mussolini coined to describe his own personal style of fascism, and 0 is following in Benito’s footsteps.

iurockhead on May 7, 2009 at 4:02 PM

What’s next? Will the Obama administration then start siphoning money out of people’s checking and savings accounts once they’re running the banks?

Aitch748 on May 7, 2009 at 1:10 PM

What I heard hinted at was the forceful conversion of 401K stocks into Government T-Bills. Since China has slowed purchasing, this rumor scares the crap out of me that it might actually have legs…

dominigan on May 7, 2009 at 4:06 PM

So, do you think there would be any way that if the CEOs are fired, they could file lawsuits against the administration? I seriously doubt they’d be able to find a single Constitutional power that would authorize such Fed involvement.

dominigan on May 7, 2009 at 4:08 PM

Late to thread.

It’s 4:00 pm and no stress test results released.

Are they going to do a Friday afternoon document dump with this stuff so it disappears over the weekend?

Knucklehead on May 7, 2009 at 4:14 PM

Are they going to do a Friday afternoon document dump with this stuff so it disappears over the weekend?

I’d say probably not, because the idea is to get folks riled up at the “bad” banks so they are then under more pressure to replace the CEOs and stuff.

JamesLee on May 7, 2009 at 4:24 PM

Are we headed for a rash of “CEO suicides”? Obama gonna have BLOOD ON HIS HANDS.

GarandFan on May 7, 2009 at 4:36 PM

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