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:
Blowback
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Hugobama!
faol on May 7, 2009 at 12:58 PM
When do we stop referring to him as President and start calling him “American Strongman Barack Obama”?
Cicero43 on May 7, 2009 at 12:59 PM
Yup! Welcome to Socialism. Ain’t it grand?????
I think they finagled the stress tests in the first place, in order to make this move look less like a takeover, and more on behalf of tax payers.
We must all be incredibly stupid to this man, who is lord, and ruler over all 57 states.
capejasmine on May 7, 2009 at 1:00 PM
All I know is this will end badly – either for America or Obama….
Here’s praying that Obama fails….
izoneguy on May 7, 2009 at 1:01 PM
Oh, this is just the evil Republican Racists trying to excuse corporate greed! Let’s get back to important things, like dijon mustard on hamburgers!
/sarc
JamesLee on May 7, 2009 at 1:01 PM
When my bank bought Countrywide they rubbed their hands in glee. I cancelled my credit card the same day. Nations/BoA got the Mr Potter virus and I wasn’t willing to pay their insurance premium. Good luck, Nations/BoA. I hear that Vito Geithner will fix you right up.
Limerick on May 7, 2009 at 1:02 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
Did the government get a majority owner stake in any of these companies which they are trying to force out the management?
Canadian Imperialist Running Dog on May 7, 2009 at 1:03 PM
If they were foolish enough to vote for Obama, it follows that they would be foolish enough to let the government into their boardroom.
WashJeff on May 7, 2009 at 1:03 PM
Thug in Chief
Boomer Sooner on May 7, 2009 at 1:03 PM
Baracky Amin Dada.
I can only imagine the inept leftist stooge that Ogabe would choose to put in charge of any of these companies.
Bishop on May 7, 2009 at 1:03 PM
Since these CEO’s and Uncle Sam are more or less partners now I think the CEO’s should follow the example set and demand that at the end of the 30 days the federal gov. needs to show their plan to “assure that the leadership of the firm has sufficient expertise and ability to manage the risks presented by the current economic environment.”
Spider79 on May 7, 2009 at 1:04 PM
Peronsally, I find it very telling that Bank of America started this ball by trying to explain they didn’t need, didn’t want TARP money in the first place, but were bullied into accepting it and lying about it to their own board. And lo and behold, what was the first bank name that was leaked (totally accidentally, I’m sure) in the results of the “stress test?”
JamesLee on May 7, 2009 at 1:04 PM
It’s good to be the King.
portlandon on May 7, 2009 at 1:05 PM
Look, a puppy!
Just ignore those first few steps to fascism, Michelle has such toned arms.
rbj on May 7, 2009 at 1:05 PM
Government loaned them money, it didn’t take ownership of them. TARP gives them no power/right to pressure the removal of anyone at all.
But yep, government involvement sure does put politicians in charge of running companies. Glad we agree that the command economy is getting into gear.
Cheer for it, nice. Yay!
lorien1973 on May 7, 2009 at 1:06 PM
Bishop on May 7, 2009 at 1:03 PM
How about one of his former fund-raisers? No business experience, mind you, but a wealth (pardon the pun) of experience in shaking down the chumps.
oldleprechaun on May 7, 2009 at 1:06 PM
America is going to quickly turn into Rhodesia… You know they’re going to install CEOs they can control.
liquidflorian on May 7, 2009 at 1:06 PM
Now—by extension, does Obama now own those of us who got some of the stimulus money, however small? Far fetched? Not with the big boss in the WH!
jeanie on May 7, 2009 at 1:06 PM
Serious question:
Can some of these companies return the money outright? I know some have tried…some banks…but seriously, can some of these companies say, “SHOVE THIS” and break the agreement legally? I want a nuclear blow up in Obama’s ugly face. I want this splashed all over that a huge company said, “Hey, we’re waking up. NO MORE for this madman and unions.”
I just want to hope.
Mommypundit on May 7, 2009 at 1:06 PM
The government can not run itself and stay within a budget…how do you expect it to run a corporation that is supposed to show a profit(in normal times)…..without profits, what does gummint live on….OPM eventually runs out
t on May 7, 2009 at 1:07 PM
Anyone who takes the tax payers money should not complain when the government wants some changes in the company.
Odd that the leaders of ACORN have never had to face the axe considering the rash of criminal investigations that organization has been involved in. Maybe they should stop getting tax payer’s money?
Bishop on May 7, 2009 at 1:07 PM
Although he’s trying to slip it all in under another guise
To all his fascist action most foul we must still be wise
In spite of all the Houdini lies
Dancing in Obama’s Mussolini eyes
MB4 on May 7, 2009 at 1:07 PM
Sucks being in the piss bucket!
WashJeff on May 7, 2009 at 1:07 PM
Are we at rule by dictate yet?
daesleeper on May 7, 2009 at 1:08 PM
If they were foolish enough to vote for Obama, it follows that they would be foolish enough to let the government into their boardroom.
WashJeff on May 7, 2009 at 1:03 PM
My thoughts exactly.
txag92 on May 7, 2009 at 1:09 PM
Barackito Thugalini.
MB4 on May 7, 2009 at 1:09 PM
You mean rubber stamp by a friendly congress? Then yep.
lorien1973 on May 7, 2009 at 1:09 PM
First, announce that all the major banks “failed” the stress test. Second, pressure the top management of all the banks to resign. Third, assign your own people to replace the former top management.
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
I am the State.
-Barackito Obamalini
MB4 on May 7, 2009 at 1:10 PM
If they were foolish enough to vote for Obama, it follows that they would be foolish enough to let the government into their boardroom.
WashJeff on May 7, 2009 at 1:03 PM
And…. they will probably vote for him again.
txag92 on May 7, 2009 at 1:11 PM
Great point…thus I must assume you are trying to disenfranchise voters and are racists.
WashJeff on May 7, 2009 at 1:11 PM
Edited for accuracy
Guardian on May 7, 2009 at 1:11 PM
If you don’t want the government dictating how you run things in your company do not accept the bailout. It is as simple as that
nice343 on May 7, 2009 at 1:11 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?
Last time I looked, this was America and the state did not use the guise of a financial emergency to act like a banana republic third world dictator socialist wannabe.
Terrye on May 7, 2009 at 1:12 PM
With his new found experience he surely would not make the same mistakes in his second term. Riiiiiiiighhttttt!
WashJeff on May 7, 2009 at 1:14 PM
Even when “dictating” isn’t part of the original terms.
Excellent. Just excellent.
lorien1973 on May 7, 2009 at 1:14 PM
Banks that did not need TARP money were required to take it last fall, because of Bernanke and Paulson. They wanted all banks to take it to hide the weak banks in the TARP forest. They did not want a run on weak banks, so made everyone take it. Some banks parked it in escrow and haven’t used a dime.
A lot of banks who didn’t want the money have tried to give it back. Tax Cheat Timmy won’t let them, as it would release the bank from the leverage the government has.
Wethal on May 7, 2009 at 1:15 PM
Will the next step be throwing white farmers off their own land and replacing with political cronies with no concept of how to grow crops? From whom would we then import our necessary food grains and meat?
a capella on May 7, 2009 at 1:15 PM
OT tip of the day…
Watch eBay. Belly up folks are starting to dump. You can find a lot of things to help you get through the next eight years (and yes, Barry gets re-elected simply because we have nobody willing to call the Fed bluff). Shop before the Feds tax the hell out of on-line transactions.
Limerick on May 7, 2009 at 1:15 PM
nice;
There were some people who actually resisted the bailout money and got pressured into taking it. I think a better idea would have been for Obama and his motley crew to tell these people up front that if you take the money we will stab you in the back, tell you what to do, ignore your property rights and in general making you sorry for thinking we were anything but a bunch of Chicago political thugs. After all, the much maligned rich actually voted for this guy, it is not as if they are all Republicans or something. He just threw them under the bus along with everyone and anyone else stupid enough to believe his line of crap.
Terrye on May 7, 2009 at 1:15 PM
The performance of some of these CEOs should be evaluated and result in their termination, however the government should not decide whether or not those terminations take place.
I have no faith that the government will refrain from selecting the replacements, nor do I have faith that the government will select qualified candidates over politically connected ones.
This in no way improves the leaderhip of these companies.
rw on May 7, 2009 at 1:15 PM
Don’t confuse those who love their command economy.
lorien1973 on May 7, 2009 at 1:16 PM
CEO: How much, dear leader, do I donate to your campaign to prevent termination?
lorien1973 on May 7, 2009 at 1:17 PM
“You knew I was a snake before you brought me in!”
Christian Conservative on May 7, 2009 at 1:18 PM
When is the world going to see this ignorant, incompetent, traitor as the tyrant he really is? Probably well before the Americans do.
Cybergeezer on May 7, 2009 at 1:19 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
Now you’ve done it. Watch out for buses, black helicopters and brown shirts.
Daggett on May 7, 2009 at 1:20 PM
This isn’t Zimbabwe or Venezuela; but Zimbabwe did something similar to this. So did Venezuela.
But this is not, I repeat, not Zimbabwe or Venezuela.
lorien1973 on May 7, 2009 at 1:21 PM
Dirty rat fink.
jbh45 on May 7, 2009 at 1:21 PM
Of course! How could we have been so blind! Put a Federal Government hack in as Chief Executive Officer at the largest banks in the world. I can see the employment ad now:
Wanted – Bank CEO
Must worship The One with all their heart and soul.
Must meet minimal Administration requirements for non-payment of taxes.
Experience in running a multi-billion dollar financial institution desired but not mandatory.
SeniorD on May 7, 2009 at 1:22 PM
It’s amazing that a man who has never run anything can know more about running Amerika’s largest
gov’t institutionscorporations than the current experienced boards.GrayDog on May 7, 2009 at 1:23 PM
These companies can expect nothing less.
The took the whore $$, now the John wants his payout.
Badger40 on May 7, 2009 at 1:23 PM
Let’s pressure the idiot Barry to resign. Makes more sense.
Vashta.Nerada on May 7, 2009 at 1:23 PM
That’s half right. The first half is that the government has no business bailing out these companies in the first place. Bush was wrong, and Obama is much worse.
But then if the government DOES offer a bailout, it’s foolish to willingly accept it.
Daggett on May 7, 2009 at 1:23 PM
Since the ChiComs are bailing out the Fed, can they replace TOTUS if the economy hasn’t turned around by mid-year?
landshark on May 7, 2009 at 1:24 PM
Read something and learn. And if that doesn’t work, perhaps you might recall this piece, which appeared right here at HotAir.
Mr. D on May 7, 2009 at 1:24 PM
Govt made the conditions for failure.
They set the rules and forced companies to abide by them.
When it failed, govt blames the free market and these companies.
You’d think it was the goal or something.
lorien1973 on May 7, 2009 at 1:24 PM
I honestly hope you are right. Two years ago my wife and I thought the world was ending when our business failed. Now I think the angels were looking out for us. We have less goodies but one hell of a lot more choice in our actions. Freedom by default. Surprised the hell outta us.
Limerick on May 7, 2009 at 1:24 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
Dude shut up!
Don’t give the mob ideas!
Chaz706 on May 7, 2009 at 1:25 PM
And this is why public schools suck.
The school baords give their power to the fed govt by accepting the govt whore $$=Title $$.
If more public schools opted out of receiving govt cash, then they wouldn’t have to waste their time complying with idiotic rules that don’t fit their unique environment.
Badger40 on May 7, 2009 at 1:25 PM
So, by this logic, the chinese should be allowed to pick our president.
lorien1973 on May 7, 2009 at 1:25 PM
This is unconstitutional. I think it’s true that “Obama is the next terrorist attack”. When is someone going to step up and challenge these thugs? The media should be ashamed of themselves. I hope the media people all go straight to hell for not informing the public of this “takeover” of America.
suzyk on May 7, 2009 at 1:27 PM
How is this any different than what Putin did in Russia to the Oil Companies?
RedSoxNation on May 7, 2009 at 1:28 PM
Shut up. That’s why.
lorien1973 on May 7, 2009 at 1:28 PM
“I won!”
How do you say “I won” in thug?
29Victor on May 7, 2009 at 1:30 PM
Barney Frank just named CEO for Crisco brand products….
dmann on May 7, 2009 at 1:30 PM
The Venezuelan States of America!
Jaibones on May 7, 2009 at 1:31 PM
It’s not.
I believe Putin did the same thing.
Though I think Putin makes Zero look like chump change. Specially since he’s knocking off journalists to keep his cover.
But we aren’t far from it. Who knows if Obama won’t do the same thing.
Chaz706 on May 7, 2009 at 1:31 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
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
PAY CLOSE ATTENTION FOLKS….
This is all about the 2010 elections. Funny money, smoke and mirrors. Fool the public. Goose the economy out of recession on the credit card, keep the super majority. If it blows up in our faces, we still have all the cards for two more years. Just enough time to give away everyone’s birthright.
I can’t believe I am seeing this.
eaglesdontflock on May 7, 2009 at 1:33 PM
How much money do you think the DNC will raise from the new CEOs installed by the DNC?
hawksruleva on May 7, 2009 at 1:34 PM
So, you like ex post facto rules? Call yourself a liberal?
DrSteve on May 7, 2009 at 1:34 PM
They are doing everything in their power to control these banks. How will america look in 2010?
therightscoop on May 7, 2009 at 1:34 PM
Pretty much the same. I think I may be one of your Obamaweenie’s heroes after Stalin of course. I think I will be able to use him. I mean, I think we may be able to do business.
PootyPoot on May 7, 2009 at 1:34 PM
You should probably invest that money in gold or other tangible assets, anyway. Inflation is right around the corner.
hawksruleva on May 7, 2009 at 1:35 PM
I’d like to see the boards of directors of both banks give a vote of confidence to the presidents of each company. And then wait to see what Timmy, Benny & the One try to do next. The “Go ahead. Make my day” approach.
After the leak about the threats to the Chrysler bondholders, the feds have to know anything they say will leak out.
Wethal on May 7, 2009 at 1:35 PM
Can we perform this same review on the OhBlunder administration?
gregbert on May 7, 2009 at 1:36 PM
Don’t worry about it. All you enemies of the state will be in one of our stalags by then so it will look about the same to you from one day to the next.
DasObamaReich on May 7, 2009 at 1:37 PM
Exactly! And at the end of the 30 days when the federal government proves its ineptness, CEO Obama and CFO Geithner turn in their resignations. (CEO Pelosi can turn in hers for not managing the nation’s purse strings within a budget.)
onlineanalyst on May 7, 2009 at 1:38 PM
Possibly not that far-fetched. The Obama administration could decide that you have more money in the bank than you require for your personal needs. They could set a threshold beyond which it would be decided that the government, and those less fortunate, could better use the funds. Call it a “bank account tax”, or “stimulus withdrawl”, or perhaps an “equalization charge”. The threshold would probably include your 401K funds and their future projected appreciation of stocks held.
Once the light bulb goes on in enough people’s minds that something like this is possible the run on the banks could be awesome. Where does “spreading the wealth” stop?
Personally, I”m bleeding a little out each week and “putting it away”.
I. Do. Not. Trust. Them.
Yoop on May 7, 2009 at 1:39 PM
To be honest I have no idea what would happen, but if you had told me when Obama was elected that hundreds of thousands of people would take to the streets protesting his policies less than 100 days after he was elected, I would not have believed it..but they did. I think that at some point even many of the witless might start to wonder just when it became legal for the govnernment to hire and fire private sector people. Especially if the unemployment numbers go up, taxes go up and inflation goes up.
Like the song says, Something’s gotta give.
Terrye on May 7, 2009 at 1:40 PM
“Hands Up”? “Reach for the sky”?
BobMbx on May 7, 2009 at 1:51 PM
And how does Obama handle those banks, that want to return the money? They can’t, as that would foil Obama’s plans of government take overs.
The bailouts should have never happened. If you’re failing, then fail, and reorganize, but NEVER take money from strangers, and there’s nothing stranger, than Government.
The bottom line is, if these institutions had failed, other banks would have bought up bits, and pieces, and made their own institutions stronger, and the economy would probably be far better off by now, than it is.
We also must remember….government caused this d@mn mess in the first place.
capejasmine on May 7, 2009 at 1:53 PM
ROFLMAO!!! Exactly!!!
capejasmine on May 7, 2009 at 1:53 PM
Somebody better stand up to these bullies and quick. Who will bell the cat?
Christien on May 7, 2009 at 1:54 PM
“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”
Oh, and you are supposed to get management with great expertise and ability while cutting salaries and bonuses. Riiiiiight.
crosspatch on May 7, 2009 at 2:00 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
Exactly what should have happened. Thats how capitalism works
ouldbollix on May 7, 2009 at 2:08 PM
The Chicago Way…
d1carter on May 7, 2009 at 2:08 PM
iurockhead on May 7, 2009 at 2:06 PM
Ohmigosh!!!! There really is a Dollhouse!
ladyingray on May 7, 2009 at 2:13 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
Whew, thank goodness that the smartest person alive is in charge! What a mess it would be if we had an idiot as prez.
JeffinOrlando on May 7, 2009 at 2:15 PM
Then why did Obama destroy Welfare Reform that required people who get government money to look for a job or do something else useful with their lives?
No requirements for the trillions we spend on S-CHIP, food stamps or welfare, but outrage over a few million going to people to whom it was contractually obligated, people who actually worked for the money.
29Victor on May 7, 2009 at 2:22 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
We’ll know how serious this is if Vikram Pandit really is fired. I would not hold my breath. This entire exercise of bailouts and TARP has been about saving Citigroup. And for Ken Lewis to get fired after the feds put a gun to his head and made him buy Merrill Lynch is unconscionable. Jamie Dimon at Chase may be the best CEO in America. Wells Fargo never needed the TARP money to begin with but also had a gun out to its head. GMAC has already replaced its CEO and its Chairman.
There simply is no reason to fire any of these bank CEOs now.
rockmom on May 7, 2009 at 2:34 PM
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