Fed up with threats from Washington, Wall Street is beginning to fight back. Besides the armed guards at AIG, the CEOs of some of the top financial firms are calling out the government for its reckless, unwarranted, and damaging hatred. The politics of highly regulating Wall Street, already the most regulated industry in the country, have started to destroy the companies that have helped bring our nation so much prosperity. This is what happens when politics and business mix, it doesn’t work. Politicians can’t run banks, they don’t have the knowledge or the political capital do so.
The result of so much taxpayer money intermixed with private financial firms is reacting like vinegar an banking soda. Here are some of the most recent push backs from Wall Street.
First, on Tuesday finance executives and attendees at the Future of Finance Initiative clashed in a war of words over the pervasive anti-Wall Street sentiment that has built over the past weeks and months. The Wall Street Journal reported that “the conflict suggested that the lines of communication between government and the private sector remain limited just as government is hoping to expand cooperation with private investors.”
Second, financial giant Goldman Sachs announced it is going to give back its TARP money, with interest. Reacting to the CEO pay limits passed down by the Stimulus, the punitive executive pay bonus tax, and calls for intensively increased control of firms that have taxpayer money through the bailout, a senior executive told the New York Times, “It’s just impossible to run our business in this environment.”
Goldman can afford to return the $10 billion TARP money it received because they have about $100 billion of available cash on hand right now and are strengthening. They don’t need the money and the government is tearing apart their business with excessive regulation.JP Morgan, BB&T Bank, and others who were forced to take this money by former Treasury Secretary Hank Paulson may also return their TARP funds soon too. This would get them all out from under the thumb of oppressive Capitol Hill.
Third, according to Yahoo! Finance, “hedge funds and institutional investors are demanding concessions from the government–including promises that future profits won’t be subject to confiscatory taxes–before they are willing to participate in Geithner’s toxic asset scheme and the related TALF program.” That we even need to ask for such assurances reveals the sad state our nation is in.
Fourth is the open letter of resignation from an executive Vice President of AIG financial products unit, Jake DeSantis. Published by the New York Times on Tuesday, DeSantis wrote to AIG CEO Ed Liddy:
“I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.”
Oh, by the way, he took his deserved bonus and gave it all to a charity helping those struggling in this economic time. His letter puts a public face to the effigy that was AIG so viciously attacked last week, its gripping.
Obama is planning to meet with Wall Street’s top executives tomorrow, we’ll see how that pans out.