Two weeks ago I wrote an article about the coming financial regulation overhaul. Since then we’ve seen the CEO of GM ousted by President Obama, the “Pay for Performance Act” (giving Treasury power to set salaries) pass the House, and Secretary Geithner ask Congress for power to seize any financial firm (not just banks) and intensify Wall Street regulations, including new oversight powers for the SEC.
Now, Secretary Geithner has said he is considering kicking out Wall Street executives, part of the continued reign control coming from Washington:
“If in the future, banks need exceptional assistance in order to get through this, then we will make sure that assistance comes,” while ensuring taxpayers are protected, the Wall Street Journal reported Geithner saying from Sunday’s interview on the CBS “Face the Nation” program. “Where that requires a change in management and the board, then we will do that.”
Furthermore, it is clear that these increased powers are not going to be temporary measures. Several banks have begun giving the bailout money they were forced to take back to the government–only Obama and Geithner won’t take it back. Why? Because taking the money back means Treasury wouldn’t have control over them any more.
For instance, the deceptively named Pay for Performance Act (PPA) only gives Treasury power to set wages at firms that have received bailout money. Once the money is given back those firms are free to determine salaries on their own… stunning. The power grab is very clear, and should give Congress pause, particularly the Senate as it considers PPA.