Posted 10/16/2008

BUSH PUNISHES HONEST BANKERS

The expression "no good deed goes unpunished" really applies to all the honest, frugal bankers in our midst – mostly small bankers.

In the last ten years, when the federal bank examiners descended on them demanding that they grant sub-prime and "liars" mortgages to those with low credit ratings, many small bankers simply refused. When the Feds threatened them with loss of federal contracts, these bankers simply said the hell with the federal contracts.

John Shover, President of The First National Bank of Barry (Illinois), said, "Despite the arm twisting, we refused to grant a mortgage unless the applicant could put twenty percent down. Now we have plenty of money."

What is the reward for those men and women who ran honest banks and refused to fall for the "greed syndrome" that is pervasive in the big banks?

The Bush Administration is demanding that banks allow the government to use taxpayer money to buy an interest in them.

This means that well-run banks are being invaded by the government, which is offering assistance they neither want nor need.

It also means that the government is subsidizing their competitors – the greedy banks who are in deep trouble.

It's like a rigged baseball game where the rules for small banks are "three strikes and you're out" while the big banks get "10 strikes and ... maybe more" because the government doesn't want them out.

It is now clear that President Bush is a "pretend" capitalist.

He is rewarding the incompetent and penalizing the competent, which violates the basic tenets of capitalism.

He is transforming areas of private enterprise into vast reaches of socialism.

He presided over the biggest expansion of government in American history – a clear violation of the principles of private enterprise.

He governed on the principle that "deficits don't matter" – a reversal of the free enterprise principle that "profits matter."

He allowed the reins of government to fall into the hands of big business cronies, which smashes the basic warning issued by Adam Smith, the founder of Capitalism. Smith, writing in Victorian England, let it be known that Capitalism was good but Capitalists were not to be trusted.

Smith wrote in his Wealth of Nations, "You must never let the reins of government fall into the hands of the mean and rapacious merchant."

In Victorian England, "mean" and "rapacious" were words more likely applied to violent criminals than businessmen or merchants.

That's how much the creator of capitalism would have hated what President Bush has done to capitalism during his ill-fated administration.

(click here for a printable version of this article)