Friday, January 16, 2009

Bank of America Nationalized - Receives $20 Billion in Federal Treasury Money

Source: Photo of a Bank of America branch in Lowell, MA.

They've done it. Bank of America has been nationalized. It's government owned now:

Two weeks after closing its purchase of Merrill Lynch at the urging of U.S. regulators, the government cemented a deal at midnight Thursday to supply Bank of America with a fresh $20 billion capital injection and absorb as much as $98.2 billion in losses on toxic assets, according to people involved in the transaction.

....

The second lifeline brings the government's total stake in Bank of America to $45 billion and makes it the bank's largest shareholder, with a stake of about 6 percent.

....

In exchange for the new support, Bank of America will give the government an additional $4 billion stake in preferred stock. It has also agreed to cut its quarterly dividend to a penny, from 32 cents, and accept more stringent restrictions on executive pay.

When will the madness stop? It said nothing in the article about Congress. Is the Treasury just going around making financial deals with companies and giving them billions in loans? Where is that money coming from and who has authorized its use? Spending money is a power that belongs to the House of Representatives exclusively among the Federal government.

How is this happening? I would really like to know. Is there some legal explanation for this? Anyone who knows what twisted rationale is behind this kind of activity- please share in the comments below.

How many more companies are they going to nationalize before Americans wake up to the reality of what's happening to their country?

And an important discussion point: What can we do to protest this? Please share ideas in the comment thread. The most frustrating thing about this is that it's so difficult to directly face and protest. It's not like they are violating my rights directly. Instead they are violating everyone's rights and they are doing it in a very indirect manner. Any ideas you might have that are creative and inspiring, ideas that involve protest or civil disobedience, please share and discuss. We have got to take action!

4 comments:

Greg said...

What can we do to protest this? Please share ideas in the comment thread. The most frustrating thing about this is that it's so difficult to directly face and protest.

I wish I knew, I despair at times. The problem is that the looters can make it appear to work - for a time. When the truth comes out, the damage will already be done, and the anger will be too little, too late.

W. E. Messamore said...

Exactly. And after the damage is done, they blame it on the free market, which was actually not in operation by any stretch of the imagination. Then they call for more of the regulations and interventions that caused the problem.

But I would love to come up with something to do that would speak volumes about how wrong the process is. Gandhi was able to burn ID cards in S. Africa, that the government required ethnic minorities to have. Then in India, he violated the government-imposed monopoly on making salt.

MLK boycotted a racist bus system. Harriet Tubman helped slaves escape. The patriots boycotted English tea. Thoreau refused to pay his poll taxes. What can we do?

Greg said...

I guess as a start, we can refuse to do business with nationalized entities or those who otherwise went to bed with the State. It would be hard to be "pure" on this, but a preference for Ford over GM, and similar action is a start.

But how often does one buy a new car? I have owned cars for 25 years, and have yet to buy a new one. Not much message potential in that.

W. E. Messamore said...

That's right- the message potential isn't too strong, unless it is a very large, organized boycott. And it's also really, really hard to determine which companies to give preference, as pretty much all major companies are guilty of pressure-group warfare in D.C. and getting favors from government. At the same time, they also all suffer from government's policies. What a tangled, twisted, confusing mess the whole system is!

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