Back in the fall, you would have thought from the media coverage of the TARP debate and its eventual passage that some sort of crime had been committed when the House didn't pass it the first time around.
"CBS Evening News" anchor Katie Couric demanded to know from House Minority Leader John Boehner, "What in the world are you people doing?" on her Sept. 29 broadcast. However, there was a side to this that people never were allowed to realize behind closed doors during the debate, as Fox News host Glenn Beck explained.
The "Glenn Beck Show" host on his April 20 program told viewers he had inside knowledge of how the Bush administration strong-armed the banks into agreeing to the terms of the TARP bailout.
"Look, I have friends that were in the room with the Treasury under George W. Bush and when Paulson walked in and said, ‘Gang, here's the deal - you're going to take this and you're going to sign this paper,'" Beck said. "And they said, ‘Well, now wait a minute here - they said you aren't leaving here until you sign this paper.'"
That according to Beck was reminiscent of Mafia tactics.
"This was Mafia," Beck said. "And it was from the Republicans. It was Mafia tactics. Now you can't get out. Now they're not letting some of these banks out of that deal. This was never about anything other than control, was it?"
Beck had compared turn-of-the-century progressivism to the policies President Barack Obama is pursuing. And, according to Rep. Michele Bachmann, R-Minn., the move of the government to become a common stock shareholder from a preferred stock shareholder is a sign of the government trying to strengthen its power over the banking system, or "a backdoor way" of nationalizing the banks.
"But, it really is a dirty deal for taxpayers because what it means is taxpayers actually get dividends from these banks," Bachmann explained. "Once you convert to a common share, the dividends go away - the taxpayers don't get the benefits. The other thing is the taxpayer loses its position to receive money back from the banks, so when the banks do well - if you have preferred shares, the taxpayers would be first in line to get paid back, common shares you don't."
However, the worst part of converting the shares is the power the government will have to exercise over the banks.
"But here's the worst thing about it Glenn - the common shares have the voting rights," Bachmann continued. "So now the federal government will essential vote and own those banks."
Bachmann confirmed Beck's theory of the coercive tactics used originally and explained the potential future consequences of the TARP bailout.
"I think part of the reason is once the government nationalizes and owns these banks, then the government will have the right to say which bank will get more money, which bank won't," Bachmann said. "And don't you see the injection of politics into all of this? So if banks play the political game right with Uncle Sam, they'll get infusions of capital or they pull back."
