The Bank of America, currently the largest U.S. retail bank, received fifteen billion dollars from the US treasury. If you count the 10 billion that it will inherit from Merrill Lynch & Co after they buy it, the dollar number of government intervention jumps to 25 billion. Being the capitalists that I’m sure you are, you know that this was a bad, bad idea on the part of the government. Of course, as the Bank is beginning to see, it may well have been preferable to go bankrupt than to accept money from our government.
When the Bank of America received its bailout, they were under the impression that the money was a gift. They would not have to do anything for the government, as the government was giving them the money for their personal interest, and not so that they could control the bank. Wrong. Taxpayers around the country are now trying to get loans from the bank that they would never have previously qualified for, on the grounds that it was tax payers dollars that kept the bank alive. “You owe us! We bailed you out,” shriek the taxpayers, in more eloquently disguised words. The best example of this is of course Republic Windows and Doors, which was forced to close after Bank of America withdrew a line of credit that it had previously received. The company was spiraling downward (a 12 million dollar drop in profits, 25%, from ’07 to ’08). The bank thought it a poor investment.
This was all immaterial to the workers of Republic, who sat inside the closed building of their company, waiting to receive the pay that they ‘deserved’. Note that this should have absolutely nothing to do with the Bank of America. The bank exists to profit, and according to the bank’s spokeswoman, Julie Westermann, Republic is unable to operate profitably in the current economy. The company is not going to make a profit. The bank decides not to give them money, knowing that they won’t get it back. The country explodes in cries of unfairness.
Following public opinion, the government decided to force Bank of America to give Republic a loan to pay their workers.
You received government money. Who are you to deny it to anyone else?
Illinois Governor Rod Blagojevich did this by saying yesterday that Bank of America won’t get any more state business until it restores the line of credit to Republic. The workers’ sit in ended today,when the bank gritted their teeth and gave every factory worker 7,000 dollars.
The conflict came to represent Main Street’s resentment of the Wall Street bailout. –Reuters
Another Illionis politician that you might have heard of (also known as the President Elect) agreed with the workers, saying, “They’re absolutely right…These workers, if they have earned these benefits and their pay, then these companies need to follow through on those commitments.”
A company goes bankrupt. It cannot pay its workers. Apparently, it must pay its workers anyway.
A Fox News analyst worries about the precedent set with forcing a bank to make a loan simply because people need the money. Home owners in foreclosure could refuse to leave on the same principle, he said.
The government forcing banks to give people money is just ridiculous. In fact, the entire episode looks as if it could have come straight out of an Ayn Rand novel. If this trend continues, it could easily be the end of all of the banks of our country. Banking rests on the premise of loaning to those who will pay you back, not to those who need the money to feed their children.
The future President agrees with the workers. The people of our country agree with the workers. Even the banks try to stress the fact that they agree with the workers. Who is left to side with capitalism?