How Short Our Memories Are

Scanning the Fox Business website (I don't know what I was thinking, either) I stumbled across what I consider to be one of the more evil and pernicious pieces of writing I have seen in a while. The author, one Al Lewis (not to be confused with Grandpa from the Munsters), describes the farce that was the Congressional testimony of major bank chiefs this week, and proceeds to flat-out deny their claim that they were forced to take bailout money. In addition to spreading abject falsehoods, Lewis' article reads like a romantic tribute to the efforts of selfless, crusading politicians. A few excerpts for your reading displeasure:

The story goes like this: One dark October day, the U.S. Treasury Secretary pulled CEOs of nine major banks into a room and forced them to accept billions and billions of dollars from the federal government.

Many of these bankers didn't want the money. Didn't think they needed the money. And didn't care to shock their shareholders by taking the money.

The spend-happy Bush administration, as if eager to introduce a virulent new form of socialism, simply rammed all these freshly minted dollars right up their big, fat pneumatic tubes....

Some bankers actually tried to maintain this bizarre myth in their testimony before the House Financial Services Committee on Wednesday.

"At the urging of the U.S. government, Bank of America accepted ... TARP money," CEO Kenneth Lewis told the committee, his eyes bulging like those of a man at a 12-step meeting recounting his helplessness in the face of horrendous abuse....

Barney Frank, the Massachusetts Democrat who chairs the House committee, put a swift end to these absurdities with a generous offer.

"If you want to give back the money, we will take it," he said. "And if there are any obstacles to your giving it back, legally, we will undo those obstacles."

Somehow, nobody volunteered.

What Lewis fails to mention is that a clause in the bailout contract forbids banks from paying back the money until they have raised extra private capital to replace the federal funds. Bah, details! This article is an absolute insult to journalism, flagrantly mocking bankers for telling the truth, as it was documented at the time in the WSJ, the New York Times, and this excellent letter to the editor written by a very conscientious citizen. CEOs of healthy banks were, in fact, forced to take TARP money under threat of arbitrary regulatory vigilance. What is even more depressing about this article than its factual inaccuracy is the facts it does present, namely the statements from bank CEOs. Businessmen today reject the moral foundation of capitalism, their own rational self-interest, and embrace a sort of mealy mouthed altruistic justification:

For Wells Fargo & Co. CEO John Stumpf, it was his patriotic duty to accept this money.

"We're Americans first, and we're bankers second," he told the committee. "So we see this taxpayer investment, first and foremost, as an investment in the future economic growth of our country. We're proud to be an engine of that growth."

Needless to say, this justification does not support an argument for individual rights, and so this happens:

Alabama Republican Rep. Spencer Bachus then asked Stumpf if Wells Fargo was indeed forced to take the money, as earlier reported.

"We've clarified our statements," Stumpf awkwardly replied. "We're happy to have the money."

In adopting an altruist stance on the survival of his bank, Stumpf is forced to deny even real, provable facts that occurred. Without a proper philosophical grounding, these gentlemen are powerless against the ludicrous accusations of Congress. When two sides agree not to think rationally, the most irrational will win.

I encourage everyone to read the article I referenced. It should make clear just how corrupt elements of our society are.