U.S. Treasury owns all bank wealth

I backslid in recently speaking of a vote by common shareholders on a new issue of preferred stock or on Treasury being on the Board of Directors. Treasury is above the Board! By the TARP legislation (Troubled Assets Relief Program), Treasury can seize any financial asset of the banks at a price it decides. My finance training took my eyes off the power ball that I only recently blogged on here. A complete rundown of the power grab is my article here. John Washburn has stayed focused on the power grab.

The news today also brought me back to the sad reality of the seizure of the banks by the government. This news article from Australia says it bluntly: “GEORGE W. Bush is expected to unveil firm plans to use $US250 billion of taxpayer funds to seize stakes in nine of America’s biggest banks.”

The initial nine banks (Paulson plans to involve himself in thousands more he has said) have no choice in the seizure by issue of preferred stock: “It is also understood that not all of the nine banks are happy with selling a stake at a discounted price, but have grudgingly agreed.” Harry Truman’s steel mill seizure was struck down by the Supreme Court in 1952. Will a bank or a friend of justice bring a case against the government and the Emergency Economic Stabilization Act of 2008? It’s very important that this be done. Otherwise, the Bush adminstration has just firmly fixed in place another girder in the building of American fascism. The Court should reject TARP. Americans should reject both it and everyone who voted for it.

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11:59 am on October 15, 2008