Paulson Forced Banks to Take TARP Money

[scheming daemons]

The next time the right wing attacks Obama as trying to "nationalize the banks" (which would actually be a good thing), show them this article:

http://www.cnbc.com/id/30745687

Documents made public on Wednesday confirm former U.S. Treasury Secretary Henry Paulson gave nine major banks no choice but to allow the government to take equity stakes in them as the Bush administration moved to address turmoil in the financial industry.

The documents, obtained by the public interest group Judicial Watch under a Freedom of Information Act request, include "talking points" used by Paulson at the Oct. 13, 2008, meeting with the banks' CEOs in Washington.

The details of the meeting had been widely reported at the time, but the documents offer a first-hand account of what transpired behind closed-doors.

"We don't believe it is tenable to opt out because doing so would leave you vulnerable and exposed. If a capital infusion is not appealing, you should be aware your regulator will require it in any circumstance," the document said, citing Paulson talking points.

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The documents include an email showing a public relations effort, run in part out of the Bush White House, to tamp down public concerns about nationalizing the banks, Judicial Watch said.

The Fed, the Treasury Department and the FDIC called the bank rescue "necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy."

The Bush White House, and Hank Paulson, were attempting a government takeover of the banks.

Actually, this is the right goal... as Krugman and others have argued for months... but the right-wing in this country is disingenuous for attacking Obama on this front when Bush and Paulson were trying to go even farther than Obama has.

Paulson literally forced healthy banks to take the government money. Think about that.

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