"...in offices around the country, bankers simmered.
Peter Fitzgerald, chairman of Chain Bridge Bank in McLean, said he was "much chagrined that we will be punished for behaving prudently by now having to face reckless competitors who all of a sudden are subsidized by the federal government."
At Evergreen Federal Bank in Grants Pass, Ore., chief executive Brady Adams said he has more than 2,000 loans outstanding and only three borrowers behind on payments. "We don't need a bailout, and if other banks had run their banks like we ran our bank, they wouldn't have needed a bailout, either," Adams said.
The opposition suggested that the government may have to continue to press banks to participate in the plan. The first $125 billion will be divided among nine of the largest U.S. banks, which were forced to accept the investment to help destigmatize the program in the eyes of other institutions.
In rolling out the program, Treasury said it would make the rest of the money available to banks that requested it. Officials said they expected thousands of banks to participate.
But both the American Bankers Association and the Independent Community Bankers of America said that they knew of few banks that planned to participate.
"I'm not sure we've heard from any that want to participate," said Karen Thomas, vice president for government relations at the community bankers group, which represents about 5,000 banks. "That said, if any community banks do enroll, we anticipate it will be just a small minority."
Federal regulators said they did expect some banks to volunteer, though none stepped forward yesterday. But they added that they would not rely on volunteers. Treasury will set standards for deciding which banks can be helped, and the regulatory agencies will triage the banks they oversee: The institutions faring best and worst will not receive investments. The institutions in the middle, whose fortunes could be improved by putting a little more money in the bank, will be pushed to accept the money from the government."
So. We can conclude one of two things from this. One is that...
....pesky politicians just shouldn't intervene when a badly-regulated part of the economy screws up and poses a systemic risk.
I suspect that someone, somewhere is arguing this, and the time we will spend reading and attempting to reason with such commenters is time that we will never get back.
Or, we could conclude that...
...the whole ideology of the absent state - including the OECD-sponsored abhorrence of state-aid - a maximal interpretation of 'protectionism' - is hollow and impractical, and that elected governments (and, sadly, unelected ones as well) are key players. That we are now (and actually, we have been for some time) in a social-democratic market economy. The time has come to ignore well-heeled pressure groups and apply the same cushion to the poorest sections of society that we are now applying to the richest.
This has huge implications for lots of sectors of the economy. I can't list them all, but for me, there is now surely a cast-iron case for the application of the cultural exception to broadcasting, film and content-production in general. State subsidy for public service broadcasters can no longer be seen as being a tax-funded competitor to commercial broadcasters such as BSkyB. A decline in regulated and accountable local media poses a systemic risk to the quality of democracy and local cultural expression.
OfCOM are currently reviewing the funding of public service broadcasting. They are doing so in the dim light of the Thatcher-Reagan doctrine. That doctrine is now dead.
Would it be a bad idea to organise a series of street-parties up and down the country to celebrate this? Halloween, perhaps? We could burn a witch in effigy?
Update: This gloating really must stop. But not yet, eh?