Anyone who has ever cashed in a Certificate of Deposit knows banks are adamant about extracting a penalty for early withdrawal but now, in repaying taxpayers, they are whining about the rules.
According to the New York Times, “Some of the healthier banks want to pay back their bailout loans to avoid executive pay and other restrictions that come with the money. But the banks are balking at the hefty premium they agreed to pay when they took the money.”
In a perverse way, it’s reassuring that the financial crunch has not altered the basic rule of banking–to squeeze every last cent out of using other people’s money for their own profit–but it also casts doubt on the government’s convoluted plan to save the money lenders from their own greed and error.
“You will be seeing additional actions by the administration,” the President said after a meeting yesterday with his advisers to discuss results of the bank stress tests and the $500 billion to $1 trillion plan for public subsidies to encourage private investors to buy mortgage assets.
That proposal has been characterized by Nobel Prize economist Joseph Stiglitz as “ersatz capitalism, the privatizing of gains and the socializing of losses. It is a ‘partnership’ in which one partner robs the other.”