Bankers Bailed (Bought) Out

It was Monday afternoon at 3 p.m. at the Treasury headquarters. Messrs. Paulson and Bernanke had called one of the most important gatherings of bankers in American history. For an hour, the nine executives drank coffee and water and listened to the two men paint a dire portrait of the U.S. economy and the unfolding financial crisis. As the meeting neared a close, each banker was handed a term sheet detailing how the government would take stakes valued at a combined $125 billion in their banks, combined with new restrictions over executive pay and dividend policies.

The participants, among the nation's best deal makers, were in a peculiar position. They weren't allowed to negotiate. Mr. Paulson requested that each of them sign. It was for their own good and the good of the country, he said, according to a person in the room...

It would take years to disentangle banks from the federal government. Some of these temporary steps would be hard to undo...

During the discussion, the most animated response came from Wells Fargo Chairman Richard Kovacevich, say people present. Why was this necessary, he asked. Why did the government need to buy stakes in these banks?...

Toward the end of the meeting, Bank of America's Kenneth Lewis said the debate had lasted long enough, and everyone needed to sign...

Mr. Paulson, in his rapid staccato, said the public had lost confidence in the banking system, despite each banker's view of his institution.

"The system needs more money, and all of you will be better off if there's more capital in the system," Mr. Paulson told the bankers.

Mr. Bernanke said the situation was the worst the country had endured since the Great Depression. He said action was for the collective good, an understated appeal. The room was silent as he described the economy's fragile condition...

The meeting ended at about 4 p.m. By 6:30 p.m., all of the sheets had been turned in and signed by the CEOs. No second meeting was held.

read the Wall Street Journal article

My thoughts: We are witnessing the death of capitalism and the birth of financial fascism. Necessity: the plea of tyrants; the creed of slaves.