Bailout’s authors didn’t bank on any of this
If Shakespeare were alive today, he’d be challenged to write anything as dramatic as the epic chapter of history that concluded this week, with one mega-CEO solidifying his position on top of the world and another forced to step down from the heights of power.
The story begins in 2008, in the autumn of the last year of George W. Bush’s troubled presidency. A catastrophic meltdown of the financial markets had brought Treasury Secretary Henry Paulson to Congress to plead for $700 billion to buy up “troubled assets” in order to stabilize the financial system.
But then, in an Oct. 13 meeting, Paulson told the CEOs of the nation’s biggest banks that the government was instead going to buy a stake in their companies. Paulson said the “investments” were mandatory, whether the banks wanted the money or not, because the public must not find out which banks were weak.
The bailout was extremely unpopular — one congressman said calls to his office were coming in 50-50; half “No” and half “Hell, no.” The following February, those same bank executives were hauled before Congress and attacked as villains who were living large on taxpayer money. In March, President Barack Obama called the bankers to the White House for a meeting in the state dining room. “My administration,” Obama said, “is the only thing between you and the pitchforks.”
But one CEO wanted nothing to do with the government’s “help.” JP Morgan Chase’s Jamie Dimon showed up at the meeting holding an oversized check for $25 billion to pay back the bailout he never wanted. Obama refused to take it.
One hundred and eighty degrees away, General Electric CEO Jeffrey Immelt was echoing White House talking points in a speech to shareholders at GE’s 2009 annual meeting in Orlando. Immelt told investors that the economic downturn had […]