Friday, March 13, 2009

Socialism by Any Other Name...

When Rep. Barney Frank was looking to aid a Boston-based lender last fall, the Massachusetts Democrat urged Maxine Waters..."stay out of it."...The reason: Ms. Waters, a longtime congresswoman from California, had close ties to the minority-owned institution, OneUnited Bank...Ms. Waters and her husband have both held financial stakes in the bank. Until recently, her husband was a director. At the same time, Ms. Waters has publicly boosted OneUnited's executives and criticized its government regulators during congressional hearings. Last fall, she helped secure the bank a meeting with Treasury officials...Such potential conflicts of interest are more serious as the banking system's crisis has led the government to take an increasingly active role in overseeing financial institutions, including OneUnited. The financial-services committee on which Ms. Waters sits oversees banking issues, and the lawmaker is a potential future chairman....Waters Helps Bank Whose Stock She Once Owned, Susan Schmidt, The Wall Street Journal, 3/12/2009

WSJ reporter Schmidt doesn't specify charges in this interesting article on corporate/government socialism, but she doesn't have to. OneUnited Bank, from its inception, has been driven by a political purpose as being a "minority-owned" bank. A free market's only political purpose is to create opportunities, including jobs, products and services, and profits for investors. When you serve political ends as a so-called private company, trouble is just around the corner.

The bank received "outstanding" Community Reinvestment Act ratings for lending in Los Angeles...In January, Ms. Waters acknowledged she made a call to the Treasury on OneUnited's behalf. The bank's capital, which was heavily invested in shares of Fannie Mae and Freddie Mac, was all but wiped out with the federal takeover of the two mortgage giants, and the bank was seeking help from regulators....OneUnited eventually secured bailout funds under the government's $700 billion Troubled Asset Relief Program, which was set up later that month....(Waters Helped Bank...Schmidt, WSJ, cont'd)

Too big to fail?


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