The ‘current’ administration was none too happy when the big banks started paying back TARP.  There was actually some resistance to the idea of accepting the money at first and the speculation was that if banks paid back TARP, the government would lose a level of control they’d prefer to keep.  But I think they came to some kind of agreement.

That’s why we now have the same government trying to capitalize “main Street Banks.” They are claiming that this will help smaller banks provide money for loans for small businesses on main street.  But my cynicism leads me to a different conclusion.  I think Obama wants to sink the governments claws into every other bank in America that will allow it.  The goal is to shackle them with the same regulations they’ve been trying to to strap onto every other financial institution only smaller banks lack the institutional girth to fight it off.  So the long term goal could be to take them over, systematically declare them stressed, (or incapable of paying back taxpayers) and either closing them up or selling them off to the big banks.

You remember those big banks?  The ones that donate gobs of cash to democrats like Paul Hodes, and powerful figures like Mr. Obama.  The ones that were once called home by at least a dozen White House insiders?  Those banks.  They’d like nothing more than to have more deposits, and be rid of these pesky little competitors.

Yeah, I know, it sounds conspriatorial.  But the government hijacked the student loan industry, owns most of the mortage industry, bought out most of the American Auto industry, has its eyes on energy and health care–just how hard it to imagin them making a deal with the big banks to take out the little banks and leave them the pieces?