In a developing story, the Federal Reserve called the heads of New York's largest banks to its lower Manhattan office earlier this week. According to some one speaking from the banks, the feds told the bankers to lower CEO compensation or....
The "precise" "or," is not known, but Judge Andrew Napolitano, sitting in for ailing Glenn Beck believe the banks have been told you WILL lower CEO compensation or the FDIC will begin an audit.
Following are quotes from Judge Napolitano (there may be an occasional word that is not exact, but it is very close). See the video below.
The CEO of the Federal Reserve Bank of New York called the heads of New York's largest banks into the offices of his lower Manhattan offices.Napolitano has a great panel that now discusses what has happened. Napolitano asks? Can the federal government, constitutionally interfer with use of private funds and private freely negotiated contracts? Listen to this conversation about extortion and demonization.
We don't know precisely what was said but we do know that the head of the Fed told the assembled bankers that they must start cutting executive compensation, or the government will do it for them.
The government admits that it has no lawful authority to regulate compensation at banks that never received TARP funds or paid the funds back already.
So what was the extortion? Undoubtedly, it was a threat to have the FDIC audit the banks if they fail to tow the pay Czar's line. An FDIC audit will cost the banks tens of millions in employee loss of time and shareholder loss of value.
What is extortion? Extortion is a threat to perform a lawful act to influence the free will of someone else. Well, can the FDIC audit these banks? Yes. But may it do so to force executives to do what they have a lawful authority not to do? No.
Remember that Obama's Treasury Secretary, Timothy Geithner, was the head of the Federal Reserve Bank of New York when Obama tapped the tax-cheater to tend to our money.
Thanks much to David Lemon the master sculptor at Clay to Bronze.