Obama blackmails a bank

The Congressional Black Caucus has had harsh words for the Obama administration recently, which it sees at not doing enough to help create jobs. To placate powerful CBC member Rep. Maxine Waters, Obama cut a deal with his friends at Goldman Sachs, no doubt through Goldman Sachs alum and treasury secretary Timothy Geithner.

The move was the culmination of weeks of tension, including a testy meeting two weeks ago that included Rep. Maxine Waters (D., Calif.), Treasury Secretary Timothy Geithner and White House Chief of Staff Rahm Emanuel. In the meeting, Ms. Waters berated the administration for not doing enough to help minority-owned businesses, mentioning specifically a New York broadcaster that couldn't get a loan reworked.

Less than two weeks after the meeting, the company, Inner City Broadcasting Corp., said Goldman Sachs Group Inc. agreed to restructure the loan.

....

Pierre Sutton, chairman of Inner City Broadcasting, said Goldman Sachs officials on Friday agreed to rework the terms of the loan. He wouldn't specify how much Goldman had lent his firm.

Mr. Sutton said he raised concerns about his company's situation with Ms. Waters several weeks ago, but was unaware that his company was mentioned during the meeting with Mr. Geithner.

When asked whether Goldman agreed to rework the loan because of political pressure, Mr. Sutton replied, 'I'm not sure. That's not a position I want to be in, responding to that particular question.'"

The loan was obviously made because of political pressure. It's reminiscent of a similar situation in Chicago when a company called Republic Windows & Doors shuttered a plant and laid off workers after Bank of America refused a loan to the failing company in 2008. The workers went on strike and then-Governor Rod Blagojevich stepped in, threatening to cut off all Illinois government business with Bank of America unless the loan was made. BoA quickly conceded. Barack Obama supported this blackmail, saying, "They're absolutely right. These workers, if they have earned these benefits and their pay, then these companies need to follow through on those commitments."

But Inner City Broadcasting didn't deserve another loan, as Goldman Sachs saw it. They lived beyond their means, eating up radio stations that they couldn't afford, which they were forced to sell off. Just as with Republic Windows and Doors, they had a poor business model.

Good thing they had a powerful friend in Barack Obama.