Monday, November 3, 2008

‘Bailout’ billions used to swallow Cleveland’s largest bank

'Bailout' billions used to swallow Cleveland's largest bank

By Martha Grevatt

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In Michael Moore's film "Fahrenheit 9/11," Bush is shown defining his constituency as "the haves and the have-mores." Now that Bush and Congress have orchestrated a historic giveaway of wealth—created by the have-nots—the have-mores are using it to swallow the less fortunate haves.

The banks that got a free government handout are taking their lottery winnings and buying up the banks that got none. When $7.7 billion was awarded to PNC Bank of Pittsburgh, PNC decided to spend $5.6 billion and buy National City Bank of Cleveland.

The 163-year-old bank was the ninth largest in the U.S. and the largest in Cleveland. Among local financial institutions, NCB was the most deeply entrenched in the subprime scandal.

This deal will create the fifth largest bank in the country, topped only by Bank of America, JP Morgan Chase, Citigroup and Wells Fargo.

Thanks to a "change of control" clause in their contracts, NCB's three highest-ranking executives will be compensated to the tune of $40 billion. The other 25,000 employees, including 8,000 in northeast Ohio, won't be so lucky. In fact, both PNC and NCB workers will face layoffs once the consolidation goes through. These are job losses that neither Cleveland nor Pittsburgh, reeling from the flight of manufacturing jobs that began in the 1980s, can afford. (Cleveland Plain Dealer, Oct. 25)

As local activists chanted in an Oct. 25 demonstration outside NCB's downtown headquarters: "NCB, PNC; all the banks are greedy!"

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