About thirteen years ago, I worked in banking.
Now I don't think sound commercial lending activities have changed in those years but consider what the bank of Obama has done with the auto industry.
First, if you have a debtor experiencing financial hardship, you don't loan them more money. In this case, many financial experts were banging the drum for GM to file bankruptcy as a way to finally reorganize all of it's labor agreements, supplier contracts, etc.
Not good enough for The First National Bank of Obama. They loaned these guys 20 billion plus with no identifiable means of future repayment. It's the equivalent of loaning an unemployed worker money for a car.
Second, within 90 days of pumping a billion dollars into GM, they're suggesting that GM pursue a reorganization.
What the hell was your end game here? You didn't have the foresight to see that the company didn't have the wherewithal to produce millions of Volts in the next ninety days for sale?
A prudent banker knows his end game. You don't loan to a company without having a primary, secondary and tertiary source of repayment identified. You sure as hell don't loan someone more money when you know that bankruptcy is imminent.
Third, banks will never call for a change in management when a company is financial distress. Why? Because other creditors could claim the bank is now running the business and could be on the hook to the other creditors claims.
What generally happens is that the bank (along with the other creditors) will push the company into bankruptcy. The bankruptcy trustees will call the shots on management (ie determining whether the management can be effective under the existing credit restraints). If the trustees think there needs to be new management, they'll call for it.
The First ACORN National Bank of Obama just started business with a 20 billion dollar charge off.
You think they'll run healthcare any better?