GILLMAN JR. | Stay out of private business

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If you had any doubts that the government should get their dirty beaters off the economy, recent evidence should put those doubts to rest.

Bank of America Chief Executive Ken Lewis recently testified under oath to New York’s attorney general that Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Hank Paulson instructed him not to disclose the horrid financial condition that Merrill Lynch was in to shareholders.

Keep in mind that this was prior to Bank of America initiating the acquisition of Merrill Lynch. Sensible investors in the company would have made it quite clear to the board of directors that such a merger was not to happen if they knew of Merrill Lynch’s condition.

But once the merger was initiated, Merrill Lynch’s condition severely worsened. Lewis wanted to execute what’s known as a Material Adverse Change clause to cut the company’s losses.

A MAC clause basically allows the acquiring or merging company to call off the acquisition or merger with the target if the target’s situation severely changes. Certainly, this was the case.

However, Lewis further testified that he was instructed not to execute the MAC clause and that if he did, the board and management of Bank of America would be changed out.

Of course, this assault on stockholders isn’t anything new. Citigroup is currently working on converting the preferred shares the government owns into common equity. This activity dilutes the value of current outstanding shares to investors.

According to the Web site fool.com, there’s also a good chance it’s going to hurt taxpayers in general.

So let me get this straight … the administration wants to engage in activities that actively harm investors and yet Obama wonders why there’s a “confidence gap”?

I find it repulsive that the government claims interventionist policies help when even a basic economic understanding shows that they only harm.

Again, I find myself wondering if members of the current administration are extremely inept or are truly malevolent.