Congressional outrage over the Northern Trust Open is a great example of the pernicious effects of coercive government intervention in the private sector.
Northern Trust, one of the healthiest of the major banks, did not need or request government funds, but agreed to take a relatively small sum ($1.6 billion) along with all major banks as part of Treasury's arm twisting. Its thanks for playing ball is to be lambasted by John Kerry, Barney Frank and others for continuing with multi-year contractual commitments to the event and related charities, and with longstanding client plans.
The lesson here is that government "help" always comes with strings attached. My guess is that Northern Trust regrets its decision to play ball and would love to pay the funds back right now. Unfortunately, unlike most of the home mortgages that Fannie Mae, Freddie Mac and their enablers in Congress encouraged, this loan comes with a hefty prepayment penalty, so it would be expensive to do so. No wonder a number of governors are thinking twice about accepting "help" from Washington.
Paul S. Detlefs
Glenview, Ill.
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