Goldman Sachs (NYSE:GS), Citigroup (NYSE:C), Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JPM) Plunge in Response to New Proposed Obama Rules

In what seems to be a relentless and increasingly dangerous mentality by Barack Obama concerning the banks of America, he continues to attack them from every angle as he suffocates the ability to generate revenue based on what looks like some type of inner torment from the failures of his first year in office as president.

His latest debacle could be one of his worst yet, as Obama has put forth the idea that the large banks need to cut back even more on risk by not allowing them to “own, sponsor or invest in hedge funds for proprietary profit.”

This could be a petty move by Obama coming after the response of bankers to his tax on compensation and bonuses which was highly unpopular and controversial, with most in the financial community opposing it, as well as many industry watchers.

It’s like Obama is saying if they don’t want a tax on their bonuses to curb what he perceives should be their proper behavior, then he’ll find another way to restrict their business practices through this latest measure, which is unprecedented as far as interference in the markets by the government and president.

The idea of the president of the United States starting to get involved in business practices at the micro level is bizarre at least and dangerous at worst.

There can be no doubt that Obama is panicking in general, as socialist plan after socialist plan, along with his fascism related to business and the markets, is rejected by almost all facets of the American electorate and population. He is targeting the banking industry because he believes that’s the one place he can win in concerning currying public favor, and so he continues his endless radical policies and ideas in hopes of getting at least one major win to turn his political fortunes around.

For the banking industry, this actually could be good, in the sense that they may come to their senses in their ongoing promiscuous relationship with the government. They need to quit looking for political favors and government interference in the markets for their benefit, as it’s now coming back to bite them hard, and we may not be through with this yet, depending on the Democrats and how they think they can turn things around before elections in 2010.

They have absolutely no issue to grab hold of at this time except the banking industry, and now that they’re obviously overreaching again, the American people will eventually understand what is going on, and realize that their cost of living will go up as the banking industry is trampled upon by the government.

Whatever things are put into place to cut back on generating revenue and profits in the industry will have to be put upon the consumers to make doing business as banks profitable. This is why the government, which can’t manage it’s own affairs, needs to stay out of the markets.

So the populist moves of cutting back on banking fees to the customers at banks which will hit the banks hard, along with other measures put in place to curb what is labeled as ‘predatory’ banking, will eventually harm the banks, and ultimately the costs will be born by consumers, as they will be if bankers are assessed fees from bonuses and/or other compensation.

Add to that the government pressuring the banks to fix mortgage loans so consumers stay in homes they never should have been in in the first place and the move by Obama to have banks go over their commercial loan portfolios to try to find any business they may have passed over for loans and get them one.

In other words, Obama is supposedly attempting to remove so-called excessive risk from the banking system, but adding even more by pushing banks to make loans they already have decided shouldn’t be made.

A scenario of cutting back on past sources of revenues like banking fees, added taxes to bonuses and pressure to keep failed mortgages alive while offering businesses that shouldn’t be given loans, loans anyway, as setting up the industry for even more failure.

Now to want to cut back on what is one of the more profitable sectors at this time for banks because there is some risk involved is ludicrous and sets a dangerous precedent.

But this is what socialism is all about: people never being allowed to try something and fail. How do we ever grow if we’re not allowed to fail when we try something?

To attempt to bring that socialist attitude to business in general and the banking industry in particular will make things much worse than they already are, and force banks into what will probably be even more risky areas as they scramble for ways to generate revenue and profits.