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BB&T’s John Allison: A Real Life Midas Mulligan ?

by @ 12:01 pm on August 11, 2009. Filed under Ayn Rand, Economics, Individual Liberty, Politics

Last week, The New York Times had a long and interesting profile of John Allison, the former President and current Chairman of BB&T Bank, who has become known as one of the biggest advocates of Ayn Rand’s ideas in the business world:

MR. ALLISON of BB&T has the tall, lean frame, copper-colored hair and confident demeanor of many of Ms. Rand’s fictional heroes, including John Galt — a look “which would not seek forgiveness or grant it.”

He also has a résumé befitting a Rand prophet. He started at BB&T, once known as the Branch Banking and Trust Company, in 1971 and became chief executive in 1989, when the bank had $4.7 billion in assets.

By the time he retired as C.E.O. in December, he had overseen 60 bank and savings-institution acquisitions and turned BB&T into the 11th-largest bank in the nation, with $152 billion in assets, according to the bank.

A 60-year-old who speaks in a rapid-fire Southern accent, Mr. Allison says the current financial crisis is primarily the government’s fault. He criticizes the Fed as trying to manipulate normal business cycles and Fannie Mae and Freddie Mac as facilitating mortgages to people who couldn’t afford them.

The government’s remedies have made matters only worse, he says: “Almost everything that has been done since this crisis started is going to reduce our long-term standard of living.”

Allison also contends that his bank was essentially forced by the Bush Administration to participate in the TARP program last year, a decision which received criticism in libertarian circles at the time:

Mr. Allison says the government forced BB&T and some other healthy banks to accept TARP money to obscure that they were simply trying to save several large banks like Citigroup.

“Everyone thinks we got some kind of subsidy,” he says, noting that his company paid the money back in June, with interest. “It’s going to cost us about $250 million for money we didn’t want.”

And his advice for the government is quite simple:

He suggests that government get out of the way and let businesses start making money again. An example of how to make money? Look no further than BB&T, which, he says, has a proven formula for success that centers on “an uncompromising commitment to reason.”

I’ve written positively about Allison and BB&T before, of course. Several years ago, in the wake of the infamous Kelo v. City of New London eminent domain case, BB&T made headlines by announcing that it would not lend money to commercial developers for projects based in whole or in part on property taken by eminent domain. Several months later, BB&T donated $ 1 million to a North Carolina college to establish a program to promote the study of Rand’s ideas. During the early days of the 2008 financial crisis, Allison had sent a strongly-worded letter to Henry Paulson speaking out against the proposed TARP bailout. It’s good to hear he still holds to to his principles.

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