TO BAILOUT OR NOT TO BAILOUT, THAT IS THE QUESTION
$700 billion. Large number. Assuming a 300 million population, that works out to about $2,333 per person in the US.
Now I don't know about you, but I just don't have that kind of cash to give to my banker. Or a broker. Or anyone else.
My daughter has five kids plus a husband. That makes seven. Times $2,333 equals $16,331 for her family. I feel sure she has other needs that that could go for.
And everyone in the US also has better uses for that cash.
And, wait. You are not going to get a chance to direct where it goes. But, you are going to pay it out. Or your kids are. Or your grandkids are. Or their kids.
That is seventy months of the Iraq war costs. Five years and eight months worth.
My nephew sent me a forward of an e-mail he had received regarding the AIG bailout. That one was worth only $85 billion. The guy that wrote it was a pretty poor calculator. He had calculated that about 200 million adults live in the US. And then divided the $85 billion by the 200 million and came up with the staggering sum of $425,000 per adult--actually it works out to $425. Still a fair little bit, that is groceries for my wife and I for about a month and a half. Or gasoline for about two and a half months.
But putting aside for a moment the enormous amount of money, does it make sense to bail out all these firms?
A person saves his money, borrows some more and goes into business. The only reason he does so is to provide a profit that he can retain for his enjoyment. He has responsibilities, primary of which is to pay off that loan he got to start the business. Once that is done, he is free to pocket his profit. If he makes bad decisions, he loses money, and his business folds. And the creditor is out the amount left unpaid. The capitalist system.
Nowhere does it say his customers must come up with the cash to make his business break-even or profitable. That is a risk of doing business. When I overspend my income, I have never found the rich uncle to bail me out. I have to suffer for my bad decisions. What makes them any better than me? Or you?
Of course I don't want the system to fail. But it was not me that made the decision to make bad loans. I do not bet on whether or not twenty million poor credit risks will be given loans for overinflated housing prices. Or whether they will repay them. Common sense has gone out the door while unabashed greed walked in and took over.
And yet they want me, whose basic source of income is Social Security, to bail them out. I already have to pay income taxes on that Social Security check. Now they want to take more of it to give to poor businessmen, businessmen who make more in one hour than I receive in an entire year.
Ethics has no apparent place in the world of business anymore. I could see that coming forty years ago when the MBA's took over from the seasoned executives, when the education received in four years in college was no longer appreciated, but the quickie specialization in how to wring the next dollar out of a business became, not the goal, but the overriding concept. Do whatever is necessary and screw the stockholders, the workers, the public, the government, just produce more and more obscene profit so the pockets of the new executive corps can be lined and relined again. Get that golden parachute from as many companies as you can, and to hell with how you go about it. Or who gets destroyed in the process.
And beginning in 1993 and continuing until this day, that has been the primary thrust of business and it has penetrated into the government as well. Otherwise why would a person spend millions of their own money to gain a seat that pays only a couple of hundred thousand a year? Clinton and Bush baby are as alike as two peas in a pod in this regard. I have no respect for either of those jerks.
Aint deregulation great?
There aint no such thing as a free lunch. Proven over and over again. And no hope on the horizon with the two that are running for president--again. Unless you are the lead dog, the view never changes.