Well, at least he got that last one right. Since ordinary Americans became the hindmost during his tenure, the Devil has us by the balls. Serves us right -- right? I mean didn't we accept all that sub-prime candy the foremosters on the income scale offered us? (Hi little girl, want some cheap money?)
Trouble is that, while the Devil is taking the hindmost, he's not being allowed anywhere near those “candy” peddlers. No sooner did those guys begin sinking – because their normal prey (that would be us) dried up, than Mr. Market in Oval Office decided to launch a financial Berlin airlift, flying in plane loads of cash to keep them afloat, and fed in the fashion they'd become accustomed to:
“In recent months, AIG has come under fire for picking up a $440,000 tab for a weeklong retreat at the posh St. Regis Resort in California for top-performing insurance agents, just days after the U.S. government stepped in to save the company with a $85 billion taxpayer-funded loan. AIG also spent $86,000 for a hunting trip in England as the faltering company reaped another $37.8 billion in taxpayer funded loans....Lawmakers investigating AIG's meltdown said they were enraged that executives of AIG's main U.S. life insurance subsidiary spent $440,000 on the retreat, complete with spa treatments, banquets and golf outings.” (Full Story)
Mr. Market's airlift to starving foremosters was going to be “just” $700 billion, but then AIG, which had already been airlifted $85 billion, was still hungry. So...
“The US government ripped up its eight-week-old rescue deal for AIG and signed a new $150 billion plan that it hopes will be more likely to save the insurance giant from bankruptcy. An original $85bn loan agreed in September, topped up by a further $38bn last month, had failed to plug the growing black hole at the heart of the company's derivatives insurance business, the US Treasury conceded yesterday.” (Full)
Oh, and then there's that little matter of the extra $148 billion Mr. Market granted banks, no one mentioned at time:
Bush sneaks $146.3 billion in bank tax breaks
“With attention focused on the $700 billion bailout plan for banks, Treasury Secretary Henry Paulson quietly slipped the banking industry an additional $140 billion tax windfall in late September, Washington Post reports...."Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no," said George Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. "They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks." (Full)
So, just roughly, you can figure Mr. Market wants to air-drop something approaching $2 trillion on the foremosters, so they can get back into the business of selling stuff to hindmosters --- who, if you recall, are currently have a Devil of a time themselves.
The next foremosters in line for an air drop is apparently the auto industry. It seems both parties want to help them out since they are combination of fore- and hindmosters. General Motors, Chrysler and Ford, are among America's foremost foremosters. On top of that they employ a couple of million hindmosters as well. So if they are allowed to starve both Republican and Democratic constituencies get hurt.
Therefore it is highly likely that, in the next few months, auto companies are going to end up with something around $50 billion in survival rations themselves.
I can hear some of you Mr. Market types right now.
“Well Pizzo, you smart ass, what would you do? Would you just let companies like AIG and GM go out of business? Do you know what economic and social chaos that would cause?”
Ah, you betchya I do. After all, banking and finance was my beat a reporter for nearly a quarter century. So, I know. I also know that we would not have gotten to this point had those companies been well-run, had not bent and/or broken the rules and if Mr. Market in the White House had regulated them properly. I know that. Do you?
So here we are, faced with the Hobson's choice; letting them fail or bailing them out, each route trading a set of immediate problems for future ones.
That is, unless there are strings attached. No wait, not strings, cables, chains and, where appropriate, handcuffs.
Take the automakers for example. If I were in charge of that bailout I would tell them;
“Okay, here's your $50 billion. Now, where's my seats at your corporate board table. I want a third of those seats. And,
About those cars you're gonna build with this money, they are going to be plug-in hybrids for starters.
Sure you can still build conventional gas-powered cars, but with limitations.
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