So, it looks like we have entered into an era of larger than life, corporate “Bailouts” that we just can’t live without. The term has become a common topic of impetuous, dinner conversations, as well as the universal slogan for “Help me, I screwed up”. And in a time where the economy is imploding on a daily basis (if not hourly); we can not help but spend billions of dollars today and ask questions later. Of course, at the end of the day we are talking about big business bailouts and not helping the little guy: the taxpayer. But, to correct the market, we (the taxpayer) should fund the protection of critical infrastructure that is essential to the U.S. economy; right? If not, who else? But, after all the political infighting ensued over who was to blame, the current state of economy was in such turmoil, they really had no other choice. They had to do something. Or at least that is what they told you, and what you really wanted to believe. It is amazing how desperation can lead to rash decision making.Certainly, the bailout of “Wall Street” was so vital that Nancy Pelosi and Harry Reed shoved the fear of “Armageddon” so far down our throats. The ultimate doomsday scenario did not come from Biblical text, but from the halls of Washington; and the masses bought it. And in a desperate attempt to add some salvation and redemption upon leaving office, the Bush administration followed suit. Whether it was fear of public outrage or an honest belief that bailing out an already greedy set of money “miss-managers” was going to deliver us to the “promise” land; who cares? Bush no longer has to answer that; so I will leave that campaign promise for Obama to deliver on (Which we all know what campaign promises are worth). And what made it worse, there still is limited control over these funds, accountability, or even a game plan for how they were distributed. Oh, sure we have the “manifesto”, but come on, seriously? Even better, Obama’s selection of Tim Geithner as Secretary of the Treasury should definitely help with improving economic stability. I guess a guy that avoided paying income taxes in 4 years is a great addition to the oversight of our monetary system. Glad to see that Pelosi actually defended this guy in the Senate confirmation meetings: I think she needs a CAT Scan. But “Wall Street” is not alone in this debacle; the financial crisis continued to loom from a lack of liquidity in the credit markets, mainly due to insolvent mortgage loans. Sure, a depressed economy and corporate downsizing will contribute to financial hardships, but a history of over-zealous lending to non-qualifying borrowers was the main catalyst in the housing crisis. As social-activist groups routinely engaged in thug-mentality: protesting and harassing banks and legislative leaders to increase the availability of housing, and mainly to low-income borrowers. Their ability to afford a loan apparently was irrelevant, since this had less to due to fiscal responsibility, and more to with a political agenda. Barack knows all to well, the efforts that these groups to go, as he worked with the activist community in Chicago for years. And if you further investigate the impact of legislation like the Community Reinvestment Act, activist groups like ACORN, and oversight institutions like Fannie Mae, you may have a different understanding of what happened. Despite all of this, the three main conspirators at Freddie Mac (Franklin Raines, Tim Howard, and Jim Johnson) all walked away with millions and subsequently worked on Obama’s Campaign as economic advisers. Surprise, surprise, surprise! But, to be fair, the situation worsened when increased banking pressure added momentum to profit seeking financial firms and hedge-fund “cowboys”. No defense here, since the equivalent expertise in this area can be found in “Vegas”; and yes, at the “Craps” table where the luck of the dice is king. So, in the end, after a second vote (and increased constituent pressure), congress passed the bailout package to a tune of $700 billion dollars. Ouch! Just think, without it, the credit markets would evaporate and businesses wouldn’t have access loans to continue operating, right? Given the nature that banks want to make money, it would have been a short time before one of them said, “Guys, we’re not making any money, I think we need to start lending again”. “Supply” and “Demand”; isn’t that how it works. And just think; it would have cost us less than $700 BILLION! Okay, just a theory, but so was assuming the “package” would actually work. Any evidence, hhmmm no. Freddie Mac executives escaped under the radar and a handful of financial executives went on vacation with our money (See San Diego hotel bookings). And do we know where all that money ended up? Besides outlier financial institutions that mysteriously unveiled themselves, claiming they were destitute; who else? Political advocacy groups anyone? Leftist Social causes anyone? Hhmmm.
Now the flood gates were open, every Tom, Dick, and Harry (I hate that expression) were grooming their pitches, dry-cleaning their suits, and applying a little more “Mitchem”. Please tell me no one actually uses that in 2009. So yes, all is good now in “Defunct-Ville”. And “Pandora’s Box” was wide open, and they came a running. And after watching the automotive industries’ first attempt at begging congress for their share of “bailout” funds, I was so appalled, it was laughable. How could I be mad that corporate executives from the “Big 3” automakers flew in on private jets, were driven by chauffeurs, and escorted by an entourage of assistants (and/or hookers: come on now, you can tell)? All you could say was, “Are these guys friggin’ kidding me”. But then again the arrogant, cigar smoking, bravado was not a surprise. But, after a second trip to Washington, this time driving across country in “Hybrids” of course, their plea was about 1% more convincing. By the way, they were still driven by chauffeurs (I do not know about you, but I enjoy a nice road trip, it really frees the mind). Of course, there are many that will blame boastful incompetence, wasteful spending, and poor product development on Detroit’s current fiscal dilemma. Yes, U.S. automakers had their issues, dating back to the1970’s trying to compete with Japan (i.e. the Ford Pinto, no explanation needed), but the recent misconception that American automobiles are not as well built as their counterparts is unwarranted. The American auto industry has been transformed, and if you took another look you would be surprised: Detroit is leading the way in greener and advanced technologies. But was it management’s fault alone? There is a vast majority that will also blame unions, litigation, and government regulation. You have to admit, it is hard to compete with cars that are $5,000 less due to the union “Mafioso” that has driven up the cost of wages at 2-3 times their competition. Now, I am not advocating “Sweat Shop” wage practices, but you have to give-and-take. No offense to the hard-working laborers out there (you are a critical component of our industry), but I am trying to justify $100 per hour for an assembly line worker to drill holes in a car door. And during the second round of “Bailout” discussions, union officials were still not willing to concede wages, until increased pressure. So, let me get this right; the management has to suffer, but the union doesn’t? That sounds fair? I think they realized; no bailout, maybe no jobs (Duh). But, in the end maybe the bailout was necessary, since most consumers did not, or chose not to see the improvements in Detroit, or they are still buying a Honda Accord because they always did for the past 16 years. And if we gave Detroit just a few more years, maybe, just maybe, all will be well So yes, the congressional process followed a similar path: come the first time (We yell at you), come the second time, and we give you the money. For all intensive purposes, they could have still flown in corporate Jets the second time around and still received funding. Once again, I do like a good road trip, but the thought of 10 hour drive following two other cars is maddening: I would have flown. And so the plea for assistance was granted, and the same “Usual Suspects” (a.k.a. Pelosi and Reed) drove home their doomsday scenario. But maybe this time, they were right? Was a bailout critical to our economy? The automotive industry is a backbone of our industrial “might”, considering all we make in this country anymore are cars, rockets, and movies. And given the latest output from Hollywood, I would say only 2 industries left. Okay, so we have a large stake in technology production, but I was trying to make a point. But where does it end? We even have to entertain the ludicrous attempt of the adult entertainment industry seeking bailout funding. Apparently, sex doesn’t always sell. And maybe with men spending less time outside of the home for entertainment, maybe a depressed economy is actually good for martial intimacy? So, there just might be some “good” that comes out of “trials” (there always is).
During the past month of weeding through my SPAM-mail, I came across an interesting e-mail that explained the “How” and “Why” Wal-Mart should have bailed-out “Wall Street” (Yes, I do look through SPAM, and I found 10 e-mails on excellent investment projects in Nigeria that I have on my “To-Do” list). And given the amount of money Wal-Mart earns (Americans spend $36,000,000 every hour of every day at Wal-Mart: this works out to $20,928 profit every minute!), maybe they could have bailed out everyone. At least the saving grace on that idea is that business would have taken care of business. Having our government include an ownership share to the financial bailout proposal was priceless; not only were we footing the bill, the only guarantee was that government would have more control over the capital market (Big mistake). Of course this e-mail was meant as a satirical response to the preposterous nature of the financial bailout, but maybe this article had merit? Not in the way you may be assuming, but in the hands of the “people”. Personally, I am happy to see consumers pumping millions of dollars into an American company. Sure, early on I was an “Anti-Wal-Mart” supporter in the war waged against the “Moms and Pops” out there. But given the larger picture of a global economic battle, I realized if I was going to give into the “Machine”, better an American enterprise than a foreign entity. And in a time of economic hardship, maybe we need to start looking at “home” and not “abroad”. This year, 7.2 billion different purchasing experiences will occur at a Wal-Mart store (Earth's population is approximately 6.5 billion): so let’s add to it in America! And given that this is a free market economy that is driven by consumer demand and spending; we can assume that if we do not continue to spend then businesses do not survive. If that is the case, then would it be difficult to argue that, we the taxpayers should have received the bailout funds? Since the power of our economic system is really in our hands, wouldn’t “we” be a better vehicle to jump start the economy? I agree that during uncertain times it is normal for consumers to cut back on spending. But it is a “Catch-22”; you can’t spend, but you also can’t afford not too. Believe me, before the 2008 election, I had to deal with the monotony of the street rallying cry of Anti-Bush supporters that blamed his administration for our current economic status. I heard the same sentiment for social activist groups like ACORN that were active in the “thug” activity to encourage irresponsible lending to unqualified borrowers. I listened to the monotony of angst towards “Wall Street” and all of its money-hungry whores (okay, there are a lot of them). I heard countless debates on the audacity of jobs going overseas; blaming corporate America, yet “unions” continue to demand wages to a level that reduce our competitiveness in the marketplace (Instead of blaming Corporate America, blame the government for not imposing a 1000% tax on foreign imports to even out wage disparity). I had to listen to the redundant complaints about factory closings and the reduction of manufacturing in America, while consumers continue to buy foreign-made products (well, product categories that we actually compete in). And I haven’t even brought up NAFTA yet: thanks Bush I and Clinton. So, you can blame Carter, Reagan, Bush I, Clinton, or Bush II; it really makes no difference to me. In the end, aren’t we are all partially responsible in some fashion or another? But, I can find some solace in the fact that the economy is a cyclical beast both in fortune and failure. And since we have been through roughly 7 economic downturns in the past 50 years (depending on how you define it) and bounced back, I think we will be okay. Sustainable growth is not a reality, as basic economic theory continues to prove that periods of intensive growth is always followed by a period of deflation (some short-lived and some longer). So, I am sorry to disappoint all of the “Idealists” out there, but there is no such thing as “Happy Time, All The Time”. Well at least in economics. But here is the good news! Since this is really a global recession, maybe all of our doubts and fears are irrelevant, since everyone is going through it. Isn’t it just a matter of time? Maybe, I CAN put a smile on again! But wait; all of the “Bush-Haters” would have nothing left to be miserable about; and we couldn’t let that happen. So, I will let you think Obama’s stimulus plan of $819 billion (full of pork fat: roads and bridges infrastructure spending; seriously?) will be our “Saving Grace”, rather than just another inevitable, natural upswing that will come. Just think; maybe Obama really is a "Supply-Side" economist? I can agree with that theory, but many have questioned whether this is less of a supply issue and more of a rectification of poor management? And do we not have the right to question who was actually receiving the money and why? Regardless, we all need to agree on one thing: let’s just hope we can eliminate any future irresponsible bailouts, and if need be, make sure it is deposited into our banks first. Won't increased consumer demand and spending help fuel the engine? So, when you ask yourself, “Ask not what your country can do for you, but what you can do for your country”. My answer is: send out 1,000,000 e-mails per day, to each of your legislative representatives that supports any future “Bail-Out” proposals. And ask them for a blank check, written out to “The Consumer Is King”.




"Two guys walk into a bar; a Jew and a Muslim. The Muslim man turned to the Jewish man and said, "Sorry Rabi, this may seem fairly irregular". The Rabi answered, "My fellow man, that is nonsense, I am taught to be open to all men". So the Muslim man thanked the Rabi and continued, "I have to confess; today I helped a man strap a home-made bomb to himself, and then I watched him walk into the town square and kill 25 people. I know that Allah promises 70 Virgins when we die, but I could not but feel that this was wrong." The Rabi gave the man a puzzled look, and then replied, "Oh, forgot the bombing my son, tell me about those virgins". Okay, this is the part where you laugh.....well at least quietly to yourself. Hey, don't look at me, it is not my joke! And personally; 70 virgins, though it may sound exotic, the last thing I want to do after spending many painful years on earth, is to emulate that experience by going through the aches and pains of virgin sex.....70 TIMES! Wouldn't you rather have 70 experienced women...hhmmm?





