Need a bailout?

Behind The News
September 18, 2008 12:52:59 PM PDT
Please raise your hand if you're having money troubles? Gimme a minute to count everyone. Ok, thanks.

Now raise your hand if you'd like the government to lend you some money to pay your bills? Again, gimme a second to count.

That's what I thought.

Hope I didn't raise your hopes, but there's no money to help you. The average Jane and Joe trying to borrow money from the federal government because they got a wee bit in debt with some bad investments and credit card purchases that were just a tad or two beyond their means? Forgetaboutit. Who do you think you are? AIG?

Truth is most of us would think that's the last thing the government would, or should, do - loan us money because we shouldn't have bought that expensive flat-screen TV when we really couldn't afford it.

But if you're a huge investment firm, step right up. Line forms on the right.

And the folks leading this charge to bail out the big boys are the same folks who have been leading the charge to keep government out of business and out of the board room. Those who believe in "laissez faire" economics, in which the government tries to let the market dictate what happens -- free from government interference -- have suddenly become true believers in government action.

What will rile people, especially now that the country is either teetering or is mired in a recession -- depending on your definition -- is that nowhere have we seen the flip side of this taxpayer bailout of corporations that make bad decisions. And by flip side I mean a sharing of the profits.

Oh, that would be socialism, cry the critics.

But isn't that what we have here, anyway?

We're socializing the losses of these not-very-smart investment giants.

These are the same brilliant titans of industry who would never consider anything but capitalizing the profits. Talk about a security net.

The American taxpayer is on the hook for these corporate losses, but doesn't get to share in corporate profits. Yes, I know, if these companies that couldn't stay afloat before somehow manage to resuscitate themselves, taxpayers will be paid hefty interest on their bailout loans. But that doesn't deal with the harsh reality: real wages for the average working stiff have gone down, at a time when executive compensation for the chief honchos has gone way up.

And now, with unemployment high and the economy at best uncertain, taxpayers have in the past two weeks become the biggest mortgage holders in the country, and in charge of the biggest insurance company in the country.

Congratulations!

Hey don't get me wrong, I'm all for saving jobs and making sure the economy doesn't fall apart. But it's just not fair for these corporations to have it both ways.

If they're going to pull in the big bucks for making decisions, they should also pay the consequences when those decisions turn out to be boneheaded.

If you or I over-extended ourselves the way these supposed financial geniuses did, I can guarantee that our homes would be foreclosed on toots-sweet, and our lifestyles would change faster than you can say, "want some fries with that order?" - which would be our new daily work mantra.

And one more thing, as long as I'm on this rant. Where does this bail-out train stop? What will the government say to General Motors when it asks for money because executives weren't smart enough to make fuel-efficient cars instead of the gas-guzzlers that now sit unsold in dealer showrooms? What will these free-market proponents say to all the companies that are suddenly buried in the economic avalanche of red ink? You gave money to AIG, you can hear G.M. Executives arguing to federal officials, do why don't we get some help?

(And that's what happened, in fact, in Washington. Both G.M. And Ford Motor execs were in Washington yesterday, asking for $25 billion in federal loans so they can pursue fuel-efficient cars. Talk about chutzpah: the timing of this request just happened to be right after G.M. Introduced its new electric car - the Chevy Volt -- and on G.M.'s 100th anniversary.)

We'll have the latest on the government bail out of AIG and the continuing upheaval on Wall Street, tonight at 11.

And from the dis-and-data files, come these items:

  • Unemployment in New Jersey hit a five-year high of 5.9% last month.

  • Barack Obama and John McCain will appear together at the Al Smith Memorial Foundation Dinner here in New York on Oct. 16. The long-standing event, hosted by the New York Archdiocese, typically has the presidential candidates appearing together - but in 2004, the church did not invite either George Bush or John Kerry to the dinner because the campaign was so bitter.

  • The top three execs of Merrill Lynch, which was sold at a fire sale this week for a fraction of what it was worth a year ago, will leave with nearly $200 million in bonuses and awards for the past year. Remember: Capitalize profits, socialize losses. Sheesh.

  • And we are getting better about buckling up. The U.S. Dept. of Transportation says 83% of people in vehicles these days are using seatbelt. There's a caveat of "during daylight hours" - I don't know why. That's up from 82% last year. And that's a big deal: 270 deaths are prevented with every 1% increase in seatbelt use, according to the government.

    We'll also have any breaking news of the night, plus Lee Goldberg's AccuWeather forecast, and Scott Clark with the night's sports. I hope you can join Liz Cho and me, tonight at 11.

    BILL RITTER


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