I’m a big fan of Gilbert & Sullivan. In their immortal operetta, The Gondoliers, the ingeneue’s father, the Duke of Plaza-Toro (Count Matadoro, Baron Picadoro), realizes that being a member of the nobility is at odds with his current, destitute state of affairs. His novel solution was to apply for by the public under the Limited Liability Company Act. In American terms, that means he “went public,” offering shares in his Dukedom on the stock exchange. If Gilbert & Sullivan were alive today, I’m sure they’d write The Gondoliers II – The Baratarian Pirates Strike Back, where they’d script the Duke in debt once again, applying to the government for a bailout.
First it was the mortgage companies.
Then the insurance companies.
Next it was the automobile companies.
Now the credit card companies step up for a handout.
Will somebody please tell me where this governmental largess (with OUR friggin’ money!) will end?
I thought it was a hugely stupid idea to bailout ANYbody, because all you are really doing is rewarding bad management. The argument that some organization or other is “too big to fail” is (IMHO) a load of hogwash. You might – might – be able to make that argument for AIG, and perhaps for either Fannie Mae or Freddie Mac, but when you start adding to that august list GM, Ford, Chrysler, Chase, B of A, and now American Express – you strain the limits of credulity. Not to mention drive up the Federal deficit.
In point of fact, when the government steps in a bails out some private entity, all they are doing is attempting to defer pain from today and foist that pain (and invoice) to the future. The plan is REALLY that the people in office now look like they are Doing Something To Solve The Problem, instead of actually solving anything.
The problem is that most of these companies need to go bankrupt. If the government wants to help (instead of doing what they have planned now), they should consider letting the companies fail, and taking that $700 billion and setting up either no-interest loans or grants to displaced workers for retraining. Give workers 6-months of salary, and allow them to go to school (and defer payment, or simply have the government pay for it) to learn new skills that are in demand. (Just for the record, my FAVORITE solution is to cut our taxes by $700 billion and let us all figure out what to do with the money ourselves, but that seems like a non-starter in tax-crazy D.C.)
Here’s what I don’t get. Toyota, Nissan, and Honda all have plants here in the U.S. of A. In those (non-union) factories, business is booming, sales are up, and workers are happy, busy, and well-paid. In the Big Three factories, workers are unhappy, idle, and well-paid. What’s the difference? In the foreign manufacturer plants here in the U.S., they’re making products people want to buy. They are unburdened by union regulations and rules that add $1,500 to the cost of making each vehicle for the Big Three. And they have plants that are run on merit, instead of seniority and union loyalty.
The Democrats want to fix all that. They want to change rules for employees to vote about unionization and union rules, to block secret ballots and allow the unions to see who votes for – and against – each issue. They support this idiotic plan because they know that it will help the UAW to force themselves into the currently non-union shops in the South. That will accomplish nothing but drag the Japanese factories productivity down to the pathetic levels of Detroit’s finest. Now THAT’S progress!
What’s the solution? I’ve an idea. But you’re not going to like it. Bailouts are like crack cocaine. It’s easy to become addicted, and that addiction spreads like wildfire. Inevitably, it will spread so far that the pusher…um…the Feds – will be unable to supply product (our tax dollars) and unable to borrow more from their backers (foreign governments). That day is coming. And that day will result in the Mother of All Bankruptcies – the day that Uncle Sam goes bust. I think that’s the only way we’ll get out of this. To have our Federal Government go bankrupt.
Think about that, the next time you hear another deadbeat industry beat the drum for bailout money. And be afraid. Very afraid.