Most people that have important decisions to make generally rely on that thing they call their, “gut” to guide them through the process. If it smells bad now, it’s going to smell bad later. There is nothing like making the right decision when all around you others are saying to go the opposite way. Senator Obama must say a payer every night thanking the powers that be for his stand against the War in Iraq. Unfortunately the American people might not be so lucky when they think back to the most recent economic bailout however.
Sold to them as the dire emergency of a lifetime, that if not approved they would see business fail and the economy plummet into a recession the likes of none have ever seen, they called their Congressmen and said, “ get on board with this thing.” Like so many of George Bush’s dire emergencies, however, this emergency may not have been as bad as we thought. The bailout it appears is lined with golden parachutes, bonuses, and get out of jail free cards. Plus it seems that given the largesse of the bailout it will take years for the full effect to ever be seen or felt by the man in the street.
It wasn’t a week later that officials of AIG were on the golf course in San Diego taking a break from all of the stress of the crisis; on America’s dime this time. Their 85 billion dollar bailout check had barely cleared the bank (and it wasn’t even a part of the bailout!) and they were racking up bills of over $400,000 dollars that week on golf, massages and accommodations. Talk about stress relief. When queried as to their actions the less than red-faced group agreed to freeze bonuses this year not just for themselves but of course for many not on the trip but still back at the office trying to salvage careers, jobs and your money.
And quite frankly it’s just the tip of the ice berg we are yet to fully appreciate. Banks have been given billions to free up the credit markets but with little instructions on how to do so and far fewer oversights to make sure they do it. A clean broom as the saying goes makes for a cleaner kitchen. So most sit waiting for the election to see just how clean a broom will be coming to Washington. One that looks familiarly the same or one that is fresh and ready to go.
Yet tell that to the nearly 800,000 people that are now out of work or are soon to be. Some reports tell us that for nearly every dollar lost on Wall Street, the bailout provides at least three dollars to the company that lost it. The engineer of the bailout, Henry Paulson himself a Wall Street veteran of Goldman Sachs was fearful that if the package limited too much the compensation, the banks and investment houses were to receive, they would not participate in the bailout. Kind of like telling me that people on the Titanic would not have got in an extra life boat until they got a better deal.
As the reports come out, there is little doubt the Bush administration and their PR company of Bernake and Paulson will go down in history as the best salesmen since PT Barnum. Regarding what the American people will get out of this bailout is going to be hard to figure out; actually the only thing we can be assured of getting is the bill!