Wednesday, November 12, 2008
Government Bailouts
First let me say that I think the government does have a role in helping out society. I lean towards a certain socialist program in things like health care, mass transit, education and the like. I'm not however so sure of the government's role as a business bailout well. It's one thing to dump a few billion into better meals at schools, but something else altogether to dump those billions into a rundown factory. And we are talking a bunch of billions here.
Like, billions and billions, all the way up to trillions actually, of dollars being tossed around as part of Troubled Asset Relief Program (TARP) - (To Any Rooting Pig). AIG insurance just got another $40 billion for a total of around $150B (as near as I can tell anyway). The automotive folks want $25B on top of the $25B they already got and I just read that Detroit is looking for $10B. Something like $250B of the TARP funds are going to 67 banks.
American Express (who keep sending me credit card applications) wants $3.5B and Fannie Mae wants even more over the $100B they already got since they lost $29B this quarter. Just how much money can the government (who is us, by the way) keep shoveling into companies who are running into the ground?
I personally don't have a clue here. It doesn't seem right to keep pouring billions into a failing business. To me, since it's failing, it must be doing something fundamentally wrong. On the other hand, it sucks because while the CEO will make out no matter what, the peons working the assembly lines and manning the phones are well and truly fucked when the company goes under. And since they're out of money they won't be spending any to buy other stuff which means more companies going under. It kind of makes you wonder how anyone survived the olden days when credit was as unavailable as it is now (said oozing with sarcasm and irony). In the mid-seventies I had a hard time getting a credit card - and that was while in the USAF making steady money. Now I probably shred half-a-dozen credit card applications a week, and I in 1996 going back to college, fellow students - with no real job - had credit cards to burn. But with saving account interest rates at 1 percent or under, why would anyone save.
Labels: government, michigan
