A very slippery slope…

I like to cut through the bullshit and separate the issues.  Since I’m not making millions of dollars, nor do I need to bow to advertiser interests, I have a lot more wiggle room than the papers and the news networks.  Especially television news or news-entertainment programs like to have compelling stories that will pull the viewer in and make them watch for 25 minutes until they finally show the hook. 

The headlines and lead stories are about how the bailed-out banks are spending their money.  AIG has used it for retention bonuses to some of the very people who nearly collapsed the global economy.  And Citibank needs $10 million for new executive offices.   The general public is outraged.  They’re about to come marching down Wall Street with their pitchforks and torches ablazing. 

Here’s the problem.  AIG had employment contracts that awarded bonuses that were not merit-based.  So no matter how good or bad a job these people did, the checks were going to be cut.  Not bad work if you can get it.  And I’m not saying all these people were saints, but like the old saying goes, a few bad apples spoils the bunch. 

So the federal government sends an ungodly amount of money to the banks in order to keep the world from coming to an end.  Citigroup gets $45 billion in bailouts, and the spend a paltry $10 million in executive office renovations.  It doesn’t look good that the top honchos are getting new mahogany desks, gold-plated carpets, and diamond-encrusted chandeliers for where they have to go to work while the ham-and-eggers are sitting in 20-year-old cubicles.  It makes for a PR nightmare.  But I highly doubt that Citigroup got the call that the feds were sending the trucks full of money, and somebody got on the phone and started calling interior decorators and architects.  If this were any other year, they would have spent this money anyways!

But here’s the rub.  Last year the Bush administration doled out stimulus checks to just about everybody in the country in an effort to give the economy a kick in the pants.  The idea was that we’d just go out and buy new televisions, laptops, and cars with them.  And while a few did, a good number did what they would do given the circumstances…they paid off credit card debt, paid utility or other outstanding bills, or just threw it in the bank.  Now how would we as the general public like it if we were told that after we spent those checks, that we were bad people for paying off credit cards and not buying more consumable goods?  You wake up in the morning and see your name in the paper…can you believe how much he sent to MBNA?  And then you hear an angry mob coming down your street.  It’s the UAW!  And they want to know why you didn’t buy a Dodge Durango!  It doesn’t matter that you weren’t in the market for a new car.  Because if more people spent their stimulus checks on Durangos, Chrysler wouldn’t be shutting down the assembly plant in Newark, DE.  Do you see how ridiculous this is?

The problem is that some people say that the government shout not interfere with big business, and let the market shake things out.  Sometimes you have to bend the rules a little to keep some companies that are too big to fail from failing, because the ripple effect would be much much worse.  Once the government starts tries to run the businesses through specialized regulations, we’re entering very dangerous territory.  They want to tax the AIG bonuses at 90% in an attempt to get some of the bailout money back.  Allowing this kind of legislation to go through sets an awful precedence.  What’s next?  Taxing profits for oil companies whose initials are E.M.?  Or government subcontractors whose name rhymes with Richard Burton?  Perhaps if the government had actually regulated the banking industry instead of letting the equivalent of children running with scissors, we wouldn’t be in the mess after all.