Friday, September 19, 2008

Congress, bailouts, and other economic shit

The other day I was at a friends house watching some TV. We're watching some news channel talk about the stock market free-fall and all the financial problems. How were facing the biggest economic crisis since the great depression, and then he switches back to ESPN and the headline is about how "Congress rips the Yankees." I couldn't help but laugh.

Although actually we then switched to another channel so I didn't know what they were talking about and now that I do it wasn't such a waste of time as it sounded. Turns out the Yankees were trying to get taxpayers to foot a big part of the bill for their new stadium. Uh, fuck that. Why should my tax money be used to build a stadium for a private business? Particularly outrageous when that private company is as rich as George Steinbrener and the Yankees.

Why is it that when the government tries to help people in need its "creeping socialism" but when the same government gives handouts to huge corporations trying to increase their profits, its economic stimulus, and for the greater good of the community? Hypocrites, they wanted de-regulation, they got it, now that its failed as miserably as we expected it too they should pay the price. Fuck 'em, they were happy to rake in the benefits they can't complain when they lose it all. Except of course there is the legitimate point that allowing them all to fail will cause even bigger problems.

The way I see it is that we shouldn't bail out these companies, we should invest. The stock isn't worth shit cause they are on the verge of collapse. So the government buys a shit load of stock, maybe even for a little more than its current market value. The important part to me is that rather than take our tax money and simply give it to a failing company and hope for the best the government now has some say in the company. (I think this is basically what happened with Fannie and Freddie) More importantly as the company gets back on its feet and starts turning a profit I don't want to see the tax payers simply paid back, I want to see some fucking return on our investment. We gave them 85 billion, I want to see 100 back. I don't see this as greedy, at least not any greedier than any other investor is, and why should we be treated any different?

Oh and this sounds interesting, I don't know business or economics but apparently the Gov allowed five corporations to avoid some of the usual regulations.

Who were the five that received this special exemption? You won't be surprised to learn that they were Goldman, Merrill, Lehman, Bear Stearns, and Morgan Stanley.

As Mr. Pickard points out that "The proof is in the pudding — three of the five broker-dealers have blown up."

Without even really knowing about the SEC, it sounds like someone needs to explain why these companies were excluded, and ensure it doesn't happen again.

2 comments:

media kingdom said...

from a historical standpoint it's hard to object to the government's mass bailouts since similar debt-producing methods were put into action to save the U.S. from the Depression; maybe we're all socialists at heart and don't want to admit it...

Kilgore Trout said...

I don't mind a little socialism, I just don't like when we put up safety nets for a corporation with billions while real people are struggling to get by.

I'm glad they let some of them fail though, I also think its good that the CEO's that got fired aren't allowed to collect bonuses. If we didn't let a few fail then corporations would continue on their risky ways, happily raking in the profits when the risk falls their way and crying to Uncle Sam every time their luck runs out. It's funny on TV, they were talking about some CEO's of failing companies still getting huge bonuses, and the talking heads were saying that those are insignificant, I mean sure they might be tens or hundreds of millions of dollars, but were talking about a trillion dollars here, whole different order of magnitude. They seemed to want to ignore that fact that it's just a sign of how perverse our corporate form has become when a person can be the head of a company thats falling apart around them, and still get a bonus many times bigger than their salary. I'd be ok with a christmas bonus, usually like an extra weeks pay, those are cool. But to be given twenty million dollars, well then shouldn't you have to earn that by doing something really fucking impressive?