Tuesday, February 10, 2009
Bailouts.. TARPs… Recession… Stimulus… No matter how you label it we’re a little McScrewed. I use that term because that’s probably where I’ll end up working with the way things are going. The government seems fit to throw money at organizations that have shown they can’t be trusted with money. The promise is that the Federal Government is giving IOU’s to banks to stabilize credit and in return they pay back the loan with interest. In theory, there should be a profit.
Now, I don’t know about you, but the last time I used an IOU was when I was a college student and a little short on cash around the holidays. I used my student computer account and Photoshop to create these little “Coupons” for my parents that basically stated that I would clean out the garage or wash the cars instead of buying them a present. That was 15 years ago and I never did make good on those IOUs. So, how do we know the banks will pay back the Government? In essence, the Government just became Fannie Mae and the banks became the American homeowner who bought a sub-prime mortgage.
For the most part attitudes have changed but still people are conducting shady business as usual. John Thain, there’s a guy we’ve all read about in the news, he was the Merrill Lynch CEO that used $1.2 million dollars to renovate his office and gave out billions in bonuses to executives days prior to the sale of Merrill Lynch to Bank of America. In his defense, he cited that a lot of the losses Merrill Lynch suffered were due to his predecessor. Ok, the man had a $1400 garbage can in his office. You tell me who is to blame for this? Oh, and his answer for why he gave the bonuses, “if you don't pay your best people, you will destroy your franchise.” Well, guess what, Bucko. You were supposed to be the best and you almost destroyed the franchise.
This type of mentality doesn’t surprise me when you hear about all the rumblings along Wall Street in response to President Obama’s decree that salaries will be capped at $500,000 for executives of companies receiving TARP funds. Now, there is anarchy and bedlam in the board rooms as executives find themselves suddenly in a salary freeze. What to do? What to do? Rudy Giuliani has said that if you take away bonuses and incentives from these people that the rest of New York will suffer from reduced patronage at restaurants and other establishments. Sorry, Rudy, but these guys aren’t going to McDonald’s or even Houlihan's and they aren’t creating unemployment buy losing a few zeroes in their paycheck. They already created unemployment by letting their companies become so screwed up.
Look, if you are a company that is going to the Government and asking for millions of dollars to help keep you afloat then you need to tighten your belts, too. Guess what? Everyone else has to so don’t think we’re picking on you guys. My salary got frozen along with a lot of other folks’. You’re going to have to start living like the rest of us. If you can’t, then you’ve proven our point. You work for a financial institution for pity’s sake. Did you not learn how to manage your money? Now, if your company was solid and didn’t need financial assistance from the TARP, then by all means, do what you want. By that token, you should be acting responsibly and mindfully of the economy. If anyone believes we’ve already seen the bottom of this hole, then they’re just as delusional as bonus backed bankers.
Just like we, as regular taxpaying, nine to five working folks need to realize that everything didn’t change in November. You try stopping a speeding locomotive on a dime. It’s impossible, even for Superman, and sorry to say, Obama is not Superman. No one is. It’s going to take a lot of time and patience to slow this speeding train and get things working properly. Unfortunately, we are an short attention span audience. We want something to happen right now. We want our credit lines to be fixed, our jobs saved, and our President to wave a magic wand and make all the bad people go away. An economic stimulus package won’t solve all the problems. In my opinion, I don’t think I’ll be getting one of those rainbow sherbet looking checks with the Statue of Liberty on it. I think this package is more for the businesses that give us our other checks, the ones we get every other week. That’s so we can keep getting them. This isn’t a hand out. This is an opportunity to create jobs to fix roads and bridges. It’s a chance to upgrade our cities instead of building up on the degraded infrastructure that has been allowed to lapse into the old standards of the 20th and in some really depressed areas, the 19th centuries.
Is the Government doing the best they can for the nation. I hope so. I don’t think you can narrowly point to one man, one company, or one administration and say, “Shame on you.” This has been allowed to go on for years and people figured, it’s only wrong if you get caught. Somebody out there screamed and waved their arms, trying to be heard as the voice of reason and was ignored as is usually the case in any disaster movie. Well, now the economy could be the basis for a new Michael Bay or Roland Emmerich film, in fact they’re probably sitting around trying to figure out how to work in huge explosions to take out their fictional Fannie Mae’s or Lehman Brothers. Be sure that Hans Zimmer is firing up the synthesizers trying to find the right set of chords to play as President Obama, as played by Will Smith or Jamie Fox, slowly stands up with that stern look on his face as the camera pans up and around him in slow motion. This is the moment you’ll be waiting for because that when he’ll get pissed and go on the offensive, taking out bankers left and right without having to reload. Once you wake up and realize that life is not a movie, albeit almost a bad one, you’ll go back to your job, look at other companies’ postings and wildly throw your resume about hoping that one of them is in better shape and willing to hire you.
If you think that throwing money at the problem will make it go away, then all you’ll do is live from bailout to bailout, stimulus to stimulus, and we’ll be right back where we started when this whole mess reared its ugly head. We all need to be aware that it’s going to get worse before it gets better. We need to change our course as individuals whether we make $500,000 or $50,000 a year. We need to realize that when it does get better, it won’t stay that away. We need to be ready for the next big hole or out of control locomotive, otherwise we’ll be saying “Would you like fries with that?” instead, “I’d like to supersize that.”
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