By Jake T. Snake
The true tragedy in what I am about to write is that I doubt that even one of you will be shocked by it. We know that without guidance and diligent oversight, many people will revert to bald self interest. Bankers will do this sooner than others as it is their default setting and is in line with their training. (Ethics training in business schools Blahahahaha!) This facet of human behavior is what has brought us to a place where a bailout was required. As I noted in my previous post, those who made the mess could not be trusted to clean it up and so...(big sigh).
It appears that the bailout money given to the banks by Congress with no strings attached is not being used to loosen the credit crunch. (Feign surprise here) Gretchen Morgensen in her Times article today writes that the banks in fact seem to be exacerbating the credit crunch by making fewer loans, adding fees and pulling in all the assets they can get their hands on and quickly. Senator Chris Dodd was on NPR this week complaining about the banks using bailout money for executive bonuses, acquisition of other banks and payment of dividends. Senator Dodd concludes the interview by stating that no conditions were placed on the money, because coming to agreement on those terms with the 535 members of Congress would have been difficult. See, here's the thing...THAT'S YOUR FUCKING JOB! The really appalling part of this interview is his revelation that the 700 billion is just the tip of the iceberg. Once all the pieces of this bailout are included the pricetag will be in the ballpark of 5 Trillion. I hope our children can forgive us for mortgaging their future to these pillaging arrogant entitled assholes.
All this would be bad enough, but what if we gave 25 billion to a bank and it was still in danger of failing? This just may happen to Citigroup.A lot of people are holding their breath and waiting to see what happens. Now the question is do we authorize more bailout money for a bank that has already squandered their first installment? How can we do this and deny the automakers their own bailout?
After my last post, one of the commenters essentially said what option do we have (At which point I imagine a shoulder shrug and a vacuous look)? A fair question, I suppose, if one isn't very bright. You could do what the federal government does with the majority of its other contracts, which is to provide parameters for how the money can be spent and consequences for not doing so up to and including financial penalties and prison sentences. I work in the nonprofit sector and our organization receives money from both the federal and state government. Before my organization receives one cent from either entity, we have to submit a detailed budget and workplan that lays out exactly what we will do for the money and where it will be spent. If something happens along the way, say we don't fill a position as quickly as we thought we would and the money for that salary line is unspent, we have to turn in a budget modification to explain how the unspent funds will be used in line with the contract's purposes. Anywhere throughout this process the people who provide our oversight can make changes, veto parts of our plans, cut our funding if they feel it is not being used properly or in the case of medicaid ask for a return of money already given.
I do not believe that anyone in the Congress would have objected to a clause in the bailout bill that required the banks receiving free money from the taxpayers to lend a minimum of 50% of the money they received, since that was the purpose of giving them the money in the first place. There was that hard? Even hard core pro-business people would not feel that such a provision took away the bank's autonomy or ability to use the money as they felt their particular context demanded. The plan as it was implemented is nothing more than complete surrender to the arrogance and narcissism of a financial elite that believes itself untouchable.
Why are we not instead spending billions of dollars on work programs like we did during the great depression and really receiving something for our money? Instead we pour more money into the shell game that the finance world has become, where people make a living by being the middleman in endless transactions. If that is not parasitism could you please define it for me? It is time to stop moving the money up to the rich in the hopes that they will help us all, they haven't. I will tell you this, if you give money to working folks they do something fabulous for the economy with it, they spend it. I take heart that the government is giving the automakers a hard time about having a plan if they want money, perhaps we are starting to wake up to what has been happening. Let's watch, shall we?