I have been silent for a long time for a lot of reasons, and I'll go into that more later. One of my New Year's goals is to start blogging here again and keep it going. Suffice it to say... I needed a break.
With that out of the way, I am absolutely incensed over the waves of government bailouts. I can't believe what I'm watching happen in Washington.
Let me get this out of the way. I am not, in principle, opposed to the government helping out businesses or individuals in temporary, short-term ways to get past hard times. It's like getting your parents to help you through a tough spot here and there. Lord knows I'm not the only person who's ever had to do that. But it was temporary, and it got me back on my feet.
However, the current wave of goverment bailouts violates every single premise I hold in my mind about what any kind of goverment aid should look like.
1) It's targeted toward the fat cats at the top (The Big Three and large Wall Street firms). These guys (especially in Wall Street) rode the profits of their risk taking to the top. I have no problem with that. But now that the risk has come due, it's time for them to accept that as well. Similarly, UAW workers have demanded unjustified levels of pay and benefits for years. Now it's time to pay the piper. The average UAW salary is higher than my own. Now, this isn't something I'm opposed to in principle. Plenty of people do and should make more than me. But I'm a Software Engineer, which is a high-demand, highly skilled field demanding high levels of education. Auto factory work is skilled - but demand is falling and the education requirements are low. Economically, it makes no sense for the *average* salary to be that high, yet these workers refuse to adjust, even though the likely alternative is losing their jobs altogether.
2) The "conditions" for both Wall Street and Detroit are absurd. For Detroit in particular there's no guarantee that these people won't be back - and soon - for more money. But even in Wall Street, what, exactly, are the consequences? If you don't turn it around and pay us back, why, why, we'll take over your failing, worthless business, that's what! Gee, thanks. Thanks, Uncle Sam, for sticking me with the bill.
3) None of these bailouts show any signs of actually accomplishing their stated and intended goals. We just loaned Wall Street three quarters of a trillion dollars to free up credit, yet the credit markets are still stalled. Likewise, loaning Detroit auto makers more money isn't going to suddenly cause them to make cars that people want to buy.
4) These bailouts are incredibly unpopular. I've seen poll results ranging from 60% to 90% disapproval (depending on how the questions are phrased). How the hell is any of this getting past congress when the American people are so against it?
5) As a good southerner, I am outraged. We've got plenty of auto factory jobs here. They're just run by Toyota instead of Ford. Big deal. "Japanese" cars are just as often American built these days as "American" cars, and they employ my neighbors. Why are we being taxed to subsidize our competitors in the North? Worse, why are we subsidizing them to build crappy products? My wife and I own two cars right now, a Subaru and a Ford. My Subaru has 80,000 miles on it and is in great shape, other than needing new tires (and that spot on the back seat where a bottle of nail polish broke open during our move). My wife's ford has 90,000 miles on it and is falling apart Why, exactly, are we giving them more money? We had already decided upon no more "American" cars after our experience with the Ford. Now I'm dead set on it.
6) Where's the help for the little guys? What about the people who can't pay their mortgage and might lose their homes? Where's the help for the millions of Americans stuck driving crappy American cars? I have no huge issues with big business in and of itself. But why the hell are we stepping in to help them? If big business is really better than small, why can't they make it on their own? If they can't, then we need to let them fail and let smaller competitors step in to take their place. This may be hard in the auto industry, but it's NOT in the finance business. Let them die.
Look, I recognize that the argument for bailing out the financial industry was the very real risk of them bringing the entire economy down with them. I don't like that we let - nay, encouraged - a few firms to get that big, but it happened and we're stuck with the mess. But the bailout as it happened was dumb plan that hasn't worked.
"Doing something" is not always better than doing nothing. The politicians don't even have an excuse this time. The people aren't out in the street demanding that they "do something" - they're out there telling them they don't like these plans. Yet it's happening anyway.
These bailouts are a bad deal for the American people, and the American people know it. I, for one, plan to make it an important factor in how I vote next time around.
