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The Freeloaders’ Gauntlet

12 November 2008

Good grief.  

So much anguished hand-wringing over where we stop now that we’ve established a precedent.  Did these brilliant people in Washington really fail to see this coming?  Did it really never occur to Bush, Paulson, Bernanke, Reid, Pelosi, and Frank that Fannie Mae and Freddie Mac were just the tip of the iceberg, and that bailing out the private sector with public money is a bottomless abyss?

Granted, it’s difficult to turn down GM, Ford, and Chrysler/Jeep now that we’ve bailed out AIG, the financial-services sector, etc., and now American Express.  Any line we draw now will be necessarily arbitrary and will invite (and justify) accusations of bias and prejudice.  And the beggars’ gauntlet is lengthening by the minute.

But that’s precisely the point.  Did not even the idiots among us see that coming?  That’s not an argument for going further than we’ve gone thus far.  That’s an argument for never having gotten in the bailout business in the first place, and for liquidating all of the so-called “partnerships,” like Freddie Mac and Fannie Mae, that privatize profit but socialize risk.

Who are these geniuses, anyway?

Like the round-headed kid said:  good grief.

—–

I just stopped in the hallway for a quick chat with an economist (>25 yrs. experience) on the Texas A&M faculty and joked with him that I was preparing a letter to President Bush asking for my personal financial bailout so that I can pay off my mortgage.  He said that the automakers’ plea is just prolonging the inevitable; the domestic Big Three are so intertwined with union states that there’s no obvious way to change their cost structures, so GM and Chrysler are “dead companies walking,” with Ford perhaps not far behind.

He said, “it’s crazy.  Toyota and Nissan chose to build their domestic factories in right-to-work states, so they just price their cars high enough to make sure they can pay their workers competitively.  But they’re not over a barrel the way the Big Three are.  

“Why are we penalizing people who do things right and who keep their debt in line with their ability to pay?”

Indeed.

qb

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6 Comments leave one →
  1. Bryan Reeves permalink
    12 November 2008 12:50 pm

    Years ago a foreign government had its own bailout of the commodities markets. That move, spearheaded by a man named Joeseph, ended in the enslavement of the masses with total power belonging to one man.
    Is this move any different?

    PS: If we can afford a 700 B bailout, how much extra are we being taxed?

  2. Andrea permalink
    12 November 2008 2:44 pm

    The automakers must be allowed to go bankrupt. I’ve written my congresswoman and my senators about it so I’m sure it will get solved according to my desires.

    If we’re going to bail them out, why not just have the government (us) purchase $25B worth of cars for those of us who are driving older cars? That way we’d at least get something for our money and the inventory would be reduced by more than 500,000 vehicles.

    qb, let me know when you get your mortgage check and I’ll let you know when I get my new SUV. Can afford the gas now if I don’t get laid off.

  3. queueball permalink*
    12 November 2008 3:59 pm

    You nailed it, sister o’ mine. This whole thing is mind-boggling. qb

  4. Ben permalink
    12 November 2008 5:26 pm

    What is happening right now in Washington is simply shameful. I noticed an article exploring the possibility of governmental investiture in the Big 3. Gracious. I had such high hopes for the Bush admin. and the Republican congress just 4 years ago. Now I find them all distasteful, greedy opportunists. I hear Australia might be a nice option…

  5. 15 November 2008 2:25 pm

    Today I “filled up” for $26.52 , down from $52 a couple of months ago. It was hard not to grin, but deep in my heart I knew it was a lie. Your brother-in-law will tell you that $1.84 a gallon will not support energy independence. I wonder if those folk with the “interest only” loans had a reaction similar to mine. The good news, I think, is that the “murmur in the concrete stands beneath your feet” that you wrote about in 1995, may be replicating the gentle, persistent whoomp, whoomp, whoomp. We can only hope and pray that it is real.

  6. queueball permalink*
    16 November 2008 7:04 am

    *chuckle*

    Well, it’s a secondary or tertiary source, but Krauthammer has just confirmed what the economist told me. In his article “A Lemon of a Bailout,” he says that the average workers for the Big Three and for Toyota USA cost an hourly $73 and $48, respectively, and that the Democrats’ push to rescue Detroit is a surreptitious means of preserving the UAW’s clout, which might be diminished by a cascade of bankruptcy reorganizations among the Big Three.

    qb

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