The Bail-Out: A Scam of the American People and a Feathery Bed for Politicians

by Daniel T. Zanoza, Executive Director

 

It's been said a certain percentage of auto racing fans go to these events to see a crash.  The more mayhem, the better.  They don't necessarily want to see people die, but as the old adage of a gaper's block applies, people can't take their eyes away from a good accident.

 

I suppose individuals like myself must fall into the same category.  I just finished watching Treasury Secretary Pat Paulson's press conference where he discussed just who would be entitled to the first installment of over $350 billion targeted for the Wall Street bail-out.  I'm sorry, Pat Paulson was a comedian who frequently appeared on the Smothers Brothers show back in the late '60's, but Henry M. Paulson's act was nearly as comical, except for the fact King Paulson's decisions will affect America for generations to come.  In essence, Secretary Paulson told a multitude of reporters gathered the bail-out money was beginning to flow out of the U.S. Treasury.  He had some bad news, at least temporarily, for the auto industry.  GM, Ford and Chrysler will only be receiving $25 billion in American tax dollars.  But never fear, there is always hope the auto industry, encouraged by the United Auto Workers (UAW) Union, will get the other $50 billion they are seeking in the second half of the bail-out money which has to be approved for release by Congress.  Oh, by the way, for you home owners in danger of going into foreclosure, Paulson said you'll have to bite the bullet like the rest of...oops.  Too bad you didn't need a few billion because then you'd have money to give back to the politicians.  Remember, quid pro quo.

 

I have only one question for the Bush administration and both Democratic and Republican elected officials:  Where will the gravy train stop and, for that matter, where did they receive the mandate from voters to turn America's economy into a bastion of socialism?  We have all learned some interesting things about the bail-out which were conveniently shared with the American people after Congress stamped its approval on this give away of all give aways.  Americans have learned banks and financial institutions who didn't need government assistance will receive a nice stipend any way, permitting such institutions to buy out other banks, share vast increased profits with their CEO's and more.  In addition, it has been revealed corrupt officials who helped lead the United States into this financial crisis may be prosecuted by the federal government.  The only problem is, these same corrupt officials can use the bail-out money to pay for their defense through the hiring of high-priced legal representation.  Only in Washington would this make sense.  But if we look deeply behind the reason for the bail-out in the first place, the pieces of the puzzle all fit together.

 

Before the election, both Senators Barack Obama and John McCain were in favor of the bail-out.  However, for those who follow politics closely, this didn't make sense from the start.  Democrats hate big corporations.  They see such institutions as the root of all social evils.  Yet Obama supported nearly $1 trillion of taxpayers money going to the Darth Vaders of the economic world.  In contrast, McCain and Republicans allegedly hate regulations.  One of the themes of the Reagan era said we needed to get big government out of our lives.  Yet John McCain not only supported the government give away, but suspended his presidential campaign at the most crucial of times and returned to Washington to make sure the legislation was passed.  Later on, McCain tried to claim he was against the bail-out.  But his words fell on deaf ears with the public and well they should.

 

The truth of the matter is all Americans received an unsavory look at how Washington, D.C. and Wall Street have combined forces in the effort to secure the solvency of the good ole boys club.

 

You see, there were financial fat cats who had dipped their grubby hands into the financial till too may times.  They were in trouble.  They were in big trouble and a few millions shifted around here and there would not solve their problem.  At the same time, Washington, D.C. politicians saw the end of their financial gravy train may be at hand.  If New York fat cats didn't have the money, there would be an end to the cushy deals U.S. Senators and U.S. Representatives have become accustomed to.  Fat cat lobbying jobs were at stake.  There would be less positions on the boards of financial institutions which guaranteed the future of every elected official and crony that made it to Washington.  It was a crisis.  As it was once said in Mel Brooks' Blazing Saddles, the chant went up, "Gentlemen, we have to protect our phony baloney jobs" and there was no better way to do so than by propping up corrupt and failing financial institutions and the people who ran them.  For the first time, Americans had a chance to see the classic "I'll scratch your back, if you scratch mine" scenario performed right in front of their eyes.

 

The only problem is, and don't get me wrong, this is a big enough problem now that there are other industries with their hands out, including the auto makers, credit card companies and the list will get larger as time goes on.  The auto makers want relief because they have made deals with the UAW which are preventing them from seeing profits.  In comparison, an average member of the UAW makes $40 an hour with benefit packages that would make members of Congress salivate with envy.  When you buy a car from Toyota, roughly $400 of that price tag goes toward the health plans of auto workers.  When you buy a car from the big three auto makers, $1,500 of that cost is allocated for the health plan of its auto workers.  Is it any wonder why Chrysler, Ford and GM are on the brink of bankruptcy?

 

By no fault of our own, we have all become part-owners of many financial institutions and the auto industry.  But none of us will see the profits from our taxpayer investment.  Oh yes, we are told the American taxpayer will eventually see a financial windfall from the bail-out, but that promise can go along with the assurance that "the check's in the mail."

 

I guess the individuals we are sending to Washington are playing us for fools and, if we keep sending the same people back, I guess we are. 

 

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