Thursday, September 25, 2008

Brother Can You Spare a Dime?

Make that around $100 with inflation

Timing is everything. A few weeks ago the Feds decide Lehman Brothers could go ahead and fail. Then Merrill Lynch gets bought out by Bank of America. Then AGI almost goes under a few days later and the Feds save it. And then they decide a few days later to spend trillions of dollars (you don’t really think it’s ‘only’ going to cost the taxpayers $700 billion, do you?) to ‘save’ every financial company.

The 24,000 that lost their jobs at Lehman Brothers have to be thinking “what about us?”. If the company had only hung on for one more week they would have been covered by Uncle Sugar’s proposed bailout plan (still not passed at this writing - so there is hope that we won’t get screwed over and have our tax dollars wasted again).

Who did Lehman tick off in DC? Did they not payoff, I mean make campaign contributions, to the right senators and congressmen? Did their lobbyists wine, dine and bribe the wrong folks inside the beltway? Did they go to the salad bar illegally? Wear stripes with plaids? Try and cross breed dogs and cats?

Whatever went wrong you got to feel bad for the regular employee’s who worked there and their families. This is not the time to be an unemployed financial sector worker, especially in NY. Besides Lehman dropping 24k workers on the job market, all the other big companies have been shedding employees faster than Paris Hilton and Lindsay Lohan shed clothes.

Let's assume for a minute that it really will only cost $700 billion to bail out these companies...sorry I'm back...I was laughing so hard while typing that...I wet myself and had to change my jeans...

Just how much money is $700,000,000,000? I don’t know about you but once you get to a million I have a hard time getting a handle on how much a billion is, let alone 700 billion.

$700 billion is about what the U.S. has spent on the Iraq war so far.
$700 billion is more than the total annual budget of the Pentagon.
$700 billion is a stack of $100 bills 475 miles high.
$700 billion is enough money to buy 8,235,294,117 pairs of my running shoes.
$700 billion is $100 for every person on earth.
$700 billion represents $2,300 for every man, woman and child in the United States. guess I should just mail the Feds a check for $29,900 right away.

Does bailing out companies make the remaining companies more responsible? (that would be a rhetorical question) or like our children, does always bailing them out make have a devil-may-care attitude and not worry about the consequences of their actions?

And what about us regular Joe's, do we pay attention to the health of the banks where we keep our money? Or do we not even worry about it because the accounts are FDIC insured?

6 comments:

Karen LH said...

Hi, Rob --

I hear you. I resent the fact that Bob and I have been behaving more or less responsibly, and through no fault of our own our 401K has been flushed down the toilet and we're looking to being on the hook for more taxes (or something).

And I can't think where the government plans to get $700 billion. Raise taxes? Borrow it? Print it?

Here's the thing, though: I don't know anything about the financial world. But I've noticed, watching various news shows and reading the paper, that every single financial reporter, every person from the field of finance who is interviewed, is saying that some kind of bailout must happen -- and soon -- or else the economy will tank. No hedging, no waffling, no nothing -- they've been very definite about it. The problem is apparently that credit is drying up completely.

So, I don't know. But that carries a certain amount of weight for me.

Kristi said...

I blame the bulk of this problem on people who spend beyond their means. Of course financial institutions want to loan money to irresponsible consumers. They make more money that way....or at least they were until people buried themselves so deep. Of course greedy CEO's deserve some blame too. It's just another example of how unfair things can be. Even though we have always been financially responsible. We have to lose a crap load of money because other people are irresponsible. Guess I should have bought everything I wanted too.

Worst of all I found my darling boys laughing directly at the tv during Bush's speech last night. Bush was talking about politicians always standing up in times of crisis blah blah blah... My boys aren't even three yet and they are already jadded.

Rob said...

Karen -I assume the money will just get tacked on to the ever growing deficit.
My banker dad and BIL stock broker say the bailout needs to happen too. But I'm thinking this isn't a long term fix. Just a few fingers in the dyke of a broken financial system. I think the system is going to die someday and it might be better just to get it over with. Plus I've yet to see a problem that the government can't make worse - but that could just be my libertarian bent showing through.
I started writing this post as lament to the Lehman workers who lost their jobs and somehow I digressed :)

Kristi - Yeah I'm just thrilled about having to bail out dopes who borrowed what they couldn't afford and the morons who lent the money to them.

I shouldn't laugh but I think that's really funny about your boys. Look at it this way; they aren't jaded - just realistic.

Karen LH said...

But I'm thinking this isn't a long term fix.

I don't get the impression that anyone thinks it's a long term fix -- just an emergency stop gap to give us time to figure out what a long term fix should look like.

Rob said...

man I don't want to see the price tag of the Long Term Fix

Kristi said...

I don't want to see that bill either Rob. It will be a doozy!