I find it ironic that people aren’t more upset about the bailout package that was supposed to fix our economic woes. So far, it looks more like an early Christmas present for the banks and investment houses before the Bush administration leaves office, while simultaneously making our economy worse instead of better — by wasting more than a trillion dollars of our tax money.
Even the stuff we know about is pretty disgusting, and I’m sure there are lots of things we don’t know about. For example, according to USA Today, PNC Financial Services Group was approved to receive $7.7 billion in bailout money, so they turned around and announced that they were acquiring National City Corp. for $5.58 billion.
Excuse me? Can someone tell me why we are handing them money so they can buy up other companies? I thought that part of the reason this trouble started in the first place was because these companies are “too big to fail” — so now we are paying them get even bigger?
When asked about this, Secretary of the Treasury Paulson, who was given the bailout money basically to do with as he pleases, told Charlie Rose on PBS “The driver is to have our healthy banks be well-capitalized so that they can play the role they need to play for our country right now.”
I feel so much better.
Other recipients of bailout money are using that money to pay dividends to their shareholders. Pardon me, but I thought the whole idea of capitalism was that you took a risk by investing in companies, and that if a company was not well run and got into trouble, then you take your lumps. But not in our topsy-turvy world where we make sure investors get their dividends, but people who lose their jobs or their homes because of medical problems are left to sink.
And if that weren’t bad enough, the treasury is paying New York Mellon Corp to run the program that buys up worthless assets from banks, but on the same day it hired Mellon to run this program it also decided to give them $3 billion in bailout money. Three billion dollars is a lot of conflict of interest. My head hasn’t stopped spinning from that one.
Neel Kashkari, the head of Treasury’s financial stability program, told Congress last week that there are few strings attached to the bailout money because too many rules would discourage financial institutions from participating. So not only do we have to hand them money, we have to be nice about it and not ask too much in return? As a result, companies that are getting bailed out are free to use that money to pay bonuses to their executives, or even just sit on the money (you know, like stuffing it under their mattress).
About the only thing that hasn’t been done with all this money is to actually stop a single home foreclosure.
We are screwed.