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So far, the Congress and the Federal Reserve have bailed out:
- Bear Stearns
- Fannie Mae
- Freddie Mac
- AIG (multiple times)
- Bank of America
- The States (see: Gov. Mark Sanford, R-SC; Gov. Bobby Jindal, R-LA; et al.)
- Everybody and their dad
Now, the discussion has come to newspapers and the US Postal Service. Pretty soon, we’ll be asking who hasn’t had a bailout. Rather than letting bad businesses fail, we’d rather throw cash at them and hope that their business models and/or practices magically transform into profitable ones. This is otherwise known as “wishful thinking.”
In Obamaspeak, however, “wishful thinking” is the same thing as “investment.” Much like his “tax cuts” which were actually naked income redistribution, these “investments” are actually just cash given to enterprises in which no individual in their right mind would invest. Generally speaking, we used to call this “corporate welfare.”
So while we’re at it, I have a few suggestions for industries that need bailouts (excuse me, “investments”), all of which have seen massive losses in the past few years and are in danger of collapse:
- 8-track tape makers
- Betamax production lines
- Telegraph operators
- Typewriter factories
- Analog TV companies
- Horse-drawn carriage drivers
Or, we could just save ourselves a lot of money and let the market work like it’s supposed to. What are your suggested industries for bailout?
Credit: Michael Ramirez
So the Congress is feigning outrage at AIG bonuses, despite the fact that they now own the company. So what’re they covering, what’s more outrageous than the bonuses? How about campaign contributions with bailout money?
While a few big firms, such as Wells Fargo and JP Morgan Chase, have curtailed their campaign giving, others are quietly doling out cash to select members of Congress, particularly those who serve on committees that oversee TARP. In recent filings with the Federal Election Commission, the political action committee for Bank of America (which got $15 billion in bailout money) sent out $24,500 in the first two months of 2009, including $1,500 to House Majority Leader Steny Hoyer and another $15,000 to members of the House and Senate banking panels. Citigroup ($25 billion) dished out $29,620, including $2,500 to House GOP Whip Eric Cantor, who also got $10,000 from UBS which, while not a TARP recipient, got $5 billion in bailout funds as an AIG “counterparty.” “This certainly appears to be a case of TARP funds being recycled into campaign contributions,” says Brett Kappell, a D.C. lawyer who tracks donations. (A spokesman for Cantor did not respond to requests for comment. A spokeswoman for Hoyer said it’s his “policy to accept legal contributions.”)
This is particularly timely, considering AIG:
“If you have been voting for politicians who promise to give you goodies at someone else’s expense, then you have no right to complain when they take your money and give it to someone else, including themselves.”
“A recession is when your neighbor loses his job. A depression is when you lose yours. And a recovery is when Jimmy Carter loses his.”
– Ronald Reagan
Might we be saying something similar in 2012?
From the Reuters/Forbes article this week:
Amid simmering outrage over $165 million in bonuses paid to executives at ailing AIG, Representative Barney Frank said on Monday it may be time to fire some people at the insurance giant.
‘These people may have a right to their bonuses but they don’t have a right to their jobs forever,’ Frank, a Massachusetts Democrat who heads the House Financial Services Committee, said on NBC’s ‘Today’ program.
From the CNBC article:
In an interview with CNBC, Representative Barney Frank says he wants to push for prosecution of the people who caused the country’s financial meltdown.
The Massachusetts Democrat says he has no specific targets in mind, but says the most significant thing lawmakers can do is make past bad practices illegal.
I have some suggestions for Mr. Frank:
And of course, the always-excellent Michael Ramirez adds his editorial flare:
The Democratic Congress and their union pals have finally killed DC’s voucher program. The NY Times (gasp!) has a good video editorial on Sweden’s universal voucher program (double gasp!). How odd that even a socialist nation like Sweden could figure out that market competition is good for education, yet this country seems incapable of it. But then again, they do have one of the most highly-regarded education systems in the world.
Credit: Carpe Diem
Esteemed liberal economics blogger Megan McArdle discusses her new doubts about Obama:
Having defended Obama’s candidacy largely on his economic team, I’m having serious buyer’s remorse. Geithner, who is rapidly starting to look like the weakest link, is rattling around by himself in Treasury. Meanwhile, the administration is clearly prioritized a stimulus package that will not work without fixing the banks over, um, fixing the banking system. Unlike most fiscal conservatives, I’m not mad at him for trying to increase the size of the government; that’s, after all, what he got elected promising to do. But he also promised to be non-partisan and accountable, and the size and composition stimulus package looks like just one more attempt to ram through his ideological agenda without much scrutiny, with the heaviest focus on programs that will be especially hard to cut.
Isn’t there anyone at BLS who could have filled him in on the unemployment figures, or at Treasury who could have explained what a disproportionate impact finance salaries have on tax revenue? These numbers . . . well, I can’t really fully describe them on a family blog. But he has now raced passed Bush in the Delusional Budget Math olympics.
Can’t say you weren’t warned, McArdle.
HT: James Taranto
Disagreements between the European Union and the US over how to combat the global recession widened on Tuesday as EU governments made clear they had little appetite for piling up more debt to fight the collapse in output and jobs.
I submit that when it comes to deficit spending, you’ve gone too far when the Europeans think you’re going off the deep end.