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>Bailout Beatdown

>As I’m reviewing the continuing saga about our financial woes I’m of mixed minds. I truly, honestly see both sides of the argument on several levels.

The government is shelling out billions of dollars to save our ailing financial and automotive giants. On one hand I would prefer to just let them fail on sheer principle, figuring that a demand-based market system will sort itself out in the end. On the other hand, it’s obvious that the impact on our overall economy if these companies go under would be devastating, and it definitely would make for a much deeper hole for the country to dig out of.

The car companies got hit first because of last year’s fluctuations in gas prices, and then they got a second whammy when the finance crisis hit. The government can and should regulate the price of gas as sold in this country, and part of these regulations should include an allowed price variance over a period of time. Too many people get hurt when it goes up and down like it has. While the car companies have shown a commendable eagerness to adjust their offerings to a different price level, it’s not fair because it takes so much longer to re-tool factories and re-engineer cars than it does for OPEC to say “We’re going to charge more next month”. I know there’s more to it than that, but not THAT much more.

I read stories of the “Lobster-to-potato-chips” downgrades in hospitality during some of this year’s earlier PGA tournaments. There was an uproar when AIG blew half a mill on a previously planned high-end spa outing for management and top performers in the middle of sitting before congress asking for handouts. The Big Three got smacked around for flying private jets to DC so they can hold their hand out. Now Northern Trust is catching grief about sponsoring a golf tournament in the middle of this kind of a crisis, and Wachovia took its name off the upcoming PTA Tour event in Charlotte, mostly due to backlash against the struggling financial institutions’ spending.

I totally expect the grandstanding politicians to take full advantage of the situation where taxpayers are paying for the companies to stay alive while the companies are eating caviar. Heck, one of my favorite new segments on the Daily Show is “American Grandstand”. At first glance it’s a dead easy argument. The point that has not yet been raised, maybe for lack of coconuts, is that we cannot take over these companies and then tell them not to market themselves, or what they can and cannot do in order to retain the qualified employees who they will rely on to take them out of the hole. Their skill and inventiveness in marketing is part of what built these companies to the size they are, and I feel like the recovery process will be prolonged if they’re not allowed to market themselves along the lines they’re used to. Does this really benefit the taxpayers in any way? If their top employees leave the companies, the same effect will be felt, and again, who does this benefit?

Of course, there’s yet another flip side to this point, as their aggressive and excessive marketing and incentives programs is part of the whole Cycle Of Greed which has driven us to where we’re at today.

In short, I have absolutely no answers, and I have the utmost respect for those charged with turning this economically toxic tanker around to the right direction. I don’t expect the economy to ever get back to where it was a year ago, because that position was not real but built on a foundation of flimsy and hopeful anticipation, a woeful lack of controls and governance, and in some cases numbers which flat out did not exist. The question is not about how quickly we can get the Dow up above 13K again. The challenge is to re-engineer our financial system so that the next time we do get to 13K (and we will) we can actually trust it.


About golferinkilt

Creative golfing and creative writing


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