Thursday, January 22, 2009

THE A-B-Cs of Bailouts - A Primer

Years ago Willie Sutton was asked why he robbed banks. He calmly answered, “Because that’s where the money is.” Well ever since then the banks have been returning the favor.

First the bankers attempted to ruin our economy through greed and stupidity. Our government felt that a strong economy must have banks around to loan money to businesses. Thus was born T-A-R-P - the Troubled Assets Relief Program.

But I believe the alphabet has far more to offer than just that 'A' in TARP.

Here are the A-B-Cs of my proposal:

T-B-R-P – Toxic Budget Relief Program.

New York’s Governor Paterson is adding another fee onto the already absurd rates we pay LIPA & National Grid (formerly Keyspan, formerly Multi-Span; formerly Brooklyn Union Gas) because there is a 15.4 Billion dollar State budget deficit. Don't reward failure with TARP; distribute some of the cash to the States in need under a TBRP?

T-C-R-P – Troubled Consumer Relief Program.

Energy prices are still trending higher; banks are reluctant to loan money; consumers are strapped with ‘passed along’ increases. Print a few hundred million dollars to distribute to the consumers on Main Street as a temporary allowance under TCRP.

T-D-R-P – Tax Dumb Relief Program.

A record number of Americans have lost their jobs. They are collecting tiny amounts of unemployment insurance money, BUT they are forced to pay tax on that money. This dumb idea allows less spending and thereby stalls the economy further. Suspend this tax under TDRP?

I could go on and I am certain you could as well but I have one more that I believe fits the current situation.

T-W-E-R-P – Tremendously Weary Economically Raped People

Through no fault of our own we on the ground have suffered the loss of our nest eggs and retirement funds, not to mention our jobs and in many cases our future.

The debates in DC continue as they have for many years. One side says help big business in the belief of a trickle down theory while the other side says a quick aid to the middle class would work better.

Our country reveres and hates the wealthy but allows them to make the decisions that determine our lives. We are weary of waiting and need action now.

Giving money to banks without strings did not work before and never will. We appear to have finally figured that out when the Big 3 Detroit idiots jetted in for cash. But allowing business to continue its merry way in the future without learning from the mistakes and pain we are currently going through is absurd.

From the early 1940s until the 1980s the average CEO compensation was approximately 30 times that of his worker. In 2004 that multiple had jumped to around 120 with some CEOs actually pulling over 800 times as much as their employees! Since then the number has fallen but it's still well over 100 times the average worker. In other words if the company is in manufacturing and the average worker is making $65,000 per year the CEO is taking between $6.5 and $52 Million!!!

And that is just the money from this company. This CEO most likely sits on the board of directors of many other companies pulling in bonuses and options from their bottom lines as well. These disgustingly wealthy people also control huge lobbying concerns that work behind the scenes in Washington to see that nothing stops their gravy train. Hopefully the current administration will go through with the promise to CHANGE this practice.

There is no way we should allow a CEO to make such obscene amounts of cash but in a free society we have no choice. However when the same CEO begs the Senate for aid because his greed and stupidity caused a meltdown we can and should hold his feet to the fire. Our tax payer money will fix the company but they personally get nothing in return. But the price for remaining free from prosecution is they must divest themselves of all stock and stock options at a zero price. The result will put an immediate amount back into the company they so dearly wish to help.

See? It’s a win-win Mr. CEO and you may live off the cash you salted away all those years.

You may call it the T-A-B-C-R-P (Take All the Bastards Cash Relief Program.)

To once again reference Mr. Sutton we should start our healing process by squeezing these greedy CEOs because, "That’s where the money is!"

No comments: