Citigroup Gets Keys to the Candy Store While the Big 3 Can't Get a Candy Bar

Here's a joke for you--Ford, GM and Chrysler all engage in plans to turn around their companies prior to the financial crisis. They all engage in new technology development, organizational changes and financial upgrades. Granted, they still have problems, but they were at least working on them. Meanwhile, Citigroup is one of the main perpetrators of the mess we're currently going through. They gave away bad mortgages, sold them to the highest bidder as assets and basically undercut the market to get a stock advantage. Then they hit the skids when the rest of the country did, in large part to the tactics they used in the past ten years.

The punchline? Citigroup gets a huge multi-billion dollar bailout in the form of cash that does not have to be repaid while the automakers, who employ hundreds of thousands of people, can't even get a loan.

I just don't get how the auto industry became the proverbial red-headed stepchild of our economy. This focus on the financial and service industry is going to leave us a poorer country in the short and long runs. We have to have a manufacturing base to compete in this world. The financial sector has to be fixed, but just handing over the keys to the candy store to those who robbed the candy store and poisoned the customers in the first place isn't a great plan.

And yet we're willing to let the automakers go bankrupt and not the financial sector that was in large part to blame for this mess. I guess the lesson is just to foul things up as much as possible and then you'll get help. If you actually try to help yourselves, you're screwed.

The Bailout is "Working"

Here's a joke for you: two bald dudes walk into a Congressional hearing room and testify that a multi-billion dollar mess is working.

That's it. There's no clever punchline.

That's what Ben Bernanke and Henry "Hank" Paulson are doing today. They're sitting in front of members of Congress and lying through their teeth. Either that or they're delusional. I can't tell yet.

Meanwhile, the Big 3 and their entourage are in D.C. today for hearings on their measly $25 billion bailout request. People ask whether the auto bailout will work, and skepticism is more than healthy given the failings of our last bailout. I guess for this commentator, the differences are enough to give it a go. The CEOs are placing their mea culpa at the feet of a very angry and actionable Congress, though, so who knows what the outcome will be?

What I do know is this: there are American families hurting and they'd like to be next in line for this government cheese.

Point of Contention: Different Standards for an Automaker Bailout

In September when the stock market crashed and millions were left, jaws agape, to pick up the pieces of their broken investments, Wall Street flaunted its power. The big wigs went to Capitol Hill and demanded help. We branded them villains but, in the end, allowed the villains to continue. In fact, we were even told that the only people who could get us out of this mess were the very same people who got us into it in the first place.

Washington joined its constituents in crying foul, and the world watched as certain banks and brokerage firms fell victim to the inevitable downsizing. We felt less than sympathetic for the broken CEO who carried on so well for the past eight years, as right we should. But instead of doing something about it, we just flushed money into the system to try and take the pain away and watched as those who broke the system profited from its demise.

But now, even the Democrats are taking turns vilifying the auto industry for their missteps along the way and asking them, as part of any bailout, to get out. I'd like to think that the reason for this is that we've learned our lesson when it comes to who we trust, but I know better. The real reason for this change of heart is that instead of dealing with bankers and brokers, we're dealing with unions and line workers, and, frankly, the latter group doesn't hold as much power as they should.

It's amazing to me that we're spending so much time fighting over $25 billion to automakers when we essentially have given a blank check to bankers and brokers of all people to run amuck without any controls. Could it be a little class warfare that's playing into this?

Sure GM, Ford and Chrysler need to shape up. And I think that the leaders of those companies need to hit the road as well. But the insistence that is running crazy-like through D.C. today against the automakers is in stark contrast to the "doing what we have to do to save the banks" attitude that Washington took last month. It's as if D.C. has gone off its meds and is looking at the world much more cynically now, and instead of quesitoning the people they should be questioning, they are holding the latest victim accountable.

The fact is that a large part of the reason the automakers are in a bind is because people are not buying cars. People cannot buy cars because they can't get credit. Sure an auto bailout has its problems, but there are solutions to those problems. Meanwhile, it's the banks who got a free ride last month who caused this credit crunch on the everyday American in the first place. There are other factors that need to be addressed, but nothing will happen if the auto industry fails while we're bickering about this.

So when D.C. has gone postal on the Big 3, the big Banks have walked out the back door to the Oceans 11 music, smiling the whole way. And the automakers are being left to wither in the wind, with millions of workers' lives hanging in the balance.

Seems that the government socialism is only applicable to those who already have the means to help themselves.

Hot Topics: Am I Pinko Commie Scum?

One of the things that I'm not shocked to hear from people like this (and this and this) is that I'm some sort of socialist, left wing nut. Though to be brutally honest, I don't much care because if socialist, left wing nut means I believe in fairness and equality, then I guess they're right to that extent. But recently, the "bailout" or "rescue" plan and the surrounding inequity in our financial system has lead a lot more people to be fellow comrades. I guess when it comes to money, tough times make for strange bedfellows. It seems McCain believes in Selective Socialism.

Something is starting to catch on in America though from the academics all the way down to the factory worker--when it comes to the rich and powerful, socialism is acceptable; it's only when the weak and poor are helped that it becomes such a sin. The facts are the facts--this most recent bailout was nothing more than government subsidizing the mistakes of the rich and powerful on Wall Street and in financial centers around the country. This was socialism. There are many who were mad about this instance of socialism, though, that don't get the basic fact-of-the-matter, which is that this type of socialism goes on all the time, you just have to make enough money to take advantage of it. McCain faults Obama for claiming to want to spread the wealth (which I think is a great idea by the way, and I'll stand by that), but McCain's policies as a senator and the GOP's platform as a whole support this kind of socialism.

In the past decade, Americans have watched as their wages stagnated and even fell. With a President Obama, the middle class will see a $13,000 a year increase in wages. With a President McCain, the middle class will only see a $5,000 a year increase in wages. Perhaps it's just me, but if we are to truly be capitalists, wouldn't we promote a greater and stronger middle class who has the purchasing power to make our economy whole? Yet McCain's politics give the middle class less just in time to give the companies more.

I think we've seen the end result of deregulation in the financial and energy markets. It has lead to higher costs of living and lower wages for the average American worker. Though the fundamentals may be strong, the deck is stacked against them. Regan said deregulate now--and we did. Bush I echoed this--and we continued. Bush II played favorites with the likes of Enron and Haliburton--and we didn't stop it. Do you really think McCain won't do this too?

What we've done over the past 60 days says a lot about what our contry is willing to do for the rich and what we aren't willing to do for the poor. We're willing to bail out Wall Street for falling victim to it's own greed and laissez-faire attitude while punishing everyday Americans for living outside of their means or just trying to get by. Instead of helping the people that need it most, we helped the ones who caused the problem, hoping that, in the end, they would help us. And now most of us can't get a loan or line of credit to save our lives--and that's exactly what people have to do to get by. If that isn't basic socialism, I don't know what is.

The thing is that those people in high finance don't give two cents, quite literally, about the rest of us. In fact, they're making a killing off of our genorousity in the bailout. We've been asked instead to look at Joe the Plumber, forgetting that Joe the Banker is raping us dry and Joe the Homeowner and Factory Worker is getting the shaft.

If I may use a McCain line: Here's the facts, my friends. John McCain doesn't want to spread the wealth because people like him who have so much of it are afraid that making the pie bigger will divest them of their piece of it. What they don't get is that when the pie is bigger, everyone can have a big slice.

Or do they not want us to eat at all?

But don't worry conservative types who claim I'm pink commie scum....there are plenty of people out there who agree with me and my values. And I'll stick by them (like here and here and here and here) any day of the week.

A Note to Our Leaders Upon the Passing of the "Bailout"--Don't forget the rest of us

Today is a sad day. Today, Congress finally passed the Bailout. As you know, I'm neither for nor against it, though I do believe that it's probably a necessary evil. Nonetheless, it is passed and on its way to GWB's desk right now.

The Bailout Congress just passed provides Wall Street with the means to pick themselves up by the bootstraps--something they have always been able to do because, unlike many Americans, they have bootstraps in the first place. And although there were numerous ways to skin this cat, they chose this one and it's fine to me. For now.

My great fear though is that we will now stop working on the crisis and leave it to the next president, the next Congress to handle. I think Congress should call off any election period recess and keep working on a housing bailout bill and an automotive industry bailout bill and an employment bailout bill and so on.

For ninety-year-old Addie Polk, the bailout was too little, too late. Wednesday, as sheriff's office tried to foreclose on her Akron, Ohio home, she took matters into her own hands and shot herself. Now Addie is in the hospital and the home is in foreclosure. There is no happy ending to this story for now, because congress hasn't passed Ms. Polk's bailout yet.

So congrats, Congress. You did something necessary and patted yourselves on the back. Now get back to work and make sure that the Addie Polks of the world suffer no more.

Not The Kind of Record You Want

The Dow Jones Industrial Average suffered its biggest point loss in its history.

Rumor has it Tent Cities are popping up across the nation.  If we start setting up tent cities in Central Park, let me know.  

Sometimes This Helps

A LOL cat may help those people wanting to jump out of their office window right now due to the failure of the bailout.

I think they should call it a day.

The stock market has taken a nose dive, the likes of which hasn't been seen in a long time. Even the events of my birthday weren't this bad. Apparently, Wall Street, like every other street in America, has lost faith that a true measure to save the economy will pass.

It seems every day for the past two weeks we have been waking up to more incredible news. I thought this was a one-week thing, but it continues like a daily alarm clock ringing--only we can't hit the snooze button. Today it was Wachovia. Pretty soon there are going to be two or three banks in America, and although they'll be strong, I'm not sure that's a good thing.

I don't have time to read the 110 page tome that is the "Bailout Bill". But you can read it here, if you want.

I'm not alone in this questioning of the bailout. There are many people like me who question whether this bail out will work, when it will work and what it will do to any hope of getting help to the people who really need it. As you can see, my concerns are multi-fold.

First, will this bill even work? Are the firms that have bad debt going to be around to take part in the clean up? Wachovia won't be there. Washington Mutual won't be there. Bear Stearns won't be there. Leheman Brothers won't be there. So basically about 50-75% of the people who created this mess have left the party before it ended and therefore can't help to clean up. Is this enough?

Second, if it works, when will it work? Sure, the world has become a much faster place with a pace that rivals Robin Williams on his most crack-ridden day, but at the same time, how is it possible for just a mere vote of confidence to lift the markets? And really, that's what the bill is intended to do for right now.

Third, regardless of when and if it works, will this end the sense of urgency that allowed for bipartisanship in the first place? In other words, what about struggling home owners like Mom and Dad Grace. Will they get anything down the pipeline? Or are we done? I fear that once the urgency is over, the work will not get done. So health care, housing, etc., will just be trampled on in the meantime. I don't think the average American had high hopes of Congress helping them, but damn it, if this passes, they'll have to lower their expectations even more. And that just ain't right. Maverick McCain might think the fundamentals of the economy are strong and the American worker is strong--but if the American worker has no work, then the whole thing falls apart.

We need a New Deal, folks. Corporate bailouts without populist policies to aid the everyday American are nothing more than a screendoor on a submarine. DadGrace would tell you that.

As I write this, it appears the bailout bill has stalled and might fail.

I hope by the end of the day we have an economy at all.

If this is how the bailout is going to help, count me out.

Stocks are going to tumble this morning. Just freaking fantastic.