Has it really come down to Gov. Jennifer Granholm’s being handcuffed by CNN on the Big Three’s CEOs' flying separate corporate jets to Washington? Three million jobs, thousands from Lansing alone are in the balance, and “Saturday Night Live” is spoofing the automaker bailout.
I know. When it’s all said and done, GM, Ford and Chrysler will probably get a federal loan to carry them through until they start selling cars again. But the double standard in Washington over accountability as they set a bailout pecking order would be hysterical if it wasn’t scaring the pants off us. U.S. Rep. Barney Frank & Friends stuck GM CEO Rick Wagoner over an open flame, but where were the country’s financial giants when they had their hands out? JP Morgan Chase’s high rollers weren’t dragged in front of a C-Span camera and asked why taxpayers should throw $29 billion their way to buy out Bear Stearns.
The bigwigs from Citibank or AIG would have probably flown their corporate jets to D.C., too … if they’d been ordered to testify.
Washington was just told by somebody that financial Armageddon would rain upon the earth if something didn’t happen. So something did happen, and in much, much larger dollar figures than we’re talking about with the Big Three: Congress handed U.S. Treasury Secretary Henry Paulson $700 billion to play with after a congressional hearing.
Here’s what President-elect Barack “I loved Michigan in September” Obama said Monday: “I was as surprised that (The Big Three CEOs) did not have a better thought-out proposal when they arrived in Congress. I think Congress did the right thing, which is to say, ‘You guys need to come up with a plan and come back before you’re getting any taxpayer money.”
Did AIG ever submit “a plan”? Did Congress know the insurance behemoth would stick to spending $125 million to put its tarred corporate logo on Manchester United’s soccer jerseys after getting its hands on $85 billion in loans, as ABC News reported? Speaking of sports, Citigroup has $400 million for the New York Mets' new stadium, but they needed Washington to take care of $300 billion in stinky assets. They got a cut of that $700 billion bailout that absolutely needed needed needed needed to happen without any questions asked in the panic of late September — and now Citi is getting more. Analysts say Bank of America, Wells Fargo and Morgan Stanley are next in line. Bloomberg News is estimating the $700 billion could only be the tip of the iceberg. Bloomberg’s number crunchers estimate a final financial bailout could hit $7.4 trillion.
Again, where was the hard-hitting congressional hearing on this one? Outside of promising not to pay their executives, what is Citigroup’s “plan” for their enormous slice of taxpayer dough? Congress took care of their friends at Freddie Mac and Fannie Mae, but the risky home loan problem isn’t gone. According to Business Week, thousands of subprime loan sharks are using a longstanding federal program to tempt potential homebuyers with marginal credit.
The magazine predicts the “nation could soon suffer a fresh wave of defaults and foreclosures,” with one firm predicting a fresh $100 billion in five years.
Remember those $600 giveaway checks earlier this year? We were supposed to shop ’til we dropped in the name of the economy. Did Congress ever ask us for a “plan” on what we were doing with the money? No, we all blew our freebies in our own special way, the economy is rotting under our feet and Treasury has $118 billion less in revenue for more targeted bailouts.
But as long as the Big Three auto execs fly commercial or drive 12 hours to D.C. next week with their “plan,” who cares, right? The industry that employed many of us and our parents before us and their parents before them isn’t entitled to a comparatively meager $25 billion loan until its execs are told once again by a New York or Alabama member of Congress how their product sucks and their lazy employees make too much. Then again, who are we to question Congress or the financial institutions? They obviously know what “the plan” is. They just haven’t gotten around to telling the rest of us.
(Kyle Melinn is the editor at the MIRS newsletter. His column runs weekly. E-mail firstname.lastname@example.org.)