Citi, AIG Enjoy Bailouts; Auto Industry Bailout: EPIC Fail
Well, it happened. Congress decided to make a stand. Over a paltry $14 billion loan. After dishing out nearly $1 trillion to ensure that the financial companies are fine, the Senate balks at a relatively small loan for the auto industry. The Senate requires the auto industry to come with a plan to make themselves more viable, the auto industry does this, and the automakers are denied. Even after pledges of $1 a year salaries and no health benefits for top executives.
Let’s review what mortgage insurers (like AIG) and mortgage lenders (like Citi) were required to do for their a bailout goodness:
Not a damn thing.
AIG even got more money after blowing a great deal of what they had been given. And Citi is thanking the taxpayers for their generous bailout by making sure executives get their bonuses and by jacking up interest rates on credit cards. But they’ve got their money, while the auto industry is on the verge of failure — and likely to take others down with them — and thousands of jobs and pensions and future financial well-being of individuals is at stake.
It’s sort of hypocritical. Okay, it’s not sort of hypocritical. It is hypocritical. Now, I’m not a big fan of bailouts. But if you’re going to give billions and billions and billions to one “essential” industry, you should give some money to others. All this talk about taking responsibility for your poor decisions is ridiculous, since Congress has already given the financial industry a pass on responsibility.
Holding taxpayers responsible
In the end, though, the auto industry is likely to get help from somewhere. TARP is a big contender. But, in the end, the only people paying any consequences are the American taxpayers. While Citi and other mortgage lenders wag their fingers at irresponsible homebuyers, telling them to face up to the consequences, they are enjoying the fruits of our labors. Perhaps the real bailout should come in the form of an enourmous cash payment to individual taxpayers.
