Bailout debates

So we now have a bailout for the financial industry on the order of $700billion. We also have a bailout for the auto industry in the neighborhood of $15billion. That is wonderful. I will sleep so much better knowing that these executives that ran their companies into the ground will be able to continue earning their money.

It is amazing how Bush and his cronies can speak about capitalism and free market and small government, but when his fellow members of the upper class are in trouble, all that goes by the wayside and suddenly the government needs to step in.

Now I do not have a problem with the government helping out business that are in trouble, but only if the businesses are faltering for reasons beyond their control. As an example, back in 2001, the government provided some relief to the airline and tourism industries. Based on the events of 9/11, these industries suffered great losses. I do not have a problem helping out these businesses given the circumstances.

I did have some reservations regarding the assistance given to the airline industry because they overextended themselves and were already hurting before 9/11. However, since 9/11 really prevented any hope of them getting out of trouble on their own, I accepted the situation.

The downturn in the economy in 2008 is the direct result of lenders giving bad loans. These are people whose business it is to identify acceptable risks and provide money to consumers that they are confident can pay it back. Because these companies rode a wave of greed and gave loans that should never have been given, they found themselves on the losing end of the gamble. There were no circumstances beyond their control forcing them to give bad loans.

I don't care what anyone says about government policies desiring more loans to minorities or games being played with interest rates. The bottom line is these companies make the final decisions regarding who they will give money to. If they give a bad loan, then the fault is theirs and theirs alone. I am not sure making bad decisions is enough justification for government assistance.

So what about the auto industry?

Because the financial industry gave bad loans, the industry collapsed. They were then unable and/or unwilling to give loans to anyone with anything but exceptional credit -- a knee jerk reaction serving only to demonstrate how incapable the executives are at managing their businesses. The problem is that industries such as the auto and housing markets rely on consumers being able to get financing. When loan money was no longer available, these industries began their collapse.

The auto industry has only themselves to blame for continuing to sell gas guzzlers while Toyota and Honda saw the future of hybrids. If that were the only reason they were struggling, then I could not justify it, but I am okay with them getting a little help to see them through.

Through all of this my only real concern is the individual. While all of these industries are getting their bailout money, who is bailing out the consumer? Who is protecting their jobs? The workers at Merrill-Lynch and Goldman-Sachs had no say in the decisions that were made, yet they are the ones in the unemployment line. The assembly line workers at GM cannot control which cars the executives decide to build, but it is they who see their pensions disappear. Where is their bailout?

If I make a bad decision that costs me money, then I am just stuck. Yet and executive at a company can make a bad decision and can run to the government for help. Something is not right about that.

I am fine with bailouts, but I think they should be focused on saving the jobs and pensions of the people that are doing the work. The bailouts should simply be a way to protect the workers while the company goes through bankruptcy.

I will be glad to see what the Obama administration plans to do to help the people that really need it.