Uncle Sam’s Bailout Bandwagon
Wednesday - September 22, 2010
There is a creeping phenomenon in our midst that we continue to tolerate at our peril: the bailout bandwagon!
From General Motors and AIG (“too big to fail”) to first-time college credit-card holders (too little to fail?), corporate and individual accountability just ain’t what it used to be.
GM executives negotiated absurdly generous wage and benefit packages with their unions when times were good, as if times would always be good. So when the economy hit the skids and it was time to “pay the piper,” the new Uncle Sam stepped in to bail them out and, by the way, preserved those cushy union benefits, thereby making all those UAW folks continually beholden. But since somebody’s head had to roll, the president of the United States fired the president of GM!
Then, of course, there were the bank bailouts, so that few if any bank executives would be held accountable for their bad investments and losing loan contracts - the latter of which was really a policy bailout of the U.S. Congress, which passed legislation forcing the banks to make those loans to unqualified borrowers. Thank you, Rep. Barney Franks, chairman of the House Banking Committee.
We’ve all heard the radio ads: “Are you being harassed by the IRS? Have they come to your home or your place of business? Do you owe back taxes for two, four or five years?” And the testimonials follow: “Why I owed the IRS over $40, 000, but ended up paying only a fraction of that!” Or “XYZ Tax Reduction Company helped me cut my tax bill by over 50 percent!”
And I’m thinking: “You freaking freeloader. I pay my taxes, why can’t you?”
Or how about, “Is your credit card debt getting you down? Are you considering filing for bankruptcy? Hey, no worries! Why ruin your credit for years? Call us now! We’ll teach you the strategies your credit card company doesn’t want you to know about.”
And I’m thinking: “Hey! What about the contract you signed? Doesn’t your word (signature) mean anything?”
Then there are the Fanny Mae, Freddy Mac mortgage defaulters that put inflated income information on their mortgage applications, or who let themselves be duped by loan brokers trying to make their government quotas of unqualified borrowers. In either case, good ol’ deep pockets Uncle Sam steps in again to save them from themselves with forgiveness of unpaid months and low, low interest loan-refinance schemes.
Accountability, anyone? Let’s not forget about unemployment compensation, a system designed to tide over the unemployed for short periods of time until a new job can be found - sound in theory, but not as practiced now. We’ve seen extension after extension to the point where some unemployed have simply gotten out of the habit of working. Some have become so content with their compensation income that any work they do find must be “off the record” or “under the table” to preserve their dole. Who says you can’t have it both ways?
The most recent $13 billion bailout to state governments to help them avoid defaulting on public worker contracts and pushover pension plans were negotiated by state legislatures during good times to keep those union votes and campaign donations coming. So rather than having to tighten their belts and be held responsible, round-heeled legislators were simply let off the accountability hook again.
I don’t mean to imply that there are no circumstances in which an individual deserves a break or a business enterprise is hit by a bizarre economic turn, but overall - with government encouragement - we seem to have hit an all-time low in personal and institutional accountability.
Whatever happened to the sanctity of a signed contract, or of simply planning ahead for future difficulties before signing a contract?
With the recent proliferation of government bailouts, it’s hard to believe they come without an agenda. We are raising a generation of young Americans more dependent upon (beholden to) a Big Brother government.
“Hey man, no worries, be happy! Here comes the Bailout Bandwagon playin’ our song. Just jump on!”
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