As our economy continues its slow death spiral towards insolvency, one would think that there would be a sense of urgency for unity in Congress to see our way out of this mess. Unfortunately, the Republican Party has taken this calamitous event and has turned into yet another classic case of talking point politics.
Here are the facts as I see it:
We have haphazardly pumped hundreds of billions dollars into the financial sector in the hope of creating financial stability. Though there have been some objections to this action, it has been generally accepted that this is necessary for our survival. The original intent of the bailout was to prop up these institutions against the failing sub-prime mortgage market. Once in place, the bailout morphed into a blanket re-capitalization of the banking industry. Citigroup has benefited to the tune of $55 billion dollars and a generous government guarantee to cover 90% of their future losses. This is an outrage! This is not a bailout… this is a blind salvage operation (corporate giveaway) largely funded by borrowing money from the Chinese. The relative ease in which Citigroup has gotten these funds, with little transparency and even less national debate is alarming at best, nefarious at worst.
In the midst of this rescue operation, the big three automakers has requested a $25 billion dollar loan from Congress. The big three have been struggling and operating capital is at its lowest point in years. Their products are not as desirable in this country as they once were. Their survival, they contend, is dependent on this loan approval. Yet, Republicans in the Senate and in the House have turned this into a union bashing party. Citing statistics that UAW members make up to $75 dollars an hour (talking point), Congress has shifted the blame of the failing industry onto union workers in much the same way that the Bush administration blamed the common folk for the sub-prime meltdown.
We all know that the money we are pouring into the financial sector will never be seen again. Granted, we have gotten a stake in these banks but I seriously doubt that we taxpayers will ever see any real benefit from this bailout other than saving these banks outright. Yet, it is important to note, that in 1980, the US government loaned the Chrysler Corporation $1 billion dollars. Many at the time opposed the move. What is seldom discussed is that Chrysler repaid the loan in full by 1983 and the US treasury made $350 million dollars in the process.
It is obvious that there is a blue collar bias in this whole scenario. Even in an age where the gap between rich and poor has widened like never before, it remains the well-to-do who will benefit the most from this financial crisis.
The financial crisis this nation faces is catastrophic. To think any less of this would be foolish. This Thanksgiving, while sitting at the table, do not forget to thank your children, for it is they who will be shouldering this humongous debt. And while you’re at it, say a silent “Toa chie” to our new Chinese masters.