No Bailout – Corporate America Needs to Find its Bootstraps

In the headlines yesterday, George W. Bush expressed panic about the economy. The same man who has repeatedly denied that America is in an economic meltdown is now calling the $700B bailout of financial institutions “urgent” and warning Americans of the doom and gloom that is sure to follow if Congress fails to hand Wall Street some taxpayer-made bootstraps.

There are a few things the average worker knows that have escaped the narrow minds of politicians. Despite the lies and empty assurances coming from Washington, we’ve known about the meltdown for a few years. We have felt the indifferent shoulder of Congress as Exxon reported astronomical, record breaking profits two quarters in a row last year. We felt the pain at the gas pump and the grocery store, even as our smirking President was telling us all would be fine. We’ve seen our jobs get cut, our wages stagnate, and our cost of living rise. Many of us sent our “economic stimulus” checks right back to one of the financial institutions in question. So this sense of impending doom is not exactly new to us.

We also know that this bailout has disaster written all over it. Financial institutions are suffering, in large part, due to the failures of its clients to pay their debts. Those clients are us – the average citizen and small businesses – and until our prospects improve, we will continue to struggle, which means that this massive bailout will be no more than a ridiculously expensive and temporary Band-Aid. There is no bailout or relief for the working and middle classes planned in the near future, and until our prospects improve, we’re going to continue to be financial risks.

We can also tell Congress and the financial institutions a few things about bootstraps and sacrifice. Namely, that when you’re down, the answer is not to rob and pillage those who support you, but to work with them towards a win-win solution. Yet, the same financial institutions who are begging for corporate welfare are those who have adopted some of the most unethical, vicious, and predatory policies towards its own customers.

Capital One, for instance, has policies that substantially raise the interest rates of customers who are one day late with their payments. Chase Manhattan and Household Bank have similar policies. I know a woman whose interest rate on her credit card was raised from 15% to 29.95% for being (less than a week) late with a payment twice in one year. When financial institutions add exorbitant late fees to substantially increased interest rates for imperfect but paying customers, they profit in the short term, but in the long term, they hamper the ability of consumers to pay down their debts. A debt-ridden public is one that is at risk for more financial disasters, including foreclosures and bankruptcies.

The American public should say no to corporate welfare, and let the financial institutions find the incentive — and the bootstraps — to correct a problem they are at least partially responsible for creating.

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19 comments

  1. In the 70s there was a decline of American power abroad, a ramp down of the longest useless war had finally ended in a ‘peace treaty’…a paper justification for years of fighting, leaving only dead soldiers and Vietnamese.

    American dependence on foreign oil, the United States at the mercy of world markets, our military power was irrelevant, and economic pressure was ineffective in controlling other countries.

    Middle East dictators hell bent on religion and money, the owners of the oil, were in a self righteous power play to beat the US to it’s knees.

    With Watergate, the government had corruption from the president on down. Deceit and illegal activity and scandals…Nixon always downplayed the allegations as his staff was fired, left on bad terms, or jailed.

    There was widespread panic, an international oil embargo, gas lines on Main Street that spawned a massive undertaking to find alternative energy and save resources but it never got taken seriously.

    Instead we got wrapped up in recession and bailouts…railroads, banks, the defense company Lockheed, and even the city of New York all got bailouts during this time!

    Gerald ford finished out Nixon’s term and a frustrated and weary nation elected Jimmy Carter, he, winning with his platform based on…you guessed it, Change.

    Does any of this sound familiar?

    Its funny that 35 years later, no matter what politician has been in office, no matter what has happened, the circumstances are the same! It’s not bailouts that are the common denominator to our problems. It’s oil!

    All of the other things, including bailouts, are just one big distraction from that looming, very real issue. The cycles keep repeating…we break it down then rebuild again, pay it out then reap it back, terror and greed are followed by short-lived peace, and then we go back and fight, of course over oil, again.

    35 years later and we still struggle with our planet, and how to grow as a human race without ruining it. In fact, Jimmy Carter was working on the alternative energy idea back then, we were going to save the world, but the predictable nature of its inhabitants did not change so it was soon forgotten.

    History does repeat itself and there were plenty of bailouts under Bill Clinton as well, some of them so profitable on payback that it put America in the black for the first time in many years!

    Yes we survived then, and I believe we will now, no matter who is in power, or who we bail out, but only if we, the people, change our idea on what is most important.

    If only we, the people, raise the bar and make them look at something else besides oil to use for fuel, and we, the people, stop falling for every little distraction thrown at us to steer us from the real issue – until we get our energy crisis off our plate, nothing will change.

    That’s why this election is so important. Not all of this other BS but this one issue. Look, maybe Obama is the next Carter, a lunker who will get distracted by all of this recession and bailout stuff too, but I am willing to risk it, voting for him I mean, because the alternative – McCain -offers nothing but more oil.

    I understand the need to rise up to say NO to the bailouts because of the greed and other behaviors that got these people here, but in my humble opinion we need to stay focused and keep our government focused and say NO to more oil instead.

    If we don’t concentrate on finding other energy sources, and detox from oil in the next 10 years, we won’t have another 35 to get it right and these bailouts will mean absolutely zero to anyone.

  2. You said what I was thinking, Jane! This problem did not happen over night, why was there no oversight? Why are the CEO’s still walking away with millions of dollars in compensation packages? For example, the CEO of WaMu, who started his job three-weeks ago, is being allowed to keep his $7.5 million signing bonus and will also walk away with an additional $6m in severence (http://www.iht.com/articles/ap/2008/09/26/business/NA-US-WaMu-CEO-Pay.php).

    I think he needs to personally write George W a thank you note.

    So, tell me…if I called my credit card company and told them that I was broke and unable to pay my bill, would they offer to pay off my entire balance? Of course not, but isn’t that what every single American is doing for them?

  3. This topic is a painful one for me to comment on right now. Everybody I know is suffering financially including us now and to think that a corp. can make grave errors in judgement and we the taxpayers have that placed upon us especially now that things are so tight? I say no way. Sell your 9 homes Mr. CEO. Oh that’s right nobody can afford to buy a home right now.

    My husband works for one of the few banks not in trouble right now. I hold my breath and pray that those in charge have done the right things necessary to not only protect the company but the public as well. So far so good but who knows.

    Boy Canada is looking better and better.

    Julia

  4. I guess in a delicious moment of irony – I am less worried by this crisis than many – and I have anxiety disorder – but my nothing and no assets that I have this week doesn’t feel much different than my nothing and no assets I had last month. Not to say that I am not intellectually worried about the country and I ache for the people that did NOTHING to deserve this and now are going to have to struggle.

  5. So true.

    My local paper ran a story this week about the bleak economic situation, complete with a photo of a retiree posed in front of his Mercedes. His lame ass quote was something about him not being able to live off his dividends any longer. My head exploded. I’m tired of having my head explode.

    I’ve had a problem w/Chase the past 2 months. Sent a payment a week before the due date and both times they posted it a day after it was due & charged me a late fee. I normally have a very a minimal balance that I pay off , but it’s like they flagged me now that I’ve charged a few college related expenses.

  6. Why don’t CEOs ever lose their jobs and walk away with nothing? I know I am the woman of endless whys buy I want to know why.

  7. $87B divided out to 200,000,000 American adults = $425,000+ each. We could afford to buy houses (mortgage crises ends), buy products and cars (more bailouts avoided, strengthening economy), etc, etc, etc. Thirty percent tax on each payout would send $127,500 back to the gov’t, which would total $25.5B towards the deficit.

    Just ONE day! That’s all any of us would need to dismantle this non-government! Pick me! Pick me!

  8. Do tell, Kris D., is that a direct quote from Ralphie in “A Christmas Story”? Remember? When he was holding a hub cab full of lug nuts and his father whacked his hand and pitched them into the snow?

  9. The difference between 1929 and now is, those guys jumped out the windows instead of running toward the horizion with a suitcase of money in each hand.

  10. Donna!!! thanks for that laugh and for planting these words in my head all..day…long….

    “you’ll shoot your eye out with that thing!”

    really, it’s been an interesting mantra and strangely fitting. :)

  11. Maybe Bush should send them each an economic stimulus check which equals the cost of their monthly utility bill. That’s where my check went. I never heard anything about how this stimulus worked, did you? A poll of my friends determined that most of them sent their money off to pay bills.

  12. I was at the food shelf today. They are booked through late Friday afternoon with people needing to get food…..all I could think of was the Hoovertown images. I am scared for my child

  13. I’m not American – but our economy is affected by this Bush fuck-up. Yes. He caused it with his BS toying with interest rates for years. I am tuned in to CNN waiting for round two of this Bailout mess – it is a scary time on planet earth.

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