OK I know this blog is not for complaining and ranting about negative topics, but when you have the luxury of watching CNN all day long if desired, you have time to wonder if I will benefit in any way from the $700 Billion bailout approved by our government.
When first approved, the bailout was for government to buy some “toxic debt” which would directly help the banks that enticed us all with their tempting bottom rate mortgages and endless lines of credit. Now it seems that the billions are being diverted to help the auto industry and maybe even individual homeowners which are already delinquent on their mortgages.
If you read my earlier assay on the benefits of $5/gallon gasoline, you probably can guess where I’m heading with this (see March 08). The message that we are getting of all this economic mess is clear:
If you are amongst the largest companies in the world which happens to build cars for consumers, one that builds and market huge gas-guzzling vehicles, one that has focused on large short-term profits at the expense of a viable long-term vision, one that has fought tooth and nail for every governmental attempt to mandate higher fuel efficiency. Don’t worry. If your profits ever go down to a level that your senior executives could see a reduction in their yearly bonus, the government will bail you out with a handsome cash infusion which would provide enough to fund your golden parachutes and then let you go back to the same business model you had before.
If, on the other hand, you are an individual that took advantage of any get-rich-quick scheme regardless of risk, and you bought a house that you knew ahead of time that you wouldn’t be able to afford when the teaser rates expired, but you thought that you’d be able to flip the property to make a bundle. Or maybe you were just buying into the new American dream of owning a vacation home which you were planning to pay off with the profits from flipping other properties. You also don’t need to worry. Just disregard any notion of fiscal conservatism, continue to support the economy by spending on hundreds of unnecessary Chinese-made goods and if for some reason the rug gets pulled from under your feet, you too will benefit from the government bailout.
Great, so what about the rest of us? If you didn’t believe in the “no-money-down” house buying schemes or in buying expensive houses to profit from a simple flip, or if you continue faithfully pay your mortgage month after month, then you’re out of luck. Sorry. Hope you learn from this experience and do better next time around.
You see, I’m so glad I’m not wearing president-elect Obama’s shoes. If I was I’d be making a lot of counter-intuitive decisions with the bailout money.
Instead of bailing out GM, I’d give $25 Billion to Toyota for a job well done and as incentive for them to take over the American auto industry to build high quality, energy efficient Lexus for the masses. Instead of bailing out delinquent homeowners, I’d give bonuses to those that didn’t feel it was safe to buy with a no-money-down, interest-only, more-than-I could-afford mortgage and with that money let them buy foreclosed houses which they could fix and lease out to those that didn’t have any business owning houses to begin with.
Well, let’s just say that I’m glad president Obama will not be consulting me for any ideas on how to fix the economy. In the mean time, let’s hold tight and enjoy the ride. I hope to be inspired to write a more positive and light-hearted entry next time around.
Note: In keeping with the (semi) automobile topic of this entry, I'm including a few pictures from the Miami Beach Auto Show that we attended last weekend. Top (Ferrari), Middle (Audi A8), bottom (Aston-Martin)
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