$775,000,000,000. That’s what it looks like. Seven hundred and seventy five billion dollars. For just about any entity other than the US Government it is not a manageable figure. It is however the reality of the bi-partisan Wall Street bail out engineered by George Bush and Barack Obama. It’s likely we’re going to take on almost a trillion dollars in foreign debt to pay for it.
I’m not much on ciphering especially with all those zeroes running around but if my calculator is correct it translates into about $4,000 for every American. Try dividing it by working people alone it rounds out at $10,000. Subtract those who don’t pay taxes and we’re in hock to the Wall Street banks to the tune of $15,000.
These mind boggling numbers are only matched by the absurdity of Wall Street rejecting them. In the last 8 weeks the Dow Jones Industrial Average has shed 25% of its value. Now Detroit’s big three auto makers want $25 billion.
Those wonderful folks who brought us the fuel efficient monster truck for the elite – the Cadillac Escalade – are knocking on Washington’s self proclaimed prestigious doors looking for a loan that someday might be repaid. Keep your eyes on someday and might.
What’s the difference? If you can save the pampered hides at AIG Insurance, then let them throw a lavish party at an exclusive resort, why not save the jobs of auto workers and the people who depend on them?
It’s an important argument to be made. A generation ago, the last time the American auto industry had to re-invent itself; I visited Dearborn, Michigan, headquarters of the Ford Motor Company. The roads around the factories were lined with suppliers, diners, fast food joints and even a mechanic who stayed open late to service a plant’s 3 to 11 shift. During those difficult times those independent business owners took bigger hits than the auto workers. The self employed didn’t have guaranteed pensions.
Some say the bail out of Chrysler under Lee Iacocca is a model. Many claim that the government actually made a profit on that 1979 deal. Today the auto market is extraordinarily different. Global capacity for auto production has tripled in the last 30 years. Auto production is measured by the number of days inventory is in showrooms. Healthy numbers generally are in the range of 30 to 45 days. For November Toyota and Honda are reporting backlogs in the range of 70 to 80 days.
Comparatively why make a big deal of a mere $25 billion? One can make the hold-your-nose case that the three quarter trillion dollar Wall Street rescue is a form of currency stabilization in a global market. If you buy that line why not throw relative chump change at an important industry?
Because of the sneaking suspicion that we are subsidizing their poorly managed pension plans. General Motors employs roughly 150,000 people who are supposed to support 450,000 pensioners and their benefits. In the 70’s and 80’s it was easy to throw pension promises at the United Auto Workers and other unions. Now the pipers want to be paid.
With all the zeroes, of all kinds, running around Washington it is difficult to make sense of this mess. What we know right now is that Secretary Paulsen hasn’t written any big checks yet. Seems in a couple of cases he’s changed his mind on how to do that. Since we’re dealing in absurdity anyway I want to throw another idea at him. Take his big computers and do the same arithmetic I tried. If I’m even close he can write a check to every tax paying American. It can have one condition: it must be invested in a market for retirement. Someday the people and the markets would sort out the survivors. The big 3 and any other company that needed bailing out would truly belong to the people. A new kind of capitalistic/socialism that should make everybody happy, except those who have to pay it back.
Albert Paschall is senior fellow at The Lincoln Institute of Public Opinion Research, a non-profit educational foundation based in Harrisburg. Somedays is syndicated to leading newspapers and radio stations in Pennsylvania. [email protected]