Welfare for Wall Street

by Fred Dungan

Everything is an emergency with the Bush Administration. We couldn't wait for United Nations authorization to invade Iraq. It had to be done right now, no time to ponder—we had to destroy Iraq's nuclear arsenal immediately. Of course, we later learned that Iraq had no weapons of mass destruction. Oh well, everybody makes a mistake or two and I suppose we should forgive our president for having gotten us into an unnecessary war. That is, we should forgive him provided he is repentant. But that's not the case, is it? Here he is again, crying wolf, telling us we have no time to think, we need to bailout Wall Street immediately to the tune of $700 billion. No time to wait, no time for discussion—either we fork over $700 billion or suffer an economic meltdown.

While I may find myself branded unpatriotic for questioning how the Administration arrived at the $700 billion figure, I'm willing to take that risk. It appears to have been plucked from thin air, a nice round number that would make the bailout easier for taxpayers to swallow. My guess is that if we offered Wall Street $20 billion, they would take it and run. After all, it's a fire sale, and $20 billion beats going bankrupt. I see no reason to reward the financiers who run Wall Street for having gotten us into this mess. Considering the damage they did, they should count themselves lucky if they don't go to prison for the rest of their lives.

And what guarantees do we get that that the Bush Administration won't come back when the subprime mortgage crisis is over and ask us for another $700 billion to solve the credit card crisis? Aren't we simply throwing good money after bad? I can't believe there are no alternatives. With $700 billion we could rebuild our country's aging infrastructure, thereby providing full employment for the forseeable future. Or we could provide tuition free higher education for our children and realize the Bush Administration's stated goal of “no child left behind.” I'm willing to bet that almost anybody could come up with something to do with $700 billion that would benefit the United States more than a welfare program for Wall Street.

What bothers me most is that this nation does not have $700 billion readily available. There is no surplus, we are a debtor nation in search of a cure. Ask yourself this: will going $700 billion deeper in debt make the economy better or worse? According to the media, public opinion is running 100 to 1 against the proposed bailout. We pay taxes, why don't we have a say in the matter? I don't know about you, but I trust public opinion a lot more than I trust Wall Street and the politicians who play games with our tax dollars.

Next in line for a bailout are American auto makers. They are unwilling to compete with the Japanese, their gas guzzling behemoths aren't selling, and they want taxpayers to give them a $30 billion handout to stave off the inevitable. I say inevitable because they are resistant to change. It's obvious that American auto makers are way off balance and aren't likely to recover anytime soon. General Motors, Chrysler, and Ford have no game plan. The Big Three simply don't get it, they're spinning their wheels, forgetting more than they learn, repeating the same mistakes over and over again. Why should taxpayers throw good money after bad? Chapter 11 bankruptcy will not spell the end of American auto manufacturers. Rather, they will emerge from bankruptcy leaner and meaner. Who knows? If things get bad enough, the Big Three might eventually produce cars that people want. Isn't that what capitalism is all about?

Update to 2023: U.S. auto makers are still pushing their gas guzzlers, despite the fact that gasoline now costs $4 per gallon. Presidential candidate Al Gore predicted climate change many years ago. Still, few corporations seem to be getting the message. It is high time for Congress to eliminate their perks.

This page last modified on January 9, 2023.