Atlas Didn't Shrug, He Bailed

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November 25, 2008

Watching the CEOs of the 'Big Three' sitting before a congressional committee groveling for a piece of the bailout pie brought Ayn Rand's prophetic (and historic) novel Atlas Shrugged to mind. The scene in Washington D.C. was the equivalent of turning on the National Geographic Channel and watching a 400 pound lion beg a 90 pound zebra calf for its life.

In a sense it was satisfying watching these three stooges squirm. These are some of the very same people who have blown billions of their shareholders' and lenders' money on a bacchanalia of unnecessary luxuries, retreated like spineless cowards in the face of union bosses, and lavished millions in campaign contributions and perks on the same two-faced politicians who were now chastising them. The scene was also disconcerting because these are the men (I use the term loosely) charged with running some of the largest 'private' corporate entities in the United States, groveling and begging for money from people who hold my purse strings (and yours) at gun point.

Representative Brad Sherman, a California Democrat, asked any of the three executives that flew commercial to raise their hand, following up with yet more grandstanding, 'I'm going ask you to raise your hand if you're planning to sell your jet . . . and fly back commercial." Needless to say, none of the CEOs raised a hand. I was surprised (not really) no one asked the Congressman, in light of the current financial crisis caused by many of the laws that he voted on, if he would cut his salary by 50 percent, cut his office budget by any significant amount, or forgo all pork-barrel spending in his home district. I suspect such questions would at best be met with the same stunned silence he received from the triumvirate of CEOs, or some cynical form of theatrical sound bite indignation.

Some in the media are doing their part on behalf of the 'Big Three' by strongly suggesting that the failure of the auto giants would have a financially catastrophic effect on every human living north of the Equator and south of the North Pole.

One morning news report cited these 'facts' as reasons why the government 'should do something' for the troubled auto makers. The reporters reminded the viewers that these companies pay a lot of taxes, so logically we should tax everyone else more so these companies can continue to pay taxes--I think Ronald Reagan called it trickle down taxation. They said that if these autoworkers lose their jobs, mom and pop business in the vicinities of the auto plants would close down, and this could lead to people all over the country losing their jobs. Reason dictates that if Joe's Diner shuts down in Detroit , Archer Daniels Midland would collapse due to a sharp decrease in food sales costing hundreds of thousands of further job losses.

Finally the real reason was broached at the end of the report; the 'Big Three' spend approximately $5 billion annually in advertising, most of which goes to the major networks--one of which had put together this report. The news anchor, reporter and network were asking the rest of us to bail them out by proxy.

The word is out: Money is easy in Washington , DC . Now everyone is lining up for the spoils of the bailout, including the state of California and numerous municipalities. Why not? It's only someone else's yet-to-exist money. Money which will probably be paid back by someone who's not even a sperm cell yet, so it shouldn't count, right?

Another big player in the bailout game is AIG . Why has the government taken such an interest in bailing out this 'insurance giant'? AIG holds a lot of public employee pensions, which have been very generous to retirees from government jobs. This generosity in these mostly unfunded pensions was easy while the market climbed, but with the Dow hovering at approximately 8,000 (down from over 13,000), everyone is wondering how $47 trillion in unfunded pensions will actually be paid (funded). Maybe if we bailed out GM, Ford, Chrysler and Joe's Diner with your tax money those entities would then generate enough tax revenue to fund the unfunded pensions, and if that doesn't work we can just erase a few zeros, or pass it on to those pesky, non-existent sperm cells. See how easy it all is? s certain