Those auto companies don't deserve a dime of taxpayer money.Only I'm describing Citi and the other consumer-facing financial institutions that are lining up to get handouts worth $750 billion (and climbing). Think about it for a minute: over the span a weekend's worth of closed-door deal-making, Citi made off with $20 billion outright, and guarantees for $300 billion of its worst loans.
Companies like American Express are falling over themselves to get qualified as "banks" so they can share in the largesse. AIG got $75 billion in little more than a week, and did nothing more than appear (and be) pitiful.Contrast that to the heat Detroit's automakers have been getting for having the audacity to ask for help:Legislators demanded specific plans, as if they had the savvy and insight to decide if the automakers had the capacity to run their companies A steady stream of negative publicity has focused most often on the stupidity of making SUVs, and on the terribly selfish (if not outright oafish) unionized workers who've caused the problems.
Bailout? Yeah, right. I think we've all pretty much concluded so far that the legacy US automakers don't deserve it.But Citi does?The argument for saving Citi (or AIG, or Freddie, or Fannie, yadda yadda) is that they're too big to fail...if a major consumer-facing financial institution went bust, it could trigger a run on the banks. 200 million savers and investors could be impacted by Citi's failure.This is a marvelously circular argument, as the natural conclusion is that no financial institution can be allowed to fail, as each feeds into the system (Lehman Bros had little consumer relevance, so it was discarded).
"The Market" is a thing that exists beyond time, place, and the laws of causality, and we need to help and protect it, even as we can't quite point to what or where it is (Stocks? Mortgages? LIBOR rates? Small-business loans?). The logic also makes serious moral value judgments about the nature of capital versus labor. Investors can chase the highest returns possible, even to the point of embracing (or willfully ignoring) serious risk, but they're not guilty of the same selfishness as that of union workers who negotiate for the best possible contract terms.
Shouldn't self-interest be self-interest, whether shown by union workers getting the best contract deals, or investors chasing the highest interest rates/returns? Once an investor/depositor has an asset, it's a sacrosanct obligation to honor and reward that capital (with more capital); wheres a worker who spends a lifetime building assets for a company in exchange for retirement health care is an "onerous liability" that unfairly impedes said company's competitiveness?
The dependencies of capital (one bank lends to another while borrowing from a third, multiplied a zillion times over, all around the world) are core to the very fabric of our way of life, while the dependencies of people, suppliers, manufacturers, and the communities they both enjoy and support...well, those aren't so important in this global marketplace of ours? So it's with straight faces that Congress can demand plans from the automakers to fundamentally rethink their entire operations, from what they make, to how they pay their employees and vendors.
But no such radical plan will be forthcoming from Citi, or any other financial institution benefiting from the bailout funds. There are no alternatives to the absolutes of Captialism, and their failures have been deemed failures of judgment and execution, not fundamental principles or practices. All they need to do is revise their tactics, while the automakers need to rework overall strategies.
There's a bias here to the presumptions of Capitalism, and I think it clouds our ability to see and understand what's really going on. It's why we hear a lot about "fiscal stimulus" and tax cuts vs. job creation. And judging from the toxic nonsense around using the word socialism during the Presidential campaign, we're not about to start talking about our problems any differently. There's a branding lesson here, somewhere.