Bailout culture 40 years late
WASHINGTON – America wanted their government to shift to the left and whether they know what shifting to the left means or not, they got it.
Now as a strengthened Democratic Party majority with President-elect Barack Obama is taking power, the big hand of government is going to be there to make sure everyone has a chicken in every pot – or at least the states that traditionally vote Democrat.
In the late 1960s, the city of Mobile lost its biggest employer, the United States Air Force after Brookley Air Force Base closed. One of the legends as to why that happened is that Alabama went for losing presidential candidate Barry Goldwater in 1964 and the move to close the base was meant to be punitive by the victor, President Lyndon Johnson.
Afterwards, the city government was regularly in financial trouble. Other municipalities on the west side of the bay deteriorated (Prichard, anyone?). The push to make the paper industry the driving economic force never caught on, especially after Scott and International Paper left in the early 1990s.
It’s probably naïve to think there weren’t pleas for handouts from the federal government. Federal legislators have a reputation for bringing home the bacon to the state, so to speak. But did the leadership in Congress come to Mobile and other struggling southern cities with some sort of “bailout” program because their economies were “too big to fail?” No, and today the city is probably better for it.
Under a plan to save auto giant General Motors proposed by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, the U.S. government would step in and buy a stake in the company and start meddling in the long-term business model of the company to promote a “green” anti-global warming agenda.
Whenever the federal government tries to function as a business in the market economy, things never quire work out. Case in point – look at the United States Postal Service, which is now operating $2.8 billion in the red. You just can’t have government-run capitalist enterprises. Failed mortgage GSEs Fannie Mae and Freddie Mac are two other examples.
That’s because whenever taxpayer money is used, the wizards-of-smart elected to Washington think they should have strings attached that will allow them to socially engineer the country to be a better place.
So what if this bailout culture had come to Mobile in the late 1960s or early 1970s? It may have maintained the status quo somehow, but the modern day attractiveness to a ThyssenKrupp or EADS probably wouldn’t have existed.
Sessions comes back swinging at bailout-happy Washington
Sen. Jeff Sessions came back to Washington a couple days early from election intermission fresh off his landslide win over State Sen. Vivian Figures to begin his offensive against the push to bailout various struggling private sectors.
Somewhat reminiscent of the junior Alabama senator’s media campaign against the so-called immigration reform legislation pushed by failed GOP presidential candidate Sen. John McCain and Sen. Ted Kennedy, Sessions made appearances CNBC and Bloomberg, two financial networks, to lobby against an automaker bailout.
Rather than do as Reid and Pelosi want to do, which would obviously placate the enormously influential United Auto Workers, Sessions proposed GM and any other troubled automaker seek Chapter 11 bankruptcy protection and reorganize to become a leaner and better business.
He also had some harsh words for the buying spree Treasury Secretary Henry Paulson has been on – his effort to save the financial system.
“Secretary Paulson thinks he’s an investment banker instead of Secretary of Treasury,” Sessions said to CNBC. “He’s allocating taxpayers’ money right and left without any control. Am I wrong about that?”
Paulson is the former head of Goldman Sachs, one of the most powerful investment banks on Wall Street hit hard by the financial crisis.
Sessions’ press secretary Stephen Boyd told Lagniappe this aggressive attitude was going to be a strategy, which is part of a larger effort “to restore some common sense and principle to the party.”
“We’re making it a priority so stay tuned,” Boyd said.
Did anyone else notice … ?
Not trying to belabor the entire government bailout thing, nor make it a pattern of being critical of our congressman Rep. Jo Bonner, but he was quoted in the Press-Register on Nov. 2 worried the potential of a banking collapse would rival the chaotic scenes in New Orleans immediately following Hurricane Katrina’s arrival on the Gulf Coast in 2005.
One has to wonder who is advising these guys in Washington and there’s no way of knowing what might have happened if the worst case scenario had occurred – if Congress had said no to the banking bailout/rescue back in October and these overleveraged banking institutions had set off a dominos effect causing other banks to collapse.
But is there someone in Washington warning our elected officials of mass looting and violence without a nanny-state corporate welfare? It’s really troubling there’s a lack of confidence in human nature by politicians that our American society could deteriorate that rapidly. Sounds a little on the alarmist side, but then again – we the people are not privy to the same daily briefings the folks on Capitol Hill are.
Contact Jeff Poor at jeffreypoor@yahoo.com.
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