I received this from a friend.  It’s insane what our government thinks it’s ok to do with our tax money.  They aren’t helping anyone, they are simply postponing the inevitable fall of companies that do not know how to create a viable business plan and compete.  They are grandstanding with a self-created hero complex where government swoops in and saves the day.

If we add in the Citi bailout, the total cost of the bailout now exceeds $4.6165 trillion dollars.

The bailout has cost more than all of these big budget government expenditures – combined:

    • Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
    • Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
    • Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
    • S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
    • Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
    • The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
    • Invasion of Iraq: Cost: $551 billion, Inflation Adjusted Cost: $597 billion
    • Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
    • NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

    TOTAL: $3.92 trillion

 

The only expenditure that comes close is WWII, and even that cost less.

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Now, the worst Congress ever wants to bail out the auto industry.  I don’t really blame the auto industry folks.  For years, the government has been propping up major airlines, so why shouldn’t they get a piece of the pie.  It’s perfect timing, too, since they just gave the most stable banks in the US blank checks with no real accountability on how it will be spent.  Take a look at this from a CBS news article:

The Treasury Department agreed to post every transaction on the Internet, but all it shows is the list of banks and how many billions they got. 

The brand new Financial Stability Oversight Board has met four times already but they don’t know how the banks are using the money. 

There’s no hint in the first official Treasury report to submitted to Congress last week. 

And Congress promised to create its own special oversight board, but more than five weeks later not one person has been named to the panel. 

They didn’t even give the money to the troubled banks, but to the stable ones who are using it to acquire smaller institutions.  That’s an awesome deal.  So why wouldn’t Detroit itself ask for $10billion from the federal government and the major auto manufacturers ask for billion$ out of the bailout?  It’s free money that you don’t have to be accountable for.  Seriously, they need it.  They are hardly staying solvent due to a decline in sales and the United Auto Workers union.  It was just over a year and a half ago, the United Auto Workers union were negotiating contracts with the big 3 and arguing they were no where near close to collapsing.  

Now, Obama, as part of the transition, asked Bush to solve their problems.  Bush and team have already granted some $25billion in low interest loans to help the auto industry retool and focus on energy efficient technology.  They don’t want to do it.

I understand that the auto industry accounts for some 3 million jobs, but those have been decreasing year over year due to the high cost of union workers and high compensation packages of executives.  I’m all for people trying to get paid what ever they can get, but if your company… your source of income is at serious risk of just going away… don’t you accept pay cuts?  Don’t you accept cuts in benefits?  What else is there?  loss of your job?  If you can’t get by on what you earn, get a different job.  If you can’t get a different job where you live, move.  

The government can not guarantee you a job.  It just can’t.  This is a free market capitalism moderately government regulated capitalism system.  Companies and industry rise and fall based on market demand.  If the automotive industry was proving products that Americans generally wanted, they would be thriving.  If they could successfully manage their costs, they would be thriving.  Neither is true so they should fall.  They will not all fail.  There will be collapse and combinations.  They’ve happened in the past and they’ll occur again.  it’s painful, but healthy.

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On May 23, 2006, as a jury in Houston deliberated the case against top Enron executives Kenneth Lay and Jeffrey Skilling, a little-known regulatory agency in Washington, the Office of Federal Housing Enterprise Oversight (OFHEO), released a study with the dryly bureaucratic title “Report of the Special Examination of Fannie Mae.”

During the years 1998-2004, while headed Franklin Raines, Fannie Mae was found guilty of illegally inflating their earnings by $10.6 billion.  The main reason was to increase their bonuses (Raines received around $50million additional bonus due to this) and overall executive compensation.  Raines’ base pay was $1million per year.

…as a result of the investigation, Fannie Mae has agreed to pay $400 million in penalties. The company is now under criminal investigation by the Justice Department, and will likely be in trouble with the Securities and Exchange Commission, too.

Raines and team fought the investigation, they fought proposed government regulation and had the support of several democrats in congress.  For two years a bill to increase regulation was stymied until it was finally passed with a straight party vote.  The argument against the bill was that it would hurt granting loans to low-to-middle class applicants.

So, how come this hasn’t been more widely covered since the report came out over 2 years ago?

Franklin Raines is the former Clinton budget director and a member of his senior staff at Fannie Mae during this time was former Clinton Justice Department official Jamie Gorelick.  She received $15million in bunuses related to the inflated profits.  She was also responsible for creating the communications wall between the CIA and FBI during the Clinton years while working in the Justice Department.

Fannie Mae legally donates to political campaigns.  These are the top 5 candidates they donated to:

Top Recipients of Fannie Mae and Freddie Mac

 

Name	Office	Party/State	Total
01. Dodd, Christopher J	S	D-CT	$133,900
02. Kerry, John	S	D-MA	$111,000
03. Obama, Barack	S	D-IL	$105,849
04. Clinton, Hillary	S	D-NY	$75,550
05. Kanjorski, Paul E	H	D-PA	$65,500

Some analysis…

So, why aren’t politicians all over this? Why isn’t the media tearing this apart?

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