Wall Street Bail Out
The government opened up $700 billion to our banking institutions. Some argue that Hank Paulson is partial to his friends at Goldman Sachs. Afterall, these same companies paid out millions of dollars in bonuses to their execs just last year – execs who are supposed to safeguard investor interests. First, the mortgage crisis was born out of greed. Now, despite all the liquidity, near zero interest rates and all the government support, Citi and Co are still laying off their staff, and beefing up their reserves instead of passing on the government bail out to the consumer. And I bet their execs will still remain among the top paid in the country. The greed continues.
Compare this to how the Auto-maker’s are being treated. They had to give detailed testimony and plans on how they plan to use the $35 billion they are asking for. The Senate Banking Committee grilled auto-industry execs and asked them point-blank, sometimes humiliating questions. Yet no such hearing was held for the likes of Citi and Co.
Did you know that almost 3 million jobs are associated with the auto industry? This includes auto parts suppliers, repair shops and dealerships. So why are the rich buddies of Paulson getting preferencial treatment, when the blue-collar factory workers in Detroit stand to lose their livelihood? Why is the $35 billion for Ford, GM and Chrystler such a bitter pill, but the $700 billion for the financial industry a no-brainer?
Granted that our US auto-makers have been getting it wrong for a very long time, but how bad must it be out there that Toyota, the supposedly “perfect” auto-maker reported a loss this last quarter? This is a company that has never reported a full fiscal year loss since it began disclosing operating profit in 1941.
Now I think that every company that the government helps, whether it be the airline industry, the auto-industry or the financial industry needs to be accountable, because it is no longer just the shareholders, but every single tax payer that is now invested in them. So I am ok with the auto-makers having to justify their existence and their tactics, but I am not ok with the financial institutions responsible for a world-wide financial mess getting away without being reprimanded.
Frankly, I am disgusted at how much these guys get away with considering they single-handedly screw millions out of money, jobs and livelihood. Consider the Madhoff scandal, the Mortgage crisis, the Nasdaq bubble and many more scandals before that. If you ask me, there needs to be serious reform in our financial system and safeguards need to be employed to protect the masses from the greed of Wall Street.
– Faisal Laljee
