Even as we fight to recover, there is a lot of blamestorming* going around in Washington right now as to who was responsible for the economic downturn. The Democrats of course blame the Republicans and vice-versa.*(ok, not a real word, but I like it).

Yesterdays meeting over the proposed bailout turned into a playground brawl. Macaroni was thrown in the lunchroom and some politicians were given swirlies in the restroom. Ok, maybe not to that extent but it is how I picture it in my mind. 

The Democrats say they reached bipartisan agreement, the Republicans are not so sure. Obama and McCain were present and I don’t think anybody on the road missed them. 

Far from solved, some of the issues are far reaching and cross the line to new ground. 

For starters, I am very interested in the draft that would require limits on compensation for the executives participating in the bailout. Yes, you heard right, they are considering limiting excessive “golden parachutes” for the executives that ran the failing companies. I hope it did not take “America’s Best” to figure that one out – unless of course some of the politicians are on payroll. 

Why on earth would you not limit the compensation? How about you limit it to say…ZERO. If the companies go under (without the help of taxpayer money) I suspect their current golden parachutes would fail to open under any circumstance – so why should the taxpayers fund any of it? 

Another point is whether, going forward, bankruptcy judges will be able to modify mortgage terms. Although perhaps seeming good for the consumer on the surface, these newly structured loans go back to pay…well, us. Good luck finding any lender in the future if the courts can go in and change the terms at any time. 

The upside? 

It appears they are not looking at dropping $700 billion all at once. The draft calls for Congress to make $250 billion available with another $100 billion on standby. 

Why the delay? 

Well, I would like to think it is because some people in DC are coming to their senses; that taxpayers bailing out private companies might not be a good thing. In reality I am going to guess the Treasury just can’t print money that quick without jamming up the machine. 

Joe Biden (Obama’s appointed VP) is calling for the higher income individuals to pay more in taxes. Although McCain would have you believe most people will pay more in taxes under Obama, the fact is about 94% of all Americans will actually pay less. But in either case Biden says, “paying taxes is Patriotic.”

An interesting stance. Not since Kennedy’s famous “Ask not what your country can do for you, but what you can do for your country” has anyone went the route of “time to pay the piper.”

Is paying taxes “Patriotic?” You have to first decide the definition of Patriotism. Typically it is the “pride” and “support” of your country. Flying an American Flag – Check. Dedicated people in the Military – Check. Wanting to pay more in taxes – Ummm Houston, we have a problem.

I am not going to suggest paying taxes is “Patriotic,” but I am going to suggest most people in this country want a whole lot more than they are willing to pay for (surprise!) 

Everyone wants health care (and should have it). Everyone wants great roads to drive on. Everyone wants their children to be educated in superior schools by the best teachers. The catch is, when it comes right down to it, most people just don’t want to pay for it.

The new “you owe me” mentality will, for the most part, be the final destroying element of this great country. This is the time to step up to the plate. Not just the wealthy, everyone. The government bailout of both private and public companies is just the beginning – a band-aid over what is amounting to be a very large wound. It is not the symptoms we need to treat, but the underlying mentality behind it. 

If paying more in taxes will (really) get this country back on track – then I am all for it. And, if that is how we define being Patriotic going forward, so be it. 

When Mexico was in serious financial straights the US said the (Mexican) government needed to stay out of the way – the market knows best. 

When Russia was on financial brink, again, the US said government intervention should never happen – you should be like us.

When Thailand was….nevermind…you get the idea. 

We are real good at telling other governments they need to stay out of their country’s “free market” affairs even when the result includes joblessness and domestic turmoil. The economic system will correct itself…well, unless it happens to us – then the rules change. 

The Federal bailout is approaching (and will pass) the Trillion-Dollar mark. What is on the table so far? 

$300 billion for failing mortgages.

$200 billion loans to banks

$200 billion to buy Fannie Mae and Freddie Mac

$87 billion to JPMorgan for financing Lehman trades

$85 billion to buy (79%) of AIG

$29 billion to JPMorgan to buy (failed) Bear Stearns 

Is this a glimpse of a US move towards Socialism? Well, the government will now basically control the lions’ share of mortgage lending (Fannie Mae and Freddie Mac) and Insurance (AIG).

I think Sen. Jim Bunning (R-KY) summarized it pretty well. “The only difference between what the Fed did and what Hugo Chavez is doing in Venezuela is Chavez doesn’t put taxpayer dollars at risk when he takes over companies. He just takes them.” 

Think about it. The US, with taxpayer dollars, has taken over failing companies for billions of dollars. If they are right, and companies rebound, the government has serious intervention into the once private sector. If they are wrong, and the companies fail, taxpayers deal with more loses and ongoing repercussions. Sounds like a no-win situation to me.

I don’t think we should have bailed the companies out. Yes, I know jobs would have been lost. I know the economy would have suffered as it worked its way back to manageable levels. But I also know that “just print more money” is not the path to recovery.