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Bailout. I used to equate this with the penal system - as in bail someone out of jail.
Lately, bailout has taken on a new meaning - as in bail out companies and businesses whose poor decisions put them in dire financial straits.
First, the U.S. Congress bailed out the nation's financial markets to the tune of $700 billion.
While this plan initially left me scratching my head, I began to see the wisdom after a few local experts put it into layman's terms for me.
"It's a rescue plan that goes to individual banks to generate bank lending," Joe Foster, assistant professor of business and economics at Campbellsville University, told me in October. "Without financing, people don't buy cars, homes, go to school and, in some cases, even buy appliances."
The money, as it turns out, was going to us, not the lenders, in order to jolt the ailing economy back to life. Makes sense. It hasn't worked yet, but it sounds good on paper.
One example of how the financial system bailout would generate economic growth, Foster said, is that with the federal government now backing them, banks will have confidence in lending to businesses, which, as a result, will grow and create jobs thereby pumping some life into the economy.
But, now, automakers are looking for a piece of the bailout pie and I'm beginning to think that there could be more out there with open hands and a good sob story.
Lawmakers are currently mulling over a plan that, unlike the previous bailout, doesn't seek to help us all. Instead, it seeks to help a single industry stay afloat.
Before you start rattling the sabers, I know that millions of Americans work for the auto industry and that if automakers begin to crumble, they could lose their jobs. We've already seen the impact declining auto sales have had with the layoff of 28 people at Murakami.
But, I don't think we, the taxpayers, should be on the line to bail these guys out, unless they are willing to be held fully accountable for their actions. Auto sales didn't just drop off the map one morning. If they had their eyes open, they had to see this coming.
Congress can't keep spending our tax money to bail out corporations. If they say yes to automakers, who's next? The retail stores? The motion picture industry? Major League Baseball?
House leaders passed a White House-backed $14 billion bailout bill on Wednesday. The next day, the bill stalled in the Senate as Republicans said the proposal wasn't tough enough. Among the concessions, Senate Republicans, including Mitch McConnell, are asking for is a reduction in wages and benefits to bring American automakers in line with those paid by Japanese companies Nissan, Toyota and Honda.
Union bosses refused and, by Thursday night, the bill was declared dead.
Seems some lawmakers are looking out for us after all. Now, many are urging President Bush to take funds from the $700 billion financial bailout and use them to help automakers. Whatever aid is provided, I just hope it comes with some tough provisions. If we help bail these guys out, I only want us to have to do it once.