Don’t Buffet the Economy

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In another dramatic turn for our economy, Barack Obama pulled a Commissioner Gordon and got hold of Warren Buffett on the Bat Phone to rescue yet another American company in distress…

Mr. Buffett, fresh from a bath—no visuals, please—figured out a $5 billion rescue plan that’s a win-win—for Warren Buffett.

What’s wrong with this picture…?

Other than Mr. Buffett in tights, Y-fronts, and a cape?

Too big to fail?

Somehow, it just doesn’t feel right…

When a company is in trouble-- whether it be a GE, a Goldman Sachs, or Bank of America—it used to be that market forces would provide the solution.

The firms would fail, customers and assets went elsewhere, and life went on.

What should not occur is the collusion of the President of the United States and a private--albeit wealthy—citizen to “fix” things...

Giving Warren Buffet such power and advantage in the financial wellbeing of the country seems…unseemly.

But then, multi-billion dollar, tax-payer funded bailouts by otherwise failing corporations is also unseemly.

In today’s America, big players get sweet deals.

Why?

Because, as we’ve been lectured by the big players the past few years, they are in fact, too big to fail.

The take away from all that?

If you’re too big to fail, then it doesn’t matter what you do, does it?

Hemingway was right—not the shotgun-to-the-head-thing, but that the rich are different than you and me…

In the case of so many “rich” corporations, they don’t have to pay the consequences for failure…

Rather, they are rewarded for it.

What message does this send the market?

Those that who rightfully bet against Bank of America are punished…

That the secret to success in America is becoming too big to fail.

That way, you’ll have the full faith and credit of the United States government behind you…

But the deals we’ve seen repeatedly warp the market…

And sow distrust in the American people…

Who see that market forces don’t apply to everyone equally across the board.

Shouldn’t a company just fail if it makes poor decisions?

What used to happen?

Someone else picked it up for a bargain, re-structured the company and made it profitable again…

But those days are, apparently, gone.

Market forces are for chumps.

More plurbis, less unum

Is that what our country, and our economy, has become?

Both the economy and the country are starting to resemble the Japanese zaibatsu, where industry and finance are integrated into one big vertical monopoly…

Or a backroom card game with a few Big Players moving chips around and having a laugh…

The motto of the United States of America is “e plurbis, unum” -- out of many, one.

But somebody tell Barack Obama and Warren Buffett that it is not the motto of our economy…

But when one man is repeatedly called upon to shore up the fortunes of GE, Goldman Sachs, and now Bank of America, alarm bells ring…

Risk seems to no longer be an issue…when you’re too big to fail…

And in case you hadn’t noticed, Warren Buffett has become a dominant force in the country, and all it takes is a phone call from the President...

Funny…I don’t remember not voting for Warren Buffet…

And I can’t help wondering what the other parts of the deal are, that have nothing to do with Bank of America…

Do the anti-trust laws apply to one person?

Now, don’t get me wrong, I’m not naive…

Presidents have made phone calls to influence outcomes before…

Dick Nixon called George Allen, coach of the Redskins, to recommend—what else?—a trick play against the 49ers…

And cost them the game…

But President Obama giving Warren Buffet a phone call to put $5 billion into play with Bank of America?

Or getting him to shore up the President’s tax policy?

This President is playing a different game altogether.

By the way, care to guess what Buffett got in return for his endorsement of Obama’s policy of higher taxes?

Anybody?

Wake up and smell the oligarchy

A hundred or so years ago, business was becoming too powerful of a force in America—more powerful than the federal government.

Anti-trust laws were adopted to break up those oligarchic forces…

Why?

Because they restricted free competition, fixed prices, and engaged in other market warping, monopolistic tendencies.

But, like the ebb and flow of tides, oligarchy is back in America, and better than before...

Because now, oligarchy involves the federal government, instead of excluding it…

That way, government corporations like Fannie Mae and Freddie Mac can make it easy for anyone to get a home loan...

Bad credit?  No credit?  No job?  No social security number?  No problem.  Just sign here and you’ve got yourself a half-million dollar a mortgage, no money down.

Banks can stick millions of Americans with crappy loans…

Securities firms can make billions selling the securitized loans…

As the warped real estate market trashes the economy…

And trashes the banking system…

And the best part?

No one pays any consequences.

No worries…You’re too big to fail…

You’re getting a bail out…

But bailouts are like heart transplants…

Someone has to have their heart cut out of them for it to happen…

That someone is the American tax payer.

The return of oligarchy is not good news for the American Republic.

Picking losers and winners in the economy is not the business of the federal government…

Nor is bankrupting the economy…

In the past several years, America has been buffeted by one crisis after another…

And I can’t help wondering where this latest “buffeting” will leave the economy…

One guess?

“Wasting away in Margaritaville…”

And those are…The Gorrie Details.

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