Bailout Extended to Insurance Companies, Ford & GM Next?
In another grim day of economic news all the major market indices plunged approximately 3.5%, an Atlanta bank failed (the 17th bank to fail this year), and an increasingly desperate Federal Reserve extended the bailout to insurance companies.
Apparently the financial industry cannot survive without the insurance they used to cook their books, the insurance companies are on the hook for a lot of failure and default they can’t pay, they went begging to Treasury and got help. It isn’t just a financial industry story, insurance failure is having serious effects all across the country.
The news from GM and Ford continues to be very bad, and today Chrysler announced an astounding 25% reduction in its white collar work force. What company can survive losing 25% of its staff? To the absolute surprise of no one, Michigan lawmakers are now going begging to Treasury too:
Michigan lawmakers responded to the quickening pace of Detroit's demise by calling on the Treasury Department on Thursday to use a portion of the $700 billion bailout package to help breathe life into the ailing auto industry.
What industry is next? Retail? Steel? Semiconductors? Forget about American capitalism, it’s gone. We are a semi-socialized industrial demcoracy now, and by God it’s the last time it ever happens again, what’s the Treasury supposed to do, bail out anyone in trouble? Where does it stop?
Just to add salted acid to the wounds all major banks receiving bailout money are still going to give out billions in bonuses to their failed executives. Congress lied to us when it said there would be executive controls on compensation, it was obvious the crooks would walk with millions but we just had to leap off the cliff. George Bush told us to, why not? [makes the sign of the cross]
As I’ve said before, this is completely backwards, the country was set up for the little people, not bankers. The more we ignore our people and rescue lying bonus-rich crooks the more we will fail, reality and the system utterly dictate it. If we continue to have a steep recession none of this bailout is going to work anyway, the problem is solvency with the American public, a view I’m finally thrilled to see in the mainstream press.