How good ‘ole Uncle Sugar scewed us, and we didn’t even get a kiss!

This is a follow up to my article “If you break it, you buy it”.  When you hear the word “lobbyist” what do you think of?  I immediately think of some over-aged retired government big shot oddly looking like a used car salesman, stuffing $100 bills into the pocket of a congressman as they walk down the hallway.  Is this an accurate picture?  Probably not, but I’d venture to say most have the same negative view.  In my attempt to find out a bit more about lobbyists, my portable Google was overwhelmed with responses to “are lobbyists good or bad”.  The overwhelming amount of blogs basically stated that lobbyists are the root of all evil and if you know one, find a priest to save him/her.  Now, I think that may be a bit harsh, as some of the news media (I believe CNN is the most centered of the big media channels, as compared to ABC, CBS, NBC & FOX) point out that there are good points to lobbyists; you just have to look closely, like the details of an auto loan, their good points are found in the small print.

I throw lobbyists in the same category as unions (oh, I can hear my more liberal friends screaming!).  Both have served some good, but also seem to breed corruption and greed.  Unions are notorious for not giving a hoot about whether the company folds or not, as long as they get “what they [workers] are owed.” Lobbyists spend a lot of time and money “lobbying” for a particular cause, not particularly caring about the other side of the coin, their company/idea/bridge to nowhere is best, period.  Whether that be for curing cancer in kids or whether they are trying to lower the legal smoking age to 5. Companies pay lobbyists to affect our congressional system for a competitive edge, i.e. make more money for themselves, period.  It is in this capacity that I think lobbyists should be done away with, I mean, for the most part aren’t most of the “big ones” already collecting a government pension?

One blog I read stated that lobbyists serve a unique purpose, that they enable our elected representatives to have a view on a bill when they go and vote,  in short, they interpret the bill for the desired person.  Silly me, I could have sworn that our representatives have a staff for that sort of thing (another good idea would be to limit the amount of crap that goes in a bill, simply have one item per bill – but that dead horse can be tackled another day).

In an article by Carly Fiorina, a former CEO of HP, there is some truth that the “wall street mongrels” are a bit out of control.  She doesn’t think congress should dictate the salary of a CEO, but the shareholders (ie. the stockholders) have lost control, and they should be able to tie, not only the CEO, but the entire board of directors to the profits and productivity the company has. Every aspect of their compensation should be on the chopping block; no positive production – no positive compensation.

The question is not so much how to punish companies and their CEOs, it is more about how best to reward successful CEOs, while not rewarding non-productive ones. That, in my opinion is the crutch of the situation.  Currently, both good and bad are being rewarded.

The US of A rewards those who take the risk.  It is an essential part of our economic value and one of the pillars of our system of capitalism.  That ideal, as Ms. Fiorina points out, should not be lost in the current outrage at wall street.  You know the funny part, this article was written in 2009, two years ago!

While I have your attention; How does all this fit with Uncle Sugar screwing us?  Well, remember that whole bail out fiasco?  We talked allot about it in the office, and as best as I can tell, this is how the financial system was supposed to work:

1. Banks insure their loans with companies like AIG.
2. When loans default, they file with their insurance company (like the rest of us-sort of).
3. The companies like AIG pay a percentage of the loss back to the bank.
4. Weak banks fold – remember, FDIC insures individuals, and it was raised to $250,000/per account at the time.

That, in my non-economic and simplistic mind is how our little crisis should have played out. But no, Uncle Sugar had to play God and inject it’s silly self into the crisis, OK, I can understand the premis of bailing out AIG, but giving money also to the banks?  That, in my opinion was just stupid..now the banks (courtesy of their lobbyists & CEOs) have a percentage of the original loans coming in from AIG, and Uncle Sugar announces to the banks, “Hey, we’ll cover you and give you all this money, how about a bonifide crap-load of cash? Courtesy of the American taxpayer; they won’t mind, trust me”.  With the amount of cash the Fed dumped into the system, maybe the Fed could have paid off yours, and mine, with a little spare cash to boot.  In short, the Uncle Sugar screwed us, not only did the banks NOT distribute the cash as new loans (would you have if you were the CEO?), but our country incurred even more debt that my grandchildren get to pay off.

Hey kids, don’t think I never left you anything!