Banana Republic

Yesterday, I warned that if we didn't get a handle on the fundamentals of the economy that America might turn into a Banana Republic. One day later, I am wondering if I wasn't wrong? Perhaps we have already slipped on the banana peel? Today the government announced an $85 Billion bailout of the insurance company AIG in exchange for 80% of the stock. Now thems a lot of bananas! Where do they get the authority to use taxpayer money to bail out a private firm? Bad enough that they had the authority from Congress to use the "bazooka" that they gave the Treasury to bail out FNMA and Freddie Mac, but at least they had gone to Congress to get the authority. These were also businesses that were chartered by Congress so there was a least a rational argument that they had a responsibility to deal with them. However, when did anyone ask about lending money to a private firm? I wasn't aware the the US government started a sovereign wealth fund. When they offered government guarantees for the Bear Sterns takeover by JP Morgan, they slipped on the banana.

Now they are all going bananas! Every large company that has gotten itself into trouble because of bad management is now up to some monkey business. While all this was going on, GM's Chairman, Rick Waggoner, was making his pitch for a bailout for GM? What about Ford? Will Chrysler be next, perhaps, but they are owned by the private equity firm Cerberus? Will taxpayers then bailout the Cerberus private equity fund with a cast of characters including former VP Dan Quale and former Treasury Secretary John Snow? If these were small businesses there wouldn't even be any thought of loans or bail outs. They all got themselves into trouble pushing SUV's, pickup trucks, and luxury muscle cars while their paid lobbyists convinced the Reagan administration to relax fuel efficiency standards. Interestingly our current president, Bush, has maintained a low profile by visiting the hurricane devastation in Texas where he is promising to pick up the lodging expenses for people evacuated from Galveston who built their home blocks away from the beach a few feet above sea level. Why isn't he addressing the country when we are facing perhaps the worst financial crisis since the Great Depression?


Now I am going bananas just thinking about this whole mess. Unfortunately all the monkey business has gotten us into trouble. With the unitary executive aka, the Decider, just giving our money away to Georgia (not the state, but the country), Iraq, AIG, Fannie and Freddie, and people who choose to live a few hundred yards away from the sea in an area known for violent hurricanes, perhaps we are already living in a Banana Republic. Bring it on!