Treasury Secretary Henry Paulson is holding hearings to take a look at the package. Paulson, as we all remember, was given what amounts to a blank check and unrestricted use of taxpayer’s money to do with as he wishes. He conveyed a convincing story to reel in members of the House and Senate to go along with his plan. To date there has already been billions handed out around the financial industry. These handouts have been instituted without strings. This has lead to a gross misuse of these funds without any accountability. AIG is the perfect example of this misuse as they continue to fund “Executive Retreats” at taxpayer’s expense.

Now, Paulson has changed his tone and is looking to change the auspices of his plan. In his press conference held Nov. 12, Paulson babbled on about nothing. He spent more time spinning the truth then focusing on the ineffectiveness of the current plan. After reading his words, I’m thinking his remarks were written by Dr. Seuss.

What will he come up with next? Only the Shadow knows.

We, as American taxpayers have been duped. We were told that the plan would be a good thing for our economy but, as it urns out there real was no plan. Our tax dollars have been flying out of the Treasury door at an alarming rate. These funds have been used by the recipients as they have seen fit and little stabilization has been realized, if any. The markets still fall every day and have finished each week of trading on a down note. Financial institutions are not using the funds to make more money available in the credit market; instead, they use the funds to cover capital losses and executive bonuses.

The move towards this bailout legislation was opposed by the majority of Americans, but they moved forward with it. We can now say “I told you so.”

Now the auto industry will receive $25 billion with another $25 billion waiting in the wings. I have already voiced my opinion on that subject, “Big Three Bailout”.

Our government believes that there is an unrestricted surplus of our tax dollars available for them to use as they wish. Our Founding Fathers never intended for collected taxes to be used in this way. The taxes collected by the government from citizens were intended to be used for the good of all citizens not a select few. We live in a free market, capitalistic society, and one where businesses succeed of fail based on their business practices. If greed drives the business, it is destined for failure and this has been realized in our financial industry. Where is it that our government can find the right to interfere in that market?

In 1979 Chrysler Corp’s then CEO Lee Iacocca made a trip to Washington to look for a bailout for his struggling company. He was successful in securing $1.2 billion in federal loan guarantees and Chrysler had recovered but the end of 1983. But, what was the actual cost and did this bailout actually prove to be the element of success for Chrysler. In an article by James K. Hickle from July 13, 1983 and published by The Heritage Foundation, Mr. Hickle addresses the real reason for Chrysler’s recovery. To summarize, Chrysler Corp operated as if they had filed Chapter 11 without actually doing so. They contacted their suppliers and renegotiated their debts and contracts. Chrysler’s work force also suffered. 20,000 white collar jobs were cut and 46,000 hourly employees lost their jobs.

“Many observers, including Senator William Proxmire (D-Wisc.) complain that the number of employees laid off at Chrysler in this period is at least as large—and may even have been larger—than the number of jobs that probably would have been lost had Chrysler actually been forced into bankruptcy.”

”The truth is that the Chrysler Corporation has gone bankrupt by every normal definition of the word. In the past three years, Chrysler has renegotiated its debts and restructured its organization in a way that greatly resembles a company going through Chapter 11 bankruptcy. Its creditors, like those of bankrupt firms, were forced to swallow sizeable losses.

This was the result of a clause in the Chrysler Corporation Loan Guarantee Act of 1979 that required creditors to make certain "concessions" to Chrysler. With this clause to exploit and with Treasury Department officials, including then-Secretary William Miller, pressuring its creditors, Chrysler was able to pay off more than $600 million in debts at just 30 cents on the dollar.

So who will be next? Will Wal-Mart and Target, Lowes and Home Depot or a couple of the big warehouse clubs come seeking “Bailout”? Where will this end and what will the cost be for the government’s meddling in the business world? If I bet the farm on investments or a business venture and it went south, would I have the availability of some one else’s money? Just because you are “Big Business” and have friends in high places, does this give you the right to fringe benefits at taxpayer’s expense?

So what does this all mean? It looks like we are heading down this same road, only at a much larger scale. The rules are changing from day to day, thus making this bailout more volatile than the market or economy itself.

If we do not study and learn from history, we are destined to repeat our mistakes. Our government is heading do that exact slippery slope.

John Stone

TakingBackAmerica.org