Bail-outs

I'm not an economics expert. I slept through freshman economics in college. The first day the professor told us "The most important thing to remember about economics is that there is no such thing as a free lunch."

I believed him, took his advice to heart and tuned out most of the rest of the class. I grabbed a nice nap each day. Payed a little attention occasionally and managed to get a B in the class. Most of the test seemed to be pretty much common sense. The stuff that wasn't so common was probably the stuff I slept through.

Regardless of all that I grew up trying to maintain a pretty basic set of personal economic principals. I don't spend more than I make. I pay my bills, then myself (savings), then if there is anything else, that can be used for play and fun. I try not to buy on credit except for large things like cars and houses. Everything else I don't buy it until I can play for it. Sure I use credit cards. But that is for convenience. I never charge anything I can't write a check to pay for in full at the end of the month, and then I do just that. I have been carrying credit cards for 26 years now and I have paid a monthly interest charge exactly 8 times. Five of them were the first five months I had my first card. When I discovered how much I hated paying that extra money I swore I wouldn't do it again. The other three times were one emergency purchase and twice that I screwed up and didn't get the check mailed in time.

This all brings me to all the bailouts that are being slung around by our elected officials in Washington DC. As a general rule I don't like it. Maybe there is some large overarching economic principals that I don't understand that make some or all of these bailouts necessary. But if we, the American taxpayers have to help these businesses out of the jams they are in I think there should be some simple rules put in place before we give them a single penny.

1. To the CEOs of these companies - If your corporation is in such bad shape financially that you need the rest of us taxpayers to bail you out, then you have obviously failed miserably as a CEO. Every member of upper management (top 3 or 4 tiers of managers including the board of directors) of any company that receives a bailout must be fired. No pension, no golden parachute, no bonuses, no recommendations. If you are this bad at your job perhaps you should try selling french fries at McDonalds. I'm sure there are plenty of good young businessmen out there that could do your job. At their worst they could probably do no worse than you did.

2. All contracts with any union that works for that company are immediately null and void. If those unions wish to continue working for that company they will have to renegotiate all contracts with the new management.

3. The idea that a company is too big to fail should be eliminated from our thinking. Any company that is too big to fail should not be too big to be broken into smaller pieces. Granted my thinking may be rather simplistic here. But would it not be better for our economy to depend on a hundred smaller companies each with a CEO who make a million dollars a year, than one huge company with a CEO who makes 100 million dollars a year. Take a lesson from the internet. Instead of one big router, the internet depends on thousands of interconnected routers. So if one of them fails the rest of them can keep working. Would this not work just as well with banks?

4. Finally before they give out even more dollar of bail out money, Congress needs to figure out that encouraging, forcing, blackmailing, or legislating banks to lend money to people who cannot afford to pay it back is what got us into this trouble in the first place. Continuing to do so will not help but will just hurry along the destruction of our great nation. Banks need to be free to determine who to lend money to on the merits of the borrowers ability to repay that loan without interference from the morons in Congress. To that end, Congress, as a whole, every single member has to stand up and say "I caused this problem and I am going to fix it." They they have to immediately change the rules to stop government meddling in the way our financial institutions do business.

That's it. Plain and simple. Maybe too simple, maybe too plain. And I doubt that any of it will ever happen. The morons in charge who think they are so much smarter than the rest of us will never see it my way. Unfortunately I only have one vote to try to change their minds by changing their jobs. And apparently a large portion of our country doesn't agree with me either because they keep right on voting these morons into office.