Look, I am not any big fan of bailing out a bunch of Investment Bankers and banks. Fine, I am not a fan of the idea at all. And I am not going to spend too much time on the negatives, the golden parachutes, idiotic CEO pay scales, and the like. These have all been well documented and hammered home on virtually every blog and Tweet on the subject.
However, in all the negativity on the subject, something has gotten lost, and I don’t think (well I know, but I didn’t want to overstate it) many quite understand the gravity of the situation, and why it wasn’t just an “easy” decision for lawmakers to just tell these companies to, “go ahead and fail,” or ”you made your your own bed.” It just isn’t, as much as we would like to think it is, to untie these situations from the rest of the economy because of the scale of it all.
A car dealer not far from my home, Bigelow Motors, had been in business for 66 years. It had weathered upturns and downturns many times over the years, but they were basically forced to close their doors this past week. The reason? They lost their line of credit.
In my own business, there are times that I need credit to cover the time between when I secure the supplies I need and the time my client pays me. Without that line of credit, I am seriously hampered in what I can do and what orders I can complete.
This is a common way of doing business for companies big and small (only the size of the line of credit changes). From small corner delis that need to cover stock to mega corporation deals, there is very little that is done “in cash” because income and outlay do not always line up nice and neatly.
Obviously, the impact on business also affects employment as well. Everybody at that car dealership I mentioned earlier is out looking for a job now. Unemployment is up all over the place, and would only get worse as businesses need to either cut back or shut down because they are not able to conduct business as usual.
So, just understand, it was not a “no-brainer” to just vote this bill down. (Well, it was in that crazy first draft sent over from President Bush, but that was pretty much obvious to everybody except I guess President Bush and Treasury Secretary Pauson). Is it ideal? No. Did it have to be as quickly as it was? Unfortunately, Yes.
While people joke around now about how it hasn’t fixed everything already, this plan it going to take time to actually start having an effect, so even now we are still in crisis, but everyday that it waited is more time until implementation takes effect, and the more business that are apt to fail if this wasn’t passed in some form.
What I think a lot of people are shocked with, it that they got a good look at how Washington works. The sort of wheeling and dealing (and pork additions) that happened here goes on constantly. It is “how things work” and while this is no secret, it was clearly (and expensively) on display here.
I guess what I am trying to say here is, that I am not saying you shouldn’t be angry about what is going on. I sure am. But be angry at the right people, for the right reasons. Look to former Texas Senator Phil Gramm and his slipping in of the Commodity Futures Modernization Act (CFMA) that enabled things like the Enron collapse, and the bundling of “derivatives” that helped make this mortgage crisis possible. Be angry that this same Phill Gramm is on John McCain’s short list to be Treasurer of the United States. Be angry at those that politicized this process and demanded pork for their vote. But don’t take a “yes” vote in and of itself to be the whole reason. This really wasn’t an easy situation for anyone to swallow, and there are valid reasons to have voted for the bailout. The damage has long since been done, and now it needed to be fixed to keep the situation from getting worse.