Dear Sirs:
We all watched with interest as the United States Treasury, at the request of the Federal Reserve, guaranteed the purchase of Bear Stearns at a 95 percent discount. According to a Treasury department memo, the American taxpayers will be on the hook for $30 billion (and probably a great deal more). We were informed that this was necessary to help solve a “liquidity crisis.”
A liquidity crisis is when Ole drills a hole in the stern of his boat to drain the water that is rushing in from a hole in the bow of his boat. Drilling a hole in the Stearns of this economy will have the same result.
These various taxpayer-financed initiatives have as their biggest beneficiaries the same financial executives who made outlandish mega-buck salaries, which were justified by the “risk” they were taking. Well, now that the risk has come home to roost, we have had market capitulation—but it’s been capitulation by the federal government. To rephrase businessman and politician “Engine” Charlie Wilson’s comment about General Motors: What’s good for Goldman Sachs is good for America.
While Wall Street and its many masters of the universe require unlimited taxpayer bailout, let us suggest that there are even more worthy objects of your beneficence.
You may have read that news-papers are rapidly going broke. Newspapers are even more vital to the functioning of our democracy than are investment banks. In a little-noticed financial development, newspapers now securitize their income stream by selling their subscription income in tranches to small regional banks. These subscription-time regional income baskets—or STRIBs, as they are known—have been the only thing keeping most newspapers alive for the last several years.
Because you no longer have to go through Congress for appropri-ations, we believe that a binding memo from the U.S. Treasury back-stopping these STRIBs—or better yet, just buying them—would go a long way toward preserving the institution of the free press. A total meltdown of our democracy will thus be avoided.
Of course, the beneficent government is already sending out $40 coupons in the form of plastic debit cards to all people who aver that they have an analog TV set, which will be rendered (almost) obsolete when the television waves go digital in February of next year. I’m sure both of you already have your plastic debit card, but for others that think I’m making this up, you should visit the digital television section of Best Buy. Of course, this was vitally necessary to prevent a meltdown of the electronic broadcasting industry.
By this same token, I’m appealing to you to issue $40 plastic debit cards from the U.S. Treasury for all of us who still have our 8-track audiocassettes—now rendered obsolete by MP3s and other audio formats. A total meltdown of the music business could be averted and, after all, what a sorry place this world would be without music.
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