We All Deserve a Bailout
Henry Paulson, secretary, U.S. Department of the Treasury
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.
Americans spent more than $300 billion on legalized gambling last year. Much of that money was lost—which is as much a surprise to lottery-ticket buyers as rising interest rates are to adjustable-rate mortgage (ARM) holders. Housing has varied in value since yaks were traded for yurts, but who could possibly have foretold that ARMs would ever be adjusted higher, or that house values would ever cease to go up? And really, is there any difference between holding an ARM that cannot possibly be repaid and holding a lottery ticket?
Yet, through absolutely no fault of their own, the vast majority of people who hold lottery tickets never see a return on their money. We would ask that the Fed open its borrowing window to exchange Federal Reserve notes for lottery tickets. Most legalized gambling operations are incredibly profitable—on a par with the outrageous megabuck salaries of the masters of the universe—because they are monopolies enforced by sovereign powers. If we persist in not bailing out individuals who, through no fault of their own, are unable to get any return on their lottery tickets, we risk the entire meltdown of gambling monopolies. You can bet on it.
Please let me know where I can turn in my 8-tracks, lottery tickets, and old newspaper subscriptions. We really need the money.
Vance K. Opperman
Unintentional Financial Victim