Leading the World in Selling Nothing.

I am going to admit this right off the bat: I have not done and solid research before making this post. I have been to the internets before (over 7 years!) and I know that research is rarely (never) needed before you put something on-line.

I'm sure everyone is aware that Congress is currently considering a "bridge loan" for the Big 3. This is quite often compared to the recent Financial Bail Out passed hastily by Congress. There are several differences between these two, so i'm going to compare and contrast to give my ramblings some structure.

1.a. The Auto Bailout is, in fact, a loan designed to give the automakers enough credit to survive until concessions by the UAW take effect. Ford may not even need to use this line of credit. The automakers, should they regain profitability, would repay the taxpayer money. The last I heard the Big 3 was asking for about $34 Billion in loans total.

1. b. The Financial Bailout is about $700 Billion, which ballooned to over $800 Billion after Congress got their pet projects attached to the bill. Instead of being a loan, there are some various regular and preferred stock options that the government has attached to the bank bailouts... This does mean that IF the banks turn around, we may get a chunk of that money back. I am unsure what sort of guarantee if any there is on money given to other companies such as insurance giant AIG. I am assuming it is probably another form of stocks.

2. a. One of the main beating points from the media over the Big 3 bridge loans was the use of private jets by Auto Executives. The PR was so bad that the Auto CEOs actually drove from Detroit to Washington for their next meetings. That is an incredibly stupid, empty gesture that achieved nothing. GM is not going to be saved because it sells it's Jets. It was essentially Congress forcing the Big 3 to bow down before them like dogs and beg. And why? Because Congress desperately needs to try and regain face after bending over for AIG.

2. b. Since being bailed out out twice, AIG has planned to pay executives $503 Million in "retention bonuses". Basically, they plan to overpay their executives on a massive scale to prevent them from leaving for greener pastures. These are the same executives that ran the company into the ground. The Financial industry is, rightfully so, shrinking at the moment. There are thousands of qualified businessmen looking for jobs right now. There is absolutely no reason anyone should overpay to higher an AIG employee away from them, and therefore no reason to really overpay to keep an AIG employee from bailing ship. They should be thankful they still have jobs. In addition to this little ploy, AIG was also famously caught throwing massive retreats and parties for employees after getting bailed out. Our taxpayer money has gone to sending their already over compensated employees on some unnecessary retreat.

3. a. Congress has actually made the good move of demanding the Big 3 present some sort of plan before receiving a loan. This is a good move and should not be criticized.

3. b. Congress made no move whatsoever to require a plan out of the Financial Sector. We gave them $700 Billion and have no idea where any of it is going.

4. a. Congress was in such a hurry to pass the Financial Bailout because "financial experts" said an imminent shutdown of the economy was about to occur (These same experts, and many congressmen, happen to have worked for all these banking companies before. Many of them plan on returning to spots on the board of executives when they are done working for the government. It's in their best interest that these companies survive and profit unharmed). Basically, the financial industry was going to go bankrupt and need to be painfully rebuilt. No one wants this.

4. b. Nobody is in a hurry to pass the Big 3 Bridge Loans. A main argument against them is that the better course of action is to just let the Big 3 fail, as their are already "broken beyond repair".

That is where I become confused. It is okay to allow a major section of American Industry to fail, causing millions to be unemployed, therefore putting a major dent in middle-class consumer spending. This is okay because the industry is already "broken". If you ask me, our financial industry is clearly also broken. Yes, it will be painful to rebuild it. But maybe we should.

Poor decisions and fraud are everywhere in the financial industry plagued by greed. There are accounts of loan applications being doctored by the financial companies (approved by high level execs) in order to sell more mortgages (which were then packaged together and sold off like stocks). They were essentially issuing bad loans and then using them to gain more capital. That's what scares me about the financial industry... It thrives off greedy people finding ways to make money without producing anything. Why can't we let that fail? Doesn't anyone want to see the financial industry fixed the way people want the auto industry fixed?

That's what is scares me about America. Over time we have turned away from actual industry/making actual products and toward making money off of the work of others. Americans have fired their fellow countrymen in order to pay poorly for other countries to make our products. We've made it so that knowing a physical trade... actually creating a tangible product for your living, is seen as a dirty occupation. Nobody wants to be a carpenter or an electrician anymore in America. Those are jobs you get if you can't be a lawyer or CEO.