Wall Street Bailouts Are at Your Expense

Lehman Brothers, it was announced Sunday, are not to receive a government bailout. Well whoopdee-do.

In the business world that I live in if my business fails it goes bust or bankrupt. However, it seems that if a bank or financial institution goes bad, the Federal Government bails them out.

We're being taken for suckers. Why? Because the governments generosity draws from the same place - the taxpayer's pocket - yours; mine. It may be wrapped in a ribbon and a bow and called something technical, the bottom line is, it's your money they're shoveling.

Take Lehman for example. They lent money on iffy loans. Times were good. Brokers, shareholders and bankers made money. What a party. The economy turned, the loans went bad and the bank CEO, with blubbering lower lip and tears in his eyes, turned to the government for help. Unfortunately for Lehman there is an election weeks away and they got shown the door. That is not always the case.

Interestingly, when funds are given to the banks only the bank shareholders benefit. That's right, the poor guy in foreclosure benefits not one bit. They're out one way or the other.

Banking; what a business.

When times are good they make money - no problem there; when times are bad we give them money. You can't beat that. Next time you're downtown count how many of the buildings owned by banks (most) are for sale (none) to get an indication of how lucrative a business it is. It's truly a beauty.

And to show just how good it is here's how a bailout works. The average Joe with a troubled loan can't repay the bank and loses his home. The bank gets money from the Federal Government to cover the financial loss and the bank gets to keep the home. Think about that for a second. That's the best deal ever.

These are the same banks that, with a straight face, charge their customers $32 for an overdraft - to the tune of $19 billion in annual revenues - regardless of what straits those customers might be in; even those earning $7 an hour, for whom an overdraft fee is a half day's wages. (A story for another time about a potentially devastating lawsuit for the banks that's bubbling away on the back burner.)

Meanwhile the Federal Government is giving Fannie and Freddie's CEO's, Herb Allison and David Moffett - the leaders of two of the largest failed financial institutions in the history of mankind - an 'exit package' of up to $24 million each. As opposed to say 20 years in jail for gross mismanagement.

Bollix I say! We've been collectively bent over a barrel and have been getting supremely shafted for too long.

It's time to stop the merry-go-round, allow the banks to fail and let the chips fall as they may. For those who don't make it, McDonalds is always hiring.