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A guest post from Constantine von Hoffman, veteran business journalist and author of the blog CollateralDamage.biz, a humorous look at marketing, business and his dog.
In a time of economic crisis, where every moment brings more bad/alarming news, what does it mean that we are essentially in a holding pattern for the next two months?
Many people are concerned this will mean a continuation of the Paulson strategy of throwing good money after bad. (“Am I the only one worried that by the time Obama is sworn in on January 20th, the Paulson Treasury will have run through almost a trillion dollars to little or no effect?) Currently there are attempts to qualify GM as a bank so it can get a cut of the bailout money (LOL!!!). A similar request by GE makes more sense to me because GE is a well-run company. Several large cities are also making requests for funds. Personally, I’d give funds to Wasilla before I’d hand a dime to GM.
Still others think that Paulson and the Congress will take this moment to do nothing — and that’s a good thing. Oklahoma Sen. Jim Inhofe thinks this is such a good thing that he wants to legislate a freeze on the remaining bailout cash. (Inhofe’s willingness to rip Paulson a new one is a great indicator of how the Bushies are closer to dead-duck instead of merely being lame: Senator Inhofe suggests Paulson “may have given the [bailout] money to his friends.”)
The last major outbreak of government stasis — when Gingrich et al. shut down the government and kept passing level-funding resolutions for all departments — certainly resulted in a lot of good things. It got us our long-departed budget surplus. It got us the truly amusing Monica-gate (remember when we thought that stuff was important? Ahh, the good old days.) And it showed us exactly what a wiener Gingrich was. A bipartisan win! Of course times were different then. We weren’t in two wars and a “recession”. Tax revenues were rolling in and not spending them meant putting money in the bank.
This time it is difficult to see maintaining the status quo as a good thing. Despite swearing that he wouldn’t reat this money as a blank check and just spend it on whatever he wanted to, Mr. Paulson has done just that. Even so, doing nothing is probably a bigger risk. Taking minimal action was how we wound up with the Great Depression, after all.
Fortunately, the Bushies and the GOP are against bailing out the auto industry. Also, I am not particularly worried about the proposed bailout of the auto industry in this rump session. If Congress even manages to pass the clearly needed extension on unemployment, it will be nothing short of a miracle. Sadly, my hopes diminish with the next congress.
What is clear is that it is time to shorten the time from the end of an election to when the new regime takes over. We’ve done it before. Originally inauguration day was March 4th. It clearly needs to be moved up to at least Jan. 1.
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