The Trickle-Down Becomes A Brown Flood

(Subtitle:  Maybe Stalin was on to something.)

A while back I mused about why Wall Street was being bailed out and Main Street wasn't.  

By now, nearly $1 trillion of your dollars (and some of mine) are being added to bank balance sheets where, so the story goes, combined with large doses of good intentions and some rare intelligence, they'll "un-freeze" credit markets...whatever the hell that means.  At least that's the spin being spun by all the ex-Wall Streeters now infesting Washington.

Funny thing though, when asked what his bank planned to do with its newly-found $25 billion in taxpayer largesse, J.P. Morgan Chase President Jamie Dimon reportedly said "...not a damn thing."  He's gonna let the funds sit there, maybe do an acquisition or two.  So much for un-freezing, but it does re-spin the bailout as an exercise in Wall Street embracing risk if there's upside benefit and then fleeing when it explodes in their faces, leaving middle-income taxpayers to mop up the downside s**t-storm.

And like predictable dominoes, it's now old-line industrial America trooping down corridors of power, empty hats in hand.  Auto companies, their suppliers, labor unions, financing arms and dealers, even whole states like Michigan and (egads!) California, all want their piece of taxpayer absolution for accumulated decades of strategic and leadership sins. 

Unfortunately, along the way to the drunken bailout orgy, too few otherwise smart people had their "John the Baptist Blinding Flash Of Light Holy S**t" moment, as in,

"Holy S**t!  Economic activity is way down! Nobody's buying!  Nobody's spending!  Nobody's investing!  Consumers are frozen! Hey!  Maybe banks and car dealers would do better if CONSUMERS were doing better!  Maybe, just maybe, MAIN STREET drives WALL STREET, not the other way around! Uh-oh we've got it bass-ackwards!  Holy S**t!"

Well, duh.  Consumers aren't spending cuz they fear getting laid off (or already have been) and cash is king when the times ahead look pretty tough.  Until you fix THAT and regain CONSUMERS' confidence and get the MAIN STREET economy growing again, bailing out the economy's financial and industrial sectors AIN'T GONNA WORK!  At best the fix'll be short-term and, given their current cash burn rates, in six months they'll all need to be re-rescued, again at taxpayer expense.

But hey, it's only money!  Fine, rescue banks and auto companies and Michigan's clueless Governor (part of The Messiah's economic transition team...go figure.)  In some ways it's probably inevitable and inescapable.  Long-term though, none of it's gonna work until you fix MAIN STREET!

If they'd done it my way - starting at the bottom and letting the benefits trickle UP for a change - maybe the first trillion dollars woulda worked.  As it stands now it's gonna cost at least twice that, though the rank pragmatist in me says if you put a few of Wall Street's big swingin' d**k bankers in front of a firing squad it'd probably be fixed next week and cost almost nothing.

Geez.  I sound like a freakin' populist.  Who knew?  

Just kidding about the firing squad.  Probably.  Definitely kidding about the big swinging d**ks; Wall Streeters are all far too labial for that.