Mark Patinkin: Bailout only for the rich
01:00 AM EDT on Tuesday, September 23, 2008
I called Washington to say Im ready to help ease the financial crisis.
We appreciate that, said Washington. What are you offering?
Id like you to bail me out.
Pardon?
As I understand it, I said, youre about to spend $700 billion giving top dollar to banks for their bad mortgages.
Thats correct.
Because if you dont, I continued, the banks will fail and cause a catastrophe.
A huge catastrophe, sir.
So I thought it would be patriotic to have the government bail me out, too. Its bad enough that Freddie, Fannie and AIG were about to fail. We cant let me get in trouble, too.
Its different. Wall Street faces unusual forces.
Actually, Main Street faces the exact same things: The collapse of real estate and the Dow means our net worth is down and our debt is up. So we can use a bailout, too.
To be frank, sir, youre not bright enough to understand what Wall Street is going through.
Which is?
The paradox of de-leveraging.
Isnt that an intentionally complex phrase to force us to trust you? And actually, I looked that up and it means government will hugely overpay to buy bad mortgage holdings so Wall Street doesnt have to take a hit by selling them at face value.
Sir . . .
Ill admit that, like Wall Street, I lived high off the housing bubble and stock market and relied on fantasy projections to tell myself my net worth would forever go up. But theres still one big difference.
Which is?
I didnt base bad bets on suicidal amounts of borrowed money like Wall Street did. Which I guess means they were even more irresponsible than Main Street, so remind me why they get a bailout and I dont?
Youre implying that Wall Streets beneficiaries are some privileged class.
Arent they?
Not at all. Just like normal folks, they put on their $3,000 Yves St. Laurent tailored pinstripes one leg at a time.
They do?
And some have had to downsize to interval-ownership luxury jets instead of owning their own.
Thats rough. But Im facing a hit, too. That $700 billion breaks down to $2,000 per American, which means my family of five will be on the hook for $10,000. Since youre investing my tax dollars in Wall Street firms, can I at least get some stock in return? That way if things turn around, Ill get a payoff for my investment.
Im sorry, we have to reserve those profits for the CEOs. For example, the ousted CEO of AIG was promised a $47 million parachute and the head of Lehman Brothers last year made $34 million on his way to bankrupting the company.
Then how about this: I had a bunch of stocks once worth $20,000, but now theyre only worth $10,000. Could you buy them off me at $20,000 so I dont lose money?
Are you crazy?
Well, youre giving $85 billion to AIG and $25 billion to Fannie and Freddie to make up for their losses. So why not make up for mine?
Sir . . .
By the way, how could a mega-insurance firm like AIG whose business is managing risk have so catastrophically mismanaged it?
Its not their fault. It wasnt in their computer model that millions of financially borderline people encouraged to take on huge mortgage debt wouldnt be able to pay.
That reminds me, my own house is down in value. Could you buy it off me for what I wish it was worth which is basically what this bailout is doing for Wall Street?
No can do. Youre too small. And frankly, your finances are nowhere near as bad as Wall Streets.
So, as The New York Times said, youre telling me that regular folks who are neither rich nor reckless have to bail out those who are both?
Yes. Well only bail you out if you squandered billions, not thousands.
So we have to live within our means, but Wall Street doesnt?
Exactly. And one more thing before you go.
Yes?
Keep your wallet handy. The automakers will need a bail out soon, too.
mpatinkin@projo.com
