# So our bailout money isn't going to be used for what we thought it would? **URL:** \ **Category:** The BBQ Pit\ **Created:** [October 25, 2008, 4:57pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527 "2008-10-25T16:57:17Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![dgrdfd](https://avatars.discourse-cdn.com/v4/letter/d/eb8c5e/32.png) [@dgrdfd](https://boards.straightdope.com/u/dgrdfd)\ **Post date:** [October 25, 2008, 4:57pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/1 "2008-10-25T16:57:17Z")
> [@](#): > > First, the $700 billion rescue for the economy was about buying devalued mortgage-backed securities from tottering banks to unclog frozen credit markets. > > Then it was about using $250 billion of it to buy stakes in banks. The idea was that banks would use the money to start making loans again. > > But reports surfaced that bankers might instead use the money to buy other banks, pay dividends, give employees a raise and executives a bonus, or just sit on it. . . . > [@](#): > > Other planned uses of the bailout money have lawmakers protesting, although it is only fair to note there is nothing in the law that they just wrote to prevent those uses. Fuck everyone. ---
**Author:** ![Enderw24](https://avatars.discourse-cdn.com/v4/letter/e/ba9def/32.png) [@Enderw24](https://boards.straightdope.com/u/Enderw24)\ **Post date:** [October 25, 2008, 5:05pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/2 "2008-10-25T17:05:15Z")
> [@dgrdfd](#): > > . . . > > Fuck everyone. I’m shocked. Shocked! to find they’re gambling with our money in this established economy. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [October 25, 2008, 5:13pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/3 "2008-10-25T17:13:31Z")
From the New York Times, “The chase for a piece of the Treasury Department’s $700 billion bailout program intensified Friday as the government considered extending it to include insurance companies as well as banks.” Also, “Michigan’s Congressional delegation is urging the Treasury secretary and the Federal Reserve chairman to use their authority as part of the $700 billion bailout package to help more consumers obtain car loans, warning that the tightened credit markets were endangering millions of jobs.” And by the way, that last bit comes after this, “A proposed $25 billion federal loan program to help retool the American auto industry would speed the development of electric cars and other alternative-fuel vehicles, a Chrysler executive said Wednesday.” Any other time, a $25 billion loan for the automakers would be front page news. Now, it’s barely noticed. ---
**Author:** ![Hyperelastic](https://avatars.discourse-cdn.com/v4/letter/h/a3d4f5/32.png) [@Hyperelastic](https://boards.straightdope.com/u/Hyperelastic)\ **Post date:** [October 25, 2008, 5:20pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/4 "2008-10-25T17:20:37Z")
Well, the government just gave PNC bailout funds to buy National City Bank. One reason National City became a target is that it was deemed unworthy of bailout funds itself. So here I am, paying federal taxes in Cleveland that are being used to shut down one of our biggest employers and most important corporate citizens. Back when we used to manufacture things, some people said the government should have an industrial policy like many other countries: they should protect certain vital industries until they were profitable, and provide more funding and tax breaks for research. But that wasn’t allowed, because it would be “picking winners”, so every goddamned factory in Cleveland went belly up. Well, what the fuck is the National City deal but the government picking winners? I expect Dennis Kucinich to have an aneurysm over this any minute. He voted against the bailout both times. I predict approximately none of that auto industry money is going to go into research. It’s all going for pension and healthcare expenses. All that shit would have ended up on the government’s plate anyway once the automakers bite the dust. How did motherfucking banks and financiers get so powerful? How did they set things up so they can get government money, but manufacturing can’t? Is it a simple matter of corruption? These fucking bankers have spent so long buried in their spreadsheets that they have forgotten the only thing that generates an overall return on investment: productivity. Without productivity, all the wheeling and dealing and mortgages and bonds and all that crap are just a zero-sum game. Finance used to be a means to enable productivity, but nowadays productivity is a means to enable finance. It can’t go on like this forever. Government intervention or not, we are in for a hard fall. ---
**Author:** ![1010011010](https://avatars.discourse-cdn.com/v4/letter/1/ea666f/32.png) [@1010011010](https://boards.straightdope.com/u/1010011010)\ **Post date:** [October 25, 2008, 5:25pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/5 "2008-10-25T17:25:07Z")
I’m not sure what you thought, but I’d say it’s playing out as expected. ---
**Author:** ![dgrdfd](https://avatars.discourse-cdn.com/v4/letter/d/eb8c5e/32.png) [@dgrdfd](https://boards.straightdope.com/u/dgrdfd)\ **Post date:** [October 25, 2008, 5:32pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/6 "2008-10-25T17:32:00Z")
Oh, and here’s my cite I should have put in the OP: [Yahoo Finance - Stock Market Live, Quotes, Business & Finance News](http://biz.yahoo.com/ap/081025/meltdown_evolving_bailout.html) ---
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [October 25, 2008, 6:13pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/7 "2008-10-25T18:13:51Z")
> [@Hyperelastic](#): > > \Government intervention or not, we are in for a hard fall. And taking the rest of us with you. [On a positive note, the developed nations of the world are working on a plan to not let the rampant greed, corruption and stupidity in the US destroy everyone’s financial heath.](http://www.ft.com/cms/s/0/34a9c294-a09b-11dd-80a0-000077b07658.html) I hope. ---
**Author:** ![Morgenstern](https://avatars.discourse-cdn.com/v4/letter/m/f9ae1b/32.png) [@Morgenstern](https://boards.straightdope.com/u/Morgenstern)\ **Post date:** [October 25, 2008, 6:19pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/8 "2008-10-25T18:19:42Z")
With 700 billion on the table, don’t expect anything to go as planned. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [October 25, 2008, 6:19pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/9 "2008-10-25T18:19:54Z")
> [@Dewey\_Finn](#): > > And by the way, that last bit comes after this, “A proposed $25 billion federal loan program to help retool the American auto industry would speed the development of electric cars and other alternative-fuel vehicles, a Chrysler executive said Wednesday.” Any other time, a $25 billion loan for the automakers would be front page news. Now, it’s barely noticed. Incidentally, that “proposed” auto industry “loan” isn’t proposed at all. It was passed - _before_ the bailout itself was. I started a Pit thread about it. ---
**Author:** ![Boyo\_Jim](https://avatars.discourse-cdn.com/v4/letter/b/87869e/32.png) [@Boyo\_Jim](https://boards.straightdope.com/u/Boyo_Jim)\ **Post date:** [October 25, 2008, 6:22pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/10 "2008-10-25T18:22:09Z")
> [@featherlou](#): > > And taking the rest of us with you. [On a positive note, the developed nations of the world are working on a plan to not let the rampant greed, corruption and stupidity in the US destroy everyone’s financial heath.](http://www.ft.com/cms/s/0/34a9c294-a09b-11dd-80a0-000077b07658.html) I hope. Maybe Canada could come up with a bailout plan to buy the US. In anticipation, I’m trying to use the tern ‘hoser’ at least once a day. ---
**Author:** ![Peanut\_Gallery](https://avatars.discourse-cdn.com/v4/letter/p/838e76/32.png) [@Peanut\_Gallery](https://boards.straightdope.com/u/Peanut_Gallery)\ **Post date:** [October 25, 2008, 6:27pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/11 "2008-10-25T18:27:00Z")
Hey look on the bright side. We have taken a \*step up \*from handing out suitcases full of hundred dollar bills! At least this time we have some general idea of who is fucking us. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [October 25, 2008, 7:46pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/12 "2008-10-25T19:46:39Z")
That is why the true staunch citizens, the members of both parties, in the House that voted against this bailout bill twice, were right. This is like handing your drunk brother-in-law a thousand bucks cash so he can find a place to sleep for a couple of days, buy some clothes and look for a job. There were no failsafes in the plan to keep him from blowing it on hookers and cocaine. This was just a multi-hundreds-of-billions of dollars appropriation to an executive department head with absolutely no oversight as to how it was spent. ---
**Author:** ![levdrakon](https://avatars.discourse-cdn.com/v4/letter/l/49beb7/32.png) [@levdrakon](https://boards.straightdope.com/u/levdrakon)\ **Post date:** [October 25, 2008, 7:53pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/13 "2008-10-25T19:53:20Z")
A trillion on Iraq. A trillion on this economic big business bail-out. Where does 2 trillion come from, and why doesn’t it get spent on things I want, like the space program, or education, or healthcare, or blanketing the country in solar panels? I’m tired of hearing, “we can’t afford that.” ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [October 25, 2008, 8:19pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/14 "2008-10-25T20:19:57Z")
> [@Really\_Not\_All\_That\_Bright](#): > > Incidentally, that “proposed” auto industry “loan” isn’t proposed at all. It was passed - _before_ the bailout itself was. I started a Pit thread about it. Sorry, I must have missed your thread. And that’s the weird thing. A $25 billion bailout passed without, as far as I can tell, much comment. The Chrysler bailout in 1979 (of “only” $1.5 billion) passed only after much debate and discussion. But this one seemed to involve much less discussion. On the other hand, Obama’s talk with Joe the Plumber about the idea of increasing taxes on the wealthiest Americans engendered a _lot_ of discussion. We seem to be at an age when spending government money is much easier than raising it. And as **levdrakon** suggests, a lot of other things we could spend money on (social services, healthcare, infrastructure, alternative energy, research, etc.) get money only reluctantly. ---
**Author:** ![Ichini\_Sanshigo](https://avatars.discourse-cdn.com/v4/letter/i/d9b06d/32.png) [@Ichini\_Sanshigo](https://boards.straightdope.com/u/Ichini_Sanshigo)\ **Post date:** [October 25, 2008, 8:28pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/15 "2008-10-25T20:28:47Z")
> [@levdrakon](#): > > A trillion on Iraq. A trillion on this economic big business bail-out. Where does 2 trillion come from, and why doesn’t it get spent on things I want, like the space program, or education, or healthcare, or blanketing the country in solar panels? > > I’m tired of hearing, “we can’t afford that.” QFT. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [October 25, 2008, 8:35pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/16 "2008-10-25T20:35:44Z")
I’m kinda busy. Please insert my standard “running dog jackals of the Wall Streeet ruling class” rant here. ---
**Author:** ![Vox\_Imperatoris](https://avatars.discourse-cdn.com/v4/letter/v/f9ae1b/32.png) [@Vox\_Imperatoris](https://boards.straightdope.com/u/Vox_Imperatoris)\ **Post date:** [October 25, 2008, 8:44pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/17 "2008-10-25T20:44:29Z")
> [@jtgain](#): > > That is why the true staunch citizens, the members of both parties, in the House that voted against this bailout bill twice, were right. > > This is like handing your drunk brother-in-law a thousand bucks cash so he can find a place to sleep for a couple of days, buy some clothes and look for a job. There were no failsafes in the plan to keep him from blowing it on hookers and cocaine. > > This was just a multi-hundreds-of-billions of dollars appropriation to an executive department head with absolutely no oversight as to how it was spent. Exactly. I don’t know what people were thinking when they supported this in the first place. Oh wait, yes I do: “Capitalism has failed and the nation’s economy will be destroyed if this bailout isn’t passed!” So goes another lesson that people will learn and forget about 5 minutes later. Valete, Vox Imperatoris ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [October 25, 2008, 8:50pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/18 "2008-10-25T20:50:48Z")
> [@levdrakon](#): > > A trillion on Iraq. A trillion on this economic big business bail-out. Where does 2 trillion come from, and why doesn’t it get spent on things I want, like the space program, or education, or healthcare, or blanketing the country in solar panels? > > I’m tired of hearing, “we can’t afford that.” Can’t do that, ol’ bean. Funding those things would shift the fundamentals of our economy over to a different sector, and the people in the sectors getting the big bucks now would have to either figure out how to adapt or go broke, and asking them to do that would be downright unAmerican. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [October 25, 2008, 9:01pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/19 "2008-10-25T21:01:32Z")
Back around the beginning of the month, I kept hearing [how tough a bargain Hank Paulson would strike with those failing banks.](http://delong.typepad.com/sdj/2008/10/dean-baker-on-t.html) Color me unimpressed. FWIW, [the WaPo also did a story about this](http://www.washingtonpost.com/wp-dyn/content/article/2008/10/21/AR2008102102520.html) on Wednesday: > [@](#): > > ``` > In an appearance on "Charlie Rose," Paulson said acquisitions were "not the driver behind this program. The driver is to have our . . . healthy banks be well-capitalized so they can play the role they need to play for our country right now." > > ``` > > \ > When the Treasury’s program was announced last week, some bank executives said they didn’t need the money and resented the federal intrusion. But in a number of earnings calls and interviews in recent days, several bank executives were more receptive. > > ``` > The federal deal is relatively sweet in financial terms -- it requires banks to pay 5 percent interest annually on the investment over the first five years -- and some bankers said they would not pass it up. > > ``` So the ‘bailout’ consists, in pretty sizable part at least, of giving sweet deals to healthy banks that don’t need help. Swell. :mad: ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [October 25, 2008, 9:25pm UTC](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527/20 "2008-10-25T21:25:16Z")
[Here](http://www.nytimes.com/2008/10/25/business/25nocera.html?partner=permalink&exprod=permalink) is Joe Nocera’s column in the New York Times today. During an employee conference call at JPMorgan Chase, an employee asked how the $25 billion the bank received from the government would affect its plans to make loans. The answer, as given in the Times: > [@](#): > > Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase. What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop. In short, they plan to use the money to buy stuff. [Next page](https://boards.straightdope.com/t/so-our-bailout-money-isnt-going-to-be-used-for-what-we-thought-it-would/469527.md?page=2)