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I thought my first blog entry would be something sexy, but unsexy thoughts preoccupy my mind.  I have been doing a lot of thinking about this stimulus bill, and I am sure some of you have been preoccupied as well.  With all this bullshit about a NY Post cartoonist depicting the writer of the bill as being a monkey, I decided to delve into into the numbers and find out exactly how unintelligent and monkey-like the logic behind the bill actually is. Also, I want to know who the organ grinders are.  More after the jump.

First of all, as of Friday, February 20th, the market cap for Citicorp was 10.53 Billion dollars.  Waittaminnit!  What? Yep.  $10,530,000,000 is the total value of the company based on it’s stock price.  But didn’t they just get $45 Billion in stimulus money?  Yep.  So they are effectively worth less (35 billion less, to ballpark it) than the amount of money that they took from the taxpayers.  Now, if someone handed you 45 billion dollars, how much would you be worth?  I would imagine 45 billion minus whatever you owe on your mortgage, car, and credit cards.  So about 45 billion dollars. Ok,  about $44,999,900,000.  Sounds to me like we, the taxpayers,  are throwing good money after bad money that we threw at really big greedy assholes.

The idea of giving so much money to a company that has acted so irresponsibly is itself an act of irresponsibility.  The mystery is, and remains, why are we doing it?  Does Citicorp have some kind of a magical grip on the government psyche that has them convinced that it can’t fail?  Maybe so.  If you, like me, have less than $250,000 deposited in Citibank, then you have nothing to worry about if the bank fails except for maybe a slow payout by the FDIC.  What if you have more?  I mean a lot more?  Then you should be worried.  So who does the bailout protect?  Obviously people much wealthier than you or I.  So you, the taxpayer, have generously given up your hard earned cash to save the rich bastards that caused this mess in the first place.

I want to know why Citicorp isn’t forced to sell off it’s profitable units for cash and use that cash mitigate the losses of its unprofitable units.  I would guess (wildly) that if they did so, there would be no need for any public assistance at all, and that a more responsible bank operator would step in to take it’s place if it folded.  Survival of the fittest.  Easy concept.  The average person would be better off if they were allowed to fail.

What about the auto industry?  Too big to fail?  Maybe so.  One in 10 people work in or around the auto industry in this country and putting them all out of work would be bad.  Or would it?  Many of these people had a hand in the demise of the industry by demanding unreasonable labor contract terms which include job banks where they get paid to sit around and do the jumble in the local paper.  Would the factories and the robots and the computers and the dies and the various other hard assets disappear into thin air if GM failed?  Probably not.  Someone would probably make a lowball offer, break the union, and step in to start making cars that make sense.  One in ten people work in the car industry.  One in 15 people are already unemployed, and rising.  Combine the two for 17 per cent unemployment overall.  That is less than most of Europe and less than almost all of Asia.

Citicorp got money to loosen up the credit markets, as did Bank of America, Wells Fargo, and many others.   These banks then turned around and raised credit card interest rates and reduced credit limits to many of their customers, while not increasing lending in any way.  This shameful practice was uncovered BEFORE the second stimulus bill was passed.  So whose side do you think the government is on?  Certainly not mine.  Many recipients of stimulus money assert that they need the money to cover short term expenses, such as payroll and purchasing.  Everyone knows someone who owns a small business.  Walk into the small business of your choice and ask what happens when they can’t make payroll.  I’ll help you out with that one.  They lay a few people off, or they tap an emergency fund, or they change their business model (raise prices, etc)  to try to generate more income.  They rarely go to a bank to ask for a loan because the bank will almost always say NO.  A small business owner would be forced to shutter his business if he couldn’t meet expenses.  Are they getting any help?  You know the answer to that one.  Are they too big to fail?  Obviously not.  How many people are employed by small businesses?  By some definitions (how big does a business have to be to be considered small) 6 in 10 people nationwide work for a small business.  Remember, only 1 in 10 work in the auto industry, and about 20 million or 1 in 7 work in some capacity for government (Federal, state, and local).  So lets break it down.

14,000,000 in auto industry and peripheral industries

20,000,000 in government

87,000,000 in small business.

9,000,000 give or take, unemployed

24,000,000 in other large business and finance.

154,000,000 is the total estimated workforce (These figure is from the 2005 Department of labor report combined with census data, the most recent I could find).

If you loosen lending or provide government direct lending to small businesses, you help save the vast majority of jobs that exist in our economy and also create new jobs.  If you fund only big business and banking, you only encourage bad behavior and irresponsible business practices.  Give the average Joe $300,000 to start a business and he will likely put 10 people to work.  That’s ten people that pay taxes and buy cars, groceries, and homes.  Tell me how many people are going to buy homes with the $20 billion that GM wants.

I think it’s fairly obvious that a whole bunch (barrel?) of monkeys wrote this bill and that their organ grinders are the fattest fat cats in the country.  And calling our legislators monkeys is an insult to your average monkey’s intelligence.