Robert Reich offers an explanation of the perverse narcissism of Wall Street (and the Treasury Department and Federal Reserve, which share Wall Street's mindset) that thinks Citigroup deserves a bailout while General Motors does not. Nutshell: Big financiers want to believe that they are special, that their money games are more vital to the economy than manufacturing real goods, not to mention the jobs and communities GM more directly supports.
Reich is no champion of free money for GM, either: he notes that both GM and Citigroup are in trouble because of their own management blunders. He just wonders why, if we have tax dollars (or unused deficit capacity) to throw at losers, we don't help the losers who do more immediate good for American workers.
Listening to Bob Edwards Weekend yesterday, I heard a NASA supporter, maybe an astronaut in training, respond to a question about whether we can afford to fund NASA when we have to deal with the economic crisis. He noted that NASA's budget ($17.3 billion this year) is a tiny fraction of the hundreds of billions of dollars we are throwing at failing banks. [Paraphrasing] "Instead of throwing money at failure," he said, "maybe we should try throwing money at success."
Throw money at success. We can conjure up hundreds of billions of non-existent dollars to protect bankers and investors who made selfish, stupid choices. Yet we scrape together maybe $20 billion next year for brave women and men who risk their lives for science, exploration, and the future hope of mankind (not to mention GPS and Google Earth).
Want to stimulate the economy, or even just keep it alive? Let Citigroup and GM sink. Let's throw money after some winners. I'll bet $700 billion could build a whole lot of moon rockets and Mars Rovers (how about Pluto Rovers?!).
Or if you don't want to build the Enterprise, let's look around for some successful existing enterprises that deserve a reward. Someone out there has got to be making good products, services, and investments. Maybe we should match every dollar we hand to losers like Citigroup and GM with a dollar to winners like First Bank of Madison and American-based Toyota factories (oops, wait a minute...).
I can think of a host of success stories whom we could reward with some economic stimulus:
- South Dakota teachers: producing above-average graduates on the lowest teacher wages in the nation. Dump some $10,000 bonuses on them; those teachers will spend that money on books, computers, decks and landscaping....
- Soldiers: National Guards leaving their jobs and families for mulitple tours, dodging snipers and roadside bombs, coming home with lifelong injuries. Time for some bonuses. Big bonuses. Three million personnel in the regular ranks and reserves, $10,000 each, extra for war-zone duty... $100 billion would cover that.
- College graduates: let's forgive student loans! But not every student loan: Uncle Sam let's you off the hook, but only if you get straight 4.0 (o.k., maybe a 3.6), and only if you get it done in four years. No dinking around—the economy needs you!
When you bet on the stock market or the horses, you generally don't lay your money on a losing streak. You look for proven performance. Let's stop throwing money at failure. Let's look for programs and people—like NASA, teachers, and soldiers—who continue to prove they can succeed.