The FreeDictionary.com defines the word “bailout” as “a rescue from financial difficulties.” That was the term used to describe the initial government action and spending that occurred while Bush was still in office. We were told at the time that the $750 billion raised and appropriated by Congress at the behest of the President and his folks at the Treasury was to prime the pump so that cash-strapped banks and other institutions could begin lending again—entities deemed by the government “too big to fail.” And of course, it seemed plausible—and I only use that word with reservation—that because many of the lending institutions were in a jam due to failed mortgages and other similar loans (otherwise known as “toxic assets”) mostly due to government rules and regulations as dictated through Fannie Mae and Freddie Mac, they (the government) help clean up the mess. Of course, when the government gives out money, it comes from you and me.
And once the financial industry got their hands on this “bailout” money, other industries—most noticeably the automobile industry—decided to follow suit and came calling with outstretched hand looking for some, too. A business model based upon endless credit to keep production going to pay for expenses incurred previously and no cushion to fall back on, coupled with labor unions unwilling to give the slightest concession, is nothing more than the proverbial “sword of Damocles,” ready to drop at the first wrinkle. In this case, when the credit markets dried up, so did auto sales, as many people suddenly lost the ability to borrow because there was no money left to lend. At this point, we know that a “small” amount “bailout” funds have been funneled to the automakers, but we still hear that several are on the brink and in need of much more. The question is whether more money will really help fix the problem, or simply perpetuate systemic problems for another day? The same question applies to the financial institutions noted above.
As we moved down the road from the Bush Administration to the Obama Administration, it appeared that the word and notion of a “bailout” lost its luster. Time for a new word… The FreeDictionary.com defines “stimulus” as “something that acts as an incentive to (someone).” As you all know, following the bailout came the “stimulus” with a promise to “jump start” the economy. I guess it only seemed right—if “priming the pump” didn’t work, a “jump start” would come next. Of course, what came next was the stock market continued to tank and peoples’ money continued to evaporate—along with even more jobs. It seemed that the only good thing about “stimulus” was that it made for good fodder for jokes.
“Yo, Doug, feelin’ ‘stimulated’ today?” Of course the answer is, “Not really. But I AM getting bleeped…”
Uh-oh– Time for ANOTHER new word… and fast! Enter the term “recovery.” Ah yes, a much more positive word. Maybe this will be the one that gets the job done for Team Obama as they seek to “fix” the economy. Again, let us turn to the FreeDictionary.com, which defines “recovery” as “the regaining of something lost.” How perfect. As the government continues to dole out our children’s grandchildren’s great grandchildren’s money hand over fist, it can now claim to do so all in the name of going back to the way things were. Or something like that…
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