Bailouts and Stimulus

In 2008, Banks and insurance companies perpetrated the greatest scam ever upon the American people. They essentially took America hostage and held a gun to it's head, boldly stating: "give us the money or we'll go bankrupt and kill the economy." Their mouthpiece was Henry Paulson, the U.S. Treasury secretary who "coincidentally" just happened to be an ex partner for Goldman Sachs, a bank holding company that stood to receive a nice, large chunk of any bailout money given out. This puke had the audacity to go down on one knee and beg Nancy Pelosi not to "blow it up" as he mistakenly feared the Democrats would do the right thing and send him packing. The cost in taxpayer money for this abomination was US$700 billion.

There is an easy way to smell out sleaze, either government or corporate; it's lack of public accountability. The Securities and Exchange Commission has denied a recent Freedom of Information request, seeking more information about the federal government’s bailout of American International Group.
Why is this secret? We are not talking about plans for the next nuclear sub, this a bailout of a private company with taxpayer funds, there is NO excuse for any secrecy.

Not surprisingly the bailout recipients have also been closemouthed, as the following quotes from this article point out.
From USA Today http://www.usatoday.com/money/industries/banking/2008-12-22-bailout-money-where_N.htm

"After receiving billions in aid from taxpayers, the USA's largest banks say they can't track exactly how they're spending it. Some won't even talk about it. "We're choosing not to disclose that," said Kevin Heine, spokesman for Bank of New York Mellon (BK), which received $3 billion."
Thomas Kelly, a spokesman for JPMorgan Chase (JPM), which received $25 billion in bailout money, said that while some of it was lent, some was not, and the bank won't say exactly how the money is being used. "We have not disclosed that to the public. We're declining to," he said."

The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings? And what's the plan for the rest? None of the banks provided specific answers.

"We're not providing dollar-in, dollar-out tracking," said Barry Koling, a spokesman for SunTrust Banks (STI), which got $3.5 billion."

How can these companies get away with taking taxpayer money, and then refuse any accountability for what they are doing with it? The answer is simple, the government gave out 700 billion dollars with almost no conditions attached. This, if nothing else, should show this scam for what it is, the biggest cash giveaway to giant corporations in American history. Think on that the next time some asshole politician tells you to "pull yourself up by your bootstraps".

Of course the argument from the other side was that these companies were "too big to fail". Let me play devils advocate and for the moment assume that is true. If they are too big to fail, then they are just too big and it's time to bust the trusts. If public money had to have been spent, any company receiving it should have had the CEO fired and been broken up into smaller companies. Furthermore strict public accountability provisions should have been attached to any funds disbursed.

Government cash giveaway part 2, the "stimulus".

I guess the U.S. really isn't running a deficit, as now we have government giveaway part two, this time to the tune of $787 Billion dollars. Unlike the bailout before it, the dispersion of funds from this are far more diverse. There doesn't seem to be the same level of secrecy with this as there has been with the bank/insurance company bailout, but the sheer scope of this makes tracing where all the money goes somewhat difficult. It's not all bad, but it does look like, as usual small business is getting the short end of the stick in favor of large corporations.

From: http://www.huffingtonpost.com/lloyd-chapman/obama-stimulus-plan-fails_b_349235.html

Firms with 20 or fewer employees are responsible for over 97 percent of all net new jobs, according to the most recent U.S. Census Bureau data. http://www.inc.com/news/articles/200708/data.html To date the Obama Administration has awarded less than one percent of all funds allocated under the stimulus to those firms.

I'll end this with a simple question; "what's next?" With no accountability required of them, what happens when the banks and insurance companies run through the bailout money? Are they going to come back for another 700 billion?
The economy is continuing to remain sour, what happens if in spite of the stimulus plan it gets worse?

References
http://en.wikipedia.org/wiki/Henry_Paulson#U.S._government_economic_bailout_of_2008
http://www.portfolio.com/views/blogs/market-movers/2008/09/26/what-was-paulson-begging-for/
http://www.businessweek.com/investing/wall_street_news_blog/archives/2009/02/bailout_secrecy.html
http://en.wikipedia.org/wiki/Stimulus_plan