The Senate has approved yet another version of the Bailout Plan. Except, we’re NOT supposed to call it a “Bailout” anymore! The Bush Administration came up with the term to describe its plan to “solve” the nation’s financial crisis. But the B-word is now a nasty, dirty word! (Pesky reporters still keep using it, but we’ll try not to!)
Bailout, (sorry), connotes a sinking ship. One where the Coast Guard is plucking desperate, drowning people from a choppy sea, while sharks close in. From now on, it shall be referred to as a: “Rescue” plan/package. We are still using the Coast Guard, but now, the boat isn’t sinking. It just ran out of gas!
There is no arguing that the crisis will reach Main Street. It’s already hitting High Street. Companies are scaling back on expenditure and Connecticut casino Foxwoods just cut some 700 jobs. In my home state of Massachusetts, the government could not raise money! Treasurer Tim Cahill says they couldn’t sell enough bonds or get a loan! Banks told them no! Wow!
Apparently, the state anticipates it will collect X-amount in taxes, and then borrows against that hoped-for amount (Why not? Aren’t we all living off credit, anyway?) But this time, the state got a shock. There was no credit! And soon the shock may be ours…
We’re now looking at budget cuts, including local aid to state retiree pensions. So while some of our representatives were on TV explaining why they voted against the bill, the state treasurer was getting a big NO from banks. See how voters like that!
So far this year, the financial-services industry has already lost 110-thousand jobs. Some experts predict another 60-thousand could be lost. Some 12-thousand people reportedly lost their jobs when banking giant Citigroup swallowed up Charlotte-based Wachovia Bank, the nation’s sixth-largest lender.
Lehman Brothers had 25-thousand employees when it filed for bankruptcy. Bank of America bought another failed investment bank, Merrill Lynch…what about Merrill’s 60-thousand employees? Analysts say Lehman and Merrill Lynch together account for 50-thousand job losses! And we haven’t even factored in Bear Sterns, AIG, Fannie and Freddy!
The auto industry also announced some 15-thousand job cuts last month…nearly a 100-thousand so far, this year. And it’s likely to get worse. Sales at Ford, Chrysler and GM are down by about a third, (compared to this time last year) and even Japanese makers like Toyota, Honda and Nissan are not immune.
New figures also show that manufacturing is contracting. We’ve apparently hit the lowest level since October 2001! The Institute for Supply Management says we are near recessionary levels!
So U.S. Congress…Rescue or Bailout? Deal or NO Deal?
Somehow that’s not exactly making for a bright Christmas.