The joy of $700 billion — especially when it isn’t yours

October 27th, 2008 at 06:46pm Annette LaCross

Published Oct. 27:

Dollar stores and discount retailers are reporting mostly positive earnings these days as skittish consumers retrench.

I find some rampant ironies in this.

Not in jittery consumers, of course, or the relative good fortune of certain retailers amid a teetering economy and the ongoing histrionics of Wall Street.

But as we pinch our pennies — a sensible response in such an environment, it seems to me — the government is giving away as many as it can, as fast as it can … more than $1 trillion and counting (that’s a lot of pennies) to make sure the people who drove us to dollar stores are still around to see tomorrow.

Once again, your tax dollars are hard at work as the Treasury Department, the Federal Reserve and Capitol Hill fight over which one gets to hand out the most taxpayer money to the fattest cats in the financial sector.

Oh, and let’s not forget the fat-dumb-and-happy guys who are busily cashing multimillion-dollar paychecks while we stare numbly at the stuff on Wal-Mart’s shelves.

That’s stretching reality a little thin, but it sure sounds outrageous, doesn’t it? I get mad just thinking about it.

Don’t get me wrong — I’m all for the $700 billion bailout plan Congress passed this month, for admittedly selfish reasons.

Without it, it would have taken a good many years for the economy to right itself. Companies and banks in untold numbers would have fallen — maybe rightfully so — but it would have protracted the situation in which we now find ourselves.

If one fell, we probably could have weather the storm. But the storm has grown to mythic proportions, and nothing short of divine intervention will subdue that tempest.

Enter the U.S. government — not exactly divine, but the only earthly presence with the power to march in after the fact and try to jump-start the markets before the rest of us all move to Canada.

And $700 billion is just the tip of the iceberg. Don’t forget, the government first stepped in back in March when the first rescue package was announced — a $29 billion loan to JPMorgan Chase & Co. in a sweetheart deal so Morgan could buy failed investment bank Bear Stearns. Whose executives, by the way, are still under indictment.

Eight months later, $29 billion almost sounds like cab fare, doesn’t it? After weeks of being pummeled by dollar figures so astronomical they’re impossible to fathom, the money we paid to help JP-Morgan buy another company is just … well, cute.

And therein lies the danger. This is real money. Our money. And when it becomes meaningless — understanding $700 billion in any real or meaningful way is like trying to swallow a doorknob — it opens the door to all sorts of unintended consequences.

We are, for the most part, comfortable blaming old-fashioned greed as one of the biggest contributors to this crisis. Can you just imagine what kind of greed kicks in when we start handing out this much free money?

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