Slowly but surely, public outrage is building in reaction to the seemingly endless parade of monetary bailouts of irresponsible corporations by the federal Government. The Financial behemoths getting assistance are teetering on the brink of insolvency because of unquenchable greed. The most appalling case is AIG, the insurance and financial services behemoth that laid waste to itself by taking on way too much risk without nearly enough capital. The rationale for the injection of hundreds of billions into the financial sector has been that a collapse of the big banks would quickly trigger a deep depression that would hurt everyone. And while such a doomsday scenario is certainly plausible, that still doesn't explain why the government bailouts have been so poorly designed that they have essentially become gifts from taxpayers to irresponsible companies. When it was first announced the government would be bailing out shaky financial institutions, the news wasn't warmly received by the public, but there was some hope that if the program were effectively administered it might prevent an economic collapse. Now months later, the public rightfully can't quite grasp how so many billions have disappeared down a rat hole with so little to show for it.
The government's reaction to the financial crisis is exposing the unfairness of our capitalist system that is hidden in less perilous times. It is hard for the public to swallow that the same rapacious financial industry that lobbied for a more draconian bankruptcy law and got it enacted is now being saved by ordinary taxpayers who have been regularly fleeced by the big banks. Though it is laudable the Obama administration has moved to enact legislation that will offer troubled homeowners help to stave off foreclosure, there is only a relatively paltry $75 billion earmarked for Obama's foreclosure rescue plan. To put this in perspective, this is far less than the financial help the government has provided to just one company, AIG. Which leads almost inevitably to the conclusion the government favors big corporations over ordinary people. And why shouldn't it? The big financial behemoths have essentially rigged the game by their sizable political contributions and lobbying efforts in recent years. This essentially is systemic corruption. Because the glaring unfairness has now been exposed, the public is understandably(and rightfully) not amused.
Though Obama has rightfully denounced the awarding of bonuses to AIG executives, it must be noted the real problem here is the TARP program(the plan hatched to save teetering financial institutions) is fundamentally flawed. Supposedly, the TARP was supposed to re-energize the moribund credit markets. Yet, all indications are the banks have essentially hoarded much of the money. This is not surprising given the current dysfunctional condition of the financial system. The banks don't trust one another and are consequently reluctant to lend to each other. It can only be described as criminally insane that the government has been willing to inject billions into the banking system without proper oversight and regulation. Trusting banks to do the right thing might not have seemed absurd five years ago, but it is nothing short of criminal negligence for the government to trust the big banks after their irresponsible behavior of recent years. Because there does not seem to be any end in sight to the government bailouts of greedy corporations, the public is getting angry.
Though Obama is the beneficiary of the honeymoon period afforded a new President, the honeymoon period won't last long if the populace believes it is being snookered. Unfortunately for Obama, recent development are revealing to ordinary Americans that our capitalist system is rigged in favor of corporations. If this trend continues, the public's outrage will continue to build and they may eventually turn against Obama.
