It's been a few years since I played the ponies market, but I remember a few things. Like, when a company is struggling and needs an infusion of cash, they can either sell more stock, or go find somebody with a bunch of cash. If their stock is tanking to the point where it isn't worth diddly squat, then they won't have much luck trying to sell more of it. It makes lousy wallpaper.
That's where we're at in America today. All these "TOO BIG TO FAIL" financial giants are, well, failing. They need cash.
And guess what? We, the American taxpayers, have become the venture capitalists of last resort.
On a conceptual basis, I'm okay with that. Since we get to play with the funny-money of the U.S. Treasury, it's not quite the same as maxing out our remaining credit cards. We won't actually feel the pain in the short term.
And hey, if somehow this thing works and the economy gets off the canvas (or, if you prefer, out of the toilet), some of us might actually have a job sometime next year.
But there seems to be a little piece of the deal missing. Those venture capitalists (you and me) who are pumping up all these TOO BIG TO FAIL corporations, are supposed to get a piece of the action.
That's what I want to see before the US Treasury hands out a gazzillion more dollars to guys in suits who have already demonstrated their incompetance by betting the store on a bunch lame ponies.
I'm okay with the U.S. taxpayers becoming controlling partners in these ventures (at least I'm more okay with it than I would have been if the Bushistas were still calling the shots while handing the cash to their corporate BFF buddies).
But here's what we should be getting out of the deal. We, the US taxpayers, should be reaping the benefits of our wild-ass investing in these broken corporations. Assuming they do get back on their feet, the US taxpayers should be first in line when the dividends start to roll again. That's the prefered position, and it's exactly what the US taxpayers are entitled to.
Now, I don't care if those dividends go to pay off the national debt, provide additional stability to Social Security and Medicare, fund national health insurance, or go into our IRAs and 401(k)s. Somebody smart can figure that out. I just want some guarantee that it's going to happen.
And if and when all these TOO BIG TO FAIL financial (and manufacturing, and whatever else) concerns get back on their feet and want to buy out their big controlling partner, the US taxpayers, then that can certainly be on the table. All they'll need is plenty of cash.
"You only paid to see the cards. Lessons are extra."
-- Lancey "The Man" Howard (Edward G. Robinson) in The Cincinnati Kid