BAD ATTITUDE

BAD ATTITUDE 

I am starting to worry about the bailout. Or bailouts. 

Not the economics of it, or them. I think I understand that as well as most Americans who don't run around with Ph.Ds in economics mounted to their walls.

Certain institutions are too big to fail in the sense that the consequences of failure for the rest of us are enormous and inequitable. Neither you nor I, for the most part, made the bad decisions at AIG or Fannie or Freddie, so it's not right that we should feel the potentially fatal pain of their incompetence. If, however, they fail, we will too. Because we shouldn't, the Government intervenes. In saving the big shots from their bad bets, we also save ourselves, which was the main idea in the first place. The big guys become what economists refer to as "free-riders," unintended (and undeserving) beneficiaries of the safety net erected to catch the rest of us. 

All of this, I get. 

What I am failing to understand is the sheer idiocy exhibited by many of those who now have become recipients of our forced largesse. And I am now worried about the fall out. 

Here' s what I mean. 

When I was a boy growing up in Brooklyn, there were really only two ways to get in trouble at home. At a minor level, my sister or I could blow off a chore or not make our bed or get a little too sassy for a ten year old. These usually resulted in, at best, a raised eyebrow (or a forced march back to the unmade bed). I call these minor infractions because they compared not a whit at the level of consequence to what was the only major infraction. 

Which was Exhibiting a Bad Attitude. 

The attitude offender was in big trouble in my Brooklyn. After notice, indictment, trial and conviction on the charge -- for which, I should add, I still received more due process than the detainees at Guantanamo -- the penalty was a sour look of despair, one that said you were still loved but for now not respected. This was a killer for me. Mostly because I really loved my mother. Who, I believe, pretty much wrote the book on Good Attitude. In truth, it wasn't all that hard to avoid the problem of bad attitude. Generally speaking, good attitude was more or less a subset of good manners and keeping one's ego in check. If you said please and thank you, shared the toys (or even better, gave one up), did the minimal chores with a smile on your face, and made sure there was desert left for someone else when you eyed your slice of the pie, you were pretty much home free. 

That, it seems to me, is what is missing from all these bailouts. 

We just gave Hank Paulson $700 billion in walkin' around money, his to dispense in an effort to unclog the artery known as credit which is threatening America and the world with an economic coronary. This followed an $85 billion infusion to AIG. We now know, however, that the banks aren't lending nearly enough of the $250 billion they already have mainlined, and that AIG is still showering its executives with overwrought compensation and other goodies, and charging us for the privilege. 

This is bad attitude run amok. And it is catching. 

Today, the newspapers announced that GM's CEO, Rich Wagoner, was demanding a federal bailout for that company. GM apparently does not have enough cash (or cash equivalents) left to meet its operating expenses through the end of the year. The right and the left have now assumed their regular positions, the former arguing it's all the unions' fault, the latter pinning the blame on a management that wasted its time lobbying Washington to kill higher fuel economy standards while Toyota and Nissan were designing and building hybrids. Ford and Chrysler can't be far behind. Neither is profitable. And both endorsed the same failed business plan (if you talk to the left) or entered into the same union contracts (if you talk to the right).

In truth, both sides have a point . . . and are missing one. 

The business plans were stupid. They relied on the notion that oil would forever flow at $60/barrel or less, that climate change was a hoax, and that investing in a Congressman was better than investing in a plug-in. The labor contracts have now become unsustainable, but this is not because they are unfair. Rather, it is because the auto companies themselves have become so unprofitable. To lay that lack of profit at the feet of labor, moreover, is false. Toyota and Nissan aren't making more money just because they locate plants in right to work states and negotiate better deals with their workers. They often do neither of these things. 

The truth is, Toyota and Nissan are making better cars. 

They also are paying less in health care costs. When she was running for President, Hillary Clinton noted that GM was really a health care provider that happened to manufacture automobiles. And she was right. The solution, however, is not to blame the UAW for negotiating health care benefits for its members (or to praise Toyota and Nissan for having the foresight to avoid union contracts which could have required the same deal). It's to provide national health insurance. Unfortunately, when Hillary tried that in the mid-'90s, GM -- to use the language of my kids -- did not have her back. 

Americans are pissed. They did not give AIG $85 billion so that it could continue to run a toga-party at the public's expense. They were not interested in sending $250 billion to the banks so their CEOs could dither on lending the money while worrying about pools for executive compensation. And they don't want to give GM whatever it says it needs so that Detroit can lobby Washington to kill health care for all while it builds another gas guzzler no one buys. 

So here's my advice. 

Before Rich Wagoner goes hat in hand to a lame duck Congress and a now-I-am-worried-about-moral-hazard lame duck President . . . 

Before AIG spends another dime on an executive cruise . . . 

And before the banks hoard (rather than lend) another penny they get from Paulson . . . 

They need to talk to my Mom. 

'Cause these guys have a bad case of bad attitude.