fail / bail

Can my company get a bailout? Watching the economy implode has been frustrating and fascinating at the same time. But you don't necessarily feel the effects until your job security is in jeopardy. While the subprime mortgage mess got messier and Wall Street self-destructed, I continued to collect paychecks and paid my thankfully fixed-rate mortgage, bills and car notes. Even shopped a few times while shaking my head at the growing financial crisis.

Then came the layoffs at my company. 10% of the workforce gone. The president announced sales getting worse next year with more layoffs scehduled for next January. Yes, its not as bad as other companies - but it doesn't make it easier to hear. The whole culture has changed. What was always a stable work environment during my time has changed into a place of paranoia, nervousness and concern. People are wondering who's next. Unproductive people were cut first, but ultimately no one is safe.

One morning, I was talking to a buddy in another department at his desk. He was away on family vacation during the layoffs and said he was thankful to still have his job upon returning. 30 minutes later, he texts me from his home saying he was laid off (after 11 years of service). His wife has a struggling business and they have 2 kids in daycare and an expensive mortgage. Luckily, he gets severance and he'll collect unemployment. But they'll likely have to downsize housing, cram all their medical checkups before their current health insurance runs out. Pull kids out of daycare and look for more affordable care (or relatives). Lives get turned upside down and its mind-blowing how so many people are in this same boat. A boat with that Titanic feeling. This isn't the Great Depression, but are we approaching a "Little Depression"?

Call me late to the party, but now I've pulled back on my consumption. And now, I can see firsthand why the economy isn't moving. People don't spend or borrow when there's no job security. Worse when they're unemployed and in debt. Simple but true. I suppose we're paying for the sins of over-consumption and reckless spending. But for us common folk, we're paying for the sins of others. Reportedly, $300 billion of the bailout has been wasted - given to big banks for their own purposes (bonuses, shareholder benefits, unassociated acquisitions) rather than buying up clogged mortgage securities. How frustrating is this to watch when those AIG execs take a lavish half-a-mil spa vacation a week after getting bailed out? Or when those Detroit auto execs take a private jet to Washington to beg for taxpayer money? Its like going to collect welfare in a limo. You get the feeling that these fools will collect the bailout money and just commit the same mistakes again? Yeah, me too.

Just gotta hope Obama gets things in order. It seems he has all the right people on his economic team. Although its funny seing Robert Rubin advising when he directed Citigroup through its current mess...


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