Since there’s one standard for automakers and another for bankers, the quickest way for GM to pick up some loose change would be to buy a few banks and thus get the company’s mitts on some of the Treasury’s $700 billion. If insurance companies are doing it, why not GM?
A story on the Bloomberg wire on November 17 told us that four of the world’s biggest insurers, including Transamerica and Hartford Financial Services Group, may buy some ailing S&Ls in trouble with the Office of Thrift Supervision for making shifty loans. That way the insurance giants can join the excited line at the back door of the Treasury’s Troubled Asset Relief Program (TARP) and dip into the moolah. “Hartford’s $10 million acquisition of Sanford, Florida-based Federal Trust Corp.,” Bloomberg’s reporters wrote, “may entitle it to $3.4 billion of U.S. capital. Lincoln National in Philadelphia may win access to $3 billion by taking over Newton County Loan & Savings, which has three full-time employees and $7.3 million of assets.”
Whenever the issue is one of giving money to big industrial corporations employing real, live workers, particularly workers in labor unions, the commentariat hauls up the Double Standard and nails it to the top mast, next to the Jolly Roger.
Last Sunday I had the usual urge to machine-gun the TV set while listening to the McLaughlin Group, all of whom presumably haul home at least $200,000 a year, as they deplored the unconscionable wages of line workers in Detroit. The same urge flares up when reading the Wall Street Journal‘s editorial page. As a matter of economic principle, the WSJ‘s editors have always taken a stern line about letting the weak die in the snow.
In the November issue of Le Monde diplomatique, editorial director Serge Halimi quotes George Melloan, a particularly bloodthirsty sidekick of the late Bob Bartley, commander in chief of the WSJ‘s editorial pages for many years. Melloan once recalled, “Before President Reagan, Jimmy Carter had named Paul Volcker Federal Reserve chairman to kill inflation. Paul invited Bob [Bartley]…and me to lunch at the New York Fed not long after he was selected, and asked: ‘When there’s blood all over the floor, will you guys still support me?’ I responded ‘yes’ without waiting for Bob, which was [a] clear breach of etiquette. There was blood indeed, as over-extended Latin borrowers and American farmers were caught out by a return to a sound dollar. But we held fast.”
So it was the law of the capitalist jungle for millions in Latin America or farmers driven to bankruptcy and suicide in the Midwest, but when it came to prostrate bankers, the Angel of Mercy descended from heaven and took up residence in the WSJ‘s editorial suite. On September 27 an editorial approved of the $700 billion banker bailout. Then came GM’s crisis. On November 10 the Angel of Mercy quit the Journal‘s editorial page abruptly: “We hope Messrs. Bush and Paulson just say no. The Tarp was intended to save the financial system from collapse, not to be a honey pot for any industry running short of cash.”