Saturday, August 1, 2009

Cash for Clunkers.

You are, by now, well informed on the governments "Cash for Clunkers" program where you can get up to $4500 if you trade in your old car and buy a brand new one. President Obama's idea on how to jump start the car industry after gifting GM and Chrysler with a speedy bankruptcy and money that, I bet, will never be paid back in full.

Be that as it may, this program appears to be working and the government is going to throw more money at it. For you Small and Family Owned Business owners, I would like to propose a new government program. Cash for Whatever! If what should be done to make the economy right is throw money at it, they why not just throw some to small businesses who need to get jump started again. Or, give them money if they have too much debt and it would be better if they didn't so lets eliminate their debt and make the banks suck it up.

It aggravates the snot out me that Washington is now mad at the salaries and bonuses paid to banks that were in trouble. I am not. Several of them have paid back their TARP funds (a few were not allowed to pay back the money because the government deemed them to not have enough equity if they paid back the money. And of course we know that he government is the best person to determine how solid a bank is and to establish equity requirements.) and are now profitable and the government doesn't like it one bit. Do you know why the banks are paying it back faster than first thought? Because they are risk takers every time they make a loan and they are doing that. Because they do not want the eyes of the government controlling them and limiting their pay. As long as they have TARP funds, salaries at the top are limited. And lastly, because they are creative business people who understood that the economic situation was not a depression or even near one and they just pulled up their boot straps and did what they had to do. One bank I read about, took their recent profits and divided equally to all their employees. How novel. Lincoln Electric has been doing that for years.

What does that have to do with Cash for Clunkers? I am not sure but I decided to rant about it.

What do you think?

1 comment:

  1. I think a lot of the problem with the Cash for Clunkers program, is that it brought the desired car buyers into the dealerships, but the dealers can't get the paperwork processed with the gov't to get their money back. Looks like a lot of dealers may be stuck with the $4500.

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