Blue-Collar vs. White-Collar Bailouts: ysabetwordsmith

Blue-Collar vs. White-Collar Bailouts

My partner Doug pointed out something to me recently, regarding government assistance to troubled businesses. People who shower before going to work get treated better than people who need to shower after work. When the government was dealing with auto companies, and workers who put cars together, it took the approach that workers "must" make "sacrifices" in order to get government money. Retirees were stripped of benefits they had been guaranteed in their contracts. But when the government was dealing with banks and financial institutions, and workers who sit at desks manipulating largely imaginary money-data, it took the approach that contracts are "sacrosanct" ... and when taxpayers complained about paying bonuses, it was "how dare" the "angry mob" intrude into private business matters and threaten contracts. The plain fact is, the people receiving the millions of taxpayer dollars in bonuses were making more money in the bonus alone than most auto workers make in a year on their base salary -- many times as much.

The less money someone has, the less they can afford to lose before they get to a point where not even frugality and sacrifice will stretch the funds far enough to cover utilities, food, health care, and housing costs all of which have risen much faster than wages. The more money someone has, the more leeway they have to lose some of it, because they can reduce spending on luxuries for quite a long time before they have to start crossing items off the grocery list to pay for medication. If rich people have less spending money, they might make fewer investments and slow the economy a bit; but if working-class and poor people don't have enough income for basic expenses, the whole economy collapses because people can't afford the goods and services made by the businesses in the first place. Therefore, when it's time to make "sacrifices," it is more appropriate to start that at the top of the income slope, not the bottom.

America doesn't do that because it respects wealth more than practicality. It respects people who handle large sums of money, even if they do their job so poorly that their company flounders, more than it respects people who handle very small sums of money, even if they are extremely frugal with it. No matter how little you have, it is your fault if you can't make it go far enough, and you're "lazy" and "stupid." But if you have a lot of money, you are "crucial" to the economy and "brain power" to your company, and it is not your fault if your bad decisions destroy your company and/or the economy.

What a bunch of bullshit. Thinking like this is contributing to America's slide down the achievement slope.

oakwind

March 29 2009, 15:43:17 UTC 12 years ago

New comment

I hope you will send this to the Whitehouse or at least some version of this. As someone who can articulate extremely well you make a good spokesperson. Maybe if enough ppl point out the disparity someone will feel obligated to do something. It could happen...

thetathx1138

March 29 2009, 16:02:13 UTC 12 years ago

While I don't think blue-collar workers should get screwed, and I don't approve of bailouts...

The reality is, the UAW's benefits really were unsustainable, and they didn't care. I firmly believe in unions, but they need to be as market-minded as companies or, well, things like THIS happen.

veronica_milvus

March 29 2009, 17:11:36 UTC 12 years ago

It's because the collapse of banks affects everybody, and every business, that we can't afford to let them fail and we can't afford to piss off the intelligent people who work in banking.

But some of the people are not as intelligent as we had all hoped. And in my company, we only get bonuses if the company is performing well, and we are performing well as individuals. Any bonus that is compulsory in someone's contract and has to be paid even when the company fails is not a bonus at all. It baffles me why they are still entitled to any.

The reason people are generally well paid is rarity value. If the world were stuffed full of talented footballers, they wouldn't be earning £50,000 per week. Garbage men and office cleaners might be absolutely necessary to the functioning of society but someone else could be easily trained to do their job, therefore they are dispensable.

It's just supply and demand.

A competent and ethical banker ought to be worth her weight in government bonds these days, since we now know how rare such people are.

siliconshaman

March 29 2009, 21:12:05 UTC 12 years ago

I suspect that a lot of it also has to do with the fact that the people make the decisions about bailouts and who gets to make sacrifices, are the sons & daughters of white collar workers themselves...
in their world, if one works hard and is smart, one gets rich. Ergo, those who aren't are stupid and lazy.