It’s reported today (Reuters, BBC) that the US government is again offering a massive cash injection to the banking giant Citigroup, this time in return for shares to the tune of $20 billion. The group still claims to be in financial hardship, despite the previous cash bailout totalling $25 billion. With these repeated bailouts it has to be asked why they have also announced a total of 75,000 job cuts. Where is the money going exactly?
It seems that all the losses are again being given the socialist or perhaps Keynesian treatment to try and resolve them, something neo-liberal economists claim is a failure, when the economy is having one of its high-flying booms. The taxpayer is, again, picking up the bill.
In Britain there has been advice coming in from all quarters as to how Alistair Darling (Labour’s chancellor) should shape his coming plans. The shouts for him to do his utmost to close the tax gap by ensuring that tax evasion is reduced, thereby recovering the 40+ billion pounds lost in tax every year by tax evasion, will probably pass him by. The likelihood is that he will pander, in fear, to big business, hoping that they won’t carry out their eternal threats to remove their operations from Britain to another country more willing to reduce their tax burdens.
This is the real picture: the people ultimately responsible for financial collapse want to be bailed out on their terms with no risks to themselves. The public has no duty to save these companies, this only benefits the CEOs and their million dollar consultants. IF they fail, then let them file for bankruptcy; no one bails out the small man, they take his home instead.
In this precarious financial situation, everyone should be told where the bailout money is actually going, who is spending it and on what. At the rate jobs are being cut it seems it isn’t doing anything to prevent what it it is supposed to prevent.