I have been thinking about the proposed bail out by the US Government to the tune of US$700 billion for banks and other institutions affected by the “global credit crisis”. It bothers me when I see any government writing big cheques for big business when individuals and small businesses do it tough thanks to circumstances not of their doing. The banks the US Government proposes to bail out actively participated in creating this problem.
I appreciate this may seem off topic. However, some of the challenges newsagents face are as a result of government regulation changes. While we have sought compensation for the government changing its mind, none was forthcoming. We did not ask for the regulation from decades earlier to change, we copped the consequences. We have moved on. If the Australian government joins the US giveaway then we have every right to be angry. Just as we have a right to be angry at the continued help to a bloated and inefficient car industry.
Why is it that governments so readily help the top end of town in these situations?
Jeff Jarvis at Buzz Machine has an excellent blog post on the US bailout.
If the government was not to bail out banks, and the bank went under it would cause losses of jobs for tens of thousands, shake the stockmarket, affect those with direct and indirect (via super)shareholdings and affect the other major banks with incresed panic. If a few (or even a lot) of the small people go under, they just disappear into the figures. Politicians need to be seen to be doing something and it will have a much bigger impact providing cash to big business than a small business who may or may not be able to weather the storm anyway. As for the car industry, we lose not only the car company jobs but it impacts upon our terms of trade and the loss of the component industry and the skills loss as well is seen as being a negative. Big job losses create loss of security and stability, which is better for everyone.