Another day, another disappointment for the hapless Obama administration. Today it’s AIG bonuses. Already, our eager beaver President has taken on stimulus, healthcare, bailouts, education, war, the return of blue M&M;’s. You name it, everything’s a priority. Unfortunately, he’s done it all with the soft-touch of a trusting, gentle Democrat. I started wondering, OK fantasizing, how would Tony Soprano handle AIG and the other alchemists on Wall Street?
Let’s start with a basic premise: anyone who can fondle a Thinkpad for 4 hours and claim to have generated a real asset worth millions – without exponentially increasing risk – is a liar and should be treated that way.
So when someone like that suddenly pleads poverty, you have to be suspicious – very suspicious. Tony Soprano would be. Instead of breaking with the Bush administration on funding bailouts, Obama has continued this welfare program. And who lines up for welfare faster than a good capitalist?
Tony would have taken a different approach. If Tony spent $50,000 for a truckload of Rolex watches, but received only two watches and the rest in derivatives based on Rolex watches, he’d be a little upset. Would he:
(a) Continue to spend more money in the hopes of someday getting real watches
(b) Demand such exorbitant terms, that his business partner would never cross him again
(c) Break his supplier’s legs and feed him the two Rolexes that were shipped
Yes on TV, I’d want to see option (c). In real life, (b) would do just fine. The US government, which is broke, does not have the capital to reinflate the derivative bubble. (Imagine Tony paying $50K over and over when there are only two real Rolex’s in every truck). Therefore, the best solution is to offer painful, loan-shark terms – 15-30% interest on government loans, full repayment in 5 years or asset seizure, etc.
Would this force these companies out of business? Maybe one or two. More likely, what it would do is compel them to find private sector solutions…and believe me they would. Sadly, neither Obama nor his sidekick, Timmy “Nerfballs” Geithner, have the guts of Tony Soprano…or Meadow Soprano, for that matter. Where’s Pauly Walnuts when you need him?