I must have been dozing in government class when they explained the part about how the U.S Constitution grants the legislative or executive branch the power to bail out failing businesses.
Joking, of course. Here's what the Constitution actually says: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
No, this isn't the start of a civics lesson. But what with the laundry list of corporations on Wall Street and Detroit lining up for government assistance, how long before a company from the technology industry decides to get in while the getting is good?
Considering current events, that's not a far-fetched possibility and the candidate company need not be one step away from intensive care. Take a gander at Thursday's Wall Street Journal story reporting on on the latest holdup: In this case Bank of America is about to get another TARP bailout from Treasury Secretary Hank Paulson--not because the company's teetering on the edge, but to help close its acquisition of Merrill Lynch.
The Journal article notes that BOA is "now broadly exposed to the nation's economic ills. With its recent acquisitions of troubled California mortgage lender Countrywide Financial Corp. and Merrill, the bank is now a major player in every corner of the battered U.S. financial system."
Of course, nobody put a gun to CEO Ken Lewis' head. He decided BOA had an opportunity to build itself into a financial services superpower while his competition was failing. And so he took a shot.
Since Paulson is in such a giving mood, why shouldn't the same privilege get extended to Advanced Micro Devices or Yahoo or Palm? Thousands of people, who depend on their livelihoods--directly or indirectly--will go on the dole if those companies continue to sink. And what would be the implications of losing such centers of technology innovation? Surely, that can't be in the national interest?
And while the printing presses are still warm, why limit the list to companies piling up red ink? For instance, Dell is not losing money but it's no longer the powerhouse it once was. That can't be good for the industry or the country. Michael Dell is working on that question as we speak and no doubt, could do wondrous feats if Uncle Sam offered $20 billion or so. And that would be cheap compared with the $25 billion BOA already received from the government. I'm sure some nitpickers may call for congressional scrutiny, but if we're already betting that Rick Wagoner can revive General Motors, why is Michael Dell not an equally good risk?
Of course, the answer is that all this borders on the insane. Then again, it fits with the ridiculous times that we inhabit. In case you missed it, Hustler magazine wants a porn industry bailout. Why not? Nothing is too crazy in Bailout Nation, folks.