Roger Marolt: Roger This
In early October 2008, just after receiving nearly $85 billion in bailout money from the U.S. taxpayers, the insurance giant American International Group, Inc. (A.I.G.) threw a lavish party at a California resort with a reported price tag of $440,000. Less than two weeks later the company picked up the $86,000 tab on a partridge hunting trip for some of its honchos. Executive Sebastian Peril allegedly told an undercover reporter that, The recession will go on until about 2011, but the shooting was great today and we are relaxing fine.Last week Merrill Lynch chief, John Thain, was ousted when it was reported that he paid out billions of dollars in bonuses to members of the firms hierarchy just before it was acquired by Bank of America under a government sponsored restructuring plan. Merrill subsequently disclosed that it incurred a pre-tax operating loss of $21.5 billion for the year. In his defense, Thain assured the American public that, the total bonus pool was substantially less than the amount allowed under our merger agreement [with Bank of America]. Shortly afterwards it was widely reported that Thain had remodeled his Manhattan office at a cost of $1.2 million dollars, including $38,000 for a toilet on legs.On Wednesday of this week, after coming under a firestorm of criticism, Citigroup announced that it was scrapping plans to purchase a $50 million Dassault Falcon 7X jet. Pressure came from President Obama, amongst others, after Citi received $45 billion from the government to keep it solvent.And you thought that the executives from General Motors and Chrysler arriving in Washington D.C. in an squadron of private jets to beg congress and the citizens of the United States to rescue them from self-induced financial ruin by giving them billions of TARP (Troubled Asset Relief Program) dollars was appalling. Are you angry? Are you indignant? Are you fed up? Are you near your tolerance level for wasteful and irresponsible spending in our government and corporate America? Are you mad as hell and not gong to take it anymore?!Okay. Get it out of your system. Then, stop being so damned emotional. Public outcry has resulted in the State of New York investigating the payment of those Merrill bonuses. John Thain has been fired and has offered to pay back the cost of his office remodel. Citigroup has not only cancelled its plan to buy that new Falcon jet, but an anonymous company spokesperson has said that the company is planning to sell three of the five jets it currently owns to assuage unfavorable public perception. And, in case you didnt notice, the automobile executives showed up to their second go-round with Congress after driving cross-country in four-door sub-compacts from directly off their own assembly lines. Can there be any greater punishment than that?So, where has this outrage gotten us in regard to the Great Recession we have been mired in since the beginning of 2007? Ill tell you. Nowhere. What has happened so far is that most of the billions of dollars borrowed from the taxpayers is sitting in banks to make their balance sheets look better by covering up toxic debt with the TARP. That doesnt help you and it doesnt help me.On the other hand, if we are honest and pragmatic in assessing the situation we are in, we might have to admit that wasteful spending, either by our government or large corporations, can actually help the cause. Unlike us in shock, the economy does not discriminate when it comes to spending. It likes stupid spending every bit as much as it likes prudent spending, probably more.There are people working at the Falcon jet factory who are certainly disappointed to hear that an order for a large jet has been cancelled. People at the large brokerage houses are now tightening their belts because they know that this years compensation packages are going to be scrutinized into a pittance of what they once where. General Motors executive airplanes in mothballs are not going to burn any fuel, require any maintenance, or need to be replaced anytime soon. Carpenters, architects, and furniture makers can now cross bankers names off their dwindling list of potential customers. How does this help an economy that is anemic from ironclad fists pulling household purse strings tight that used to be stretched wide, pouring out cash to satisfy every wanton desire?It may be that these high level, blatantly reckless expenditures have minimal effect on providing salvation for a country as vast and middle class as our own so that the average American can afford to be indignant towards the audacious spending of those in power, but what about us in Aspen? As fallacious as it is in most aspects of life that we try so hard to convince ourselves that we are performing exponentially better up here in the mountains, in one regard it is most certainly true: modern Aspen was founded on the stupidest spending of all, if I may generalize.If a man like John Thain spends over a million dollars refinishing the place where he works, how abundantly must he spend on the place that he lives, or more to the point, the place he vacations? How much has our local economy benefited in the past, and could so currently, from people like him coming to town? Have we ever, as a community, discouraged the prodigal sons and daughters of the world from taking temporary root here? Have we ever cared where their cash came from?It wasnt long ago that Ken Lay of Enron fame was a part-time regular in our town. To refresh your memories, he bought several homes. He reportedly tipped heavily. He donated hundreds of thousands of other peoples dollars to local charities. We smugly acknowledged the eventual revelations of his shenanigans with customary eye rolls and smirks, but we never disowned the bastard until he died and was no longer of any use to us.The truth of the matter is that the average American, Aspenites included, are scared. Much of the TARP funds that are targeted towards the newly cautious will immediately be used to pay down debt, which is only necessary and good for the long-term. However, if the aim of our leaders is to immediately stimulate economic activity to promote an expedient recovery, funds must make it into the hands of those who are not prudent, because those who are not prudent will spend it. In the case of Aspen, they have spent it lavishly. For our own good, please support stupid spending.
Roger Marolt hopes that some large chunks of TARP funds make it to Aspen soon. Contact him at email@example.com.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.