Thursday, February 05, 2009

Bad excuses and simple economics: Taxpayers subsidizing corporate excess AND religion

Wells Fargo, one of the largest banks in the country, received $25 billion in taxpayer money as part of the recent bank bailout. Apparently, running a business so poorly that you need a $25 billion handout is all the more reason to celebrate—only under increased public scrutiny did the Wells Fargo executives cancel a lavish Las Vegas junket. This did not come without some severely lame rationalization. The spokesperson for the company said that “recognition events are still part of our culture”. Recognition events are fine—how about a cake or after-work drinks on the boss? In the past, Wells Fargo’s “recognition events” have included performances by such bland celebrities as Huey Lewis, Cher, and Jay Leno (as well as camel rides!) Here’s the worst one—the official Wells Fargo statement about the eventual cancelling of the planned trip said that the bank had “never planned to use taxpayer bailout money to fund the trip”.

This is why these banks are losing their collective asses—I’m once again convinced that the people running them don’t really know that much about economics.

Floyd is on his way to buy groceries, with a $50 bill in hand. However, Floyd is out of gas, but if he spends his $50 on gas, he won’t have any money for groceries. Floyd’s neighbor, Hank, could give his friend $50. However, due to Floyd’s smaller than average penis and chronic premature ejaculation problems, he drives a Hummer. Hank has something of an environmental conscience, and doesn’t want his money buying gas for Floyd’s suburban tank. Floyd cleverly tells Hank that if he gives him the $50 that he is short, he’ll buy groceries with Hank’s $50 bill and use his own $50 to buy gas.

You see the problem? This is basically what Wells Fargo is saying, in their desire to convince the public that nothing about their conduct is/was wrong. The same kind of math is in play with respect to faith-based initiatives. The argument goes much like Floyd’s—religious groups can take the money provided they use it for social services (and thus freeing up more of their money for bigger buildings, missionary work, researching that cure for lesbianism, etc.) I’m beyond disappointed (though not entirely surprised) that Obama has announced he will continue and expand the Bush administration’s policy of funding religious groups that provide certain social services. It’s a political move, I know, and as I’ve said before, I’m loathe to second guess the guy’s political strategy (like SarahJ said, he just “gets” politics) but at a certain point, I’m ready for some principle. This is one of them. Funding religious groups is a bad idea, both for religious groups, religious freedoms, and social services. Let’s put that money to use fixing and expanding social services—certainly that would be more cost effective. Let’s avoid the divisive questions that come along—if a religious group is receiving funding from the government, do they still get to fire and hire based on religion? Are we impugning religious freedom if we say no? These are questions that are distracting from what should be the central point of faith-based initiatives: the increased access and quality of social services. Under Bush, I think it was more about throwing some dollars and a political bone to the right. Under Obama, this just ought to go away. This is the time to show some principle, Mr. President; let’s not buy gas for Floyd’s Hummer any more.