Drinks Are on the House (and Senate)

 

 

by Walter Brasch

 

“Got any idea how to make a frozen daiquiri?”

Saturday. 6 a.m. A question no one else would have asked at that hour. I knew it had to be Marshbaum, my faux-friend foil.

“Too early to be drinking,” I mumbled, then hung up. The phone rang again.

“It’s not for me,” said Marshbaum, but since I’m going to own a bar, I should learn how to make drinks.”

“Marshbaum,” I said, reluctantly awake, “you can’t even afford to buy soap to wash your fuzzy navel! How are you going to afford a bar?”

“The government’s going to bankroll me,” he said matter-of-factly.

“New kind of welfare?”

“Old kind of subsidies,” said Marshbaum. “First thing those Santa Clauses in the red ink suits are going to do is to help me find an appropriate location.”

“Something available in Afghanistan?” I asked.

“It’s called exploration subsidy. Thanks to those patriotic pure-bred Republicans who just blocked the President’s proposal to eliminate $2 billion in subsidies a year to oil, gas, and coal companies, all I have to do is say I want to build my bar over a proposed but hidden coal vein. Doesn’t even matter if there’s coal or not. All I have to do is say I think there may be coal. Later, I get a low-interest small business loan, build the bar, and deduct the mortgage interest from my income taxes.”

“That deduction is meant to allow the common person the right of home ownership.”

“And what’s more common than taking someone else’s money? Besides, it isn’t the middle-class that gets most of the benefit.” He explained that almost 100 percent of everyone with at least a $100,000 mortgage takes the interest deduction, while fewer than 20 percent of Americans below the poverty line get federal rental subsidies.

“You’ll still have to pay property taxes,” I reminded him. He reminded me that it didn’t matter.

“Most local and state governments will be so happy to have me build a business and hire minimum-wage bar girls, they’ll probably waive my taxes the first year or two and then give me tax rebates for a couple of more years.”

“O.K., for awhile you have a cheap bar. How are you planning to keep the lights on?”

“Electric companies save about $210 million a year when they buy electricity below cost from the federal dams. I just tap in on some low-voltage energy.”

“Even with cheap utilities, you’ll still have problems keeping it going.”

“Only problem I’ll have is deciding which line on the income tax form is for deductions for advertising, dinners, and research at the country club.”

“I suppose you have other scams?”

“Other subsidies, just like everyone else,” said Marshbaum snippily correcting me.

“The government pays farmers about $20 billion a year to grow feed grains to assure there will be an adequate supply. I plan to get some of those bucks by selling malt liquor. Rye. Barley. Wheat. Corn. It’s the Basic Four food groups. I can even water down my drinks since   the government also provides about $400 million a year in water subsidies.”

“The agriculture subsidy program was begun during the Great Depression to benefit poor farmers who—” Before I could finish, Marshbaum interrupted.

“It’s true that the largest 10 percent of the corporate farms get over 75 percent of the subsidies. But, as a poor struggling farmer, I may get $500. That’s still money in the pocket.”

“So, you’re saying that the government wants you to sell more drinks?”

“And less too,” he said. “There’s far too many of those nauseous appletinis. I might be able to get a government subsidy not to grow apples or tinis.” He thought a moment. “Maybe I can feature kahlúas. The government has a minimum price on milk. I may even get NAFTA trade concessions for my Friday Night Margarita promotions. Olé, y’all!”

“Aren’t you just blowing a lot of smoke past me?”

“Smoke,” said Marshbaum, “will fill my bar. It’s the least I can do to help the tobacco cartel, which gets about a billion dollars a year. I’m sure the tobacco growers would want me to have several cigarette machines in my bar.”

“And what happens when the bar fails. Your business record is as bad as cheap vinyl on a 50-year-old 45.”

“I expect to fail,” said Marshbaum. “It’s all part of my business plan.”

“Why would you want to fail?” I naively asked.

“So I can get money to keep from failing even more. Three trillion went to financial institutions. I figure I should get something for being greedy and a failure. That’s the American way!”

“Even if all of what you said is true, President Obama has been trying to reduce subsidies to the rich and to eliminate most of the annual $100 billion in corporate welfare.”

“As long as the Republicans control Congress,” said Marshbaum, “the American way of life will be preserved. Want a drink now?”

[Walter Brasch is author of the social issues mystery, Before the First Snow, and 16 other books. Before the First Snow is available at www.greeleyandstone.com, amazon.com, and other stores.]

Drinks Are on the House (and Senate)

 

 

by Walter Brasch

 

“Got any idea how to make a frozen daiquiri?”

Saturday. 6 a.m. A question no one else would have asked at that hour. I knew it had to be Marshbaum, my faux-friend foil.

“Too early to be drinking,” I mumbled, then hung up. The phone rang again.

“It’s not for me,” said Marshbaum, but since I’m going to own a bar, I should learn how to make drinks.”

“Marshbaum,” I said, reluctantly awake, “you can’t even afford to buy soap to wash your fuzzy navel! How are you going to afford a bar?”

“The government’s going to bankroll me,” he said matter-of-factly.

“New kind of welfare?”

“Old kind of subsidies,” said Marshbaum. “First thing those Santa Clauses in the red ink suits are going to do is to help me find an appropriate location.”

“Something available in Afghanistan?” I asked.

“It’s called exploration subsidy. Thanks to those patriotic pure-bred Republicans who just blocked the President’s proposal to eliminate $2 billion in subsidies a year to oil, gas, and coal companies, all I have to do is say I want to build my bar over a proposed but hidden coal vein. Doesn’t even matter if there’s coal or not. All I have to do is say I think there may be coal. Later, I get a low-interest small business loan, build the bar, and deduct the mortgage interest from my income taxes.”

“That deduction is meant to allow the common person the right of home ownership.”

“And what’s more common than taking someone else’s money? Besides, it isn’t the middle-class that gets most of the benefit.” He explained that almost 100 percent of everyone with at least a $100,000 mortgage takes the interest deduction, while fewer than 20 percent of Americans below the poverty line get federal rental subsidies.

“You’ll still have to pay property taxes,” I reminded him. He reminded me that it didn’t matter.

“Most local and state governments will be so happy to have me build a business and hire minimum-wage bar girls, they’ll probably waive my taxes the first year or two and then give me tax rebates for a couple of more years.”

“O.K., for awhile you have a cheap bar. How are you planning to keep the lights on?”

“Electric companies save about $210 million a year when they buy electricity below cost from the federal dams. I just tap in on some low-voltage energy.”

“Even with cheap utilities, you’ll still have problems keeping it going.”

“Only problem I’ll have is deciding which line on the income tax form is for deductions for advertising, dinners, and research at the country club.”

“I suppose you have other scams?”

“Other subsidies, just like everyone else,” said Marshbaum snippily correcting me.

“The government pays farmers about $20 billion a year to grow feed grains to assure there will be an adequate supply. I plan to get some of those bucks by selling malt liquor. Rye. Barley. Wheat. Corn. It’s the Basic Four food groups. I can even water down my drinks since   the government also provides about $400 million a year in water subsidies.”

“The agriculture subsidy program was begun during the Great Depression to benefit poor farmers who—” Before I could finish, Marshbaum interrupted.

“It’s true that the largest 10 percent of the corporate farms get over 75 percent of the subsidies. But, as a poor struggling farmer, I may get $500. That’s still money in the pocket.”

“So, you’re saying that the government wants you to sell more drinks?”

“And less too,” he said. “There’s far too many of those nauseous appletinis. I might be able to get a government subsidy not to grow apples or tinis.” He thought a moment. “Maybe I can feature kahlúas. The government has a minimum price on milk. I may even get NAFTA trade concessions for my Friday Night Margarita promotions. Olé, y’all!”

“Aren’t you just blowing a lot of smoke past me?”

“Smoke,” said Marshbaum, “will fill my bar. It’s the least I can do to help the tobacco cartel, which gets about a billion dollars a year. I’m sure the tobacco growers would want me to have several cigarette machines in my bar.”

“And what happens when the bar fails. Your business record is as bad as cheap vinyl on a 50-year-old 45.”

“I expect to fail,” said Marshbaum. “It’s all part of my business plan.”

“Why would you want to fail?” I naively asked.

“So I can get money to keep from failing even more. Three trillion went to financial institutions. I figure I should get something for being greedy and a failure. That’s the American way!”

“Even if all of what you said is true, President Obama has been trying to reduce subsidies to the rich and to eliminate most of the annual $100 billion in corporate welfare.”

“As long as the Republicans control Congress,” said Marshbaum, “the American way of life will be preserved. Want a drink now?”

[Walter Brasch is author of the social issues mystery, Before the First Snow, and 16 other books. Before the First Snow is available at www.greeleyandstone.com, amazon.com, and other stores.]

Drinks Are on the House (and Senate)

 

 

by Walter Brasch

 

“Got any idea how to make a frozen daiquiri?”

Saturday. 6 a.m. A question no one else would have asked at that hour. I knew it had to be Marshbaum, my faux-friend foil.

“Too early to be drinking,” I mumbled, then hung up. The phone rang again.

“It’s not for me,” said Marshbaum, but since I’m going to own a bar, I should learn how to make drinks.”

“Marshbaum,” I said, reluctantly awake, “you can’t even afford to buy soap to wash your fuzzy navel! How are you going to afford a bar?”

“The government’s going to bankroll me,” he said matter-of-factly.

“New kind of welfare?”

“Old kind of subsidies,” said Marshbaum. “First thing those Santa Clauses in the red ink suits are going to do is to help me find an appropriate location.”

“Something available in Afghanistan?” I asked.

“It’s called exploration subsidy. Thanks to those patriotic pure-bred Republicans who just blocked the President’s proposal to eliminate $2 billion in subsidies a year to oil, gas, and coal companies, all I have to do is say I want to build my bar over a proposed but hidden coal vein. Doesn’t even matter if there’s coal or not. All I have to do is say I think there may be coal. Later, I get a low-interest small business loan, build the bar, and deduct the mortgage interest from my income taxes.”

“That deduction is meant to allow the common person the right of home ownership.”

“And what’s more common than taking someone else’s money? Besides, it isn’t the middle-class that gets most of the benefit.” He explained that almost 100 percent of everyone with at least a $100,000 mortgage takes the interest deduction, while fewer than 20 percent of Americans below the poverty line get federal rental subsidies.

“You’ll still have to pay property taxes,” I reminded him. He reminded me that it didn’t matter.

“Most local and state governments will be so happy to have me build a business and hire minimum-wage bar girls, they’ll probably waive my taxes the first year or two and then give me tax rebates for a couple of more years.”

“O.K., for awhile you have a cheap bar. How are you planning to keep the lights on?”

“Electric companies save about $210 million a year when they buy electricity below cost from the federal dams. I just tap in on some low-voltage energy.”

“Even with cheap utilities, you’ll still have problems keeping it going.”

“Only problem I’ll have is deciding which line on the income tax form is for deductions for advertising, dinners, and research at the country club.”

“I suppose you have other scams?”

“Other subsidies, just like everyone else,” said Marshbaum snippily correcting me.

“The government pays farmers about $20 billion a year to grow feed grains to assure there will be an adequate supply. I plan to get some of those bucks by selling malt liquor. Rye. Barley. Wheat. Corn. It’s the Basic Four food groups. I can even water down my drinks since   the government also provides about $400 million a year in water subsidies.”

“The agriculture subsidy program was begun during the Great Depression to benefit poor farmers who—” Before I could finish, Marshbaum interrupted.

“It’s true that the largest 10 percent of the corporate farms get over 75 percent of the subsidies. But, as a poor struggling farmer, I may get $500. That’s still money in the pocket.”

“So, you’re saying that the government wants you to sell more drinks?”

“And less too,” he said. “There’s far too many of those nauseous appletinis. I might be able to get a government subsidy not to grow apples or tinis.” He thought a moment. “Maybe I can feature kahlúas. The government has a minimum price on milk. I may even get NAFTA trade concessions for my Friday Night Margarita promotions. Olé, y’all!”

“Aren’t you just blowing a lot of smoke past me?”

“Smoke,” said Marshbaum, “will fill my bar. It’s the least I can do to help the tobacco cartel, which gets about a billion dollars a year. I’m sure the tobacco growers would want me to have several cigarette machines in my bar.”

“And what happens when the bar fails. Your business record is as bad as cheap vinyl on a 50-year-old 45.”

“I expect to fail,” said Marshbaum. “It’s all part of my business plan.”

“Why would you want to fail?” I naively asked.

“So I can get money to keep from failing even more. Three trillion went to financial institutions. I figure I should get something for being greedy and a failure. That’s the American way!”

“Even if all of what you said is true, President Obama has been trying to reduce subsidies to the rich and to eliminate most of the annual $100 billion in corporate welfare.”

“As long as the Republicans control Congress,” said Marshbaum, “the American way of life will be preserved. Want a drink now?”

[Walter Brasch is author of the social issues mystery, Before the First Snow, and 16 other books. Before the First Snow is available at www.greeleyandstone.com, amazon.com, and other stores.]

Here Comes Another Bailout

The Wall Street Journal reports that GMAC Financial Services Inc. and the US Treasury Department are in advanced talks to prop up the lender. It will be the third infusion of cash into the troubled financial services company that was granted an exemption and allowed to become a bank holding company so that it could tap into the TARP money.

The U.S. government is likely to inject $2.8 billion to $5.6 billion of capital into the Detroit company, on top of the $12.5 billion that GMAC has received since December 2008, these people said. The latest infusion would come in the form of preferred stock. The government's 35.4% stake in the company could increase if existing shares eventually are converted into common equity.

The willingness by Treasury officials to deepen taxpayer exposure to GMAC reflects the troubled company's importance to the revival of the auto industry. Founded in 1919, GMAC has $181 billion in assets and is a major financier for 15 million borrowers and thousands of General Motors and Chrysler car dealerships in the U.S.

The new capital would help firm up GMAC's balance sheet and solidify its auto-loan business. GMAC provides the vast majority of wholesale financing for GM dealerships across the country, meaning scores of local distributors would be unable to bring new vehicles onto their lots if GMAC were to collapse.

Federal officials also are moving to shore up GMAC's ability to fund its daily operations, with the Federal Deposit Insurance Corp. telling the company Tuesday the agency will guarantee an additional $2.9 billion in debt, according to people familiar with the discussions. The FDIC guarantee will make it easier for the company to sell debt to investors. The FDIC backed $4.5 billion in GMAC-issued debt earlier this year.

Good thing we get equity for all this crap, not sure if that's a financial term or not. The government's current 35.4 percent stake in GMAC is the result of the Obama Administration's restructuring of the auto industry earlier this year. While GMAC was long General Motors' financing arm, in 2006 GM sold a majority stake to private-equity firm Cerberus Capital Management. Cerberus is a value shop. They look for undervalued companies and hope to turn them around. They are finance professionals. They knew the risk and yet we are paying the price. In effect, a bailout of GMAC is a bailout of Cerberus.

Meanwhile, GMAC's market share in the auto financing market has fallen sharply during the crisis as its cash available for lending declined. Increasingly banks like JP Morgan Chase and Wachovia are making inroads winning market share. GMAC had 3 percent of the auto financing market in the first six months of the year, down by almost half in the same period a year ago, according to Experian Automotive.

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