Monday, March 23, 2009

 

Of Scorpions and Frogs

First we had the AIG bonuses. Now, we have JPMorgan Chase using TARP money to buy luxury jets.
Embattled bank JPMorgan Chase, the recipient of $25 billion in TARP funds, is going ahead with a $138 million plan to buy two new luxury corporate jets and build "the premier corporate aircraft hangar on the eastern seaboard" to house them, ABC News has learned.
Joseph Evangelisti, a spokesman for JPMorgan Chase, said no TARP money would be used to make any payments for new jets or jet hangar improvements.
JPMorgan Chase currently has four jets at Westchester Airport,...
The claim that no TARP money will be used, while maybe technically correct, is baloney. It's an accounting trick similar to one I've seen many times. At a non-profit agency where I once worked, we received grant money specified for particular programs. Some of those programs were tremendously profitable. On the books, the grant money went to the programs but then the profits from the programs went to other programs. A circular path of sorts. The TARP money will go where the money for jets would have gone.

All this reminded me of some of my favorite reading as a child, Aesop's Fables. In particular the story of The Scorpion and The Frog.
The Scorpion and the Frog


A scorpion and a frog meet on the bank of a stream and the
scorpion asks the frog to carry him across on its back. The
frog asks, "How do I know you won't sting me?" The scorpion
says, "Because if I do, I will die too."

The frog is satisfied, and they set out, but in midstream,
the scorpion stings the frog. The frog feels the onset of
paralysis and starts to sink, knowing they both will drown,
but has just enough time to gasp "Why?"

Replies the scorpion: "Its my nature..."
As we've seen the people at AIG and JPMorgan Chase are scorpions. Like the frog, Congress and Obama were and are foolish to think these people will act against their own nature.

Congress and Obama also play the role of the scorpion to the American public. They make many seductive promises but act according to their political nature which is to increase government power over individuals, spend money recklessly, and increase taxes rather than practice fiscal responsibility. They follow their nature, even when the path is self-destructive.

Robert Fulghum's book All I Really Need To Know I Learned in Kindergarten proposes that the simple truths you learned in your youngest years are what you really need to know to get through life successfully. Reading Aesop's Fables as a child, not every story made sense to me. But, as I get older, I increasingly realize the simple truths held in the fables apply well to life. Maybe we all need to go back and read the fables again, carefully.

Comments:
Oddly I find myself not overly upset about this plan. The purchase of these jets helps General Dynamics (the American company that owns Gulfstream) and thus jobs at General Dynamics/Gulfstream. Also the remodeling/updating of the hanger again creates more jobs as well as staff to maintain the jets and the hanger. These are concrete purchases of tangible assets with know results.

I'm more concerned with the rest of the $24,862,000,000 in TARP money they received. Where the hell is that going?
 
Psycho - I'm not particularly upset over it either. And, I wasn't particularly upset over the AIG bonuses either. I'm more upset over Congress and Obama just blindly throwing money out there, hoping something good happens and getting upset when something they don't like happens although they made no plans to prevent it.

Good point about the jobs. Those AIG bonuses would have led to jobs too, as they spent the bonuses on goods and services.
 
what gets my goat over this is how they are able to compartmentalize money in their own minds like that... Happens in my company too. There is no money for anything, unless it comes from this bucket over there. It's is astounding how many opportunities are lost because money can't be released.

that's the same thing as saying well we're not using TARP money for this... what, you're not the same frikkin' company?
 
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