Tuesday, December 23, 2008

More bailouts? Even states like California?

I was talking to relatives this weekend and one thing is certain, everyone believes that the airline industry will be BACK knocking at the door for bailout money Yes, even though this industry has been in the red BEFORE 9/11, they will have their hands out to President Obama, too.

Virtually every sector of the aviation industry is pressing an expansive request for help in the upcoming economic stimulus bill, including proposals some groups have sought for a long time.

The joint request is coming from groups representing the major U.S. airlines, private pilots, airports, business aviation and airplane manufacturers large and small. Congress is expected to act on the stimulus legislation in January.

It is funny, when these industries are doing well, heavy in black ink, they are pro-business, anti any government regulations, don't want the feds in their business, all about capitalism when it suits them. Now, that this industry has been tanking for some time, these industries have no problem or qualms marching up to Capitol Hill and requesting for funds to keep them relevant.

If they expect the American Public to be ok with this, think again. Main Street has YET seen any relief or bailout for millions of Americans in the mortgage crunch, but the government can whip out a check and help these industries at a drop of a hat? Something still stinks in the whole equation here.

Now, I read yesterday that property developers want a bail out. This industry is for commercial property.
Some of the biggest U.S. property developers are asking for government money in the face of $160 billion in maturing commercial mortgages next year, the Wall Street Journal reported Monday.

About $530 billion in commercial mortgages are due for refinancing over the next three years, with $160 billion due for payment next year, according to Foresight Analytics, the Journal reported.

And with credit hard to come by and cash in commercial property drying up, companies want government assistance.

The thing is this; when you start bailing companies out expect everyone else to have their hands out, too. And let us not forget how the banks got bailout money, took it and are still SITTING on it, because they are not giving out loans to anyone. At least that was the whole purpose of giving banks bailout money, to ease the financial crisis, but instead they are only thinking of THEMSELVES.

Finally, we come to the State of California.

Let us not forget that California has been going down for some time now and Governor Schwarzenegger has been forewarning many of the financial instability in his state. Well, the shutdown of California government is real.
California's chief financial officer warned Monday that the state would run out of money in about two months as hopes of a Christmas budget compromise melted into political finger-pointing by the end of the day.

Seems like all talks with the California legislation has gone up in smoke.
"Yesterday we sat there for hours and we worked through it step by step and we made some great progress," the governor said during a morning news conference in Los Angeles. "So we feel like if we do that two more times like that, I think we can get there ... before Christmas Eve or Christmas Day."

The thaw didn't last long, as legislative leaders later in the day criticized Schwarzenegger and indicated their work was done until the start of the New Year.

The governor faulted lawmakers for "failing to take real action" in addressing the state's budget deficit but said he will continue working with them on a solution that includes spending cuts, new revenue and an economic stimulus plan.

Now a lot of this is all about negotiations from the governor and the state legislators, but one thing is critical in this state, they need money to survive and they needed it yesterday.

If the State of California somehow gets any money from the federal government, expect other states to line up right behind Cali with their hands out, too.

Well, 'tis the season to be jolly.....

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