Obama Ends Bailout Bonus Bonanza

I was climbing down from the attic, dirty air filter in hand, dreading the trek all the way down to the basement to complete the other half of this task, when a grade school level metaphor hit me - the new $500,000 cap on senior executives whose firms receive government financial rescue money put in place today by President Obama was a lot like changing the air filters in our home air-conditioning system.

Changing your air filters regularly does more to improve the operation of your air conditioning system than it does to affect the air quality in your house, the same way capping excessive executive compensation will do more to improve the operation of the banking system than it will do to affect the economic recovery. Because if you don’t clean out the ducts through which the air passes, all you’re really doing when you change your air filter is keep whatever has accumulated in there from tearing up your blower motor.

I don't have to tell you what kind of filth has accumulated in our financial industry.

I took a look at the dirty filters before I threw them away to see if there was anything more in them than a uniform layer of fine grey dust that signaled all was well with the system. I would imagine that President Obama’s people did the same thing, reviewing the often arcane methodologies used to justify executive bonuses amid huge corporate losses to see what ill effects they might have added to the bottom lines of their companies.

If the current crop of wonder boys decide to desert their posts for greener pastures, there are plenty of up and coming banking executives who would fight for an opportunity to make a name for themselves in a time of crisis. These are the kind of people who won't blink at the pay caps today, knowing that a successful tenure when all the chips are down will bring plenty of visibility, and plenty of big paydays, down the road.

Need I spell out that well trained and qualified minority executives usually thrive in situations like this - giving twice as much effort for half as much pay?

Years ago, working part time on the weekends with my uncle, who was in the heating and air business, I got to see first hand what happens when you don’t regularly change your air filters. Old, stiff filters layered with dust, dog hairs, and pollen an inch thick would literally choke the life out of a furnace by overloading the blower motor.

If the customer was lucky, we could sometimes get their system going again by simply cleaning out the furnace, tweaking the blower motor, and taping up the gaps in their ducts.

I imagine we are all keeping our fingers crossed right now, hoping, as our new president begins to find his way amid the wreckage of our economy, that he can implement more changes like the one he has put in place today to improve the financial health of our nation's banks, the same way new air filters and aluminum tape can often get a balky furnace restarted.

The "Trickle Up" Effect: Give Blacks Bailout Money

My buddy called me yesterday. I heard a lot of noise in the background.

"Where are you?" I asked. "A party? Sounds like there are a lot of people around you."

"I'm at Lenox Mall. Man," he said, "you know what they need to do with that bailout money? They don't need to give it to the banks and the carmakers. They need to give it to black people."

I started laughing before he could explain, because I knew exactly where he was headed.

"Hey man," he said, "are you listening to me?"

"Dude, I can hear you. I just got this visual-"

"Don't say anything else. Just listen. You know that seven hundred billion dollars? They need to take the all of it - the whole thing - and just give it to us. We'll have the economy back on its feet in no time, because we will spend it all. Every last dollar."

It was kind of hard to argue with his logic. We did have a consumer driven society. And the president has told us over and over, whenever we've had huge problems with the economy stalling, to "get out there and shop."

"Dude, you have absolutely no sense. But it would bring the automakers back to profitability almost overnight."

"Come on, man. You know we'll spend it. This mall is full of brothers shopping right now with no money. I just saw a brother trying to pay for some stuff at Macy's. The cashier repeated "no sir, that one won't go through" each time she swiped one of his credit cards through her register. So the brother pulls out his last credit card. He looks at her and says, 'I know this one will work.' And it did."

Many of us have literally transformed our brains into barcode readers.

Buying stuff at the mall every weekend has become one of our favorite pastimes. Bragging about the stuff we get that has not even been paid for yet is our second favorite pastime. Dreaming about the stuff we're going to get next is our third.

I have several cousins who could be professional shoppers, they spend so much of their free time in clothing stores. One of them, who aspires to be the black Imelda Marcos, seems to have forgotten that the Marcos credit cards were paid with stolen government money. And our own resident shopping diva-in-training gets as excited about "store credit" as you do about your tax refund.

So my buddy might be onto something.

I decided to do the math, just to humor myself. There are approximately forty million black people in the United States. Seven hundred billion divided by forty million is $17,500 per person.

If you assume that half of us are adult aged, and only divide seven hundred billion by twenty million, you get a nice, even $35,000 per person.

Think of all the car downpayments, plasma TV's, roofs, home additions, hairdos, restaurant outings, dental work, home furnishings, and yes, shoes, shoes, and more shoes that would be bought in the next six three months.

Henry Paulson, I know you read this blog on the sly, while you are waiting by the phone for all those banks you gave all our money to call you back with status reports. You might want to run the numbers on my buddies idea.

The "trickle up" effect could be enormous.