What’s bailout end game?
Businesses and markets abhor uncertainty. But the federal government’s bailout sweepstakes has been anything but certain. Even after months of cash infusions into banks and car companies, it’s unclear if the government has an end game.
Just when will AIG become a private company again? Do federal loans to automakers mean that the government can run the companies? What are the limits on government influence over a company that takes bailout cash?
It is no surprise that some banks that took federal money now want to give it back, claiming that the rules have changed.
Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., has said banks should be able to return the money and that the government needs an exit strategy. We agree.
The Obama administration should begin to fill in the blanks so that businesses and taxpayers know how this is supposed to turn out. Government intervention, when necessary, should be as brief as possible and its limits well-defined.
We supported efforts to prop up the banking system, because the alternative was chaos in the credit markets.
We didn’t support bailouts for GM and Chrysler, but we share the concern over their dire condition and think the thousands of people who work for them and their suppliers may need support.
But as the administration’s plans for banks and automakers have become clearer, federal officials still haven’t adequately spelled out how government will extricate itself from private enterprise.
It should do so while crafting tougher regulation to ensure that financial shenanigans are limited in the future.
— Milwaukee Journal Sentinel
Florida must honor pledge
After seven years of denial and legal battles, the Florida Legislature last year promised to pay for the lifetime care of a toddler who was beaten into a coma after the Department of Children & Families failed to protect her. Last year, lawmakers paid the girl’s adoptive family $1.2 million of the $18.2 million the state owes.
Now that the second installment — $1.7 million — is due, Gov. Charlie Crist and lawmakers are on the verge of reneging on their word. They say there isn’t enough money in the budget. That is unfortunate — and inexcusable. Marissa Amora, now 9, suffered severe brain damage when she was beaten by her mother’s boyfriend in 2001. DCF had gotten “urgent” reports that the child was in danger, but failed to properly investigate.
Adoptive parents Dawn and Ric Amora won a $26.8 million jury verdict for Marissa’s care, but after years of fighting they settled with the state for $18.2 million. Experts estimated that her profound disabilities could easily cost more than $20 million.
When lawmakers agreed to the payout, a DCF spokesperson apologized to Marissa and her family. “She has had to endure terrible trauma in her life, and we hope these dollars can begin to right some of these wrongs,” said Erin Geraghty.
Those wrongs don’t go away when the state has a budget crisis. Marissa’s need for constant medical care isn’t suspended because of the recession or because the state’s revenue coffers are low. Gov. Crist and lawmakers gave their word. Now they should honor that pledge. “Even in a difficult financial time in Florida, you have to do what’s right,” Gov. Crist said. It would be shameful and dishonorable for Gov. Crist and lawmakers to go back on their word now.
— The Miami Herald