Bailout Bait 'n' Switch

In business there is a crime called “bait and switch.” It refers to the practice of advertising something that a lot of people want, in order to lure them to a store or showroom under fraudulent premise, with no intent whatsoever of providing what was advertised, but instead switching them to a different and much more expensive alternative.

For example, an auto dealer might advertise a new 4-door sedan at a ludicrously low price; once you get to the dealership, you discover there’s only one on the lot, deliberately painted a butt-ugly color, with hideous plaid fabric upholstery, and no options. But for just a few dollars more per month, you can have one of the snazzier models with power seats and windows, CD player, and moon roof. Of course, that few dollars more per month multiplied by 72 months plus interest adds thousands of dollars to the price. Same trick has commonly been used by appliance stores, furniture stores, even clothing stores. Nevertheless, it is illegal.

Another version of it, simply called a “switch”, is when the consumer is led to believe one thing from advertising, then sold on the truth revealed after the purchase is made and product delivered. This is a common tactic in mail-order sales, where the actual product is not inspected until delivery.

There’s a popular weight loss program whose ubiquitous TV ads give consumers the idea they’ll be eating three meals and two snacks a day of pizza, burgers, pancakes with syrup and chocolate brownies shipped to them in a box and somehow losing pounds and inches with no effort or sacrifice. When the big box arrives, the switch occurs. You really get one such meal a day. Today it’s those pancakes for breakfast, but lunch and dinner consist of protein bars, shakes and veggies. Tomorrow, you can have that pizza that looked so good in the ad but is shockingly small on your plate, with protein shakes for the other meals. Oh yeah, you also need to exercise three times a week. And, individual results vary. A lot.

So, the Bush & Paulson Gang played bait ‘n' switch with Congress and sold them on a $700-billion economic rescue package. They promised to remove toxic assets from banks’ and other financial institutions’ balance sheets, thus liberating lending to businesses and consumers to fuel spending and investment. After they made that sale, they did nothing they promised. Instead, they took a first, giant step toward nationalizing the banking system, making the government a major owner-partner in top tier banks, and using all the money to facilitate mergers, pay executive bonuses and for other purposes still kept secret from taxpayers.

With all that money gone already, in the final days of Bush these same institutions were handed fresh potloads of money. This naturally brought forth an apparently endless parade of companies and entire industries, city and state governments, and others threatening unspeakable horrors if Congress didn’t fill their big trick or treat bags with candy too. Boo. Congress is easily scared.

What occurred here is the largest bait and switch scam in history, stealing money from every taxpaying consumer. It probably won’t ever be prosecuted. It isn’t even cast in this light by most of the media.

Well, that was the rescue package. Now Obama is busy peddling his stimulus package, using exactly the same bait and switch scheme, the same fear and panic tactics to create urgency. Once it is sold, we buyers will discover there’s damned little stimulus in it. It’s not about stimulus at all. It is, in truth, a government expansion package of epic proportions and far-reaching consequences. He is selling one thing with no intent whatsoever of delivering it. He is even willing to bait ‘n switch day by day while selling it, a feat no other switcher has ever been so bold to attempt. Look here, boys and girls, $3,000.00 for every employee you hire. Sound good? Ha! Changed my mind in just 48 hours. Now you see it, now you don’t. Big grin. He’s just so charming, how dare we call him a liar and thief?

In Eric Holder’s confirmation hearing to become America’s top law enforcement officer, he spoke poetically of his passion for protecting American consumers more vigilantly and aggressively than we have seen of late. A fine question to have asked would have been: will you enforce on government, politicians and the President the same consumer protection laws imposed on business? Will you prosecute bait ‘n' switch wherever you see it?