Thursday, November 20, 2008

When I was 24, and I was just getting started in the world of contracting, a boss of mine clued me in as to how the world of government contracts works. She said a company will bid for the government's money, and then attempt to dazzle them with charts, resumes and promises to do everything short of resurrecting Jesus. Then, once this company actually gets the money things change drastically. Assuming this company was awarded $55 million from the government to do something, this is how the money is actually spent:

$1 million - used to set up a call center
$3 million - used to staff the entire call center from manager all the way down to college grad manning the phones
$17 million - used for the salaries phantom jobs of project director, project manager, assistant to project manager, etc
$34 million - goes to the company(aka the CEO, the VP, and the mafia family backing the company)

Yes I have peppered quite a bit of hyperbole in there, but you get the point. Occasionally the government will be vigilant about tracking exactly how their money was spent, but sometimes they simply don't care, and it adds up to plenty of money stolen.

I mention this because for some reason, I think the "Big 3" auto companies, are looking to get paid like this with the bailout they are requesting. Now don't get me wrong, I have friends who live in Detroit, who say things are pretty bleak up there where the auto industry is concerned. But these people also say things had taken a turn for the worse way before the country was ensconced in this recession. Some of these CEOs are crying broke, yet individually, still doing things that would indicate that things are still on the up and up(whatever that means). As Rep. Capuano from Massachusetts said, "My fear is that you're going to take the money, and continue the same stupid decisions you made for 25 years". That pretty much sums up my fear too...I am fearful that so many companies will take the bailout, and then the higher ups within each company will insure that they can get paid, and then bail, which will solve nothing. I know this is highly cynical, but shit, given what's going on around the world, black president or not, how you can not be?

I've solved nothing here, then again, I don't thing I was trying to, I was just attempting to make sense of this in my own little way. If someone smarter than I am is reading this, please feel free to jump in...

Out of Touch - Hall and Oates

5 comments:

Miss. Lady said...

Glad I am not the only one that feels some kind of way about the bail out. I feel bad because I know if they do indeed go under then millions of jobs will be lost.

As a owner of an american car I must say they don't make quality fuel efficient cars. Trust and believe my next car purchase will not be an American car, provided they are even still around.

Jazzbrew said...

I agree with you. Keep in mind that my business knowledge is almost non-existent but after the bail out they still have the problem of low demand. These bailouts feel like patch fixes that will lead us to lighter pockets and the same problem multiplied later down the road.

maxwellsmusze said...

i don't claim to know a lot about the economy or this recession that no one is saying is, in fact, a recession but i agree with you rashad.

take a look ~
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/19/AR2008111903669.html?nav=hcmodule

"There's a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hands," Rep. Gary L. Ackerman (D-N.Y.) advised the pampered executives at a hearing yesterday.

Jazzbrew said...

Two quick notes:

1) That quote by Ackerman is on point.

2) Hall and Oates rule.

theradleyfiles said...

i was just watching the news, my immediate thought was...when did things get this bad.?"