Archive for January 24th, 2009

Bait and Switch. If you’re not familiar, it’s a term that refers to the rather slimy practice of selling a prospect on one product/service/idea, and then changing what you deliver, after the agreement is in place. It might be claiming that a product on eBay is “new” or “like new” when in fact, it turns out to be used. It might be a car salesman that promises side-curtain airbags and a GPS/Radio, but when you take delivery, both features are missing. Or it might be a multi-billion dollar financial bailout that suddenly becomes a multi-TRILLION dollar pork barrel trough, with no accountability in sight.

Any way you slice it, it ain’t pretty.

So how does this happen? I blame a combination of opportunity, misplaced trust, a lack of negotiations in good faith, and the ever-popular “human nature.”

Take, for example, the TARP bailout. The cause? The illogic and over-extension of the financial markets had finally caught up with them. It seems that when you game the system (like the Dems did, to create a system where people that couldn’t afford to buy a home suddenly could, and those that could afford a modest home, suddenly could purchase more home than they could afford), the eventual result is those financially insolvent chickens eventually come home to roost. The effect? Our Congressional leadership railroaded a bailout bill through the House and Senate with no real oversight, and no real restrictions on what could be done with the money. While I believe the first plan (buy up all the bad debt for homes, sell the loans to lenders, use the money to cover the spread) was flawed, the fact that they abandoned that (in record time, I might add) and used the money to assume government control of the banking system, is a nightmare for any free-market capitalist.

The Bush and Obama administrations did a number on us all, by ramrodding the bill through Congress. But the effect of the mendacity and the bait and switch may have longer and more disastrous effects, both in th long and short terms. You see, Obama will have a grace period. But I doubt it will last as long as he expects – or hopes. And when positive results are not forthcoming, the people will be very unhappy. The media has sold the country on Obama’s “Change” mantra, and the idea that he can fix what’s wrong. Unfortunately for all of us, I seriously doubt he can. It’s a Herculean task, and history tells us that you simply can’t spend your way out of a recession/depression. Everything Obama has planned will attempt to do just that. His staff marketing team will do their best to sell us all on the infallibility of his plan. That’s to be expected. But when the plan doesn’t bear fruit, I expect we’ll see a bunch of dissatisfied voters waking up to the idea that they’ve been sold a bill of goods – not once, but twice.

Bait and Switch is no way to run a country. Misrepresent your plans, change directions in mid-execution, or simply lie…call it what you will, but the bottom line will always be a bunch of customers – or in this case citizens – that will be calling for the heads of those in charge. It’s true in marketing. It’s true in finance. And it’s especially true in government, because it his everybody in the wallet – and that’s a volatile target.