Every baseball offseason, I chuckle at the outlandish free-agent spending of the New York Yankees. But unlike some fans who think the spending is unfair or excessive, I laugh because I know the truth behind all of the money spent: It does not win them championships.
Case in point: From 1996 to 2000, the Yankees won the World Series four times, coming up short only in ’97. In 2001, the Yankees re-signed Derek Jeter for $189 million, in 2002 they picked up free agent Jason Giambi for $120 million, and in 2004 they hit the jackpot, trading for Alex Rodriguez and his gargantuan $252 million contract. At the time, these were three of the five largest contracts in baseball history.
Since those signings starting in ’01 — over half a billion dollars in committed money to just three players — they have made the World Series just twice, losing both times, once to the Florida Marlins, a club with a combined team payroll from 2001 to 2008 of only $293 million.
The Yankees simply throw money at their problems. Instead of focusing on the training of their young players, they buy players developed by other teams. The team becomes a hodgepodge of talent that, due to lack of chemistry or bad karma or who knows what, comes up short of winning a championship.
Unfortunately for Americans, our government does not seem too keen to learn from the Yankees’ mistakes. As the financial markets and the economy soured, it threw bailout after bailout at our problems, thinking that money alone could make our troubles go away.
While only time will tell if our spending will be more efficacious than the Yankees’, early results belie the bailouts’ intention.
In so many ways, the Yankees are just like the United States. They are the biggest, baddest team in the world and everyone loves to hate them. They have the media’s undivided attention, they attract the best players from around the world, and their actions set the tone for every season. The Yankees do not win every championship, but they are always in contention. And in 2008, when the Yankees did not make the playoffs for the first time in 14 years, they went out and spent more on free agents through the new year than all other teams combined.
The difference for the Yankees is that the next generation has already taken over. Hal Steinbrenner, the love-him-or-hate-him owner of the Yankees for the past few decades, passed over operating control to his sons this past season, and they gladly followed in their father’s free-spending footsteps.
In America, however, the next generation has a little while longer before it is in charge. And it is getting time to notice that yesterday’s bailouts are today’s education spending and tomorrow’s tax bills.
Procrastinating today’s problems until tomorrow? Unfortunately, in this country, that’s just more politics as usual.
Now, do not get me wrong. I know these are tricky times and the idea of “fixing” the most complex financial institutions in a matter of weeks or days or, in the case of Bear Stearns and others, in a matter of hours, is ridiculous.
But for all the fuss made over the Madoff Ponzi scheme, I hear only a distant and faint cry over the real Ponzi scheme that we are all a part of: Social Security. For all the attention given to the losses felt by Americans in the stock market, how about the $2.1 trillion dollars to date in bailout money Americans are tacking on to their tax bill?
Before we talk about bailouts as a solution, we should instead address some serious underlying causes of this market dislocation:
— A severe deficiency of regulation over massive areas of market activity that clearly are not being run by so-called “sophisticated investors.”
— An almost complete lack of effort by the government and individuals to get private capital re-flowing throughout the financial markets.
— An entire mortgage industry eager to sell people houses they could not afford.
— An entire country of citizens eager to use those homes as personal ATMs for flat-panel TVs they did not need.
I do not have the solutions to these problems. But I do know that these are the problems we must face and I do know that unless they are addressed, Americans will continue to suffer, no matter how many billions General Motors or AIG get.
Barack Obama says change is coming to America. But I sure hope he’s got a whole lot more than some loose change to get out of this mess.
Although, as the Yankees have shown, even that might not be enough.
Alexander Wolf is a junior in