Santa Claus demands massive bailout

By Alex R. Dahl
Special to TV Barn

NORTH POLE, December 24, 2008 -- Rumors that Santa Claus may be the latest and most high-profile victim of the worldwide credit crisis sent world stock markets roiling and children's hopes plummeting today as Wall Street analysts warned that Santa's entire production and distribution network could collapse by the end of the day without an infusion of several trillion dollars from the federal government.

"We believe the situation is dire and there is real possibility that Santa will be unable to complete gift manufacturing and execute delivery operations this week," Lloyd Blankfein, CEO of Goldman Sachs, said. "He needs an enormous lifeline and he needs it now."

Although Santa has said nothing publicly about the situation, his spokes-elf hinted at some of the causes during a press conference here today. "We are being squeezed like everyone else. Our credit facilities are being restricted just as our suppliers and transportation contractors are demanding quicker payment or even pre-payment," he said.

Some experts speculate that Santa is the victim of price spikes earlier this year in energy and commodities, including reindeer food, which rose to previously unseen levels earlier this summer as various industries, including airlines, looked to alternative sources of propulsion. Santa's North Pole operations are so vast that they are exposed to just about every commodity and currency on earth.

Others say Santa likely engaged in risky hedging strategies in an effort to protect against such price hikes, but fell victim to turmoil in derivative markets. "The guy is too sophisticated to put himself at the mercy of commodity and currency swings," one trader said. "Any sensible person in his position would have locked in contracts for critical materials earlier in the year, but now, just like everyone else, he is probably being forced to unwind massive positions at the worst possible prices."

Financial Options Limited

The sheer size of Santa's potential capital needs potentially several trillion dollars -- means that Wall Street is unlikely capable of coming to his rescue. An IPO is out of the question. "Not since the dot com crash has Wall Street been able to raise that kind of money for a company whose business model is to give away their products for free," Henry Kravis, co-founder of private equity firm Kohlberg, Kravis Roberts & Co., said.
The possibility of a bond offering also appears remote at best. "At a time when buyers are afraid of investing in municipal bonds, which are secured by tax revenue, the chances of floating a big offering of Santa bonds -- based on what? -- is basically non-existent," said William Gross, chief investment officer of Pimco, which manages about $830 billion in fixed-income assets.

In Omaha, billionaire investor Warren Buffett played down any possibility that his company, Berkshire Hathaway, would buy a large stake in Santa's operations. "I admire Santa and his incredible business leadership," Buffett said, "but, as a rule, I do not invest in things I don't understand, and I just don't get how Santa finances his vast empire. Where does his money come from?" Others say Buffett's reluctance to invest is due to personal resentment against Santa, the only person who has given away more wealth than Buffett, who donated approximately $30.7 billion to the Bill and Melinda Gates Foundation in June 2006.

Absent a major infusion of capital, a major restructuring may be Santa's only hope. Management expert Tom Peters, author of In Search of Excellence, said that Santa may be forced to refocus his business model dramatically by finding ways to increase revenue. "He may have to adopt some of the changes made by the airline industry earlier this year when the price of jet fuel soared," Peters said. "For instance, Santa could charge $15 for each gift that will not fit in the sleigh's passenger compartment and $50 for each gift weighing over 50 pounds," Peters suggested. "Bulky and heavy items wreak havoc on sleigh efficiency and add significantly to the cost of delivery," he said. "Another idea is to start charging the reindeer for any in-flight meals other than the smallest snacks," he said.

Other business strategists suggested selling rides to the highest bidder. Russia's Federal Space Agency routinely gets $20 million per passenger for trips on the Soyuz spacecraft, which launches every six months on missions to the international space station. "A Christmas Eve ride around the world on Santa's sleigh could easily displace the Soyuz as the ultimate joy ride, and I'd want to be the first one on board," said billionaire adventurer and Virgin Airlines founder Sir Richard Branson. Sources say Branson would be willing to pay as much as $50 million for the experience.

Many business experts are less sanguine that Santa's operations, which were once seen as the envy of the world, can be salvaged. They say Santa's ways have become stale and outmoded. "Santa has used the same transportation infrastructure, labor pool and business model for hundreds of years," Clayton M. Christensen, the Robert and Jane Cizik Professor of Business Administration at the Harvard Business School and author of The Innovator's Dilemma, said. "He hasn't restructured for the modern economy -- in fact, the last time he innovated was that famous foggy, foggy night in the mid-fifties when he enlisted Rudolf to help guide his sleigh," Christensen said.

Microsoft Corp. founder Bill Gates confirmed that his company has never sold any software to Santa. Microsoft CEO Steve Ballmer added that "Santa has zero internet strategy. Back in the nineties when we were trying to develop ours, we reached out to Santa and were shocked to learn that he didn't even know what the internet was."

"It's true," Google co-founder Sergey Brin said. "And it's confounding. We get a lot of people trying to find Santa on our search engine, but nothing comes up." Larry Page, Brin's co-founder, added that, "we've put a lot of money and engineering talent to work trying to locate Santa's web presence for our users, and our only conclusion is that he has none."

AFL-CIO President John Sweeney refused to comment on whether the elves are willing to make wage and benefit concessions in an effort to help save Santa. "The local up there in the North Pole has been very accommodating over the years, particularly with regards to vacation time during the holiday season," he said. Labor experts point out, however, that the elves have little bargaining power due to the limited options in the North Pole. "It is the quintessential company town up there," one expert said. "You either work for the boss and show up when he says, or you don't work at all." There simply may not be much room for labor concessions.

Allergic Reaction in Washington

Santa's limited options for financing and restructuring led to today's widespread speculation about a massive federal bailout. But the idea of government intervention is getting a very cold reception in Washington.

"I've never seen anything like this in politics," political pundit Chris Matthews said. "You'd think every politician would jump at the chance to associate himself or herself with Santa Claus, but everyone is actually afraid of him."

"The guy is poison," political consultant James Carville said. "He is about to disappoint more voters in one fell swoop than anyone in history. And that's because he's overleveraged, he is not transparent, and he's been taking advantage of this for years."

Political commentator Pat Buchanan disagreed. "It is stunning how fast the Democrats are running away from Santa Claus," Buchanan said, "and they are doing it because they are scared of being accused of supporting more gargantuan government giveaways." The Democrats are trying to distance themselves from the old saying that God is a Republican and Santa is a Democrat, Buchanan said.

But Republicans seem no more interested than Democrats in a bailout. The White House would not comment on whether it would use the Troubled Asset Relief Program, or TARP, to provide needed liquidity to Santa, even in the form of a bridge loan sufficient to make it through this holiday season. White House Press Secretary Dana Perino said that TARP funds are being made available only to bank holding companies and auto manufacturers, and that the White House does not have sufficient information about Santa's financial situation to say whether Santa might successfully apply for relief.

"This is a complicated question, and we do not expect to make any decision until early next week," Perino said.

"They're just waiting to see what Santa brings them," Carville said. "This White House is the most self-serving Administration in history. This timetable is even more cynical than Gov. Rod Blagojevich's alleged plan to sell Barack Obama's Senate seat."

Political Climate Sour

Members of the public who are surprised by the reaction to Santa in Washington may not have noticed that he has been on the wrong side of several major political trends for years.

• For instance, some environmental groups point to the massive manufacturing operations at his headquarters in the North Pole as a major contributor to greenhouse gasses and global warming. "It is no coincidence in my mind that the hole in the ozone layer first appeared right above the North Pole," one environmentalist said. "Moreover, Santa's sleigh is not only a major emitter of methane gas, but also at the most dangerous altitudes in the atmosphere," he said. Santa is also being blamed for an extraordinary share of the world's volume of wrapping paper in land fills.
  
  Supporters within the environmental community point out, however, that Santa has shown an interest in renewable energy and has resisted some environmentally harmful practices such as sending glossy catalogs through the mail. "We consider him an early adopter of sustainable energy because it was decades ago that he began using Rudolf's nose as his main illumination for navigation," a spokesperson for a renewable energy group said.
• Privacy activists are also vocal in opposing any federal bailout for Santa. "Here's a guy who has invaded more personal privacy rights than anyone, hands down," said one activist. "He knows when you are sleeping, for Pete's sake. He invades your house every year, sneaking in through the chimney. Who knows what else he's doing in there? And he knows more about the secret desires and wishes of individuals around the world -- especially including the most vulnerable groups, children and the poor -- than anyone."
  
  "Santa's operations make the Justice Department's terrorist surveillance program look amateurish," one DOJ official said. "Early in the development process after 9/11, we examined what it would take to create an intelligence network like his, and we concluded that not even the combined resources of the DOJ, National Security Agency and Central Intelligence Agency can accomplish what he does," the official said.
• Antitrust officials are reportedly looking into both criminal and civil suits based on Santa's complete monopoly of Christmas-eve overnight delivery services.
• And intellectual property enforcers around the globe are champing at the bit to stop Santa and his elves from producing and distributing identical copies of a huge variety of toys, electronics and other consumer products. "Basically, Santa's workshop is an intellectual property organized crime spree," according to one well-known intellectual property specialist. Several international trade organizations including the World Trade Organization have been looking for ways to enforce anti-dumping laws on Santa for years.

Ethical Nightmare Looms

If the White House decides against using TARP funds, Santa could be forced to deal directly with Congress. But ethics experts say Santa will be unable to engage in any discussions with lawmakers until hugely complex and unprecedented ethical questions are resolved.

"Here's a guy who has made gifts to everyone, and I mean EVERYONE," one ethics specialist said. "Imagine the lobbying disclosure issues -- every Member of Congress and staff member has taken a gift from Santa, perhaps every single year, and some of the gift amounts are sure to be staggering."

The sheer volume of disclosures that would be involved makes it unlikely that Santa will get a chance to present his case to Congress in time for Christmas. "No one is going to talk to him until their disclosure forms are complete, and very few people are going to be able remember all the gifts this guy has given them over the years," an expert said.

Patrick Fitzgerald, the United States Attorney for Illinois, issued a statement warning Members of Congress that the ethics laws will be enforced to the letter of the law. "I am not daunted by powerful people, and I'd like nothing more than the opportunity to bring every Senator and Representative who enacts legislation in exchange for gifts before a jury," Fitzgerald said.

Although there is talk on the Hill that the ethics committees might vote to suspend the ethics rules temporarily, those efforts have already become complicated by dozens of industry groups lobbying to be included in any such suspension of the rules.

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Now, before you say "Onion ripoff," first, you gotta admit my old friend Alex Dahl did a pretty good job touching all the bases (including the Blago story - nice!). Second, I happen to know Alex's career as a humor writer predates that Wisconsin rag because he was writing the parody column, "Whatsoever Things Are Fairly Likely," for the college newspaper that I ran, The Northwestern Review,* in 1986, two years before The Onion arrived in Madison. He's now a lawyer at the D.C. firm of Brownstein Hyatt Farber Schreck, having previously served in the U.S. Attorney's Office and, before that, with Senator Orrin Hatch from his home state of Utah. And every now and then, as you can see, he gets inspired. Thanks, Alex.--AB*

Comments

[Bailoutscam.com]

Great post. I thought you would lament Santa's recent investment in Madoff securities.

http://www.madoffwithit.com

[Heidi Whitaker]

Santa deserves a bailout more than Wall Street!

Thanks for the laugh.

[Forrester]

No more bailouts! Not for Santa, not for the Tooth Fairy, not for the Easter Bunny - no one!

[Dan Schwartz in NJ]

This was picked up in NewsBusters, and highly complimented:

http://newsbusters.org/blogs/noel-sheppard/2008/12/24/christmas-eve-funnies-santa-claus-demands-massive-bailout

[Chere Romney]

The most entertaining Christmas column I have read in years. After the endless FOX, CNN and CNBC rattling and confusion about all issues facing the country...this light hearted commentary is the best gift and chuckle. Hooray for Humor!