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A Billion Here, A Billion There

Remember when a billion dollars still seemed like a lot of money? Neither does anybody else. Consider: A newspaper revered …

Remember when a billion dollars still seemed like a lot of money? Neither does anybody else. Consider: A newspaper revered for its ability to articulate the deepest concerns of the American people reported that the government’s controversial TARP program could result in massive losses to taxpayers as a result of financial legerdemain. The putatively terrifying story, appearing under the headline “TARP Said To Be Ripe For Fraud,” warned that the government’s attempt to rescue the
financial system could result in thievery costing taxpayers “tens of billions of dollars.”

The story didn’t even make page one.

And why should it? With a trilliondollar deficit, a $787 billion economic stimulus package, following fast on the heels of an earlier $700 billion bank bailout, and now reports of a $2.3 trillion shortfall in the budget a few years hence, not to mention a possible $250 billion hit to the commercial real estate sector, who’s going to get excited about a minuscule tens of billions of dollars in losses stemming from fraud? Pundits like to cite the famous quip attributed to Everett
Dirksen, “A billion dollars here, a billion dollars there, and pretty soon you’re talking real money,” but this wisecrack is no longer relevant, much less true. No matter how many billions you string together in an era of multitrillion-dollar deficits, bailouts and budgets, you can’t come up with a number that would make anyone turn their head. A billion dollars is no longer real money. It’s chump change.

You can see this by looking at earnings reports buried in the largely unread pages of the newspaper. A short while ago, Dow Chemical posted a $1.55 billion fourth-quarter loss. Once upon a time this would have been front-page, hold-the-presses news. No more. Today, $1.55 billion seems like pocket money. Same thing when Intel announced that it would take a $950 million write-off to account for the declining value of its investment in Clearwire. At this point, $950 million is starting to look like a rounding error. I’m surprised Intel even bothered to report it. And on the subject of chicken feed, how about when Cablevision announced that it was returning to the junk-bond market to raise $500 million? It did so, in part, to allay investor concerns about the $11.2 billion in outstanding debt the firm has on the books, including $1.7
billion that comes due in 2009. Wait a minute! Investors are concerned about a paltry, itsy-bitsy $1.7 billion in debt? What are they? Ninnies? Wimps? Tightwads? Skinflints?

Foreign countries trying to play in the big leagues look foolish when they throw numbers around. A good example is when the French government announced that it would give $8.4 billion in low-interest loans to Renault SA and PSA Peugeot-Citroën in exchange for promises that the companies would refrain from laying off workers or shuttering factories, at
least while the funding lasts. Mon dieu, how is a piddling $8.4 billion going to make much of a difference one way or another? Why not step up to the plate and try something muscular like, I don’t know, $175 billion? Meanwhile, Latvia, whose government collapsed earlier this year, accepted a $9.6 billion bailout from a group headed by the International
Monetary Fund. In other words, an entire country’s price tag for a bailout was just half what GM and Chrysler asked for last December to tide them over until spring. Talk about cheesy.

And then there’s the subject of good will. Not long ago, Gannett announced that it would take a $5.9 billion goodwill write-down after reporting a huge drop in operating earnings. In days gone by, this announcement would have been
greeted with hooting and hollering by investors. No more. After all, all we’re talking about here is $5.9 billion,
not $576 billion. That’s pin money. These days, a billion is the new million. Big is the new small. And small is beautiful

About Joe Queenan

Joe Queenan is a regular contributor on business issues, corporate culture, and financial follies to Barron's and The Wall Street Journal.