TOO BIG TO FAIL, OR, DOES ANYBODY GET IT?
31 March, 2009 © Pirate Joe

    In the mid 1980's, Ronald Reagan, the patron saint of laissez-faire and de-regulation  said, in reference to large corporations, “there’s nothing wrong with being big”. Indeed. As many insist AIG is just too big to fail, I keep wondering how in the world is it in our collective interests to let any corporation ever get “too aig, er, big to fail”? If “too big to fail” means this degree of economic calamity if it screws up, then I don’t think any corporation should be allowed to get that big, or, to express it another way, too big to fail = too big to exist.
    We stand here at the AIG Bonus Crisis Crossroads. Although it is distracting us from other important tasks that need to be addressed in a timely manner, we face some ponderous questions.  Should we tax it back, as I have advocated on this site, or, should we just let it go: an unintended bit of collateral damage that, percentage-wise, amounts to just a small part of the total payment. Those who advocate the latter say that taxing it back would could usher in a whole new era of abuse of the tax laws. A point well taken. Those who advocate the former say that while the percentage is small, it still amounts to very large payments on an individual scale, and that it’s totally outrageous to reward the very people who put us into this mess. Another point very well taken.
    The blame can be evenly appropriated. Democrats and Republicans both goofed on this one, and while we need to do something about it, we also need to ensure that it never happens again. For the record, about 35% of the AIG bonuses have been voluntarily paid back at this point in time.
    I would humbly suggest that perhaps we abandon this trickle-down approach to solving our economic woes. As “socialist” as Obama is branded, I can’t seem to recall him proposing that we put money into the hands of common folks, ( as I have suggested a number ways to do) in fact, I cannot remember anyone in government acknowledging the simple truism that, if you put money into the hands of the common folks, they’ll spend it, and THAT is what will revive the economy. Oh, pardonez-moi, I forgot about the “make work pay” tax cut. While AIG execs get millions apiece, we get $15. a week. Have you given serious thought to how you’re going to manage all that wealth? Better call your investment councillor.
    No one, not the “socialist” Obama, Tim Geither, Nancy Pelosi, or that gasbag (who thinks he can solve all problems), Rush Limbaugh has demonstrated any real awareness of just how desperately we need to create and keep jobs here, and that (that) means some real limits on globalization. In fact, the “socialist” Obama just a few days ago reiterated his commitment to free trade and the global economy. Translation: if your job is in India, it’s safe.
    In evaluating whether a company should be bailed-out, we primarily need to ascertain its impact on the common folks. GM has over 300,000 jobs at stake, as opposed to AIG at 116,000 (how many of those 116,000 are in the USA?). Just by that alone, I would rate GM’s importance to common folks much higher than AIG’s. Do you want to stimulate the economy? Let AIG fail, then nationalise it. Eventually the profitable sections could be sold, (or operated) while the “toxic” assets should be allowed to crash and burn, forgiving all those mortgages in the process.
    Now the Obama administration is saying we need to bail out more troubled financial institutions in order to get credit flowing again. Bull excrement. Who is our tax money protecting here? Us? Hell no. It is protecting those who hold “toxic” assets, and frankly, Scarlet, who gives a damn about them?
    Let me say something, nay, scream something: DON’T EXPECT THE GOVERNMENT TO SAVE YOUR JOBS! DO IT YOURSELF! GET OUT IN THE STREETS AND OFF OF YOUR ASSES. DEMONSTRATE! JUST SAY NO TO GLOBALIZATION! Washington will always be inclined to favour the AIG’s over you; its up to you (and I) to let them know that if they don’t act in our favour, they’ll be out of a job in November.
    Here’s something I’ve said before, and I’ll say it again: Hey, you-all in Washington! Let the government set up shop in those empty bank buildings, and use our tax money to make low (or no) interest loans. Create jobs for us and let the corporate behemoths who engendered this mess get acquainted with the dodo bird.


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