Monday, April 06, 2009

Too Big to Fail? No. Too Big to Bail 

If I walked into a bank with a note and a gun, and took a few thousand dollars from a teller, the FBI would hunt me down and throw me in a Federal Prison for a long time.

If a banker walks into a bank, makes some absolutely stupid gambles with other people's money and loses it to the tune of billions, he is rewarded for his failure and saved when the Fed cranks up the printing presses.

Look at the lack of logic in that second paragraph again. It's as if you're walking down the street and get mugged. The mugger takes your wallet with, say, eighty dollars in it. The police catch him and their response is -- they give him a hundred and sixty dollars to compensate him for your loss, then send him back on his way to be a mugger.

You seeing anything wrong with this picture?

It is time to stop rewarding failure. Conservatives bitch and whine about the mythical welfare mother who leeches off of the taxpayers but, honestly, how much could such a person really take? Fifteen, twenty grand in a year? The investment bankers and Ponzi scheme runners and other financial wizards who have run their institutions into the hole for billions could burn through twenty grand in someone else's money in seventeen minutes.

And yet, they walk the streets.

Well, enough. There is no corporation too big to fail. Or, perhaps, no corporation should be allowed to become "too big" to fail. We need to return to an era of the true free market with heavy regulation. If a company makes bad business decisions, they go out of business. No single company can become too big, vertically or horizontally, so that their implosion would have any great effect.

In recent decades, the idea of "corporate personhood" has been pushed by these same CEOs who fail upward, the idea being that they can protect themselves by applying human rights to corporations. Well, if they want to continue to do so, they have to accept one natural extension of that warped view of human rights. Corporations that go bad should be subject to the death penalty. Trample the rights of others by stealing their money, losing their investments, by screwing up royally? Off with your corporate heads, the body dumped to your competitors.

The only way to escape the current financial crisis is to execute the companies seeking bailouts, then turn over the assets -- including all those executive bonuses and jets and cars, and corporate assets and capital and machinery and real estate and etc. -- to the employees. They get to sell what they're given at government auctions, keeping the profits, tax-free. Talk about a true economic stimulus? This is it.

The Bernie Madoffs and CEOs and VPs can go beg for money in the streets. And they can be thankful that this isn't France in 1789, in which case they would have met a much more permanent form of public censure, in which more than just their companies would be publicly executed.

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