Sunday, December 7, 2008

Bailout Fever

From A Better Bailout by Bruce A. Jacobs:

Many of us have noticed how swiftly the trumpeted rigors of capitalism wilt into a mumbled version of CEO socialism when the market produces actual consequences for the titans of industry. But since the deregulation era has seen monopolies mega-merge themselves into something approaching a state labor apparatus, the "too big to fail" argument has taken on a good bit of public-interest weight. We have to save the rulers, the claim goes, so that the little people will still have jobs.

But there is an alternative. What if we specifically bailed out consumers and jobs instead of vaguely funding CEO fiefdoms? What if our federal money directly underwrote relief and procedural reform for X number of mortgage- and fund-holders, and X number of productive auto industry positions, instead of filling discretionary coffers for CEOs who have already proven their blindness and greed? After all, in the event of a bailout, someone, whether CEO or public servant, is going to have to make the judgment of how to throw government money toward productivity. Who is more trustworthy for the task: the CEOs who Lear-Jetted their companies into fiery crashes in the global race for sound investment and well-made sustainable transportation, or a fleet of independent auditors charged with instilling fiscal discipline? Do you go with the proven screw-ups or with the feasible benefits of a new set of eyes? Or, at the very least, with a buttoned-down set of stipulations for how the money is used and with clear legal consequences for failure to comply?

The heart of it, I think, is not whether there is a bailout, but who we choose to bail out.

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