Wednesday, March 18, 2009

No. The Real REAL Problem

Robert Reich: The Real Problem is AIG execs are accountable to no one.
AIG's arguments are absurd on their face. Had AIG gone into chapter 11 bankruptcy or been liquidated, as it would have without government aid, no bonuses would ever be paid (they would have had a lower priority under bankruptcy law that AIG's debts to other creditors); indeed, AIG's executives would have long ago been on the street. And any mention of the word "talent" in the same sentence as "AIG" or "credit default swaps" would be laughable if laughing weren't already so expensive.

This sordid story of government helplessness in the face of massive taxpayer commitments illustrates better than anything to date why the government should take over any institution that's "too big to fail" and which has cost taxpayers dearly. Such institutions are no longer within the capitalist system because they are no longer accountable to the market. To whom should they be accountable? As long as taxpayers effectively own a large portion of them, they should be accountable to the government.
Too big to fail. Ugh. I'm tired of this propaganda fed straight from the too big's big mouth. Too big to exist.

And he's absolutely right, but the deeper issue is that American Democracy had long ago been taken over by the new Kings of the Castle. Their corporations are their kingdoms and the executives are the modern day royalty. Our government representatives were/are merely their pawns; beholden to the biggest lobbyists.

If and when we take the power back, perhaps then our newly and freely elected representatives can make decisions for people first, quality of life first, not status quo business first. And don't get me wrong, I love business. I love a functional economy. But clearly, allowing lobbyists to corrupt effective executive decision making, so that business can maintain the status quo, stifle competition, and quell innovation is not working.