"Too Big to Fail", et al.
Specious elements of the current financial crisis I'd like to see laid to rest:
- We have to pay high bonus to retain the top talent–but that talent is by now clearly untalented since that "top talent" precipitated the current crisis
- We give the money to the financial institutions ("nationalize the risk") and let the experts, the top talent, continue to manage its use; see #1
- "It's too big to fail"
If something is "too big to fail," then it's too big to be in private hands.
The term "too big to fail" is a euphemism for any institution that is so important to the entire nation's most basic well being, that society cannot let that institution fail. This is why one of the foundational principles of civilized society has always been nationalization – i.e. government control – of the institutions that are "too big to fail": institutions like the military, whose failure would mean a basic loss of national security; law enforcement, whose failure would mean a basic loss of civil order; and infrastructure construction, whose failure would mean the crumbling of commerce. The government, as the most powerful representative of society as a whole, runs these institutions/services because they are too important to be allowed to fail.
[David Sirota, "If It's 'Too Big to Fail,' Then It's Too Big to Be Private", Campaign for America's Future, 3 March 2009; via.]
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on Thursday, 5 March 2009 at 23.11
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Sirota got off a good one.
Regarding the bonuses, given the splendid pay and perks top CEO's
get as a matter of course, and given how they almost never get canned
even if the company goes over a cliff, it's hard to believe huge bonuses
are required to keep them around. No more so than leaving an open bag
of cookies in front of a backwoods Dumpster is required to keep bears
accustomed to fetching snacks there coming back for more.
on Friday, 6 March 2009 at 20.21
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Jeff, given your blog's name and your affinity for bears,
I sincerely hope my analogy in the above comment doesn't
come across as offensive.
on Friday, 6 March 2009 at 22.34
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Not at all, SW; in fact I found it amusing. I suspected I knew which type of bears you were thinking of in re: dumpsters, but most of the bears I know wouldn't object to an open bag of cookies as a training aid.