Friday, January 8, 2010

Too Big To Fail? Sorry, Wrong Question...

Lately I've been thinking about this strange analysis of the so-called financial meltdown of the past year or so, where the excuse to bail-out banks and private-sector financial institutions was they were "too big to fail." Of course, most folks bought this BS hook, line, and stinker. Those who railed against it said bailing the bozitos out of their own greed-wrought mess completely undermined the entire idea of free enterprise, where the right to suceed is accompanied by the possibility to fail. If you or I did what these jerk-wads did (by the way - its called "gambling," except with other people's money) we'd either be in jail, or bankrupt. And it would in fact be the right outcome, in most such instances - if you play the game, and lose, that's one thing. If you game the game, on the other hand, well,  you get shot out of a cannon into a brick wall, with only yourself to blame.

But I have come to an entirely different conclusion about all this crap. These jerks weren't "too big to fail." In fact, they are too big to succeed. "What?" you say? Clearly they succeeded - look how they took all our money while posting some of their biggest profits ever! How is that not success?

Look, say you hold some shares of AIG. You turn on the news one day to learn this company has played the market for a fool, but then had all its own markers in the game pulled by their own lenders. Remember, they've done this stupid-ass deed with YOUR money. Which, sorry Charlie, is now worth squat. AI effin G, as only one huge example, has essentially squandered not only said shareholders dollars, but far more importantly, they've essentially pissed on said shareholder's trust, and belief in the system itself. By any measure I can find on the concept of success, this represents a failure of gargantuan proportions. Are they still in business? Yes, Virginia, they are. Are they still rapaciously ripping off the consumer? Yes, Virginia, they most certainly are. Will their stock recover? Oh, hell yes (See P.T. Barnum.)

But the truth is, AIG is a complete failure, as are the other greed-hounds who built this house of credit cards while telling everyone everything was peachy. They have undermined the central thesis of free-market capitalism, which holds that the market itself will determine who should survive, based on such fairy tales as price, quality, speed to market, efficiency, etc. Central to these elements is the notion that every business has both the opportunity to succeed, and the potential to fail. And when failure occurs, others will rush in to take the market. And this is the fairy tale we have all bought into, until now.

These banks and financial houses are in fact too big to succeed. That they needed bailing out from the taxpaying people of this nation is the surest sign of failure - they have NOT survived due to their own hard work and ingenuity - they have survived because they lied and cheated and then got the government to help them scare the holy crap out of the populace, who by then were so freaked they couldn't tell the truth from the lie.

And the truth is, we bought the lie.

We were told this was necessary to prevent a further collapse, a world-wide depression. So what happened? 10% + unemployment is a sign of the success of that plan? Millions of foreclosures is a sign of success? For the bloody fools we call economists, the depression was averted. But for the millions out of work, out of homes, and out of trust, the depression is not only here in force, it keeps looking like its going to become a permanent fixture of the much-vaunted American Dream.

So you tell me - how are these robber-barons doing? If success is measured only by the Machiavellian standard of "I got mine, too bad for you," well, they have certainly succeeded. But if its by the standard set by that Dream, where hard work and honesty will bring success, well...

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