Sunday, March 15, 2009

Corruption on Wall Street...and in Washington

Robert Reich on corruption from the corporation that brought you the recession:

The real scandal of AIG isn't just that American taxpayers have so far committed $170 billion to the giant insurer because it is thought to be too big to fail -- the most money ever funneled to a single company by a government since the dawn of capitalism -- nor even that AIG's notoriously failing executives, at the very unit responsible for the catastrophic credit-default swaps at the very center of the debacle -- are planning to give themselves $100 million in bonuses. It's that even at this late date, even in a new administration dedicated to doing it all differently, Americans still have so little say over what is happening with our money.

Reich goes on to explain that, according to AIG's chairman, the company needs to "retain talent." Gotta admit, it does take a certain talent to be able to bring down the economy of the world's only superpower and then turn around and persuade that collapsing superpower to hand you, free of charge, its last dime.

I made some pointed remarks recently about using logic. Reich offers the following analysis, so logical that a child could have thought of it:

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. So to whom should they be accountable? When taxpayers have put up, and essentially own, a large portion of their assets, AIG and other behemoths should be accountable to taxpayers.

Yes, a child could have thought of it, but apparently our brilliant representatives in Washington did not.

1 comment:

Ali.mostaque said...

This is good. Information Clearing House covers this area well.

I have also written about corruption in South Asia.