Robert Reich in today’s salon.com makes a powerful arguement on the scandal of AIG and the fact that “we’re helpless.” Within, Reich offers the following observation:
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.
But if our very own Secretary of the Treasury doesn’t even learn of the bonuses until months after AIG has decided to pay them, and cannot make stick his decision that they should not be paid, AIG is not even accountable to the government. That means AIG’s executives — using $170 billion of our money, so far — are accountable to no one.
The story of the AIG bonuses has legs, and President Obama was out there today with some tough populist rhetoricon the bonuses. Making the case to block the bonuses, the President argues that AIG is where it is because of “recklessness and greed” and so, while the the company is “too big to fail” the government will “pursue every single legal avenue to block these bonuses and make the American taxpayers whole.”
My hope is this will be an opportunity to be proved wrong but my instinct, based on a close reading of our country’s history, is that we’ll get lots of heated rhetoric and some impressive strutting about but at the end of the day, we taxpayers, we who worry about our jobs and our bills and our families, will end up where we always end up: screwed. As the gears of this old machine turn, the squeaks sometimes make lovely noises about freedom and responsibility but the men who rigged this contraption didn’t build it to get ground up – they built it to continue getting their bonuses and their bailouts without any unpleasantness resulting from plebeian, “democratic” notions of right or wrong or fair or just.
Reich’s point is dead-on. Buy bailing out the banks, we’ve exited capitalism already. Because we’ve made the exit, Barney Frank is right – fire the fuckers, because then there are no bonuses owed, and start over.