The first bailout came and went with very little controversy (minus a few Republican representatives getting all flustered a speech) but this second is getting more attention. People are actually starting to think about how this may not be the most ethical act the state could do.
I started thinking about it the other day and even though I do think that this problem is much bigger than what I could understand, being as it is a huge problem and I am a mere blogger, I did come up with a few points I think are worthy of some speculation.
No one can deny the fact that a collapse of the companies requesting a bailout would be detrimental to the nation's economy. If GM were to go under (which it all but has), a major mover in our economy would be gone. This is not the best solution for the nation.
However the rules of free-market capitalism are clear: manager of a corporation is not only the one who is in charge of managing the assets of a corporation, but also the one responsible for shouldering the risks involved in investment. If a company fails, the owners of that company fails as well.
We are struck with a paradox. If these companies fail, our economy will be in worse shape than it finds itself in currently. On the other hand, if we allow these mega-rich executives to come out unscathed despite having a corporation fail in the market we undermine our entire economic system.
I offer a third option: bailout the corporations but do not allow these executives get rich off of the process. This is already being promised by Washington and hopefully will be followed through with. I go a step further and ask that maybe we should allow the owners of these companies to feel the hurt of the corporations failing.
I know that we as America will never seize funds, and that is not what I'm asking for. I am however asking that these executives bear more of the burden in salvaging their corporations than the American taxpayer.
