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Bankruptcy, Not Bailouts

Friday, February 1st, 2013

America’s bailout economy started many administrations ago, but really went Big Time under President George W. Bush . . . and then went Enormity Time with President Barack Obama.

The Washington Post provides the latest in bailout news by noting an inter-departmental squabble:

The Special Inspector General for the Troubled Asset Relief Program said Treasury approved all 18 requests it received last year to raise pay for executives at American International Group Inc., General Motors Corp. and Ally Financial Inc. Of those requests, 14 were for $100,000 or more; the largest raise was $1 million.

Though this is all quite scandalous, don’t expect policies to change or heads to roll — barring a joint Tea Party/Occupy uprising. The nature of the modern “regulatory” state is clear: government bureaus are quickly captured by the industries they aim to regulate. It’s an old story. The revolving door between business and bureaucracy is as well-established as between journalism and politics.

So why do we have bailouts?

  1. They show that politicians are “doing something”;
  2. They mimic the welfare state logic of “helping the poor” (if, with caustic irony, by stuffing the wallets of the rich);
  3. They aggrandize the showy machinations of the legislative and executive branches at the expense of the branch of government designed to handle massive business failure, the courts.

Perhaps Americans shouldn’t have voted in either an MBA grad (Bush) or a constitutional lawyer (Obama). Maybe what the country needs is a bankruptcy lawyer in the White House.

This is Common Sense. I’m Paul Jacob.

Serpentine, Indeed

Friday, July 16th, 2010

California, increasingly known for its faults, has a major problem. Its politicians have rocks in their heads.

As the state teeters on the brink of insolvency, legislators are considering de-listing the mineral serpentine as the state rock.

Sponsored by State Senator Gloria Romero, a Democrat hailing from la la L.A., Senate Bill 624 would raise “awareness to protect the health of our citizens. Serpentine contains asbestos, a known carcinogen. Toxic materials have no place serving as emblems for the state.”

The trouble with this is that not all — or even most — samples of the mineral (or, more correctly, mineral group) contain asbestos. Geologists, when they learned about the bill, were all abuzz. What was the Senate up to when it voted to throw out the rock?

Dan Walters, writing in the Monterey Herald, has the answer: Litigation. If the state defines serpentine itself as asbestos-laden — not just those forms that sometimes contain the substance — then trial lawyers can sue more people for having the rocks on their property, etc. Predictably, the “language in the bill was provided by the Asbestos Disease Awareness Organization, an anti-asbestos group whose major sponsors are law firms specializing in asbestos litigation.”

If California legislators toss out the state rock to aid lawyers in plundering others, maybe the state’s citizens can use the initiative to make the rock the official symbol of the California Legislature. But only those chrysotile forms that contain the dreaded silicate.

This is Common Sense. I’m Paul Jacob.