What Caused the Financial Meltdown?
Maybe I'm just too simplistic but I think this latest meltdown is just a repeat of past meltdowns. Only the names of the players change.
The greatness of America is that one is given the opportunity to succeed. Just don't get too successful. Because if you do you attract attention from the government. Then, as entrepreneurs such as Bill Gates learned, you have to pay the piper. Government views large businesses as being ATM's. Big businesses furnish not just tax dollars but, much more importantly, political contributions. If one does not play ball with the government then all kinds of unpleasantness begins and a businesses chances of remaining a going concern may be in doubt. As Congress is so manifestly proving in the case of AIG, your business now becomes their business. AIG is less than popular with Congress now because it is likely to fail and thus cannot be counted on to deliver contributions in the future. In short, it has been sucked dry and Congress must now, in the bipartisan spirit of continuing to be reelected, search for new sources of contributions while under the smokescreen of feigned populist outrage or contrived crisis. Congress will never actually acquire AIG, even though the taxpayer is owner of almost all of it, because that would destroy the fun of getting contributions while at the same time being able to bash big business/Wall Street. The last thing Congress wants to do is give up this traditional whipping boy.
Large American businesses have to follow a calculated game of valuing their greatest toxic asset, accumulated influence with the powers that be in Washington. They have to attempt to keep Washington from legislating them out of existence so they contribute, often to both sides based on their best forward projection of who will achieve power. They know that political fortunes built up over years can be lost overnight. They also know they in the world of politics there are no business models, guidelines or forecasting methods that can be relied upon for success. These are the kinds of affairs few entrepreneurs want to deal with so the smart ones sell their companies to the suits and then start the process of building up a new business all over again.
In this way no business gets too big to succeed as a natural cap is placed on them because in the long war with government, government outlasts them. Year after year the large corporations don't create jobs. They spend their time constantly battling government. The merge, they acquire smaller innovative companies but ultimately they expire spectacularly, break apart or are broken apart by their own inability to react to changing economic times or to the whims of government. Big business becomes not such much about entrepreneurism and more about being a caretaker.
The Arabs call it baksheesh and American businessmen call it the cost of doing business.
The greatness of America is that one is given the opportunity to succeed. Just don't get too successful. Because if you do you attract attention from the government. Then, as entrepreneurs such as Bill Gates learned, you have to pay the piper. Government views large businesses as being ATM's. Big businesses furnish not just tax dollars but, much more importantly, political contributions. If one does not play ball with the government then all kinds of unpleasantness begins and a businesses chances of remaining a going concern may be in doubt. As Congress is so manifestly proving in the case of AIG, your business now becomes their business. AIG is less than popular with Congress now because it is likely to fail and thus cannot be counted on to deliver contributions in the future. In short, it has been sucked dry and Congress must now, in the bipartisan spirit of continuing to be reelected, search for new sources of contributions while under the smokescreen of feigned populist outrage or contrived crisis. Congress will never actually acquire AIG, even though the taxpayer is owner of almost all of it, because that would destroy the fun of getting contributions while at the same time being able to bash big business/Wall Street. The last thing Congress wants to do is give up this traditional whipping boy.
Large American businesses have to follow a calculated game of valuing their greatest toxic asset, accumulated influence with the powers that be in Washington. They have to attempt to keep Washington from legislating them out of existence so they contribute, often to both sides based on their best forward projection of who will achieve power. They know that political fortunes built up over years can be lost overnight. They also know they in the world of politics there are no business models, guidelines or forecasting methods that can be relied upon for success. These are the kinds of affairs few entrepreneurs want to deal with so the smart ones sell their companies to the suits and then start the process of building up a new business all over again.
In this way no business gets too big to succeed as a natural cap is placed on them because in the long war with government, government outlasts them. Year after year the large corporations don't create jobs. They spend their time constantly battling government. The merge, they acquire smaller innovative companies but ultimately they expire spectacularly, break apart or are broken apart by their own inability to react to changing economic times or to the whims of government. Big business becomes not such much about entrepreneurism and more about being a caretaker.
The Arabs call it baksheesh and American businessmen call it the cost of doing business.
posted by tovarich at 9:34 PM
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