Every family has at least one and more often than not the underlying reason for Uncle Fred’s misbehavior or that of the cousin you never liked to play with is because some parent is letting them get away with it or making excuses, or simply put: bailing them out.
Julie goes to jail again and Mommy and Daddy are there to bail her out.
The tragedy turned farce got so old so quickly that it became irritating to hear: "I just got off the phone with Mom and she is at the jail bailing Julie out… again"
The sarcasm takes over and all you can say is, "No! I don’t believe it. What a shocker!"
Bailing Julie out could be a good thing if it entailed certain changes to her behavior but if it does nothing to resolve her misbehavior then the whole bailing out ordeal is just a big waste of time, energy and resources.
Likewise, bailing out the financial companies for their greedy misbehavior could be a good thing if it entailed certain changes. The issue isn’t nor should it be: "to bail or not to bail?" The issue is: what changes need to happen so that we don’t need to bail them out?
We need to come to grips with what precisely is the problem and how the organizational structuring of the modern corporation is feeding this systemic malignancy. What are the institutional practices that predictably create these crises? Why is there even such a phrase as "cyclical recessions"?
When a business is organized along deeply anti-democratic and authoritarian lines via a corporate division of labor and the dominant motive is short-term maximization of profit by creating an illusion of wealth or revenue that doesn’t exist so that (artificial) stock prices can be driven up then the prospect of shady practices that result in "bubbles" should be no surprise. And yes, Capitalism puts the "art" in artificial.
So what to do?
We can’t limit this to just financial companies because it’s not just about banks. In fact, it’s not about any one particular company but rather the structure of our particular economic system as a whole.
And regulations are just band-aids on a gushing wound. (And who can afford the emergency room co-pay?)
I talked to my grandmother yesterday, who was inquiring into what is going on.
I said, "Mammaw, would you keep King Cobra as a pet?"
"What if you kept it in a cage?"
"What about a Tiger?"
"What if you kept it in a cage?"
"I agree, because it is sort of like the old adage: you can take the beast out of the wild but you cannot take the wild out of the beast."
If an economic system predictably produces predatory results and can only be tamed with regulations then what does that say about its nature?
Perhaps Capitalism is somewhat similar to that King Cobra or Tiger. They should no more be our pets than Capitalism should be our form of economic system. It’s too dangerous and irresponsible. Why should we constantly have to hassle with regulating it so it doesn’t do what it does best: prey and pose mortal dangers to ourselves and others?
What I am saying is, this "crisis" is not the result of a few bad apples nor will bailing out these predators make the debt they created solvent.
Let’s use another analogy. Let’s say you are at the horse races with a friend and he puts his entire life savings on a horse that is clearly in last place and as it comes around the last turn it is abundantly clear that it has no chance of winning. Would it be wise to bail him out by buying out his debt? That was a rhetorical question and doesn’t need answering.
In the short term we may need regulations along the lines of what economists like Joseph Stiglitz
have proposed, but in the long term we will need to look at system overhauls that economists like Michael Albert and Robin Hahnel have proposed with Participatory Economics (PARECON). That is to say that we need to scrap Capitalism and its private ownership of production, its corporate divisions of labor, its markets and its remuneration based off of the above in favor of a system collectively and democratically owned and operated by workers and consumers.
We need to look at how to ensure a more accurate value of goods, how to best divide our work so that empowering work is not monopolized, how to best pay people for their work and so forth.
If not then we should accept that these crises will keep coming (and perhaps we should read Naomi Klein’s Shock Doctrine to familiarize ourselves more of what’s to come).
Because it’s like what my father used to tell me: "Son, you keep going to the Barber and eventually you will get your hair cut." What he was telling me was that I was doing certain things that would result in things I didn’t want. I didn’t want that proverbial haircut yet I kept going to a proverbial Barber whose job it was to cut hair, and low and behold, I got a haircut!