Losing Football Coach, You're Fired! Failed CEO, You're Enriched!

In America you are given the opportunity to rise on your own bootstraps. Achieve success and you are rewarded.

Failure? Well there is no room for that. If you fail you need to pick yourself up by your bootstraps and try again.

Try and tell that to justifiably angry Americans in the wake of recent events. Yes, if you are a football coach in America, Britain, or Europe and you compile a losing record you will be fired. After all, winning was a condition precedent to being hired.

Remember all these folks at the top of the corporate ladder and how hard they used to hurl charges of socialism at anyone wanting to regulate their activities? Remember how this charge would be leveled if a progressive president sought to achieve a safety net?

Socialism was the immediate cry! Get out there in the business world, roll up your sleeves, and either sink or swim. If you sink this time spit out the water and try again. Maybe next time you will swim and success will be the result.

Oh yeah, that was great advice being disseminated by the same group that has recently begged for socialism and received it in huge chunks at the expense of overburdened taxpayers who have already been paying the excessive price to keep the old adage of "perpetual war for perpetual peace" alive and well.

Nobel economics laureate Paul Krugman penetrated the issue in an August 3 New York Times Op-Ed, leading off his column accordingly:

"Americans are angry at Wall Street, and rightly so. First the financial industry plunged us into economic crisis, then it was bailed out at taxpayer expense. And now, with the economy still deeply depressed, the industry is paying itself gigantic bonuses. If you aren't outraged, you haven't been paying attention."

Krugman goes on to bull's-eye an important point over how corporations that were enriched by recent bailout money have been busy racking up short term profits.

Goldman Sachs has been using super fast computers to get a jump on other investors while Andrew J. Hall, who leads an arm of Citigroup that speculates on oil and other commodities, has been recording huge profits. According to his contract he is owed $100 million.

Krugman ties the Goldman Sachs and Citigroup instances into a neat bundle:

"... (I)n both cases we're looking at huge payouts by firms that were major recipients of federal aid. Citi has received around $45 billion from taxpayers; Goldman has repaid the $10 billion it received in direct aid, but it has benefited enormously both from federal guarantees and from bailouts of other financial institutions. What are taxpayers supposed to think when these welfare cases cut nine-figure paychecks?"

Rather than achieving a social utilitarian purpose, these high tech traders benefit from what UCLA economist Jack Hirshleifer in 1971 exposed as trading speculation schemes combining "private portability" with "social uselessness."

Paul Krugman notes that Andrew J. Hall of Citigroup "makes money mainly by outsmarting other investors, rather than by directing resources to where they're needed. Again, it's hard to see the social value of what he does."

So there you have it. Let the "boys be boys" and grind competitors into the ground under the heading of good old-fashioned capitalist competition. If they fail and hit a rough patch?

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