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Too Big To Fail: Unless It’s the Entire EEKonomy!

by Gene Rothman --


A new Goldilocks gauge has gripped the Guardians of Greed. Too Big to Fail (TBTF) used to be one size fits all. Big corporations would be bailed out only if they were Big Enough. But now, the fickle public has grown Leery of the Too Large. It may now be seen as Too Much of a Good Thing and in need of “right-sizing,” a rule that used to apply only to the Little Guy before being pink-slipped.

Yet some big institutions are still TBTF. What is the secret of success for those Supersized Survivors (also known as the SS)? Two survival strategies are still used widely. Larger players are able to be subsidized by the smaller ones by a process we will define as “fertilization” which spreads around the wealth and gives birth to healthy economies of (large) scale to the recipients. TBTF firms also continue to implement time-tested frugal measures such as cutting red tape, runaway regulations, payrolls, and ordinary workers as well. The Obama team also invented a promising new form of recycling. We will now examine these measures in greater detail.

Neo-Con Economic Neo-Theory
Neo-cons (along with their first-cousins, Neo-liberals) advocate de-regulation and trickle-down theory: mucho millions of moolah is heaped on Big Money so that it can then trickle down to you. For this to work effectively, however, things must first be cleaned up. Those webs of repetitious regulations and superfluous safety nets must be swept aside.

Even one prominent labor leader concurs with the Trickle-Down treatise, according to Michael Mammon, a well-paid right-wing think-tank scholar. He notes that the late Walter Reuther said if you feed a horse some oats -- and then wait patiently -- you will soon see what trickles down at the other end for the workers. This is frugality at its finest.

An illustration of upward redistribution using the TBTF model can be seen at the state level of government. Little Blue states like Joe Biden’s piddly Delaware fertilize Big Red states, like Texas and Alaska. The latter are Too Big to Fail. This principle is even more essential when it comes to the little folks providing Big Bailouts for Big Banks and Big Corporations. And it is even more critical for the Really Big Military Industrial Complex. The powerful Pentagon has to be kept on permanent life support, due to the link between McDonald's and McDonnell Douglas. It should never have to beg Congress for these barehanded billion dollar bailouts on the installment plan.

Differences Between Republicans and Democrats on TBTF
The Republican mantra is that corporations and the military can never be too big, but government always is. But John McCain and the GOP got behind the political curve by being Too Big in Hard Times. Obama hammered him for hiring 4,092 lobbyists to run his campaign.

Eventually, he was forced to find someone folksy and more populist (read pretty). He made threw a Hail Mary pass at Sarah Palin. Her handlers developed a plan to show her off as a smart beauty pageant contestant demonstrating her knowledge of the entire spectrum of GOP economic theory: “ Deregulated free trade is good.” For maximum effect, she was to do a photo-op in a Latin American continent country. McCain himself suggested Spain.

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But the public was more concerned about local American economic problems, so Palin made a maverick detour to help the American clothing industry with her heroic Bush-like example to “go shopping.” She went on an Alaskan-sized spending spree that some observers thought would revive Main Street almost single-handedly. But despite her best efforts, Wall Street still tanked. In the background, some observers heard the Stock Market (the American God) laugh.

The Democratic Party favors Free Trade, but part of its base does not. While in office, Clinton deregulated everything he could find: NAFTA, banks (with the Glass-Steagall repeal,) telecommunications, Big Macs, you name it. Bubba was like some demonic surgeon, cutting away regulations like so much redundant throat tissue. Big Labor continues to donate to the DLC with no webs or nets or strings attached. But now, some whining wildcats have started sit-ins and bashing the Bank of America. What to do?

To take the focus off the past DLC deregulation debacle, Obama had a plan to put a new face on the Democratic party: His! He then instituted a recycling program, which will now be described in more detail.

Once elected, Obama resurrected the TBTF strategy by putting the entire Clinton crew, including deregulation devotees like Robert Rubin and Lawrence Summers, back in charge of economic policy. They were simply TBTF. But the mainstream media pundits -- who in the past predicted everything wrong but who are also TBTF -- knew how to spin this simply and successfully. “These old familiar faces are the most experienced ones around. Besides, recycling is environmentally friendly.”

One apparent problem was that there weren’t enough domestic policy cabinet positions to go around. But, wait! They all supported the war in Iraq. This made them eligible to be recycled as cabinet-level foreign policy wonks. Change we can believe in!

Plus ca change, plus ces’t la meme chose.

Gene Rothman

Gene Rothman, DSW, LCSW, is a retired social worker who worked with homeless and incarcerated veterans in the latter part of his career. He is active with Progressive Democrats of Los Angeles (PDLA) and Families to Amend Three Strikes (FACTS), and writes an occasional monthly editorial for the Social Action/Social Justice Council published in the “NASW California News.”