[Washington Babylon ]Bailing Out Failure: The American way | Harper's Magazine

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[Washington Babylon]

Bailing Out Failure: The American way


I spoke today with a former government official who was appalled by Obama’s suggested emergency aid to the auto industry and by the Bush administration’s bail-out of the financial industry. Here’s what he had to say:

I’m against these bailouts on principle but if you’re going to give these firms money, it certainly should be predicated on firing the CEOs, the CFOs and the whole corporate command structure. Management always has an excuse – it was the unions or the economy was bad or something else. But you were the guys in charge and now you want us to throw $25 billion into your failed company?

If it’s decided that a bailout is in the country’s strategic national interest, fine, then do it. But the taxpayers should not be asked to turn the money over to the people who fucked up the companies and ran them into the ground. But that’s the way it is across the board, there’s no accountability. The government didn’t fire anyone after 9/11 either. How do you even talk about generating innovation and creativity when you reward failure with staggering amounts of money? It violates every tenet of leadership and management.

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